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Republic of Moldova country vineyards

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Moldova is the second-smallest republic among the Soviet successor states, after Armenia, and has sometimes been known by its Russian and Latin name, Moldavia. The majority population, though, have always used the name Moldova, even under the Soviets. Perhaps the least known of the states to emerge from the Soviet federation in 1991, the Moldovan republic today comprises some 33,700 square kilometers, making it about a third the size of Indiana or Portugal. It is landlocked between Romania and Ukraine; however, in 1999 a border treaty with Ukraine recognized Moldova’s access to the Danube (but only a few hundred meters of river frontage). The country consists of two broad regions: to the west, Bessarabia, the area between the Prut and Dnestr Rivers, to the east, Transnistria, the thin strip of land beyond the Dnestr that has effectively functioned as an autonomous state since a separatist conflict in 1991 and 1992. The arid southern steppeland of Bessarabia is known as the Bugeac, or Budjak. In 1989, the republic’s population was reported on the Soviet census as 4,335,360, but because of out-migration and a falling growth rate, the population was an estimated 4.32 million in 1997—about that of Norway.1 Moldova is the least urbanized of all the Soviet successor states outside Central Asia and has the highest population density of all the republics. According to the 1989 census, still the most reliable figures available, the majority Romanian-speaking population accounted for 64.5 percent of the total, followed by Ukrainians (13.8 percent), Russians (13.0 percent), Gagauz Turks (3.5 percent), Bulgarians (2.0 percent), and other smaller minorities. About 83 percent of the population lives in Bessarabia and 17 percent in Transnistria. Moldovans form the largest single ethnic group in both regions, about 67 percent in Bessarabia and 40 percent in Transnistria. Over 70 percent of all Russians and Ukrainians in Moldova live west of the Dnestr River, in Bessarabia.

Throughout the 1990s, the country experienced a fall in the birth rate, a uniformly high level of infant and maternal mortality, a further increase in the general mortality rate, and a decline in the natural population growth rate. The mortality rate rose from 9.7 per 1,000 in 1990 to 11.9 in 1997. Infant mortality likewise rose from 19.0 to 20.0, while the birth rate fell from 17.7 to 11.9 over the same period. Life expectancy at birth declined, sliding to 62.9 years for men and 70.4 years for women in 1996.

The economy suffered from many of the problems common to most post-Soviet states. Agriculture, which employs about 40 percent of the population, suffered from periodic droughts, continuing problems with transportation, and the disruption of export markets to the other post-Soviet countries. Overall output fell steadily, standing at less than 40 percent of the 1990 value by the end of the decade, a decline far more dramatic than in some other republics. The average monthly salary for employees in the state sector was only 437 Moldovan lei (about $90) in mid-1998, a sum that covered less than 60 percent of the estimated monthly consumer budget. Huge wage arrears meant that employees often went without salaries for months at a time.

In macroeconomic terms, though, Moldova proved initially far more successful than its neighbors. Annual inflation in 1997 was only 12 percent, compared to 20 percent in Ukraine, 55 percent in Belarus, and 100 percent in Romania. The Moldovan leu—which is not connected to the Romanian currency of the same name—was introduced in 1993 at 3.85 lei/dollar and fell to only around 4.7 lei/dollar by late 1998, making it one of the most stable currencies in the region. The tight monetary policy of the National Bank, however, came at the cost of continual draw-downs on hard currency reserves. With the economy hard hit by the Russian financial crisis, in late 1998 the bank decided to halt the policy of propping up the leu, and the currency slid precipitously, reaching over 11 lei/dollar by mid-1999.


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