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Slowdown brings role reversal for Moldova

29.01.2009   Dmitry Chubashenko, Reuters  395 
IONITSA Veaceslav
Gradul ştiinţific: Dr. in Economics

Moldova, Europe's poorest country, is basking in its new-found status as one of the world's most stable economies, even if it did take a global slump to earn it the accolade.

Moldova has been ranked fifth, well ahead of economic powerhouses like Japan and the United States, in an index compiled by London-based magazine The Banker that rated countries on how well protected they are from the slowdown.

The index concluded that the very reasons that have made Moldova an economic laggard -- a primitive financial system, low levels of lending and an economy based on farming -- now make it well-placed to withstand the slump.

'We have been classified in the top five countries with robust economies,' Moldovan President Vladimir Voronin, a 67-year-old Communist and former bakery manager, said this week. 'To be honest, that was quite a surprise.'

Voronin said Moldova's secret was that it built its economy around producing food, not financial products.

'Crisis or not, every person has to eat at least two times a day,' Voronin said at a news conference.

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Moldova is an ex-Soviet country on Romania's eastern border. Over half of its 4 million people live in the countryside and the average Moldovan earns $250 a month.

It has a stock exchange, but daily sales rarely exceed $300,000. More than 16 percent of the population has left to find work and the cash they send home accounts for nearly 40 percent of the economy, according to the World Bank.

Many farmers use horse-drawn ploughs and in the 1990s there was a spate of cases where Moldovans earned extra cash by selling their kidneys to foreign buyers.

The World Bank has praised the government for restoring a degree of economic stability following the collapse of the Soviet Union and a war with Russian-speaking separatists in Moldova's Transdniestria region.

But Veaceslav Ionita, an analyst with IDIS Viitorul, a think tank in the Moldovan capital, was scathing about the country's new status as a stable economy.

'It's the same kind of stability you have in a graveyard,' he said. 'In a graveyard, no one dies.'

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