The Republic of Moldova is one of the smallest countries in the Commonwealth of Independent States (CIS), which was established by 11 former Soviet republics in 1991. After the collapse of the Soviet Union, and the country’s declaration of independence in 1991, the Republic of Moldova plummeted from middle-income status to become the poorest country in Europe. According to the National Bureau of Statistics the Moldovan population, excluding Transnistria, was 3 559 500 inhabitants on the 1st of January 2013. The total population of Moldova, including Transnistria, would therefore be approximately 4 million.
Farmers, and others engaged in rural enterprises, saw their incomes shrink as the country struggled to adapt to a market-oriented economy. Living conditions deteriorated rapidly in rural areas. At the same time, the rural population increased as people lost urban jobs and moved away from large towns and cities. More than 60 per cent of Moldovans now live in rural areas, where they depend on agriculture for their livelihoods. The country has returned to a substantially agricultural economy.
Landless people, small and medium-scale farmers, entrepreneurs and people engaged in agroprocessing in rural areas and small towns throughout the country are affected by poverty. And this includes people who are underemployed and those who receive low wages. The heads of almost 70 per cent of all poor households are employed, yet their wages are too low to enable their households to rise above poverty. Those engaged in agriculture are particularly vulnerable.
Rural Moldovans continue to face poverty because of the absence of on- and off-farm opportunities for income generation and employment, and because they lack access to new technologies, agricultural support services, financial services and markets. Lack of access to rural financial services remains one of the main constraints for most agricultural and rural enterprises. For rural entrepreneurs and farmers, access to financing and improved infrastructure is crucial to promoting sustainable enterprise development and farm income growth.
Agriculture provides employment for about 43 per cent of the labor force. The sector exports processed products, including wine and spirits, and fruits and vegetables. Presently the agricultural sector is suffering from a trade embargo imposed by the Russian Federation on Moldovan wines, spirits and agricultural products.
About one third of the economically active population has migrated to other countries in search of better opportunities, and their ranks include many educated and skilled young people. Remittances from workers abroad fuel the economy. They have increased continuously since 1993, and are now estimated to contribute about 25 to 30 per cent of GDP. Remittances are one of the main factors driving the country’s strong macroeconomic growth over recent years. But dependence on remittances exposes the country to the risk that if remittance levels begin to fall, falling incomes will result in a sharp increase in poverty nationwide. By the way, the remittances formed an important part of this economic vigor, though poverty remained widespread, persistent and severe in rural areas. But the recent and ongoing global economic crisis has severely affected the country’s economy. Remittances have declined sharply, and unemployment has risen dramatically with the influx of returning migrants. Rural people already living in poverty have been particularly hard hit by the economic downturn.