IA “Novosti Pridnestrovya”: Yevgeny Vasilievich, in regards to economic issues, in 2016 a preferential regime for Pridnestrovian enterprises exporting goods to Europe terminates. Are export reorientation options considered and what will be done if a new agreement with the EU is not reached? Do you have a plan for what to do next with the economy of Pridnestrovie? Thank you.

Yevgeny Shevchuk: Thank you. Indeed economic operators of Pridnestrovie are seriously concerned about planning their budget for the next financial year due to the fact that there is a threat of an abolition of certain preferences for trade with the European Union. Our Ministry of Foreign Affairs negotiates about the extension of the current regime even for the short term. But this situation shows just how dependent on external conditions the economy of Pridnestrovie is. If there are additional duties to act for our exporters, one should expect a decrease in the business activity of our economic agents in the markets of the European Union with consequences for the budget of Pridnestrovie – a possible decrease in revenues. How to overcome these conditions, borders, barriers?

We live in an open world. Pridnestrovie does not set rules in this open world, but the big players do. We are actually offered to sign a political or economic declaration, no matter what form, and to join the DCFTA, which had been signed between the Moldovan government and the EU. But this agreement is beforehand disadvantageous for the economy of the PMR. In case of its full implementation from January 1, the Pridnestrovian budget will suffer even greater losses. External conditions that will be applied or may be applied from January 1 will have negative consequences for us.

As for reorientation, let me remind you that in order to reorient and deliver goods from Pridnestrovie to other markets, it is also necessary to have a high level of competitiveness of the products, the relevant logistics. Reorientation takes time: it takes at least a year or even more. Therefore, enforced conditions or specific real situation dictates certain rules of behavior. The first step is to review the basic terms of economic policy in Pridnestrovie, to negotiate with partners to ensure that economic agents have the opportunity to trade within all markets. Thank you.

SI “Pridnestrovskaya gazeta”: Continuing the topic of economy, it is known that many private enterprises pay envelope wages. Naturally, it reduces revenues to the budget. What should be done to change this trend?

Yevgeny Shevchuk: In fact, always in times of crisis when profits or revenues of commercial organizations fall, people are trying to optimize expenditures, some try to use such schemes that reduce taxation. We note the fact that part of the revenue to be taxed became significantly lower compared to the previous year and not only because of the volume of production. It is necessary to seriously change the tax law, on the one hand, using the incentive rates for the payment of white or net wages; on the other hand, conditionally speaking, it is necessary to apply the stick. The theory of “carrot and stick” should be applied to all taxpayers: to those who are law abiding – carrot, to those who are not – the corresponding measures of compulsion.

Here I want to emphasize that in this part our legislation is fairly liberal. We have almost 50% of taxable items which do not pay income tax, as benefits for income tax are provided. There is no such practice almost in any country; almost 50% of the income taxes are not collected, although it is charged. And I would like the system to work effectively. There is an understanding that economic agents have problems. But here it is necessary to seek a balance of interests. And this balance must involve all instruments of the state power: a carrot and a stick, a modern legislation on these issues.

Pervy Pridnestrovsky TV channel: Yevgeny Vasilievich, recently there have been rumors that the Pridnestrovian ruble may be liberalized. In this regard, I have two questions. How reasonable are these rumors? And if the ruble is devaluated, on what the level the dollar will stop against the ruble? Thank you.

Yevgeny Shevchuk: All these are rumors, talks, aimed primarily at sowing uncertainty and fear in our citizens. Those, who do that, act against the Pridnestrovian state. They need to know that. At the moment there are no objective reasons for the devaluation of the Pridnestrovian ruble.

As for the national currency rate, we follow a hard line, aimed at maintaining the national currency in order to protect the incomes of our low-income citizens. Pridnestrovie and our neighbors have experience of serious consequences of the national currency devaluation. This leads to higher prices and so on. That is why we have followed the other path: we keep the exchange rate, thus maintaining stable incomes of vulnerable categories of our citizens. We support stability in pricing in our commercial networks and markets. We support the stability of the banking system, because with devaluation some problems start in the banking system with deposits, etc. In March it was decided in principle to continue the administrative keeping of the national currency rate.

We faced the choice of making an important political decision, what to do in a situation where revenues are plummeting. Practice shows that to date the decision has been correct and justified itself. If we compare incomes of even our respected pensioners who have fallen into a difficult situation, too, and are getting today 70% of the pension under the law, the average size of their pensions is higher than in Ukraine and Moldova, where a significant devaluation took place.

This tense situation affects the moral climate in society, preparation for the next political election campaign to representatives of the people’s power. Some people speculate these issues. I want to remind you that if we had followed a path of market supply and demand, the so-called mechanism of the ruble exchange rate, the parameters of it would have been quite different. And those who are now so easily criticizing unpopular decisions of the President and the Government to reduce expenditures actually provoke a reverse decision by the Government and the Central Bank on the devaluation of the ruble. I entrusted the Heads of State Administrations to study the public mood, how people regard this issue. Based on the preliminary information we receive, the majority of citizens support the PMR’s Government and the Central Bank in the need for further support of this particular course of domestic policy.

This responsible unpopular decision was made on the basis of the situation in which we find ourselves. Neither the Government nor the Central Bank, nor the President wanted to make such decisions, if they had an opportunity. Therefore, in my opinion, we have chosen the most optimal path and moved along this path. How the situation will develop further depends primarily on how the situation will develop in the external markets, in our borders and how the freedom of movement of goods across borders will be ensured for our economic operators. Therefore, today it is almost impossible to predict with maximum accuracy what will happen in a month or two or three months in an environment where we at most or largely dependent on these factors.

IA “Novosti Pridnestrovya”: Yevgeny Vasilievich! It is no secret that one of the main domestic problems was, let us say, a lack of understanding between the executive and legislative branches of the government. Here on the eve of elections to the Supreme Council, please, tell what the new deputies are like, in your view? What do you expect from the Parliament as a whole and how, in your opinion, should be built relations between the Parliament, the Government and the President?

Yevgeny Shevchuk: Thanks for the question! This question, in my opinion, is important for all voters of the Pridnestrovian Moldavian Republic. My position is that we should not allow our parliament to be ruled “out of the bushes”, as it happens sometimes. Therefore, those who really want to make decisions in state matters, work in the Parliament, should work in the Parliament. People must see their representatives, decision-makers, who are interested in these decisions and what the result of the activity is.

System of getting into representative bodies should be more transparent. The practice of political corruption, when some finance elections, while others do not represent the interests of voters, but the specific economic circles, is depraved. And I with all state authorities in this election campaign intend to assist in ensuring that all materials and information on these ties be available to the media and citizens to ensure that people have more objective information. The people elect their representatives to the authorities in accordance with the Constitution. These representatives must defend the interests of the people who elected them directly. We must learn from the experience of other countries, and not create problems. The experience both of Moldova and Ukraine shows the consequences of the system when the representatives of the authorities are controlled by large financial institutions through layers and complex so-called non-governmental organizations.

If political parties are funded by major economic institutions, it is clear whose interests these parties will represent. Citizens of Pridnestrovie should be within representative authorities which will help to increase transparency and therefore the effectiveness of the authorities. I would also like to draw attention to the fact that we are in urgent need of professionals in the parliament, and in various fields and sectors: health, education, economics, law and so on. We need those who already have significant experience and significant results.

It should be understood that the “inflation” of words are so high today that many have learned to talk, some talk even beautifully, but in fact nothing is often behind this other than trying to get to the authorities at any cost, including by mudslinging authorities. Therefore, those who go to the polls, use dirty tools, should not get to the authorities. If you go to the polls, you should, first of all, go there showing what you have already done. Secondly, you should have specific proposals on what you propose to do and how that will really affect the situation. And thirdly. You should have credibility among the people and be a man of your word, represent yourself but not some outfit for offshore organizations.

These elements are very important. On the one hand, they are plain and simple, but they must be the main elements when deciding who to vote for at the next election of representatives of authorities. We are tired of the situation when the election campaign begins, everyone starts distributing food rations, calendars, aren’t we? Unfortunately, I have to say that exalted deputies have remembered that the 2015th year is coming, that the Republic is 25 years. They have started to cover the roads. The point is that they are deputies, so, they violate the technology of production of construction works on the roads. Road builders have already resented. Now they repair roads, then they carry gifts, and then they finance some comrades, invite technologists. Anyone who is not a citizen of the Pridnestrovian Moldavian Republic, who will arrive on the territory of Pridnestrovie in order to influence the will of the citizens, there is a good article for them in our Criminal Code that can hold them here for three to five years. And it will be done. I have already given the appropriate instructions to law enforcement agencies to conduct activities to identify such persons. I think that we as the public authorities must ensure the normal atmosphere of the election campaign, and we will do it. Those who will be engaged in acts of provocation and try to attract attention through the use of really objective problems of the state will receive in accordance with the law a serious and imposing answer.