Hello, Marin. As I was preparing for the interview, I searched for the revenue figures of enterprises in the Free Economic Zone of Balti. I was assuming it wasn't too low, but the reality surprised me. Last year it exceeded 8 billion lei. And that is considering that the total revenues of all IT companies registered in the IT park - have not yet reached 6 billion lei. In addition, the IT industry has overtaken the wine industry. Therefore, does the FEZ you run produce more than the entire IT sector in Moldova or more than the entire wine industry in Moldova? Is that correct?

Yes. And if we judge by the first half of 2021, when the total production of all companies in the area exceeded 5 billion lei, the total revenue could exceed 10 billion lei this year as well.

May we compliment you on this growth?

You may, but I wouldn't want you to paint the picture only in bright colors. Indeed, sales volume is increasing, but we have not attracted any major investment for five years. Moldova needs new big players.

How could it not? What about Draexlmaier in Cahul? More than 1,200 jobs were created over there, having opened in 2018, just three years ago. By the way, why Cahul if it's the Free Economic Zone Balti?

Draexlmaier is not a new investor. Actually, it is the company that initiated the FEZ Balti. Hence, it is just an increase in investment from an existing investor, which is, of course, a positive development. As far as Cahul is concerned, it is not the only location of the FEZ Bălți outside the city of Bălți. Currently, we have 19 sub-areas, located in 11 districts, both in the north and south of the country. Why has our development taken this path? I won't go too deep into the history, I will just say that it was because of the impossibility to register new free economic zones, however, the existing legislation did not prevent us from expanding the zones, which continued to attract foreign investors.

Then who was the last big foreign investor?

Sumitomo. They opened their factory in 2016. Since then no major investments have been made. Negotiations with several new investors have only now resumed, which we hope will culminate in new major investments and the creation of companies with more jobs.

We will come back to this issue. For now, I want to understand why the FEZ Balti, being the "youngest" of the seven zones in Moldova, has developed so quickly and has considerably outperformed all the other zones taken together in terms of the volume of production of residents?

I don't think I'm revealing a secret when I say that business is built on relationships. We're used to this happening in small businesses, where the business owner is often also the business manager. However, large businesses, given the whole range of issues, are also sensitive to human relationships and interpersonal trust.

If you pay attention, the "backbone" of the Free Economic Zone Balti is made up of German companies; Sumitomo, for example, has a considerable amount of German capital. By chance, in 2008, while studying in Germany, I learned about an opportunity to do an internship at the German Parliament. There was one such internship, with students from 23 countries, but not from Moldova. We all like to remember our student years; I could tell many stories, but in short, I found out that one of the deputies was from Moldova, so I sent him a letter about my wish to do an internship in the Bundestag - and so it happened... It was the former President of Germany, Horst Koeler, who comes from a family of Basarabian Germans born in Rîșcani. So, I was assigned to Manfred GRUND, the deputy responsible for the Republic of Moldova. I started working as an assistant of the deputy, taking part in meetings, in the work of the faction, in field visits, even helping to organize a conference of representatives of the Moldovan opposition at that time in the German Parliament.

But you didn't stay in Germany?

No, from the very beginning I intended to return home to Moldova. It's just that my return coincided with another, as it turned out later, an unsuccessful attempt by Draexlmaier to create a new Free Economic Zone in Balti, where they intended to open their first factory in Moldova. They already knew me due to my work in Germany, so I was invited to get involved and, after six months of sorting out legal and organizational issues, on 23 March 2010, the Free Economic Zone Balti was officially inaugurated. But even then, to conclude with business relations, my knowledge of German and my sincere love for German culture played an important role in the negotiations with the new investors.

The economic benefits of investment do not exclude the need to build business relationships based on trust and mutual understanding. This is why things have worked out this way. Thanks to Draexlmaier, which has invested over a hundred million dollars in Moldova over 10 years, a little later Gebauer came to Moldova with another seven hundred jobs and investments of $40 million. Thanks to Gebauer, they were able to make a name for themselves in the eyes of their German partners - Sumitomo, who eventually came to Moldova, creating almost 4 thousand jobs here and investing about 40 million dollars. And one of the factors that made these results possible was precisely the relationships with German investors. They have consistently felt our support and involvement, and this has had a significant impact on their decisions to set up business in Moldova.

However, was cheap labor also a decisive factor?

Without any doubt. But in the last decade, this factor has ceased to be dominant. Moreover, both Moldova and foreign investors now face a labor shortage, especially in terms of mid-level human resources with sufficient technical expertise for working with modern equipment.

How do you think you can respond to this challenge? By importing the workforce?

This is already happening, to a greater or lesser extent. But my view is that we need to focus more on creating a system for training specialists in Moldova. And we are playing our part in supporting the educational sphere. With the help of our investors, a modern engineering college was built and opened in Straseni. The curriculum was prepared by German specialists. More than 70 students are being trained and more than 20 companies have signed contracts with the college to train specialists. The students then follow a practical training period in Germany, improving not only their professional skills but also their German language skills. Of course, this is not enough. We are currently working on new projects in engineering education and training.

Do you think it will be possible to reverse the labor shortage trend?

This is a state-level task. Take a look at the figures. In 2010, 162,000 people continued their education in Moldova after graduating from school; in 2020, 100,500 people continued their education, and 35,000 children are going to first grade.  Even if they all stay in the country and all continue their education after school, there will still be fewer students than there are now. Therefore, if we want to stay attractive to foreign investors who intend to locate their production in Moldova, we need to think seriously about retraining staff and training specialists capable of working qualitatively in modern, automated industry. 

Let us look at the positive side. You said that negotiations with investors have been resumed and that there are chances for new investments in Moldova?

Yes. I can't discuss all the negotiations, but if we talk about the number of potential investors, there are more than ten. Of what I can mention, two Magna factories are about to be put into operation, for processing and freezing fruit and vegetables, which will then be exported to Switzerland. By the way, through them, it was possible to reach another Swiss company, which is engaged in the high-tech production of coffee machines. We're basically talking about an investment of €15 million and the creation of a production facility for 500 jobs. At the same time, we have efficient cooperation with the Invest Moldova Agency. We are constantly taking part together in exhibitions and bilateral forums that allow us to present Moldova as a strategic investment destination. The events we have carried out together have had a major impact in moving Moldova from the shortlist to a selected investment destination.