The economic system of Transnistria is ‘fractured’, being based on several very large companies, while the small and medium-sized companies are very weak. The denouncement of the Association Agreement with the EU, signed and ratified by Moldova, will gradually lead to the economic isolation of the region. Such conclusions were reached by authors of the study “Regional economic magazine: Transnistrian region” that is produced by the think tank “Expert-Grup”, IPN reports.
Expert-Grup executive director Adrian Lupusor, who is a co-author of the study, told a news conference that the Transnistrian administration maintains artificially the value of the Transnistrian ruble, while their foreign exchange reserves fell up to eight times below the admissible limit.
Adrian Lupusor said that in order to survive, the Transnistrian region needs export markets. If the Association Agreement is denounced, the trade preferences will be removed in 2016 and this will seriously affect the region’s foreign trade as the EU is one of the main foreign partners of Transnistria. The region’s economic problems are hidden through the financial support coming from Russia. This assistance amounts to US$500-600 million a year.
“Expert-Grup” program director Alexandru Fala, co-author of the study, said the economic growth rate in the region is diminishing. As on the right bank of the Nistru, the region’s gross product depends on remittances sent by Transnistrians working abroad. The remittances represent about 30% of the GDP. Industry, which is an important pillar in the country’s development, cannot cope with the quality requirements.
Economist Iurie Morcotylo, co-author of the study, said the labor market in Transnistria witnesses great structural imbalances. Though the local administration does not admit it, the employment rate in the region is 33%, as against 39% on the right bank of the Nistru.
The authors of the study say the Transnistrian administration should pragmatically think about the region’s economic future and should accept to cooperate with the EU through the Association Agreement as the local economic system, which is excessively dependent on Russian assistance, can fall apart if Russia stops supporting the region.
