Book Review: Moldova: Poverty Assessment

Moldova:  Poverty Assessment, by the World Bank

Spoiler Alert:  This book was written in the 1990’s and Moldova is still an economic basketcase more than twenty years later.  To be sure, Moldova is less poor than it was before, but this particular book discusses some of the structural changes that were recommended for Moldova’s economy and one can still see the need for structural reforms to increase growth and reduce poverty and give some chance of hope and progress for children from poor families as that is still missing in Moldova today.  What went wrong?  That is a subject that would require much more extensive writing, but the political corruption, internal division, powerful vested interests that resisted change, Russian pressure and a lack of economic independence, and weak administrative capacity are all problems that this book discusses as being issues in the early independent Moldovan Republic and they remain problems for contemporary Moldova a generation later.  This sense of frustration and a lack of forward progress likely has sapped a great deal of the native well of optimism that exists in a nation like Moldova, where there is even a question as to whether they ought to be an independent nation at all given their cultural and linguistic ties to neighboring Romania.

This book is a short one at less than 100 pages.  It begins with an abstract, currency equivalents between the $ and lei, and an executive summary for those who cannot be bothered to read the whole short book.  After that there are three chapters.  The first chapter of the book discusses Moldova’s intense relative and absolute poverty and its problems in making the transition from a command to market economy over the course of the 1980’s (1), including the nature of the poor in children and families with children and in unemployed young workers and some vulnerable elderly people.  After that the author discusses the relationship of prices and incomes with poverty, the overall labor dynamics that discouraged the outright laying off of workers while keeping them in a state of permanent unpaid leave (2) and in the informal economy that sprang up around temporary work, migration, and smuggling.  After that the author discusses the role of the state in seeking to alleviate poverty through a re-targeting of social welfare away from politically important sectors to more vulnerable ones, and in the importance of education in creating opportunities for poorer Moldovans (3), after which there are references.

One thing that is sure is that the nation of Moldova was in a grim state when this book was written.  Over the course of the decade of the 1990’s, only one year, 1997, saw any economic growth whatsoever at an anemic 1.7%.  During 1992 and 1994, there were declines of around 30% each of those years in economic growth as Moldova sought to change from a command economy to a market economy without making reforms to its state-run collective farms.  Wealthy Moldovans of the late 1990’s made about $1000 a year, which was enough money to put them in the top 20% of the country and in their elite as far as consumption was concerned.  Nowadays, the per capita income of Moldovans in purchasing power is still less than $10,000, but things have gotten at least a little better.  It is difficult to imagine that the Moldovan government and administrative elite has the wherewithal to do more for their people in the absence of unity and in the inability of the nation to find markets for its agricultural products or a way out of corruption and disunion.  It is easy to be empathetic to the country and to wish their nation and its people a better fate, even if it is hard to see how that could happen.

About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
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