As a small and open economy, job-creation in Moldova depends on trade. The economy has become more open over the last 20 years, and the value of trade has quadrupled. However, Moldova has not been able to fully benefit from foreign trade opportunities, says the Moldova Trade Study report launched by the Word Bank Group office in Moldova. The report assesses Moldova’s foreign trade performance and offers policy recommendations to boost exports, IPN reports.
World Bank Country Manager for Moldova Alexander Kremer said that what this study really shows is how much Moldova’s export prospects depend upon reforms inside Moldova. “Stopping hassles at the border and cutting red tape for business are much more important for Moldova’s exports than international trade agreements,” he stated.
The main findings and recommendations of the Moldova Trade Study report are as follows: exports have been growing: the sum of exports plus imports expanded substantially, from US$1,250 million in 2000 to US$7,800 million in 2013. Diversification of markets and products accounted for much of export growth. Foreign direct investment (FDI), crucial to boost export competitiveness, declined after 2007, and remained at a disappointing 3.11 percent of GDP in 2013. Moldova's free economic zones were important in attracting FDI.
Structural business climate reforms are more likely to retain FDI and encourage investment and innovation than tax incentives. Corruption damages firms’ productivity. Deepening trade and investment integration is crucial for the country's long-term development prospects.
The DCFTA is a great opportunity: more because it should drive reforms inside Moldova than because it offers greatly improved access to EU markets. The agriculture and agro-food sector is an important driver of Moldova’s international trade, export competitiveness and poverty-reduction. Moldova’s agriculture sector has been performing rather unevenly as growth has been slow and highly variable, mainly due to the secto’'s vulnerability to the weather.
