FACTORS FOR POVERTY REDUCTION GOT WEAK IN MOLDOVA – WORLD BANK

The World Bank mentioned Moldova’s good progress in reducing poverty, but the drivers of this progress in the past are likely to exercise a much more limited role.

According to the World Bank’s latest Poverty Assessment Report for Moldova, the national poverty rate dropped from 68% to 27% between 2000 and 2004 and continued the downward trend to 11.4% in 2014.

“Nonetheless, Moldova remains one of the poorest countries in Europe and faces challenges in sustaining the progress”, the document says.

Bank experts point at the fact that aside from increases in nonagricultural wages, pensions have been the biggest contributor to income growth among the bottom 40, as well as to poverty reduction. However, pensions are not the most efficient means to target the neediest.

The document draws the attention on persistent inequalities that include urban-rural differences in education, access to services.

Maria Eugenia Davalos, one of the main WB report authors, points on the problem of remittances’ volume lowering and on the fact that the state can’t afford a bigger pension bill. This confirms that from now on, improvements in living standards have to come from jobs.

According to Alex Kremer, the World Bank Country Manager for Moldova, enhancing the livelihoods of small farmers is paramount, because the agriculture sector still accounts for 30% of employment, with an additional 24% engaged in low-intensity agricultural work.

“But since most small farmers are not going to commercialize, then urbanization, connectivity and off-farm jobs are the best escape routes from poverty”, Kremer stressed.

Infotag’s dossier: The Moldovan authorities plan to raise the average salary/wage size in economy to 5050 lei in 2016 from 4600 lei in 2015. The minimal salary in the real sector of economy in May was registered at the level of 2100 lei.