Since 1994 GTZ has been helping the Republic of Moldova manage its difficult process of economic and political transformation, working on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). Via its International Services business area, GTZ is also working for other international organisations in Moldova.

The country’s economy is dominated by the agricultural sector and its downstream processing industries. While the emerging private sector accounts for approximately 80 per cent of the economic value added, Moldova is still one of the poorest countries in Europe. Of its 4.4 million inhabitants, 700,000 (16 per cent) have left the country in search of better living conditions. The International Monetary Fund (IMF) estimates that remittances from Moldovans living abroad account for some 30 percent of GNP. However, as a consequence of the current financial and economic crisis, remittances have dropped sharply, leading to a fall in state revenues.

The economy is weakened by the long-standing and unresolved conflict over the breakaway region of Transnistria, since a significant part of the country’s industrial production is concentrated in this republic.

In recent years, the country has seen positive economic growth, although this has been accompanied by rising inflation. Nevertheless, unfavourable economic conditions, lack of transparent administrative procedures and legal uncertainties are obstacles to urgently needed foreign investment.

Romania’s accession to the EU has made Moldova a neighbouring country and hence an integral element of the EU’s Neighbourhood Policy, which aims to promote closer relationships with the new neighbouring states. Moldova is not currently a partner country in bilateral German development cooperation. Technical cooperation projects are generally financed through supraregional BMZ funds.

German technical cooperation focuses on promoting modernisation in the agricultural sector, the food processing industries and vocational training. As agreed at the bilateral government negotiations, we launched a project to modernise local authority services at the beginning of 2010. Working together with the Ministry for Construction and Regional Development, we are providing support on participatory budgeting, public tendering and project management to selected municipalities and districts.

GTZ maintains an office in Chisinau to implement these measures.