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Credit Access in MoldovaThe Republic of Moldova, a small, post-Soviet landlocked country bordering Ukraine to the north and Romania to the south, currently grapples with issues of economic freedom. According to the Index of Economic Freedom, Moldova ranks as the 97th freest economy in the world with Russia at 98th and Burkina Faso at 96th. With 180 countries ranked, the Heritage Foundation categorizes Moldova as a mostly unfree economy. Credit access in Moldova suffers along with its corrupt economic and political culture, affecting the most at-risk individuals in the population.

A Shift Away From the Agricultural Sector

Farming and agriculture once made up the bulk of Moldova’s domestic economy with agriculture accounting for 42 percent of the Moldovan GPD in 2000, according to a multi-national case study including USAID. The CIA World Factbook cites that in 2017, Moldovan agriculture made up only 17.7 percent of the GDP while Services took up 62 percent. In just 19 years, the Moldovan economy has experienced a rapid change. Moldova is transferring from an agrarian economy into a service-based economy, but during this transition, farmers are being left behind and their credit access in Moldova is dismal.

Farmers face the unique challenge of navigating a banking system that is new for their country. Before the year 2000, the Moldovan state owned all agrarian land. A USAID report explains how 800,000 private farmers became landowners and suddenly needed additional financial resources, yet struggled to acquire them since the amounts requested were only a few hundred dollars each–unattractive investments for local banks. The banks refused to work with the burgeoning independent farmer sector, making credit access impossible for many who needed small loans to fund and improve their businesses.

No Access to Investment

Along with the difficulties of learning a new market system, Moldovan farmers also encounter immense corruption in both government and business. The World Bank reports in its Country Partnership Framework (CPF) that “a massive bank fraud in 2013-14 enabled by political interference…led to depreciation of the currency, inflation, financial destabilization and loss of investor confidence.” Those who have no credit access in Moldova also have lower chances of receiving investment from outside the country because the risk of investing in a corrupt country carries too much risk for international investors.

The World Bank CPF explains that “limited access, inefficiency and poor quality have contributed to social exclusion, persistent poverty and vulnerability to shocks, especially in rural areas.” Rural farmers cannot rely on either the state or the banks to offer much-needed investment, and therefore are left without a critical resource essential to operating a thriving business.

The World Bank’s Moldovan Engagement

The World Bank currently sees transparency, accountability and corruption as the most pressing issues to the Moldovan economy. In an effort to stabilize the region and bring economic prosperity, the World Bank has ten active projects in Moldova. The organization cites three objectives: “strengthening the rule of law and accountability, improving access and quality of public services and enhancing the quality and relevance of education and training for job-relevant skills”. The objectives of The World Bank CPF, while broad, would allow for Moldovan farmers to either gain the credit access needed to operate their farms or expand into other sectors of the economy.

Three projects from The World Bank in particular help to solve the issue of credit access in Moldova. To help rural community members that wish to expand their horizons past farming, the World Bank has instituted the Moldova Education Reform Project, which gives out result-based specific loans to certain sectors of Moldovan education to improve the efficiency of the education sector and improve “the ministry of education’s capacity to monitor the reform”.

To help squash corruption and inefficiency, the World Bank also created the Tax Administration Modernization Project which reviews the Moldovan tax code to ensure an equal and comprehensive tax policy that supports the development of small businesses.

In an effort to help all Moldovans, the World Bank’s Moldova Economic Development Policy Operation Project (DPO) helps “to support the government of Moldova in reducing fiscal risks and leveling of the playing field for private sector development [by] strengthening oversight [and supporting] private sector development in access to business opportunities and resources”.

Lessons Learned

While credit access in Moldova is a complex issue, institutions like the World Bank that specialize in economic reform and recovery are getting involved in the country. Supporting institutions such as the World Bank helps the World’s poor help themselves by improving local economies and the governmental and business practices around them.

– Spencer Julian
Photo: Flickr

Poverty in Moldova

If ever there were a time capsule left in the world, it would be Moldova. Pictures of Moldovans in traditional clothes, locals driving horse-drawn carriages and a country dedicated to agriculture and the production of wine are among the first photos that come up in an image search. Though online photographs of Moldova are charming, poverty in Moldova has been a definitive characteristic of the nation since its independence from the Soviet Union in 1991. What was once a wealthy state became the poorest country in Europe after Soviet liberation.

The Statistics
According to The World Bank, Moldova has experienced economic growth and a significant poverty reduction since the start of the millennium.

Poverty in Moldova has dropped from 30 percent in 2006 to 9.6 percent in 2015. The percentage of those living on less than $1.90 a day has dropped from 39.1 percent in 1999 to zero. At its peak, the poverty rate for those living on $5 a day was at 90.4 percent in the year 2000. It has since dropped to 16.3 percent.

Remittance and pensions are responsible for lifting 51.6 percent of families out of poverty, and pensions are sustaining the aging population.

These two factors are acknowledged as the main drivers of economic growth. In fact, the Republic of Moldova is one of the few European countries that recognizes remittances as a main influencer of the economy, accounting for 26 percent of gross domestic product in 2014.

Challenges Halting Further Progress
Unfortunately, exporting labor leads to the issue of weak labor markets. Labor and demand are some of the challenges that plague Moldova and inhibit its economic progress, keeping poverty a constant.

Dependence on remittance weakens the industrial market and keeps the Moldovan economy in a cycle that increases the trade deficit and proves remittance to be untenable.

Despite an increase in those attaining higher education, younger generations are having a difficult time finding specialized occupations that are not farm-based. Post-secondary education is not a guarantee of a better job, as the business industry is not creating long-lasting positions and many firms do not typically subsist themselves.

Moving Forward
Improving the industrial state of affairs in the nation will continue to decrease poverty in Moldova.

Alex Kremer, the Country Manager for Moldova, told the World Bank that “urbanization, connectivity and off-farm jobs are the best escape routes from poverty”.

The United Nations Development Programme has innovative business development in place for local sustainable economic growth. This project is designed to facilitative innovative business development for new and existing businesses to generate internal economic development and growth in the job market.

So far, the program has already granted 83 private sector companies innovation awards and produced a campaign focused on the employability of Moldovan youth.

The initiative is scheduled to end in 2017, but with movements like this, the future of poverty in Moldova will surely improve.

Sloan Bousselaire

Photo: Flickr

Education in MoldovaEducation in Moldova includes five tiers. Students enter school at the age of six and graduate at 17, and the school year runs from September to July, similarly to American school systems. Introduction to the educational system begins with primary school until age 10. Secondary education is split into lower and upper secondary cycles. Lower secondary, grades five to nine, is called gymnasium. Gymnasium graduates must pass an entrance exam to qualify for Lyceum before admittance.

Upper secondary—or lyceum—includes grades 10 through 12. Graduating from lyceum qualifies students to receive their “Scoala Medie de Cultră general,” or general certificate of completion. Students may also be awarded a Diploma de Bacalaureat if they opt to take and pass the national baccalaureate exam.

Higher education is offered by both private and public universities, academies and institutes. Getting a degree from any of these can take four to five years depending on the chosen upper secondary education. Undergraduate, Masters and Doctoral studies are also available.

The Moldovan Constitution guarantees that state public education be free and all citizens have the right of access to education. Higher education in Moldova is more or less free. Tuition fees for students living off campus is an average of 5000 Moldovan Lei,or $280.

The Organisation for Economic Co-operation and Development’s Programme for International Student Assessment (PISA) occurs every three years in order to test the effectiveness of education in Moldova, with a two-hour-long exam on math, science and reading for 15-year old students. The program is a global effort that engages over half a million students from 72 countries tin order to evaluate education systems worldwide.

PISA encourages the development of facilitative learning environments and improved educational systems for low and middle-income countries, and aims for inclusive learning for all students. PISA is designed to assess students’ ability to apply what they have learned in school to real-life situations. The organization’s main goal is to measure a country’s effectiveness in preparing students for success in higher education and a professional career.

In 2009, Moldova scored below average in all areas of study according to PISA test results. However, in 2015, Moldovan students had a 15-point increase in the sciences, a 28-point increase in reading and a 23-point increase in math. Equity rankings between boys and girls and social backgrounds are about equal.

In 2013, the Moldovan government devised and instituted pivotal changes that may be responsible for improved scores: increased funding and academic accountability. Increased financing for public educational institutions has undoubtedly improved conditions.

The implementation of the Education Management Information system (EMIS) which includes information about a school’s ranking and performance marks, has motivated schools to improve their quality of education. This also allows parents to make informed decisions when choosing a school for their child.

The students’ PISA scores offer a hopeful insight into education in Moldova. Although it may not be the best, it is improving.

Sloan Bousselaire

Photo: Flickr

Most Threatening Diseases in Moldova
The former Soviet republic of Moldova is the poorest country in Europe. The average Moldovan lives to be almost 70 years of age. This life expectancy rate is an average of three years longer than considerably wealthier countries in the Commonwealth Independent States (CIS). Despite this longevity, Moldovans have the second highest rate of mortality in all of Europe, losing 980.094 out of 100,000 citizens annually. The most threatening diseases in Moldova that contribute to the high mortality rate include cardiovascular disease, cancer and cirrhosis.

Noncommunicable Diseases
The most threatening diseases in Moldova are noncommunicable. According to the World Health Organization (WHO), cancer, circulatory and digestive system diseases, injuries and poisoning accounted for 73 percent of all deaths in 2012.

WHO declared tobacco and alcohol consumption to be the main contributors to the most threatening diseases in Moldova. Though cirrhosis and other chronic liver diseases are not in the top three leading causes of death in the nation, these diseases still claim almost 210 men and women per 100,000 Moldovans a year and remain substantial overall causes of death.

Infectious Diseases
The incidence of tuberculosis has increased by 83 percent since 2013. Diarrhea, lower respiratory and other common infectious diseases also account for major infectious diseases.

Syphilis and gonorrhea collectively affect an average of about 90 people per 100,000 Moldovans. In 2009, the country faced a syphilis epidemic, during which 139 citizens per 100,000 were infected. Though the reported cases of Moldovans infected with syphilis have decreased, it is still more than double the average of the CIS.

The rate of HIV is double the average frequency in the CIS, affecting nearly 20 of 100,000 Moldovans. AIDS affects 6.6 of 100,000 individuals and is above the CIS average.

Government Action for Disease Prevention
In February 2007, the Law on the Prevention and Control of HIV/AIDS outlines a legal system that aims to educate Moldovan citizens on HIV/AIDS prevention. It works to ensure basic human rights and assuage discrimination for those affected. The degree is also designed to promote medical, social and psychological resources for those living with the disease.

The National Coordination Council is devoted to the enhancement of epidemiological studies and strategies to better control diseases like tuberculosis. The council aims to enhance government policies concerning the control of HIV/AIDS, sexually transmitted infections and tuberculosis by means of efficient dialogue between government and nongovernmental organizations.

Through these national programs, the most threatening diseases in Moldova will become less of an issue as prevention and care becomes more widespread.

Sloan Bousselaire

Photo: Flickr

How to Help People in MoldovaFinding out how to help people in Moldova does not necessarily require a singular approach. But whatever the method, it must be efficient, as a press release from The World Bank highlighted it as “one of the poorest countries in Europe.” Over 5 percent of the country’s people endure extreme impoverishment, and its administration “pledges to take out of poverty over 150,000 men and women” by the year 2020.

The United States AID explorer page marks the country as lower-middle income. For 2015, U.S. disbursements to the nation reached over $136 million, with its top sector focusing on agriculture. Furthermore, 11 percent of these U.S. funds took the form of military aid, while the rest fell under the economic umbrella.

The United Nations Development Programme (UNDP) released an analysis with potential growth changes needed to help Moldovans have a better quality of life. It broke down the needs into categories with the percentage of growth for each:

  • More decent jobs (89 percent)
  • Higher and fair pensions and social benefits (64 percent)
  • A reliable justice system (36 percent)
  • Access to high quality health services (36 percent)
  • Promotion of a healthy lifestyle (24 percent)
  • Investment in infrastructure (22 percent)
  • Transparent governance (20-21 percent)

UNDP mentioned that with U.N. support, the National Bureau of Statistics would consult with those “from vulnerable groups” in the spring of this year to allow better evaluations of “the complexity of poverty phenomenon and its dimensions, given that economic indicators…are not always in line with those experiences and perceptions of people…”.

The World Bank named some of the highlights from the Moldova Poverty Assessment 2016:

Pensions
Pros: Increased income
Cons: There are better methods that benefit disadvantaged groups

Labor markets
Pros: “Contributed to the progress”
Cons: This progress occurred “mostly through productivity increases rather than job creation”

Because a significant part of confronting Moldova’s poverty revolves around the workforce, it is paramount to support legislation that addresses this. This may seem like a daunting task for ordinary people outside of the country to fulfill. But for those questioning how to help people in Moldova, supporting important legislation like the Economic Growth and Development Act—which strives for “market-based economic growth in developing countries”—can be one of the most effective methods in making headway.

Maleeha Syed

Photo: Flickr

Causes of Poverty in MoldovaMoldova is the poorest country in Europe. Its gross domestic product per capita stands at only $5,200. Around 20 percent of Moldova’s 3.5 million people are poor. There are several causes of poverty in Moldova. Here are a few:

Limited agricultural investment
Poverty is more common among farming families. The country’s history can partly explain why this is.

When Moldova gained independence from the Soviet Union in 1991, the government divided a lot of agricultural land into plots too small to be commercially viable. The small size of the plots–most under 2.5 hectares–meant farmers had to depend on manual labor instead of large, advanced machinery and technology. This led to inefficiencies and poor yields compared to the land’s potential.

Rural Moldovans continue to lack access to new technology, agricultural support services and financial services, which shackles them to a life of subsistence farming. With extension services, they could better contribute to agriculture’s share of Moldova’s GDP, which is around 14 percent.

Trade restrictions
A lack of agricultural investment is not the only cause of poverty in Moldova. Sometimes, families, businesses and entrepreneurs have goods, but they do not have reliable buyers.

Countries that Moldova would usually trade with have imposed strict sanctions or all-out bans on products from the small nation. Russia has repeatedly rejected Moldovan goods, such as wine, fruit and vegetables, by stating they do not meet its high quality standards.

This closed market took a toll on the Moldovan economy, which in turn trickles down to negatively affect citizens. Before the embargo in 2014, 90 percent of Moldova’s apples went to Russia. Now they are sent to other countries that buy them at lower prices.

Government corruption 
Corrupt oligarchs and politicians rob citizens of money. In 2015, $1 billion — or about one-eighth of the country’s GDP — was stolen from the country’s three largest banks. Around 40 people, including a former prime minister, either helped or benefited from the massive theft.

The capital city’s mayor, the transportation minister, the agriculture minister, the deputy economic minister, the environmental minister and other public officials face corruption or embezzlement accusations. The many officials facing these charges do not appear to have the general public’s best interest in mind.

Corruption in Moldova makes it difficult for people to succeed in business. Around 30 percent of all companies reported that public authorities requested bribes at least once per year to pass inspections, get permits, obtain utilities access or secure an operating license. The cost of electricity in the country is nearly double the price in the rest of the region, according to the GAN Business Anti-Corruption Portal. These oppressive practices stifle Moldova’s business environment and rank among the causes of poverty in Moldova.

Weak social systems
UNICEF reports that Moldova has a social protection system that comprises 15 benefits and services. But just one of these benefits is for the poor. Furthermore, money earmarked for the poor does not always end up in the right hands. A state report found that 17 percent of social assistance is used inefficiently and goes to families with high incomes.

Adding pressure to government financial resources is an aging population. Low wages, limited educational opportunities and poor job prospects push young Moldovans to leave their home country. Moreover, the birth rate is too low to replenish the population that is lost.

These factors create a disproportionate number of elderly people in the population. The high proportion of the country’s elderly is putting pressure on the country’s pension system.

The government is considering increasing the retirement age to lessen its financial burden, but there are not a lot of jobs for people to get. The labor participation rate was a mere 42 percent in 2016.

Causes of poverty in Moldova include limited agricultural investments, trade restrictions, government corruption and a weak social system. But, the government of Moldova is committed to helping alleviate poverty.

The government works with International Fund for Agricultural Development (IFAD) to create microfinance opportunities for farmers, which supports agricultural investment and can increase farmers’ returns. IFAD has also invested in agro-processing to ensure farmers prepare their goods for domestic and international markets.

Moldova is also making progress in regards to corruption. Parliament passed a new law on prosecution in 2016. It helps in the fight against corruption by strengthening prosecutor independence and doubling salaries, so prosecutors are less prone to accept bribes.

More evidence of the government’s goal to reduce poverty is its “Moldova 2020” National Development Strategy. The strategy details how reforming the pension system and developing the labor market will contribute to poverty rate reduction. 

As the above examples demonstrate, leaders have set their sights on fixing the underlying causes of poverty in Moldova.

Kristen Reesor

Photo: Flickr

Human Rights in The Republic of Moldova

The Republic of Moldova recently celebrated 26 years of independence from Russian and Romanian control on August 27, 2017.

The country gained independence in 1991 and developed its own political traditions in the early ’90s resulting in today’s parliamentary democracy. A parliamentary supermajority had the power to elect the president until the transferral of that power to Moldovan citizens on March 4, 2016. This achievement offers its citizens a strong sense of control and power in working with the government.

The Moldovan Constitution, created in 1994, highlights the importance of its people. Such covenants as “civic peace, democracy, human dignity [and] fundamental human rights and freedoms” can be found in the document. Rights including the right to universality, equality, education, protection against inhumane treatment, freedom of speech, free access to justice and health protection are awarded to all Moldovans.

Human rights violations

The 2016 Country Reports on Human Rights Practices in Moldova, conceded that police brutality, human trafficking, discrimination against various marginalized groups and inhumane conditions in mental hospitals and prisons are among some significant issues taking place despite the republic’s zero-tolerance policies for such abuses.

Efforts to combat these human rights violations are in place. Such laws include the 2012 Law on Enforcement of Equality which legally ensures anti-discrimination for Moldovan inhabitants. The 2016 adoption of law No. 71 advocates for gender equality by requiring that at least 40 percent of each political party’s candidates are women, providing the option of paid paternity leave and prohibiting sexist language and images in advertising.

Though the country is consistently ranked as one of the poorest — and in some reports, the poorest — countries in Europe, human rights in the Republic of Moldova are redolent of some of the richest countries in the world and are continuing to make progress.

Organizations working to improve human rights

Several organizations are taking action against human rights violations including the Moldova Institute for Human Rights (MIHR), the Promo-LEX Association and Civic Solidarity. These associations are substantial in contesting civil injustices and providing free legal aid to those in need.

There is room for legal development for human rights in the Republic of Moldova. Improving the conditions for the disabled, mental institutions and prisons would be a good start. Nonetheless, the republic continues to make strides in evolving its human rights laws and enforcing them.

Sloan Bousselaire

Photo: Flickr

Poverty in MoldovaMoldova is a small country located south of Ukraine and north of Romania. Approximately 34 percent of the population lives below the poverty line. Moldova is considered to be one of poorest countries in Europe, and its poverty rate is often linked to the collapse of the Soviet Union as well as an absence of work opportunities.

Moldova used to be a relatively affluent country; in fact, it was one of the richest states in the former Soviet Union. However, once it became an independent country – when the Soviet Union collapsed in 1991 – economic problems were initiated. Moldova is still recovering from the collapse and it is struggling with making the transition to a market economy. Moldova was not successful in creating a sustainable foundation, either economically or politically. The country is vulnerable because of inequalities in education, access to services and economic – as well as climatic – shocks.

Jobs in Moldova are scarce. Between 300,000 and 800,000 citizens have illegally left the country to work abroad. This tends to be the only viable option because work is poorly paid. There is such little job creation in Moldova that family members working abroad often send remittances home. These remittances help keep the national economy from collapsing. The labor market needs to be strengthened effectively for any progress to be made in Moldova.

The agricultural sector makes up 30 percent of the labor force, with another 24 percent of people involved in low-intensity agricultural work. There is a dependence on subsistence agriculture, which is not a viable way of farming for an entire country. Focusing on improving the agricultural sector is important, because improvements will affect the majority of the country as well as the job market.

There are many areas needing repair in Moldova. Poverty there is associated with the collapse of the Soviet Union, as well as the inability to cultivate a successful job market. Focusing on the political and economic foundation will eventually bring people out of poverty. Surely improvements can be made, as Moldova is a relatively new country with substantial room for growth.

Lucy Voegeli

Photo: Flickr

Moldova Poverty Rate
One might imagine that because Moldova is part of Europe, it would be prosperous. However, Eastern Europe is far different from Western Europe; Eastern Europe is much more poor, with Moldova’s poverty rate among the highest.

The reason for this has to do with the collapse of the Soviet Union. When the Soviet Union fell, the people of what is now Moldova came together to create their own government. However, this proposition was riddled with challenges:

  • Previously, no government ruled the land, which meant that the leaders needed to set up the government first, with all its bureaucratic departments, which also made the writing of Moldova’s constitution difficult.
  • Because of the former Soviet Union, it was difficult for the people to find leaders that were not corrupt.
  • Finally, the change from a communist to a capitalist market caused chaos, affecting the production of produce. This gave the country a difficult start, and officials did not have the time (or the resources) to map out Moldova’s poverty rate until 2003. Since then, Moldova’s poverty rate rose to an all-time high of about 30 percent in 2006.

The World Bank Group, based in Washington, DC, stands at the forefront of reducing this number. With a multitude of different projects, the group gives out loans to developing countries around the world. This has helped tremendously, not only with Moldova’s GDP but also with the Moldova’s poverty rate. Eight years after the all-time high of 30 percent of people living under the poverty line, the number had reduced to only 11.4 percent in 2014.

However, the country still has a long way to go before poverty becomes an issue of the past. Just in 2014, the National Bank uncovered a corruption scandal; the equivalent of $1 billion (12.5 percent of the country’s GDP) was stolen, causing an economic recession.

Although the country recovered within two years, the scandal, as well as recent political events, indicates Moldova’s state of security. This will need to be addressed if the country will continue to grow economically.

Michal Burgunder

Photo: Pixabay

Diseases in Moldova
The Republic of Moldova is a parliamentary republic that has implemented an ambitious economic reform program. Agriculture dominates the economy, and the country depends on imports for energy needs. Moldova remains the poorest country in the World Health Organization’s (WHO) European region, although it has made significant progress in economic growth. It had an estimated per capita gross national income of $1810 USD in 2010, according to the World Bank. Life expectancy estimates are two to five years higher than the other countries in the Commonwealth of Independent States (CIS). Most deaths are a result of diseases in Moldova. Both communicable and noncommunicable diseases have been increasing steadily since the country’s independence in 1991.

The most common causes of death in the country are circulatory system diseases, followed by cancer and digestive system diseases. Most of the deaths caused by diseases in Moldova are related to heavy alcohol and tobacco use, although chronic liver disease and cirrhosis rates have decreased over the last five years.

Key challenges in the fight against diseases in Moldova also include HIV/AIDS and tuberculosis. The prevalence of tuberculosis has been rising since 1990 and has more than doubled to date, reaching 182 per 100,000 people. The most dramatic rate increase is in children.

The deadliest risk factors for diseases in Moldova are dietary risks, high systolic blood pressure and high body mass index. Lesser risks include tobacco smoke, alcohol and drug use and high fasting plasma glucose.

While Moldova has quite a bit of work to do, being number one in death rates due to liver diseases, number five in prostatic hypertrophy and number seven in both coronary heart disease and congenital anomalies, it is on the road to better lives for its citizens. It is pushing to reduce poverty, with many Millennium Development Goals being developed and maintained. The country is also working to develop agricultural sustainability and many different ways of importing medicine and products that will help with rates of diseases in Moldova.

Rilee Pickle

Photo: Flickr