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Transition: retrospectives and perspectives
Chapter I. Socio-Economic Policies
The Social Policy
According to the Moldovan Constitution, the economy of the Republic of Moldova is a socially oriented market economy. Yet, the transition process in Moldova to date has lacked the said social dimension. Life quality and living standards have been dropping, labor migration has been rampant, life expectancy has dropped and the state budget has lacked the necessary resources to keep such social services as education and health assistance working properly. Statistical data show vulnerable population at 88 percent and the poor at 56 percent. Over the past dozen years, Moldova's human development rating fell from the 75th out of 174 countries considered to 104th.
Demographically, the population of the Republic of Moldova will keep reducing and aging; both trends are due to the worsening of the socio-economic conditions and the high rates of labor migration.
On the background of a general worsening of life standards, a differentiation in the income of different social groups has occurred. About 40 percent of Moldovan urban households and 49 percent of rural households live below the poverty line currently at 30 percent of the minimum consumption basket. The 2002 Government program on poverty alleviation is to take a three-fold approach to social risks by addressing the labor market, the social insurance schemes and social assistance programs.
The changes in the national economy from the last ten years, such as the privatization and reorganization of state enterprises and the privatization of land, have changed the labor relations. The major problems experienced by the Moldovan labor market at present are the limited availability of jobs, the low wages, the inadequacy of previous training for the new economic conditions, the labor migration, etc. The state has carried out a number of programs to prevent mass unemployment, preserve the existing working places and create new ones, help the economically active population adapt to the market economy conditions and ensure the social protection of the unemployed. Despite these measures, the state of the labor market is still defective, particularly in the rural areas that require a specific approach.
The national social insurance and social assistance policies have failed to meet the existing needs, and need serious re-consideration from the perspective of the current stage of the socio-economic development of the Republic of Moldova. Further legislative and institutional refinements are needed along with a rationalization of state pension schemes which are to be complemented with private pension schemes, the development of a personalized system of social assistance, the improvement of social assistance services, etc.
New educational principles have been developed to support the reform of the education system and measures have been taken to enhance education management, funding, curricula, and methodologies. The structure of the education system has been upgraded to include gymnasiums, lyceums, new postgraduate opportunities, and compulsory evaluation at each educational level. The education system has been decentralized as a result of the administrative territorial reform and each level of education management has been assigned specific powers and duties. Yet, overall the education system has been in decline and a viable educational policy is yet to be developed. In addition, the significant impoverishment of the population has seriously restrained the access to education. To improve this state of affairs, at least 7 percent of GDP needs to be allocated for education, the salaries of teachers need to be raised up to a decent level, and workplaces need to be guaranteed to secondary and higher education graduates.
The quality of medical services has declined as well and the general health of the population has worsened significantly. This has resulted in higher incidence of chronic diseases, higher mortality and higher rates of disabilities. A compulsory medical insurance scheme which is to be introduced starting 2003 is to improve funding and administration of the health assistance system.
Thus, the reform of the social sector is being carried out along with the overall reform of the Moldovan economy. In the years to come the Government will need to step up efforts to create more jobs and ensure sustainable economic growth, and at the same time continue to reform its employment, social insurance, social assistance, education and health assistance policies. General economic recovery is to yield commensurate improvements in life quality and living standards.