Moldova country brief

Overview

Moldova is a landlocked country in Eastern Europe, located between Romania to the west and Ukraine to the north, east and south. Moldova emerged as an independent republic in 1991 following the collapse of the Soviet Union. The majority of Moldova's 3.6 million citizens (2012 est.) are of Romanian descent, and the two countries share a common cultural heritage. The city of Chişinău is Moldova's capital.

Moldova celebrates its national day on 27 August.

Political overview

Moldova is a republic with a President, His Excellency Nicolae Timofti, as its Head of State. The Head of Government is currently acting Prime Minister, His Excellency Gheorghe Brega. The change to acting Prime Minister Brega in October 2015 occurred following a banking scandal in which around US$1 billion disappeared from Moldova’s banking system, sparking numerous large protests. The parliament is unicameral, comprising 101 seats, to which members are elected from party lists on a proportional representation basis. The President is directly elected by Parliament for a four-year term. The President, in turn, appoints the Prime Minister with the approval of Parliament. Parliamentary elections were last held on 30 November 2014.

Moldova has actively participated in the EU's European Neighbourhood Policy. In February 2012, the EU launched Free Trade Agreement negotiations with Moldova. In April 2014, the EU lifted visa restrictions on Moldova, allowing its citizens to travel freely throughout the EU Schengen passport-free area. In June 2014, Moldova signed an Association Agreement with the EU which serves to deepen political, economic and trade relations.

Moldova is a member of a number of international organisations including the United Nations, International Monetary Fund (IMF), World Bank, World Trade Organization (WTO), Organization for Security and Co-operation in Europe (OSCE) and the European Bank for Reconstruction and Development. Moldova is a member of NATO’s Partnership for Peace and the EU’s Eastern Partnership along with Armenia, Azerbaijan, Belarus, Georgia, and Ukraine.

Transnistria (Transdniestr) dispute

In September 1990 (that is, before Moldova’s independence from the Soviet Union), Transnistria, the area between the Dniester river and the border with Ukraine, declared itself an independent state. This eventually led to a brief civil war in early 1992. A ceasefire agreement was later signed in July 1992. Transnistrian separatists established their own administration and Russia deployed peacekeeping troops into the region, which remain there. The region has been under OSCE supervision since 1993. The EU has restrictive measures in place against the leadership of Transnistria, and funds a border monitoring mission designed to prevent illegal smuggling activities. In October 2015, the EU extended these measures for a further 12 months.

A Memorandum of Understanding guaranteeing a degree of autonomy for the region was signed in 1997. The Memorandum of Understanding offers a large degree of autonomy, but Transnistria demands independence. Transnistria is internationally recognised as part of Moldova, but Chişinău does not exercise de facto control over the territory. In February 2011, OSCE-led negotiations between Moldova and Transnistria recommenced after a six-year hiatus. In March 2014, continuing a long-running Transnistrian practice, Transnistria once more appealed to Russia to annex the region, following Russia’s actions in the Ukrainian territory of Crimea.

Economic overview

Moldova has one of the smallest economies in Europe with significant foreign debt and high unemployment. The economy is based on agriculture, including horticulture, viticulture and tobacco production. The country does not have any significant known mineral deposits and relies heavily on Russian energy, although much of the gas imported is consumed in Transnistria..

Economic reform measures have included the introduction of a stable convertible currency and real interest rates; the end of price fixing and export controls; the privatisation of land; and the eradication of preferential deals for inefficient state-owned enterprises. The continuing reliance on agriculture at about 40 per cent of the economy, however, means that Moldova's economy is extremely vulnerable to adverse weather conditions and fluctuations in international markets.

Moldova’s economic growth in recent years has been mixed. It experienced strong growth in 2010 and 2011 (about 7 per cent), but experienced a slowdown in 2012 – when the economy contracted by -0.7 per cent. The Moldovan economy recovered in 2013 and is estimated to have grown at 4.6 per cent in 2014. It is predicted to have contracted by 1 per cent in 2015.

Bilateral relationship

Moldova has no resident representation in Australia. Australia's Ambassador in Moscow is accredited to Moldova.

Australia's trade and investment relationship with Moldova is modest. Total two-way merchandise trade in 2014 was A$1.76 million. Australia’s merchandise exports to Moldova were valued at A$0.35 million in 2014 and included telecom equipment and parts and medical instruments (including veterinary). Merchandise imports from Moldova were valued at A$1.4 million in 2014 and included clothing, alcoholic beverages and travel goods.

Last updated: December 2015

Last Updated: 16 July 2014