Selling melons by the side of the road - Zaicana, Moldova.© Martin Roemers (Panos).
Moldova is the poorest country in Europe. Although poverty has reduced in cities in recent years, it has increased in small towns and rural areas where over 70% of population live. About 36% of Moldova’s GDP is formed from remittances (the highest ratio of remittances to GDP in the world).
Moldova is a young, predominantly rural nation of 4.3 million people (including Transnistria). It gained its independence from the Soviet Union in 1991. Having no experience of managing its own national affairs, the country lacked the political and economic structures to cope with the transition to independence and a market economy. A prolonged recession through the 1990’s made Moldova the poorest country in Europe. By 1999 over 70% of Moldovans were poor and over 60% extremely poor. Moldova’s social indicators were regarded as among the worst in the region. Official data of 2007 reveal that the level of absolute poverty went down to 25.8%, while that of extreme poverty constituted 2.8%.
Following the crisis in the early 1990s Moldova has registered strong growth in GDP in recent years (peaking at 7.5% in 2005). However, in 2006 a marked slowdown in growth was seen (drop to 4%) decreasing to 3% in 2007. The twin external shocks of the ban on Moldovan wine and agricultural exports to the Russian market and the doubling of the price paid for imported gas in 2006 and the severe drought of 2007 were the key causes of the economic slowdown.
DFID's bilateral programme in Moldova amounts to £4m annually until 2011 and is focused on providing support to the Government of Moldova in improving governance, promoting pro-poor growth and conflict resolution.
Total UK aid received in 2008/09 was £5.2m (Source: Statistics for International Development 2009)