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Chișinău’s close relations with the EU and the pro-European governments have had a negative impact on the economy of the Republic of Moldova, the Russian propaganda writes, referring to the price hikes, soaring poverty and unemployment. In fact, while the Republic of Moldova remains one of the poorest European nations, the economy and living standards have gone up in the last decade.
NEWS: “In recent years, the life of Moldovans did not get any better, on the contrary. Consumer prices, the unemployment and inflation rates have gone up, while the number of emigrants is on the rise. Living standards have plummeted, the country’s own production has shrunk, under pressure from EU competitiveness.
In 2014, against the backdrop of the armed conflict in southeastern Ukraine and Crimea’s reunification with Russia, the EU “gifted” to Moldova the liberalized visa regime, which only accelerated the West-bound exodus of Moldova’s working population”.
NARRATIVES: 1. The pro-European governments in Chișinău have impoverished the population. 2 Developing closer relations with the European Union is not in the best interest of Moldovan citizens and economy, determining an increase in prices and the bankruptcy of local producers.
BACKGROUND: In June 2022, the Republic of Moldova became a EU candidate country, whereas last week the European Parliament has called on the Commission to start negotiation accession talks. With a few exceptions, Moldova has been ruled by purportedly pro-European governments starting 2009. However, these administrations were affected by corruption scandals and conflicts between ruling coalition partners. In 2020, the pro-European candidate Maia Sandu defeated the acting pro-Russian president Igor Dodon in the presidential election, and her party, PAS – Action and Solidarity Party, secured a landslide win in the parliamentary election.
The new government announced a far-reaching reform of the judiciary and the economy. Yet from the very outset, the government had to deal with a soaring inflation rate caused by the pandemic, and later with widespread security, economic and energy crises triggered by Russia’s invasion of Ukraine.
The government is accusing magistrates as well as a group of oligarchs and politicians of blocking sectorial reforms, whereas the overlapping crises have sparked social unrest. Nevertheless, Maia Sandu and her administration enjoy what many pundits have described as an “unprecedented” level of confidence from Brussels and other Western partners who support the Republic of Moldova financially.
Maia Sandu has called a meeting of the Great National Assembly on May 21 in support of the country’s European track.
PURPOSE: To fuel public disgruntlement with the pro-European government and bolster Eurosceptic sentiments in Moldova.
WHY THE NARRATIVES ARE FALSE: Inflation in the Republic of Moldova has increased every year starting 1991, both when the country was led by pro-Russian left-wing governments, as well as under right-wing governments. Admittedly, in 2022 the Republic of Moldova reported a 30% inflation rate against the backdrop of the war in neighboring Ukraine, which seriously impacted Moldovan economy. Russian energy imports became more expensive and their volume shrunk, while access to the very important Ukrainian market was strongly disrupted. At the same time, Ukraine’s rail system could no longer be used for the transit of goods the same as before.
According to the National Statistics Office, the biggest inflation rate was reported in the Republic of Moldova in the 1992-1993 period, right after the start of the war in Transnistria (which Russia was a part of), ranging between 1,800 – 1,900%. In 1999, when the economic crisis broke out in Russia, at a time when Moldova’s economy was closely connected to Russia’s, the annual inflation rate exceeded 40%. Statistics also indicate that the annual unemployment rate stood at around 7-8% in the early 2000s, when the country was ruled by the Communist Party, whereas in recent years it stood at 3-4%. At any rate, the unemployment rate in the Republic of Moldova should not be indicative of prosperity or economic performance. The rate is lower, partly because a large part of the labor force has relocated abroad, partly also due to the fact that many Moldovans are involved in undeclared forms of work. It is unclear what the author meant when he referred to the plummeting living standards. Statistics show that in 2022 the average revenues of Moldovan citizens were five times higher compared to 2006. Admittedly, these figures do not take into account the inflation rate and the exchange rate, but when compared to data referring to the consumption of food products, they suggest Moldovans’ living standards are not as bleak, and they actually consumer healthier food. In that respect, meat consumption per capita grew by 50% in 2021 compared to 2006, the consumption of fish and related products also went up by 75%, dairy products by nearly 30%, while in 2021 Moldovans consumed twice as many fruit and vegetables compared to 2006. At the opposite end, the consumption of potatoes and bakery products went down.
Statistics further show that the absolute poverty index dropped from 29.5% in 2014 (the oldest available records) to 24.5% in 2021.
The volume of agricultural production has undergone constant variations in the last 30 years, most likely due to weather conditions rather than competition from EU markets. Industry as a whole reported a steady increase starting 2000. In 2022, Moldova’s industry grew by approximately 45% compared to 2010. Over 2014 (when the Free Trade Association Agreement with the EU came into force) - 2021, Moldovan imports from the EU single market grew by approximately 600 million USD, a 20% increase, while exports grew by 700 million USD, tantamount to a 45% increase. During the interval, the negative trade balance went down by approximately 100 million USD, which means Moldovan producers and the economy as a whole had a lot to gain.
The biggest waves of Moldovan emigrants were reported in the early 2000s. There are no official figures as to their exact number, but the liberalized visa regime allows Moldovans to work in EU and Schengen only based on the additional bilateral agreements. The Republic of Moldova secured a liberalized visa regime on April 28, 2014, shortly after ratifying the EU Association Agreement and having fulfilled a number of prerequisites.
GRAIN OF TRUTH: The Republic of Moldova is considered one of Europe’s poorest countries, although poverty and living standards have been recurrent issues ever since Moldova proclaimed its independence.
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