Moldova

The vineyard of Europe

Moldova was always known for its substantial wine-growing areas. After the country became independent in 1991, agricultural production remained an important source of income for local families and the economy. In recent years, economic growth picked up and sources of income became more diversified. However, Moldova is still Europe's poorest country. According to the World Bank, approximately one fifth of Moldova’s population lives below the poverty line, whereas the living conditions in the capital and the other regions, especially in rural areas, differ considerably. A third of the potential workforce emigrated to seek work abroad. Development is not least hampered by the unresolved status of Transnistria, where traditionally most of the country’s heavy industry was located. With a population of 600,000, this region to the east of the Dnister river broke away in 1992 and has since then been under Russian control. Deficits in governance and the rule of law, powerful oligarchic structures and a high level of corruption in the public and private sectors hamper Moldova’s further democratic and economic development. The difficult formation of a government after the parliamentary elections in February 2019 brought Moldova to the brink of a state crisis, but ultimately produced a new government which gave rise to great hopes. In June 2014 the Republic of Moldova has ratified a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU. This emphasizes the significance of closer cooperation with the EU and favors the future development of the country.

KfW Development Bank supports Moldova on behalf of the German Federal Government in the area of good governance.