Transition: retrospectives and perspectives
Chapter I. Socio-Economic Policies
The Quality of Governance
Moldova has failed to build a viable state due to the weak economic and social performance of the new state, the lack of a generally accepted strategy of reforms, the discontinuity in the policies pursued by the often-changing Moldovan governments, and the secessionist conflict in Transdnistria.
General weakness of state power has characterized the period of transition in Moldova, and the numerous mass protests have shown that the state, the initiator of reforms, is held the main responsible for their failure. Hence the social dimension of the state as well as its role of guardian of the rule-of-law and of the political and macroeconomic stability are to be enhanced.
The current weakness and inefficiency of state administration brings out the need to complete the reform of the public service in a sustainable way. A socially oriented market economy is the only way the feeble Moldovan State can recover its authority and secure a successful reform process.
The transition from a centrally planned economy to a mixed, market one is irreversible and predictable in its course with such trends as further legalization of shadow economic activities and expansion of private property and joint ventures likely to endure.
Three factors are outlined as key to the socio-economic development of Moldova in the near future. Firstly, the working population is expected to decrease over the next years while the social burden on economically active persons is to increase respectively. Secondly, Moldova's fixed assets are in a continuous state of decay and, unless the investment policy is given a boost, Moldova risks remaining a predominantly agricultural economy unable to face the tough competition on world markets. Thirdly, the state debt, both foreign and domestic, is expected to put an ever-growing financial burden on the current and future Moldovan governments.
Given these trends, it will take Moldova political will, a strong commitment to the reform process, and a guaranteed 7 to 10 percent annual increase in its GDP to improve the current socio-economic situation and stop further decline. Essential to all this is the modernization and depoliticizing of state administration and of the public service generally.