The Moldovan Economy

Not sure of the source on this, but evidently it's English, with the use of the word "lorry" being the first indication. It came to me through our country director.

Migrants return to build Moldovan economy

By Stefan Wagstyl

Published: October 13 2005 03:00 | Last updated: October 13 2005 03:00

Three years ago Larisa and Pavel Cheptene were migrant workers from Moldova working in Italy. She picked strawberries, he drove a lorry.

Today, Mrs Cheptene runs the Mirage hair dressing salon in her home town of Straseni and Mr Cheptene is planning to open a cafe next door. The $50,000 (ВЈ41,500) they saved in Italy, with Mrs Cheptene working for one year and Mr Cheptene for three, went a long way to helping them to set up in business in Moldova, Europe's poorest country.

"For the moment the business is running well," says the 39-year-old Mrs Cheptene, who employs five people. "But sometimes you feel you want to drop everything and go away again."

The Cheptenes returned home in 2003 partly because their two daughters fell ill in Italy and partly because, after a decade of collapse and stagnation, the Moldovan economy was growing again and

creating opportunities for small businesses.

Gross domestic product has grown between 6.1 and 7.2 per cent each of the past four years, helped by investments from Moldovans and foreigners alike.

Among Moldovans, a key role is played by the trickle of migrant workers returning home, especially in the formation of enterprises in impoverished towns such as Straseni in central Moldova. These businesses are creating jobs allowing even the poorest to benefit from the country's growth.

Mrs Cheptene says: "Life has got better in the city in the past five years. The place looks different. New buildings. A supermarket. Roads are repaired."

It is a picture that is borne out by a World Bank study published yesterday that finds a marked decline in poverty in the ex-communist countries of eastern Europe and central Asia. Even though conditions remain difficult for many of the region's 470m people, the numbers surviving below the poverty level of $2.15 a day dropped from 102m to 61m in 1998-2003.

The bank argues that "the single most important factor behind the significant decline in poverty" is the high economic growth in the former Soviet Union, including Moldova, a largely rural country wedged between Romania and Ukraine.

However, it warns that the prospects for further rapid poverty reduction are "less propitious" because much of the gain of the past few years was due to a one-off recovery from the economic collapse that followed the end of the Soviet Union.

Further cuts in poverty depend on reducing unemployment, which remains high even in some of the region's more advanced states, such as Poland. The report recommends policies that can create jobs away from wealthy capitals - in poorer provincial cities, towns and villages.

In Moldova the need for job creation is particularly acute because so many of its 4.5m people work abroad - in central and western Europe or in Russia. The government estimates that 500,000-600,000 have left. This is about 10 per cent of the total population and 20-30 per cent of the working population. Mrs Cheptene says that in Straseni, 20km from the capital Chisinau, half the able-bodied work in foreign

countries, although not everybody is away all the time.

The Moldovan government, assisted by western aid organisations, is trying to encourage migrants to return home, partly to reduce the risk of exploitation many workers face in foreign countries and partly to bring back people who have skills and savings.

Olga Poalelungi, director-general of the government's migration department, admits that among her greatest challenges is winning migrants' trust in Moldova's stability and the effectiveness of public services. "People are scared, for example, to reveal how much money they have earned in foreign countries."

Mrs Cheptene agrees. "People don't come back because it's easier to work abroad and make money with no headaches. The bureaucracy holds everything back. It took us one year just to get the papers for the

extension we built to our apartment." But she does have hope for the future. "I have started now and I must carry on. In three years I want to employ 12-15 people and pay them better."