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Working to Alleviate Poverty in MoldovaMoldova gained its independence in 1991. Since then, it has struggled to stand independently. Moldova has a difficult history of being stuck between Russia and Western Europe. Today, Moldova continues to be pulled between the two powerhouses for its loyalty and produce from its fertile soil. This rivalry has split the country in half with part of Moldova loyal to Russia and part of it looking toward a future with Europe. In the past, this rivalry has continued poverty in Moldova, but now it is using both sides to its advantage and growing its economy.

The Situation in Moldova

Because of Moldova’s previous alliance with Russia, many of Moldova’s citizens believe that they should trade exclusively with Russia. The rest of the population believes that the country should look toward the future and trade with European countries. Doina Grecu, a woman who has spent the majority of her life in Moldova, told The Borgen Project in an interview that these people have seen the prosperity of Europe and how their trade policies have benefited them, and so they believe that they should “jump on the bandwagon.” Not to mention, Russia has threatened Moldova not to trade with Europe. During her interview, Grecu recalled seeing a video of Russian smashing Moldovan apples because Moldova signed a trade deal with the EU.

Families used to be separated in order to find work, and technology was not advanced enough for them to stay connected across borders. Grecu recounts that two of her uncles moved to France and Italy respectively; her own father had to leave the country in order to find work. People had to move in order to support their families that stayed in Moldova. Grecu explained that back when technology was not as advanced as it is now and electricity was not very affordable or reliable, people would go for long periods of time without being able to contact their family members who were abroad. This caused large amounts of immigration in Moldova.

As an agricultural economy, Moldova has high prospects in the world market as more and more people are now seeing the value of organic produce. Farming is Moldova’s highest paying trade. Despite this, Moldova’s urban areas still have less poverty than the rural areas by five times.

Child Poverty in Moldova

Child poverty in developing countries is often depicted as an entirely separate issue. And that is because it is. As previously mentioned, adults can leave countries like Moldova and find work elsewhere, while children do not have that luxury. The children of Moldova are no different.

Grecu taught children English through the Access Microscholarship Program. She observed that some children were part of orphanages even though their parents were still alive. This was because their families were so poor and the grandparents were too old to take care of the children. Sometimes the children would stay at the orphanage on weekdays, and then they were able to go home on the weekends.

The Access Microscholarship Program has not only been implemented in Moldova but in 84 other countries as well. This two-year program has been operating for 17 years. It provides development in the English language for young teens. This program is sponsored by American Councils for International Education and the U.S. Embassy awards certificates to those who finish the program successfully.

Alleviating Poverty in Moldova

In more recent years, things have gotten better for the country of Moldova. Technology has allowed people to stay in touch and Moldova has better trade relations with the EU. As Grecu put it—it is surprising when someone knows where Moldova is in the world because so few people are taught or learn about it. We asked a class of students studying Russian (spoken in Moldova), “Do you believe that Moldova’s poverty situation has improved over the past 10 years?” Half of the respondents answered yes and the other half answered yes.

However, all the students concluded that more aid needs to be given to improve Moldova’s living standards. People’s perception of Moldova seems to accurately reflect Moldova’s situation. While there is still much room to improve poverty in Moldova, the country’s future looks bright.

– Moriah Thomas
Photo: Flickr

Poverty in Moldova
Moldova suffered an economic collapse after achieving independence in 1991. Poverty in Moldova has remained high for decades with its previously weak economy and the added burden of multiple global recessions. The country continues to face the same issues in 2020. Here is some information about the severe levels of poverty in Moldova.

An Unstable Population

The foundation of a nation’s economy relies heavily upon its people. In the case of Moldova, however, the unstable population has led to a highly volatile economy.

The official population of Moldova is 3.5 million. However, estimates determine that the true figure is much less due to a significant level of out-migration ​with people seeking work in other countries. The World Bank stated that this “puts pressure on the pension system and limits the available labor force and the country’s long-term competitiveness.” As a result, poverty in Moldova will likely continue to be an issue for the foreseeable future.

Decreased fertility rates are also contributing to the unstable population. The total fertility rate (TFR) at which a population replaces itself from one generation to the next is roughly 2.1 for most countries. However, as of 2020, Moldova’s rate was 1.3. As women have fewer children within Moldova, the overall population is contracting, leaving the increased share of elderly people with very few young people to care for them in the future.

Natural Disasters

Many regions of Moldova are at increased risk of earthquakes and flooding. This has a significant impact on the economy because over half the population lives in rural areas and more than 40% of the economy relies on industry and agriculture.

Many citizens are at risk of natural disasters. People in areas of higher risk of natural disasters also suffer from weaker economies as a result. The province at greatest risk of floods and earthquakes is Chisinau–the region with the greatest GDP. However, since the region is also at high risk for natural disasters, this inevitably leads to a more volatile economy that takes significant hits during flooding and earthquakes.

According to the World Bank, natural disasters impact up to 3% of the region’s GDP, leading to a potential loss of $66 million. These events can damage arable land, create food shortages that leave people hungry and cause people to suffer from injury or loss. Environmental challenges can significantly impact the lives of citizens and drag the most vulnerable peoples of Moldova into poverty.

Sanitation and Health Care

Currently, millions of Moldovans must choose between their paycheck and their health as 60% of the economy in Moldova is service-oriented. The current global economic crisis that began as a consequence of the COVID-19 pandemic will likely continue to impact Moldova significantly. According to the World Bank, it “will lead to a contraction of Moldova’s economy in 2020.” Assuming that the country can largely contain COVID-19 later in 2020, estimates determine that the nation could still suffer through an economic recession of 3.1% that could subsequently increase poverty in Moldova.

Corruption in the Government

Moldova became an independent republic in 1991 after the collapse of the Soviet Union. However, the new nation has massive corruption within the government. In 2015, a banking scandal that “led to public discontent over high levels of corruption and poor living standards for citizens” led to an upset in Moldova’s economy. This transgression included the embezzlement of $1 billion by government officials, accounting for around 12.5% of the country’s GDP.

Governmental instability has driven money away from programs to help alleviate the suffering of the poor and into​ the wallets of elected officials. As a result, poverty in Moldova continues without the proper economic resources necessary to combat it.

Why Hope Persists

Even in these unprecedented times, the many projects that work to improve education, entrepreneurship and welfare within the nation have given the Moldovan people a beacon of hope. Although the COVID-19 pandemic has impacted an estimated 1 billion students worldwide, young people in Moldova have been able to engage in home-based learning both online and offline.

The Moldova Education Reform Project is supporting the nation’s education system in order to cope with the current pandemic and prepare for its upcoming recovery. This governmental effort has ameliorated a reported nine schools and given them the technology necessary to enable students to continue learning remotely despite the current quarantine. A total of 160 schools in Moldova will benefit from the program by the end of 2020.

By building resilience for the world’s challenges, students in poverty in Moldova are preparing themselves for better and brighter futures. The government acted by implementing emergency measures. These should protect businesses from immediate bankruptcies after streams of a crippling demand shock, disrupted supply chains and a lockdown. These measures should also help prevent unnecessary shut-downs and layoffs by providing qualifying businesses with liquidity while supporting employee retention and improving services through e-governance reforms.

Through these programs, the government has protected many citizens from moving further into poverty. These measures should allow the economy to continue to grow after the recovery period is complete. Ultimately, when considering the current circumstances for Moldova, one sees both the adversities and the victories. As complex as the issue of poverty is, with proper projects, education and economic goals, poverty in Moldova should reduce.

– Daniela Canales
Photo: Flickr

After being occupied by the Soviet forces in 1940, the country of Moldova became independent approximately fifty years after the second world war. In 1992, Moldova was declared an independent republic. Even though the invasion took place over fifty decades ago, Moldova still suffers the consequences of the fall of the Soviet era today.

Out of all the Eurasian countries that were affected by the war, poverty-struck Moldova the hardest. The country was, in fact, in a better economic situation in 1991 than after its freedom. The now democratic country is one of the poorest on the European continent. Up to 34 percent of the population lives below the poverty rate.

Environmental issues are also affecting Moldova, thus leaving the country with unsuitable ground to cultivate on. The European country mostly relies on agriculture in order to create economic profit. But such activity contributes to a decline in the quality of land due to soil erosion.

The Polish government has taken a big step forward with the success of humanitarian aid to Moldova. With a contribution of PLN 1 million, or almost $300,000, the Polish government has helped the Moldovan population to lower the level of starvation during droughts and other environmental issues that greatly affect the agriculture sector.

These and many more related issues have increased the flow of humanitarian aid to Moldova. The independent humanitarian organization Help Moldova has been a pioneer in aiding the nation. Rebuilding hospitals, helping families living in poverty and providing medical attention to those in need are just some of the initiatives carried out by the organization.

Caritas Czech Republic is also one of the many NGOs assuring the success of humanitarian aid to Moldova. The organization has been helping Moldovan families for fifteen years. By providing job opportunities, agricultural machines to provide more profit and food and creating school opportunities for disadvantaged children, Caritas Czech Republic is leading Moldova into becoming a better country day by day.

While Moldova is in the process of rebuilding itself, it is still not part of the European Union. But help and humanitarian aid to Moldova from nonprofits and government organizations alike are building a better, more developed country. Moldova still has a long way to go to become a fully developed country in terms of economic and social aspects, but the success thus far has been and still is, undeniable.

– Paula Gibson

Photo: Flickr

Poverty in Moldova
Over the past decade, Moldova had remarkable progress in the form of economic growth, the reduction of poverty and greater shared prosperity. However, poverty in Moldova is at one of the highest rates in Europe.

The World Bank reports that Moldova’s economy had rapid growth over the past decade, with an average growth rate of 5% per year. In addition, the poverty rate dropped from 60% to 27% between 2000 and 2004 and reached 11.4% in 2014. While impressive, these data points fail to demonstrate the instability caused by the very factors that spawned this progress.

Economic growth was largely driven by an increase in private consumption. However, this does not necessarily signal that Moldova’s economic situation improved, as this growth is primarily funded by remittances. In 2014 remittances accounted for 26 percent of Moldova’s GDP and were received by more than 25% of households. The decline in employment from 55% in 2000 to 40% in 2014 further demonstrates that while Moldovans may have more money and are actively participating in the economy, the past decade’s growth was not spurred by internal progress.

Any steps taken to create such progress face significant obstacles due to spatial and cross-group inequalities as access to assets, services and economic opportunities varies greatly across the population. The lack of progress toward expanding economic opportunities within Moldova pushed many to leave the country. The lack of employment opportunities was particularly damaging to rural areas, where the slow-growing farming industry remains the primary sector. Limited access to markets and non-farm jobs fostered a system where residents of rural areas are persistently poorer.

Declining fertility and the increasing emigration of the young population left the state with a rapidly aging population and a shrinking workforce. This means that pensions, which were a significant generator of income growth over the past decade, are no longer a viable tool for lifting households from poverty.

Rural areas are home to most of the poorest 40% of Moldova’s population. Residents of these areas have significantly less education and typically have inadequate access to healthcare. Even when health services are physically accessible, many lack insurance and either refuse to pay for care or are driven further into poverty in Moldova by high out-of-pocket costs.

Many believe that the 2014 association agreement with the European Union, which opened up trade opportunities, will stimulate Moldova’s domestic economy in preparation for greater dependency on exports. However, this fails to account for the significance of Moldova’s small scale farming sector which, by design, does not have access to the same opportunities as industrial farms.

Recommendations for leveling these inequalities and avoiding economic stagnation include strengthening the domestic labor market, addressing corruption in the business environment and improving the government’s social assistance scheme. Perhaps most important is the advice of Alex Kremer, World Bank Country Manager for Moldova, who urges that “enhancing the livelihoods of small farmers is paramount” for Moldova to foster internal economic progress.

Given the persistent spatial inequalities in living conditions and the fact that agriculture accounts for such a large portion of employment, it is important to note that the causes of poverty in Moldova remain much the same as they were a decade ago. To eradicate them once and for all, Moldova must invest in its human capital by improving living conditions across the rural-urban divide and foster quality education and healthcare services.

Alena Zafonte

Photo: Flickr