EMPLOYMENT IN MOLDOVA - THE KEY TO SUSTAINABLE ECONOMIC GROWTH AND POVERTY REDUCTION

(Economic commentary by Evghenii PERESTORONIN, special correspondent of the INFOTAG news agency)

One of the urgent and widely discussed issues nowadays is economic growth: its quality, sources, rates and sustainability. Politicians, economists, and journalists are involved in the discussion. They discuss problems of export-import, remittances of labor migrants. But at the same time, the key issue - employment - remains in the shadows.

The problem of availability and use of labor resources remains acute during all the years of independence, and therefore requires an urgent solution. The period of relatively stable economic growth (if we do not count the excessive 2014, in which 1 billion dollars was stolen from banks) ended for Moldova in 2020 with the arrival of the pandemic (GDP decreased by 7%). Despite the relative recovery from the low base of 2021 (+13.9%) in 2022, Moldova, along with the rest of Europe, was hit by a "polycrisis" related to the war in Ukraine, and the republic entered a period of recession.

The question of employment in Moldova was commented by Galina Selari, doctor of economic sciences.

In recent years the situation in the labor market has developed largely "independently" of the growth/decline of the economy. Statistically stable level of employment (slightly higher than 41%) and relatively low level of unemployment against the background of steady decrease of the number of employed population, which during the past 10 years reduced almost by one third. In reality, this situation is "compensated" by informal (shadow) employment and persistently high labor migration. This only confirms the fact that economic growth alone does not eliminate social deformations.

It is obvious that the informal sector of the labor market is still adapting to the changing realities: contracts are now being concluded, but they are often conventional, formal in nature. The real relations are based on the principle "as we agree."

Such marginal forms of relations on the labor market have become quite stable. And, strictly speaking, there is no reason to believe that they will be eliminated in the foreseeable future.

It seems that this is the price our labor market paid for a decade of not very intelligible reforms.

And one more illusion: everything depends on investments, they will start investing money in the economy and everything will work out right away, growth will become sustainable, general recovery and other good things will begin.

Undoubtedly, we need investment, because labor goes where production capital goes. And in recent years, Moldova has been a vivid example of this. Almost every family today has its own "representative" abroad. According to (obviously modest) estimates of the Bureau of Statistics, more than 10% of fellow citizens earn for their living abroad. A mental reassessment is taking place-not "living for work," but "working for life."

Demographic forecasts are also disappointing. Since 2004, the absolute number of people who can work has been steadily declining. Let us add to this the loss of workers from the long-term unemployment: the loss of qualification comes, on average, after a year of forced idleness and unsuccessful job search (today in Moldova over a quarter of the unemployed population is in this condition for more than a year). Besides, we have an acute shortage of people able to work qualitatively. The reason is obvious - neither employers nor employees are often not ready for full-fledged market relations.

And here we can draw a conclusion - the labor market is not ready for investments; moreover, in a certain sense it is a brake on the activation of investment processes. And if the market is not ready for investments, they may not take place or will not give the expected result.

We have to rethink Moldova, to understand for ourselves what our country can do. Until this happens, our advantages and opportunities will steadily shrink, increasing the list of risks for development. With a solution to the problem of employment, the problem of sustainable economic growth and poverty reduction will also be solved.