With rich agricultural land and a temperate climate, the agriculture sector has been the most vital part of the Moldovan economy. Following a period of economic deterioration in the 1990s, Moldova has now stabilised itself, launching structural reforms that have stimulated growth.
Economy
Following disputes with Russia over energy prices that led the country to ban agricultural imports from Moldova, growth returned to more than six per cent in 2007- 08. The deteriorating global economic environment did not have any real impact on the economy in 2008 and growth was more than seven per cent but the further slowdown in the EU and Russia in 2009 is likely to hurt the economy. In March 2009, the European Bank for Reconstruction and Development (EBRD) revised the country's growth forecast for 2009 to 1.7 per cent, down from 4.1 per cent in its previous forecast in November 2008.
Investment Climate
Being a small country, Moldova appreciates the benefits of liberalised trade and investment, and wishes to promote the exports of its goods and services. The country has been a member of the World Trade Organisation (WTO) since 2001 and has signed free trade agreements with countries of the former Soviet Union.
The government has created an adequate legal base, including favourable tax treatment for both domestic and foreign investors. Under Moldovan law, foreign companies enjoy the same treatment as local companies. The government views investment as vital for sustainable economic growth and in attracting foreign direct investment (FDI), it is emphasising strategic investments that will allow the transfer of new technologies, know-how, efficient management and access to new foreign markets.
Agriculture
Agriculture remains a key sector of the national economy. Together with the food industry, the sector contributes over a third of GDP and is a considerable source of export revenue. It employs over 40 per cent of the working population.
Moldova's main resource is its climate and the rich black Chernobyl soil covering 75 per cent of the land, making it ideal for growing wine grapes, tobacco, sugar beet and for raising dairy cattle. Grains, vegetables and fruits are also important. The animal husbandry sector specialises in the breeding of livestock, pigs and poultry. The majority of production continues to be from state farms and co-operatives, although as the land reform programme progresses this is expected to change. Agro-industrial complexes are dominant in meat and dairy production. Pork is the main domestic protein source. Of total meat production, 25 per cent is exported.
There are around 150 wineries in Moldova and 170,000 hectares of vineyards. The winemaking industry has attracted foreign investment and is dependent upon markets in the CIS. The majority of annual sugar exports go to former Soviet republics (including 60,000 tonnes to Russia) and Romania (74,000 tonnes). Moldova is also a major tobacco producer, once accounting for 35 per cent of all tobacco production in the former Soviet Union.
UK Trading Relationship
In 2008, UK exports to Moldova increased by almost £10 million to reach more than £21 million. Over the same period the UK took goods worth £18 million from Moldova.
KEY FACTS
Official Name: Republic of Moldova
Capital: Chisinau
Area: 33,800 sq km
Population: 3.8m (UN, 2008)
Major languages: Moldovan, Russian
GDP (current): US$4.40bn (World Bank, 2007)
GDP growth: 3.0% (World Bank, 2007)
GNI per capita: US$1,260 (World Bank, 2007)
Inflation (consumer prices): 7.5% (2008)
Labour force: 1.327m (2008 est.)
Unemployment: 2.1% (2007 est.)
Monetary unit: 1 leu = 100 bani
Exports to UK: £18.46m (HMRC 2008)
Imports from UK: £21.09m (HMRC 2008)
Main Industries
Sugar, vegetable oil, food processing, agricultural machinery, foundry equipment, refrigerators and freezers, washing machines, hosiery, shoes, textiles.
Main Exports
Foodstuffs, textiles, machinery.
Main Imports
Mineral products and fuel, machinery and equipment, chemicals, textiles.
CONTACTS
UK Trade & Investment
Kingsgate House
66-74 Victoria Street
London SW1E 6SW
Tel: 020 7215 4734
Email: george.szpala@uktradeinvest.gov.uk
Web: www.uktradeinvest.gov.uk
British Embassy Chisinau
18 Nicolae Iorga Street
Chisinau MD-2012
Republic of Moldova
Tel: 00 373 22 22 59 02
Email: enquiries.chisinau@fco.gov.uk
Web: www.ukinmoldova.fco.gov.uk/en
Embassy of the Republic of Moldova
5 Dolphin Square
Edensor Road
Chiswick London W4 2ST
Tel: 020 8995 6818
Email: mail@moldovanembassy.org.uk
Web: www.moldovanembassy.org.uk
