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Business Profile
Economy: Moldova’s economy is dominated by agriculture, food processing and related industries which account for over half of total output. The land is very fertile: some 85 per cent is cultivated. The republic was the largest wine-growing region in the former Soviet Union and this is still a major source of revenue. It also grows fruit, vegetables, tobacco and grain, and produces dairy and meat products in large quantities. Other than food and drink processing, Moldova’s industrial sector is dominated by metals and machinery, textiles and footwear. The once thriving electronics industry has declined due to the dissolution and/or contraction of its major clients in the Russian space and defence sector. Under the Soviet system of economic planning, Moldova exported much of its output to other Soviet republics in exchange for raw materials and fuel products. The demise of the Soviet system triggered a major collapse which saw Moldovan economic output decline by 15 per cent annually during the early 1990s. This catastrophic decline has been arrested but, there are few signs of economic growth, and Moldova is now one of the poorest countries in an already impoverished region. In 1992, Moldova joined the IMF, World Bank and the European Bank for Reconstruction and Development (EBRD) as a ‘Country of Operation’. Some aid from the European Union has also been forthcoming in specific areas such as customs and border control but, in general, relations between the two are distant: several dozen other countries are already in the queue to join the EU.
After an uncertain start, a reform programme got under way in Moldova and by 1999 much of the economy had been privatised and deregulated. However, the IMF and World Bank then cut off financial support when the Government refused to sell off the key tobacco and wine industries. The following year brought a change in policy and in 2001, Moldova was able to open negotiations with the EBRD and World Bank over financing for the next phase of the country’s economic development. In May that year, Moldova also acquired membership of the World Trade Organization.
The national currency, the Leu, introduced in November 1993, has been reasonably stable, bar the knock-on effects of the 1998 Russian financial crisis. Russia remains Moldova’s largest trading partner, followed by the Ukraine, Romania, Germany and Belarus.
Commercial Information: The following organisation can offer advice: Chamber of Commerce and Industry of the Republic of Moldova, 28 Eminescu, 2012 Chisinau (tel: (2) 221 552; fax: (2) 241 453; e-mail: president@chamber.md; website: www.chamber.md); or The Moldova Stock Exchange, 73 Stefan cel Mare blvd, Room 352, Chisinau, MS 2001 (tel: (2) 277 594; fax: (2) 277 358; website: www.moldse.md).
Copyright © 2003 Columbus Publishing Ltd.
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