Entrepreneurial activity in Moldova is almost non-existent. Moldova, a former Soviet Republic, is still the poorest country in Europe. 40% of GDP is derived from agriculture and food processing. Industry makes up only 20% of the labor force. Since gaining its’ independence from the U. S. S.R. in the early 1990’s, Moldova has been struggling to stand on its own.

The Overseas Private Investment Corporation agreement, which encourages U.S. private investment by providing direct loans and loan guarantees, was signed in June 1992. A bilateral investment treaty was signed in April 1993. A generalized system of preference status was granted in August 1995, and some Eximbank coverage became available in November 1995.

Privatization results in 2004 were not significant: several smaller companies and one winery were privatized in 2004, but the government postponed indefinitely the privatization of several larger state enterprises, including two electricity distribution companies. Sporadic and ineffective enforcement of the law, economic and political uncertainty, and government harassment and interference continue to discourage inflows of foreign direct investment.

Moldova has made progress in economic reform since independence. The government has liberalized most prices and has phased out subsidies on most basic consumer goods. A program begun in March 1993 has privatized 80% of all housing units and nearly 2,000 small, medium, and large enterprises. Other successes include the privatization of nearly all of Moldova’s agricultural land from state to private ownership, as a result of an American assistance program, “Pamint” (“land”), completed in 2000. A stock market opened in June 1995.

Important Resources