Moldova’s poverty: Outsiders aren’t helping

Date: 15/02/03

Europe's failed state

THE country is in a pickle. With only 4.4m people, its market is too small to lure foreign investors. It is landlocked, with rotten roads and dismal transport connections. Half the people live off subsistence farming but those who do grow surplus food cannot sell much of it. Forget tourism. Of all the former communist states of Europe, Moldova has fared worst in its first decade of freedom - and is now the poorest, in terms of income per person, behind even Albania. The average wage edged up slightly last year, to $70 a month.

Trade, not aid, would help Moldova most. Only a fifth of its exports reach the European Union. But for the EU's farm protection, say the Moldovans, they might be able to sell 70% of their stuff there. The EU blocks the import of the only products Moldova could compete in - wine, fruit and vegetables - while undercutting it in the Russian market with subsidised products of its own. So the EU, absurdly, is increasing aid to Moldova while denying it access to the markets that would do most to improve the lives of its rural poor.

To survive, Moldovans have left the country in droves. A good tenth of the labour force (some say a fifth) now works abroad, mostly illegally in the EU. Western Union, an American money-express service, disbursed $200m or so from these workers through its branches in Moldova last year; that money helped to keep the economy afloat. Almost the only rich Moldovans are those who smuggle their compatriots into the EU for a hefty price and then take a slice of their wages.

A radical idea, floated at a recent conference on Moldova in Switzerland, was for the EU to run parts of the country's administration - the finance ministry, for instance - itself. Odd as it may sound, ordinary Moldovans might approve. Many have lost all faith in their own politicians. Desperation and nostalgia drove them last year to elect unreformed and unapologetic communists back to power. They cannot sink much lower.