Poverty in Moldova

Moldova is still considered the one of the poorest countries in Europe even with substantial progress being made.[1] According to the UN Development Program report from 2016, 9.6% of the population was living in absolute poverty[2] and the World Bank reports that 0.2% and 0.1% of the population live at $1.90 a day in 2016 and 2017 respectively.[3] Furthermore, the percentage of the population that was living below the national poverty line was 30.2 in 2006 and 9.6 in 2015.[4] In 2012, Moldova received 0.004 as its Multidimensional poverty index (MPI).[5]

Causes

A major concern of the state is that a lot of specialized labor is migrating out of the country. Due to the low number of opportunities for post-secondary graduates in sectors aside from farming, many are looking for employment outside the country. By some estimates, a quarter of the population live and work abroad, 11th highest in the world.[6] Although many send remittances back home, several studies show that international remittances can contribute little to economic development and only alleviate extreme poverty and help raise the standard of living for remittance-receiving household in the short and medium run.[7][8]

There are additional factors that contribute to poverty in Moldova:

  • Lack of large-scale industrialization.
  • Huge population boom between 1920s until the mid 1980s.
  • Rural over-population led to lower bargaining power of labour.
  • Unproductive agriculture due to small farm size and low foodgrain yields.
  • Subsequent food insecurity.
  • Economic collapse during the transition to market economy.
  • The large share of agriculture sector in the GDP.
  • Trade barriers with neighbouring Ukraine.
  • Errors in social policy.
  • Lack of good educational infrastructure meant it could not bypass traditional industrialization and launch into the knowledge economy revolution like India or Turkey.
  • For the same reason as above, lack of white collar workforce that could seek work in more prosperous countries and send back remittances, as happened in the case of Hungary, Poland, and Estonia.[9]

Rural and urban poverty

The majority of the population that is employed in the agricultural sector are contract employees. In 2014, the average monthly salary for these employees is MDL 2773.9 which is 33.5% lower than the national average. Rural workers from agricultural sectors are more impacted by poverty risk than workers from non-agricultural sectors. About a quarter (25.5%) of households with incomes from agricultural work and 6.8% of households with non-agricultural incomes are subject to poverty risks. Therefore, increases in employment in agriculture in rural areas alone cannot solve the issue with poverty in villages.[2]

Absolute poverty rate (%)[2]
2006 2009 2015
Rural 34.1 36.3 14.5
Urban 24.8 12.6 3.1
Total 30.2 26.3 9.6

Child poverty

Child poverty is one of the most important problems in Moldova. Children living in rural areas have an extremely high risk of poverty especially if the family has three or more children. Children in poor households have a high risk of educational underachievement and a lacking access to the healthcare services.

References
  1. "Moldova country profile". 2019-06-21. Retrieved 2019-08-11.
  2. "NATIONAL HUMAN DEVELOPMENT REPORT 2015/2016 REPUBLIC OF MOLDOVA" (PDF). National Human Development Report 2016: Moldova. United Nations Development Programme. 2017. p. 42. Retrieved August 11, 2019.
  3. "Poverty & Equity Data Portal". povertydata.worldbank.org. Retrieved 2019-08-11.
  4. "Poverty headcount ratio at national poverty lines (% of population) | Data". data.worldbank.org. Retrieved 2019-08-11.
  5. "| Human Development Reports". hdr.undp.org. Retrieved 2019-08-11.
  6. "Making the most of emigration | UNDP in Moldova". UNDP. Retrieved 2019-08-11.
  7. Ito, Katsuya (2017). "Remittances and the Dutch Disease: Evidence from the Republic of Moldova". International Economic Journal. 31 (3): 451–471.
  8. International Organisation for Migration. 2012. Extended Migration Profile of The Republic of Moldova. 2012. Chisinau: IOM Mission to Moldova
  9. The Republic of Moldova National Human Development Report - 2006. pp. 58-59
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