What is Moldova? Strong essence in a small bottle

The European Political Community (EPC) Summit, hosted by Moldova on 1 June, is a chance for this country to show progress at home and economic development, writes Elena Derjanschi.

Elena Derjanschi is a Moldovan independent freelance journalist based in Chișinău.

Today, Moldova is one of the countries most directly affected by the Russian war in Ukraine.

But throughout its short democratic history, Moldova underwent several political and economic pressures, driven by extensive Russian destabilisation attempts and exposure to malicious narratives. Past crises include two Russian bans on Moldovan wine imports in 2006 and 2013.

Moldova has been well-known, throughout history, for its winemakers and well-established wine industry. So these bans affected most producers but also led to the bankruptcy of several. Yet they also brought reorientation to other markets, due to the opening of the EU’s market.

Moldova’s significant efforts and a strong commitment to maintaining a safe, stable and attractive investment climate led to palpable and solid economic performance.

However, battling the latest energy crisis brought on by Russia’s war in Ukraine, as well as the rampant inflation of almost 35% it triggered in certain moments, has been the test of a generation.

The overlapping crises of the moment have indeed emerged from structural challenges, exacerbated by latent threats that the country was facing even before the war in Ukraine: decades-old separatist movements, Kremlin-directed populists, weak administrative power and brain drain.

But there is no question that Moldova is today much more than a wine-making country, with a geographical position that has proven to be strategic at times.

Today, Moldova ranks 56th in the Global Innovation Index, eight places up compared to the previous year, and has put in motion several innovation incentives, such as the Moldova Innovation and Technology Park. The IT sector is currently spearheading growth, and the country hopes that young and bright Moldovans will decide to come back home.

Furthermore, several sustainable investment measures were implemented, attracting investors through ease of doing business, key trade agreements and free economic zones.

And while some investors may still be reluctant to come to a country so close to a war zone, many others have come to realise that the country’s commitment to a peaceful and open future is not a matter of rhetoric.

Moldova, one of Europe’s poorest countries, is also showing signs of progress at home, based on reduced poverty and enhanced access to opportunities, sustained by reforms, which also improved its image abroad, in terms of investment and geostrategic importance.

Moldovan Internationalization

Moldova now has free trade agreements with 43 countries, among them member states of the EU, CEFTA, and Turkey. And with a path to EU integration clearer than ever before, the EPC host hopes for the opening of accession negotiations by the end of this year, also thanks to its ambitious reform agenda.

“Moldova is a strong essence in a small bottle. While simultaneously boosting its traditional economy, Moldova’s resilience and commitment have been consolidating its global profile, leading the way to positioning itself in several markets and embracing diversification,” said Ana Taban, ambassador-at-large for economic diplomacy at the Ministry of Foreign Affairs and European Integration of Moldova..

Moldova is today an important agrifood player on several markets. It is the 20^th largest wine producer globally, but also leads in several fruit exports such as apples, plums and an indigenous variety of grapes.

This marked a fundamental shift for a country once fully dependent on the Russian market when it came to hard-earned harvest, but also for its energy needs and, too often, political guidance.

Statistics now show that the EU’s import of Moldova’s several goods has increased in the past three years. Among its largest export partners are Romania, Turkey, Germany, Italy, and Poland.

With Moldova’s recently granted EU candidate status, further diversification is to be expected.

Beyond proximity markets, Moldova is exploring ways to more distant markets, such as the Asian one, where India recently became a destination for Moldova’s apples. Strengthened economic partnerships and the diversification of export destinations are now featuring high on Moldova’s diplomatic agenda.

“We may be a small country but we aim high, honestly also because we have no other choice but to adapt and move forward. We are a flexible, agile nation, and we are now exploring global partnerships which can be mutually beneficial,” said Taban.