World Bank2012-03-192012-03-192011-06-14https://hdl.handle.net/10986/2805This report argues that in the future Moldova will need to develop a second engine of growth from exports of goods and services. We argue that Moldova needs to resurrect agro-based exports, to raise their value by exporting to higher value markets, and develop service exports in order to provide job opportunities for underemployed tertiary graduates. To be successful in doing so, the government will need to implement deep fiscal and structural reforms to break the cycle, while taking advantage of productivity gains. Much needs fixing, and Moldova's public sector does not have the capacity to fix it all. Moldova's leaders need to reach consensus on a comprehensive and sequenced growth and poverty reduction strategy. This report sketches out what such a strategy should contain. The author suggests that geography and the Government's policy stance fundamentally shape Moldova's economic growth potential and the path and priorities that a growth strategy should follow. Government needs to accelerate reforms so that the country can emerge from the global crisis-induced recession with faster and less vulnerable growth. Business as usual will not suffice. The world's capital markets have become tighter, foreign investors more demanding, and export markets more competitive. In April 2009, Moldova's youth indicated that that they can no longer stand aside and watch Moldova fall behind, they have called for a politics of aspiration, and they will demand economic policies consistent with these aspirations.CC BY 3.0 IGOACCESS TO INFORMATIONACCOUNTABILITYACCOUNTINGACCRUALSAGRICULTURAL PRODUCTSAGRICULTUREASSET MANAGEMENTBANK FINANCINGBANKING SECTORBANKSBINDING CONSTRAINTBUDGET DEFICITBUDGET SURPLUSESBUDGETINGCADASTRECAPITAL BUDGETINGCAPITAL EXPENDITURESCAPITAL FLOWSCAPITAL INFLOWSCAPITAL INVESTMENTCAPITAL INVESTMENTSCAPITAL MARKETSCOMPARATIVE ADVANTAGECOMPETITIVE MARKETCOMPETITIVENESSCONSOLIDATIONCONSUMERSCONSUMPTION EXPENDITURECORPORATE GOVERNANCECOST OF CAPITALCOST-BENEFIT ANALYSESCROSS SUBSIDIESCURRENCYCURRENT ACCOUNTCURRENT ACCOUNT DEFICITDEVALUATIONDEVELOPMENT POLICYDISINFLATIONDISPOSABLE INCOMEDIVERSIFICATIONDOMESTIC MARKETDOMESTIC PRODUCTSDURABLEDURABLE GOODSECONOMIC ACTIVITYECONOMIC CONCENTRATIONECONOMIC DEVELOPMENTSECONOMIC EXPANSIONECONOMIC GROWTHECONOMIC POLICIESECONOMIES OF SCALEEDUCATION LEVELEDUCATION SYSTEMELASTICITYEMERGING MARKETSEMPLOYERSEMPLOYMENT GROWTHENTERPRISE PERFORMANCEEQUIPMENTEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT COMPETITIVENESSEXPORT GROWTHEXPORTERSEXPORTSEXPROPRIATIONFARMERSFINANCIAL CRISISFINANCIAL MANAGEMENTFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL STATEMENTSFINANCIAL SYSTEMFISCAL DEFICITFISCAL POLICYFISHINGFIXED CAPITALFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN INFLOWSFOREIGN INTERESTSFOREIGN INVESTMENTFOREIGN INVESTORSGDPGLOBAL CAPITALGLOBAL CAPITAL MARKETGLOBAL ECONOMYGLOBAL TRADEGNPGOVERNMENT EXPENDITUREGOVERNMENT REGULATIONSGOVERNMENT SPENDINGGOVERNMENT SUPPORTGROSS DOMESTIC PRODUCTGROSS FIXED CAPITAL FORMATIONGROSS NATIONAL PRODUCTGROWTH POTENTIALHOLDINGHOST COUNTRIESHOUSINGHUMAN CAPITALINDEBTEDNESSINDEXATIONINFORMATION ON BORROWERSINFRASTRUCTURE INVESTMENTSINHERITANCEINPUT USEINSURANCEINSURANCE PRODUCTSINTELLECTUAL PROPERTYINTERNATIONAL CAPITALINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL CRISISINTERNATIONAL RESERVESINVESTINGINVESTMENT CLIMATEINVESTMENT PROJECTSJOB CREATIONJUDICIAL SYSTEMLABOR FORCELABOR FORCE PARTICIPATIONLABOR FORCE SURVEYLABOR MARKETLABOR PRODUCTIVITYLACK OF COMPETITIONLAND PRODUCTIVITYLAWSLEGISLATIONLEGISLATIVE FRAMEWORKLOANLOCAL ECONOMYMACROECONOMIC MANAGEMENTMARKET ACCESSMARKET DEVELOPMENTMARKET ECONOMIESMARKET PARTICIPANTSMARKET PLAYERSMARKET SHAREMICRO DATAMIGRATIONMONETARY AUTHORITIESMONETARY FUNDMONOPOLIESMORTGAGESNATIONAL BANKNET EXPORTSNET LOSSNEW ENTRANTSNON-PERFORMING LOANNPLOPEN ECONOMYPAYMENT SYSTEMPENSIONPENSION REFORMPENSION SYSTEMPENSIONSPOLICY RESPONSEPRICE INCREASESPRIVATE CONSUMPTIONPRIVATE INVESTMENTPRIVATIZATIONPRODUCERSPRODUCTIVE INVESTMENTSPRODUCTIVITY GROWTHPROFITABILITYPROPERTY RIGHTSPUBLIC BUDGETPUBLIC POLICYPUBLIC SERVICESPUBLIC SPENDINGPURCHASING POWERQUALITY STANDARDSQUOTASREAL EXCHANGE RATEREAL GDPREAL PRICESREAL SECTORREAL WAGESREGULATORY PRACTICESREMITTANCEREMITTANCESRESERVESRETIREMENTRETURNRETURNSRISK AVERSIONSAVINGSSAVINGS INSTRUMENTSSHARE OF INVESTMENTSMALL FARMSSOCIAL COSTSSOCIAL INSURANCE SYSTEMSTOCK EXCHANGESTOCK EXCHANGE LISTINGSWAPTAXTAX ADMINISTRATIONTAX COLLECTIONSTAX POLICYTAX REVENUETAX REVENUESTELECOMMUNICATIONSTERMS OF TRADETHE NATIONAL BANK OF MOLDOVATOTAL FACTOR PRODUCTIVITYTOTAL OUTPUTTRADE BALANCETRADE DEFICITTRADE POLICYTRADE REGIMETRADINGTRANSACTIONS COSTSTRANSPARENCYTRANSPORTUNEMPLOYMENTUNEMPLOYMENT RATEUNEMPLOYMENT RATESUNIONVALUE ADDEDVALUE OF OUTPUTWAGE DIFFERENTIALSWAGESWAREHOUSEWAREHOUSE RECEIPTWAREHOUSE RECEIPT SYSTEMWELFARE GAINSWITHDRAWALWTOWorld Bank10.1596/2805