"Moldova's economy is in a deep hole" - BusinessWeek

In its latest issue, BusinessWeek criticizes Moldova for corruption, lack of freedom and economic mis-management

CHISINAU (Tiraspol Times) - The latest issue of U.S. publication BusinessWeek shines the spotlight on Moldova and its record-setting dependency on illegal immigrant cash. In an article entitled "Moldova - Hooked on Remittances" the magazine reveals that Moldova now has to rely on its gast-arbeiter remittances in order to survive.

" - Since independence from the Soviet Union in 1991, Moldova rarely gets mentioned without the accompanying phrases 'failed state,' 'Europe's poorest country,' or 'the only post-Soviet nation with a Communist Party president'," writes Adam Cardais, a former editor at The Prague Post who is now a business reporter based in Berlin.

" - Now there's a fourth — 'the world's most remittance-dependent economy.' According to the World Bank's Migration and Remittances Factbook for 2008, 36.2 percent of Moldova's GDP in 2007 came from money sent home by emigrants."

More economic freedom in Transdniestria

Poor management is listed as a root cause of the vulnerability of the Moldovan economy and its crucial dependence on remittances. And, according to BusinessWeek, the government has also neglected developing civil society by, for instance, allowing independent media.

" - Economic output plummeted 60 percent between 1991 and 1999," says the article, adding that "today, Moldova's economy is arguably the weakest in Europe."

According to statistics published by a United States government agency, nearly 30 percent of Moldovans are impoverished. In Moldova itself, several experts put the number at twice that. In many parts of the country, residents are forced to sell their kidneys and other body parts to human organ traffickers as the only way to survive. This is not the case in Transdniestria, however, which has governed itself independently since 1990 - one year before Moldova got independence - and which has a different ethnic and historical background than Moldova. Today, it has a freer business climate and GDP, while still low, is at least higher than Moldova.

Despite a Moldovan-instigated economic blockade against Transdniestria in 2006, the 'de facto' independent country has managed to grow its economy and is today able to successfully exist on its own without dependency on foreign aid.

This is not the case in Moldova, where "high levels of corruption and poor infrastructure repels investors" according to BusinessWeek's latest analysis. In its conclusion it states that: "Clearly, Moldova's economy is in a deep hole. Corruption, infrastructure, labor legislation, an over-dependence on agriculture and remittances—these are all problem areas."

Authoritarian regime

Is there hope for Moldova? Not according to BusinessWeek, whose article sounds a pessimistic note:

" - Many observers argue, however, that the current regime is too authoritarian to pursue the meaningful free market, democratic reforms necessary for a legitimate shot at EU accession, which, though Brussels has said it's willing to increase cooperation with Moldova, remains a distant prospect. These skeptics point to the government's inaction on corruption—Moldova ranks 111 of 179 countries on Transparency International's Corruption Perception Index 2007—and its renationalization of industry to support their argument."

Worldwide, Moldova is now the country that is most dependent on money sent back from abroad. Young wage-earners continue to emigrate, according to both the World Bank and BusinessWeek.

With a circulation of 986,000, BusinessWeek is the largest business magazine in the United States, followed by smaller rivals Forbes and Fortune. It is published by McGraw-Hill.

In a related article published Wednesday, Forbes Magazine reports that Moldova had been relatively prosperous (as part fo the Soviet Union), but since the fall of the Berlin wall, per-capita income has fallen to only $880 per year. It also notes that Moldova "lacks a distinct culture and any semblance of national pride." (With information from BusinessWeek, Forbes)

See also:
» Moldova leads the world in immigrant cash remittances
» Foreign investors flee Moldova over lack of democracy, constitutional protection
» Moldova falling apart as corruption, poverty force half the country to leave

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