Although the social and economic situation in Moldova has improved in recent years, widespread poverty remains a problem.

Difficult independence

The current problems in the Republic of Moldova began with the collapse of the Soviet Union, when the rather small Moldovan economy was abruptly cut off from its traditional, primarily Russian sales market. The effective secession of the Russian-speaking region Transnistria from the Republic of Moldova in 1992, where most of Moldovan industry was located, has further weakened Moldova's economy and lead to political instability. Since gaining independence in 1991, the formerly prosperous Soviet republic thus declined to become one of the poorest countries in Europe.

The most important employment sector in the country is agriculture which potential is not yet fully exploited. For lack of income opportunities, over a million people have left Moldova, who make a major contribution to Moldova's gross national product through remittances.

Through rural and regional development measures, administrative reforms and improvements in the economic framework, the Moldovan government seeks to reduce poverty. The wide-ranging Economic Stabilisation and Recovery Programme 2009-2011 aims at mitigating the impacts of the world economic crisis on Moldova and advancing on the long-term goals regarding sustainable socio-economic development.

United against poverty

Austria supports the Republic of Moldova and gears its cooperation with the country to the strategy of the EU Action Plan under the Neighbourhood Policy. Above all, the Austrian Development Cooperation (ADC) seeks to contribute to reducing poverty and creating new opportunities in rural areas. The Republic of Moldova has been an ADC priority country since 2004. Austrian activities there concentrate on water infrastructure and management, economic development and employment promotion through vocational training.