| Overview |
Moldova
remains a very poor country 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 all of
its supplies of oil, coal, and natural gas, largely 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 all 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 5.3% 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. |
| Industries |
food processing,
agricultural machinery, foundry equipment, refrigerators and
freezers, washing machines, hosiery, sugar, vegetable oil,
shoes, textiles |
