Moldova enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, wine, and tobacco. Moldova must import all of its supplies of oil, coal, and natural gas, largely from Russia. Energy shortages contributed to sharp production declines after the breakup of the Soviet Union in 1991. As part of an ambitious reform effort, Moldova introduced a convertible currency, freed all prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and freed interest rates. Yet these efforts could not offset the impact of political and economic difficulties, both internal and regional. In 1998, the economic troubles of Russia, by far Moldova's leading trade partner, were a major cause of the 8.6% drop in GDP. In 1999, GDP fell again, by 4.4%, the fifth drop in the past seven years; exports were down, and energy supplies continued to be erratic. GDP declined slightly in 2000, with a serious drought hurting agriculture. Growth should turn positive in 2001.
Moldovan/Romanian 64.5%, Ukrainian 13.8%, Russian 13%, Gagauz 3.5%, Jewish 1.5%, Bulgarian 2%, other 1.7% (1989 est.)
note
internal disputes with ethnic Slavs in the Transnistrian region
