The impact of social, political and economic changes on the effectiveness of non-refundable financial assistance

Abstract

The non-reimbursable financial assistance plays an indispensable role as a catalyst for the national economy, in a globalized, interdependent world and it is continuously subject to innovative, social and geopolitical processes. Economists have established the direct connection between external assistance and economic growth, proving that this is, in fact, a short-term catalyst. The areas of intervention of the external assistance are in correlation with the existing problems at national level and in accordance with the policies and priorities of the state. Since its independence, the Republic of Moldova has received non-reimbursable external assistance, which also conditions the interdependent economic growth. The support provided by the development partners during the pandemic period has helped reduce the negative effects, take prompt action and identify the problem-solving mechanisms as well as it has given significant support in the post-pandemic economic recovery. The implementation of non-reimbursable financial assistance programs and projects is conditioned by several issues: lack of planning and communication between stakeholders, poor management, lack of own contribution, and bureaucratic processes. Their solution would be found in developing effective mechanisms and processes to properly implement external financial assistance. JEL: F35.