11.2009 – “Romania – Moldova Economic Relations” by Independent Analitic Centre Expert Grop and SAR

Two NGOs, the Independent Analysis Center Expert‐Grup (Chisinau, Republic of Moldova)  and the Romanian Academic Society (SAR, Bucharest) have joined efforts in order to perform an X-ray of the economic relations between the Republic of Moldova and Romania, and to contribute to the improvement of the relationship between the two countries.

Throughout the past decade, economic relations between Romania and the Republic of Moldova have evolved on an upward trend. The volume of commercial trade has grown from $160 million in 1997 to $690 million in 2008. Contrary to popular expectations on the 2007 annulment of the free exchange agreement between the two countries, Romania’s accession into the EU seems to have had a clear positive effect on its trade relations with the Republic of Moldova.

Moldova’s exports to Romania have increased by 36% in 2007, with Romania ranking second in a chart of markets that sell Moldova-made products. Imports from Romania grew by 29% that same year. In 2008, Romania actually became the most important exporter for the Republic of Moldova, thus surpassing the Russian Federation.

Unlike trade relations, investment relations between the two countries are far more poorly represented. After a lengthy period of stagnation, however, investment processes seem to have slightly perked up starting with 2006‐2007.

Despite the overall positive trend, the trade relation potential that the two countries share isn’t being capitalized on to its fullest extent. Several factors came into play in both countries, in order to prevent these relations from becoming more intense: political tension, a lack of transparency in privatization policies, difficulties in ensuring normal railway and cross-border traffic, the poor quality of the governance act.

Thus far, it has been impossible to set up an efficient transfer mechanism into the Republic of Moldova that would relay Romania’s positive practices and relevant experience in the European integration process. In 2009, political tensions between the two countries peaked, as Moldova introduced visas for Romanian citizens on April 8 and the Romanian ambassador to Chisinau was declared persona non‐grata.

Both measures were denounced by the new rulers who took over Chisinau after the early elections of July 2009. Bearing in mind Romania’s strategic importance, as geographically, historically and culturally it is the closest EU-member state to the Republic of Moldova, as well as a natural ally in supporting Chisinau’s European ambitions, it is necessary to identify and eliminate the factors that prevent the countries from fully capitalizing on their bilateral economic collaboration potential. These aspects are explored by the current report.

The authors wished to evaluate the entire spectrum of economic relations between Romania and the Republic of Moldova and to identify the main stereotypes and obstacles that prevent these relations to develop. To this end, the existent statistic data, the trade and the investment relations between the two countries have been analyzed and numerous agents on the Moldovan-Romanian relation scene have been interviewed.

An attempt was made to investigate Moldovan-Romanian companies according to a pre-established structure, but the number of those interviews turned out lower than the one initially planned. This aspect in itself is rather telling of the status quo. Most of the companies we called upon for interviews turned us down, especially in Moldova. Some of them were scared by the worsening of political relations which followed the April events in Chisinau, while others simply regarded our project as ‘political’ and did not wish to provide on their expectations and projects in the context of bilateral relations. These attitudes define the stereotypes that affect the economic relations between the two countries.

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