Rural poverty in Moldova

Despite increasingly robust economic growth over the past several years, poverty is still widespread, persistent and severe in rural areas.

After the collapse of the Soviet Union in 1991 Moldova plummeted from middle-income status to become the poorest country in Europe. The drastic disruption of production and marketing support systems made poverty a stark reality for most rural households. At the same time, the rural population increased as people lost urban jobs and moved away from large towns and cities. More than 60 per cent of Moldovans now live in rural areas, where they depend on agriculture for their livelihoods.

Overall poverty in the country decreased drastically between 1999 to 2005. In 2005 about one third of Moldovans were living in poverty, compared to almost three quarters in 1999. In 2005 16 per cent of them were extremely poor, a sharp decrease from 60 per cent in 1999. But in rural areas the trend is going in the opposite direction. Rural poverty is increasing, and it has risen 5 per cent since the lowest recorded incidence of 31 per cent in 2003.

Factors that contribute to the increase of poverty in rural areas include:

• the ongoing migration of young people out of rural areas and the consequent reduction in the proportion of economically active population
• lack of investment in rural areas, with the exception of larger-scale farming activities, which generate few employment opportunities
• the rising cost of living

Who are Moldova’s poor rural people and where are they?
Poverty affects landless people, small and medium-scale farmers and entrepreneurs, and people engaged in agro-processing in rural areas and small towns throughout the country. It affects people who are underemployed and people who receive low wages. The heads of almost 70 per cent of all poor households are employed, yet their wages are too low to enable their households to rise above poverty. Households of people engaged in agriculture are particularly vulnerable. 

Why are they poor?
Farmers and people engaged in rural  enterprises saw their incomes shrink after 1991 as the country struggled to adapt to a new market-oriented economy. Living conditions deteriorated rapidly in rural areas. Rural people are particularly vulnerable to the economic hardships brought by drastic cuts in wage rates, pensions and benefits and inequalities in the wage structure.

Despite economic growth since 2000, growth in the agricultural sector has been uneven. Rural infrastructure is poor and technology is inadequate. Rural Moldovans continue to face poverty because of the absence of on-farm and off-farm opportunities for income-generating opportunities and employment, and because they lack access to adequate financial services and markets. For rural entrepreneurs and farmers, access to financing and improved infrastructure are crucial to promoting sustainable enterprise development and farm income growth.

Source: IFAD

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the Republic of Moldova capital: Chisinau GNI per capita: 530 - 1,250 [more maps...] Explore... Geography, agriculture and the economy Progress on the Millennium Development Goals: United Nations Statistics World Bank Statistics GNI per capita, Atlas method (current US$) 720.0 Total population (million), 2004 4.2 Rural population (million), 2004 2.2 Number of rural poor (million, approximate) 1.4 Rural population below the poverty line (%), 2003 67.0 Population living below $1 a day (%), 2003 22 Population living below $2 a day (%), 2001 64 Population living below the national poverty line (%), 2002 49   Source: World Bank