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Moldova flag

REPUBLIC OF MOLDOVA

Formerly part of Romania, Moldova was incorporated into the Soviet Union at the close of World War II. Although independent from the USSR since 1991, Russian forces have remained on Moldovan territory east of the Dniester River supporting the Slavic majority population, mostly Ukrainians and Russians, who have proclaimed a "Transnistria" republic. The poorest nation in Europe, Moldova became the first former Soviet state to elect a Communist as its president in 2001.

LOCATION

Eastern Europe, northeast of Romania. slightly larger than Maryland

POPULATION

4,446,455 (July 2004 est.) Moldovan/Romanian 64.5%, Ukrainian 13.8%, Russian 13%, Jewish 1.5%, Bulgarian 2%, Gagauz and other 5.2% (1989 est.)
note: internal disputes with ethnic Slavs in the Transnistrian region. Eastern Orthodox 98%, Jewish 1.5%, Baptist and other 0.5% (2000)

NATURAL RESOURCES

Lignite, phosphorites, gypsum, arable land, limestone

NATURAL CHALLENGES

Landslides (57 cases in 1998) heavy use of agricultural chemicals, including banned pesticides such as DDT, has contaminated soil and groundwater; extensive soil erosion from poor farming methods.

ECONOMICS

Moldova remains the poorest country in Europe despite recent progress from its small economic base. It enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, wine, and tobacco. Moldova must import almost all of its energy supplies from Russia. Energy shortages contributed to sharp production declines after the breakup of the Soviet Union in 1991. As part of an ambitious reform effort, Moldova introduced a convertible currency, freed prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and freed interest rates. The government entered into agreements with the World Bank and the IMF to promote growth and reduce poverty. The economy returned to positive growth, of 2.1% in 2000, 6.1% in 2001, 7.2% in 2002, and 6.3% in 2003. Further reforms will come slowly because of strong political forces backing government controls. The economy remains vulnerable to higher fuel prices, poor agricultural weather, and the skepticism of foreign investors.

Debt - external:
$1.515 billion (2003)

Economic aid - recipient:
$100 million (2000)

Revenues: $474.8 million
Expenditures: $443.4 million, including capital expenditures of NA (2003 est.)

INDUSTRIES

Food processing, agricultural machinery, foundry equipment, refrigerators and freezers, washing machines, hosiery, sugar, vegetable oil, shoes, textiles

Internet hosts:     
11,984 (2003)

Internet users:     
150,000 (2002)

CONFLICTS

Difficulties with the Transnistria region complicate controlling border crossing and customs regimes with Ukraine, despite concordance on 2003 delimitation and customs protocols and OSCE assistance

OTHER CONSIDERATIONS

Limited cultivation of opium poppy and cannabis, mostly for CIS consumption; transshipment point for illicit drugs from Southwest Asia via Central Asia to Russia, Western Europe, and possibly the US; widespread crime and underground economic activity. ##

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(Images and data: US CIA February 2005)