TheWorldBank(WB)actionsforfightingpovertyaroundtheworld

CooperationofRepublicofMoldovawithWB
DunasSvetlanaL41E
I.Introduction
International attention is focused more sharply on poverty
reduction than for 20 years. The international target proposed by the
Development Assistance Committee of the OECD has been widely
adopted,namelytoreducebyhalfby2015theproportionofpeopleliving
inextremepoverty.Butquitewhatthistargetmightmeanisobscuredby
thebewilderingambiguitywithwhichthetermpovertyisused,andby
themanydifferentindicatorsproposedtomonitorpoverty.
Theconceptualdebateiscarriedovertomeasurement.Asmall,
craft industry has developed, especially at the international level, in
measuring poverty and deprivation, often in response to the need to
definetargetsatinternationalconferencesandmeasureprogressagainst
them.Differentmodelsofpovertyimplydifferentindicators.Advocates
oftheparticipatoryparadigm,inparticular,arewaryofquantificationand
standardization.
II.Alittlebitofhistory
Poverty is blessed with a rich vocabulary, in all cultures and
throughout history. From an analytical perspective, thinking about
povertycanbetracedbackatleasttothecodificationofpoorlawsin
medievalEngland,throughtothepioneeringempiricalstudies,attheturn
ofthecentury,byBoothinLondonandbyRowntreeinYork.Rowntrees
study,publishedin1901,wasthefirsttodevelopapovertystandardfor
individual families, based on estimates of nutritional and other
requirements.
Inthe1960s,themainfocuswasonthelevelofincome,reflected
inmacroeconomicindicatorslikeGrossNationalProductperhead.This
wasassociatedwithanemphasisongrowth,forexampleintheworkof
thePearsonCommission,PartnersinDevelopment(1969).
In the 1970s, poverty became prominent, notably as a result of
Robert MacNamaras celebrated speech to the World Bank Board of
Governors in Nairobi in 1973, and the subsequent publication of
RedistributionwithGrowth.Twootherfactorsplayedapart.Firstwas
emphasis on relative deprivation, inspired by work in the UK by
Runciman and Townsend. Townsend, in particular, helped redefine
poverty:notjustasafailuretomeetminimumnutritionorsubsistence
levels,butratherasafailuretokeepupwiththestandardsprevalentina

givensociety.Thesecondshiftwastobroadentheconceptofincome
poverty,toawidersetofbasicneeds,includingthoseprovidedsocially.
Thus,followingILOspioneeringworkinthemid1970s,povertycame
tobedefinednotjustaslackofincome,butalsoaslackofaccessto
health,educationandotherservices.
Theconceptofbasicneedsinspiredpolicieslikeintegratedrural
development.Itsinfluencecontinuestobeseenincurrentdebatesabout
humandevelopment.Newlayersofcomplexitywereaddedinthe1980s.
Theprincipalinnovationswere:
(a) The incorporation of nonmonetary aspects, particularly as a
resultofRobertChambersworkonpowerlessnessandisolation.This
helpedtoinspiregreaterattentiontoparticipation.
(b)Anewinterestinvulnerability,anditscounterpart,security,
associatedwithbetterunderstandingofseasonalityandoftheimpactof
shocks, notably drought. This pointed to the importance of assets as
buffers,andalsotosocialrelations(themoraleconomy,socialcapital).It
ledtonewworkoncopingstrategies.
(c)Abroadeningoftheconceptofpovertytoawiderconstruct,
livelihood, this was adopted by the Brundtland Commission on
Sustainability and the Environment, which popularised the term
sustainablelivelihood.
(d)TheoreticalworkbyAmartyaSen,whohadearliercontributed
thenotionoffoodentitlement,oraccess,emphasisedthatincomewas
onlyvaluableinsofarasitincreasedthecapabilitiesofindividualsand
therebypermittedfunctioningsinsociety.
(e)Finally,the1980swascharacterisedbyarapidincreaseinthe
study of gender. The debate moved from a focus on women alone
(womenindevelopment(WID)),towidergenderrelations(genderand
development (GAD)). Policies followed to empower women and find
waystounderpinautonomy,oragency.
The1990ssawfurtherdevelopmentofthepovertyconcept.The
ideaofwellbeingcametoactasametaphorforabsenceofpoverty,with
concomitant emphasis on how poor people themselves view their
situation.Atthesametime,inspiredbySen,UNDPdevelopedtheideaof
humandevelopment:thedenialofopportunitiesandchoicestoleada
long, healthy, creative life and to enjoy a decent standard of living,
freedom,dignity,selfesteemandtherespectofothers....
To complete this narrative, thinking about human development
findsacounterpartinthecurrentdebateinrichcountriesaboutsocial
exclusion.ThisstartedinFranceinthelate1970s,buthasspreadwidely:
forexample,theUKsetupasocialexclusionunitintheCabinetOffice
2

in1997.Thefocusisonmultipledeprivation(lowincome,poorhousing,
pooraccesstoeducationandhealth),butalsoontheprocessbywhich
multiple deprivation occurs. The key arenas for exclusion include
democratic and legal systems, markets, welfare state provisions, and
family and community: rights, resources and relationships are all
important.
III.Faultlinesinthepovertydebate
Theconceptualcomplexitycanbeunderstoodasaseriesoffault
linesinthedebateaboutpoverty.Therearenineofthese:
Individual or household measures. Early measurement of
poverty(e.g.byRowntree)wasatthehouseholdlevel,andmuchstillis.
Otheranalysisdisaggregatestotheindividuallevel,soastocaptureintra
householdfactorsanddifferenttypesandcausesofdeprivationaffecting
men,women,children,oldpeople,etc.
Privateconsumptiononlyorprivateconsumptionpluspublicly
providedgoods. Povertycanbedefinedintermsofprivateincomeor
consumption(usuallyconsumptionratherthanincome,inordertoallow
forconsumptionsmoothingovertime,e.g.bymanagingsavings),orto
include the value of goods and services provided publicly, the social
wage.
Monetary or monetary plus nonmonetary components of
poverty.Socalledmoneymetricmeasuresareoftenused,becausethey
are either regarded as sufficient on their own or seen as an adequate
proxyforpoverty.However,thereisaclearfaultlinebetweendefinitions
ofpovertywhicharerestrictedtoincome(orconsumption)andthose
whichincorporatesuchfactorsasautonomy,selfesteemorparticipation.
InMaslowshierarchyofneeds,thesewereseenashigherneeds,which
wouldbecomemoreimportantasbasicneedsforfood,shelter,housing
andsafetyweremet.However,manycurrentdefinitionsdeliberatelyblur
thedistinctionbetweenhigherandlowerneeds.
Snapshot or timeline. Many surveys and poverty assessments
reporttheincidenceofpovertyatapointintime.However,thereisalong
historyofthinkingaboutpovertyintermsoflifecycleexperience(e.g.
Chayanovs pioneering work in the 1920s on the peasant household),
seasonal stress, and shocks (illness, drought, war). In both North and
South,therehasbeenincreasingattentiontounderstandingmovementin
and out of poverty, what Jenkins calls bottomend churning. Panel
surveys,whichtrackafixedgroupofindividualsovertime,providedata.
Actualorpotentialpoverty.Someanalystsincludeaspoorthose
who are highly sensitive to shocks, or not resilient. Smallscale
3

pastoralistsexposedtotheriskofdroughtareacommonexample:current
incomemaybeadequate,butvulnerabilityishigh.Planningforthese
groupsmeansunderstandingbothshorttermcopingstrategies,andalso
longtermadaptationtolivelihoodstress.
Stockorflowmeasuresofpoverty.Thedefinitionofpovertyas
incomefocusesontheflowofmaterialgoodsandservices.Analternative
istoexaminethestockofresourcesahouseholdcontrols.Thismaybe
measuredintermsofphysicalormonetaryassets(land,jewellery,cash),
or in terms of social capital (social contacts, networks, reciprocal
relationships, community membership). Sen analysed the commodity
bundlestowhichanindividualwasentitled:asSwifthasemphasised,
entitlementsmayderivenotjustfromcurrentincome,butalsofrompast
investments,storesorsocialclaimsonothers(includingtheState).
Input or output measures. Sen has reminded us that poverty
measured as a shortfall in income essentially captures an input to an
individualscapabilityandfunctioningratherthanadirectmeasureof
wellbeing. Writing about poverty has often assumed, wrongly, an
automaticlinkbetweenincomeandparticipation,orfunctioning,inthe
lifeofacommunity.
Absoluteorrelativepoverty.TheWorldBankcurrentlyusesa
figureof$US1perday(in1985purchasingpowerdollars)forabsolute
poverty. The alternative has been to define poverty as relative
deprivation, for example as half mean income, or as exclusion from
participationinsociety.ThustheEuropeanUnionhasdecidedthatthe
poor shall be taken to mean persons, families and groups of persons
whoseresources(material,cultural,social)aresolimitedastoexclude
themfromtheminimumacceptablewayoflifeinthememberstatein
whichtheylive.
Objective or subjective perceptions of poverty. The use of
participatorymethodshasgreatlyencouragedanepistemologyofpoverty
which relies on local understanding and perceptions. For example,
exposure to domestic violence may be seen as important in one
community,dependencyontraditionalstructuresinanother.

IV. Causes of poverty origins of a worldwide plague

Poverty is the consequence of plunder. Behind every

single form of modern poverty, you find the use of
force. (Dr. Oscar Guardiola-Rivera)
History&heritage:originsofpoverty
Thecausesofpovertyarequiteoverwhelmingatfirstglance:from
colonialismtoindustrialization,frompoliticalinstitutionstogeography,
corruptionandsoon.Buttheyareextremelyinterestingtolookatifyou
want to better understand how so many countries are where they are
today.Eachcauseisrootedinaradicallydifferentphenomenonandeach
needsaspecificsolution.Heritageisunquestionablyanessentialfactor
amongthecausesofpoverty.
Colonization&slavery
Most countries that started their modern history with great
inequalitiesevolvedintosocietiesthatoftenmaintainedsuchpatternof
biasedwealthdistribution.Andconverselyforcountriesthatbeganwith
moreorlessequalsocieties.So,countriesthatexperiencedcolonization
andslaveryoftenhadtroublegettingridoftheinheritedinstitutionsand
discrimination.OtherslikeCanadaortheUSontheotherhandhavebeen
doingmuchbettersincethen.Inthecaseofcolonizedcountriessuchas
Brazil, South Africa or the Caribbean islands, the remaining white
populationofteninheritedownershipofcapitalandmeansofproduction
oncethecountrybecameindependent.
Theroleofresourcesandgeography
The former colonies in Latin America were exploited to export
theirfancymineral(e.g.gold&ironore)andagriculturalresources.They
havesufferedlargescaleinjusticeasbothlandandmanpowerwere
seized by the Spanish and Portuguese empires.
InNorthAmerica,thepeoplestartedoutmoreorlessfromthesamepoint
whichcreatedthegroundsforlessinequalityinthefirst100years.That
is,ifweforgetforaminuteaboutthe"reduction"(read"massacre")of
the Native American population to a more manageable size.
InCanadaandtheNorthernpartoftheUS,therewasalsonoparticular
activitythatwassuitedformajorexports(limitedeconomiesofscale)
andthereforetherewasnoneedforhugeamountsofworkers.Thisin
turnreducedtheappealofslaveryandthuserasedfromthestartoneof
thecommoncausesofpovertythatcountriesofteninherit.Itsinteresting

to realize how politics, geography and economics are intertwined and

influencetheevolutionofacountry(ratherthanhumanisticideals).
Thesegregation'sinthesystem
Apart from New Zealand and Australia, European colonies
generallyinvolvedonlyafewnumberofEuropeansthatwereneededto
takecareofadministrative,militaryandpoliticalaffairs.Theywerenot
really building any ideal country, nor working together towards some
commongoal.ThesegregationbetweenEuropeansandlocals(ormixed
communities) has often remained thus far one of the main causes of
poverty and inequalities. The long lasting system created by the
Europeans, giving all the power (economic and political) to a small
minority, was passed on for centuries and into the 20th century. The
newlyformednationsthenhadgreattroublegettingridofmechanisms
andinstitutionsthatlimitedaccesstosocialascensionandwerereticent
tofundpublicservices(school,hospitals,)thatwereessentialtothe
growthofthenationasawhole.
Agriculture,industryandneeds
Allcountriesandcivilizationswereagrarianatsomepoint.Nearly
everybody was living off agriculture, up to only 200 years ago. The
development process has been quite the same since then: increased
production in agriculture frees a lot of manpower that goes to the
developing industrial and services sectors. The improvement in
agriculture means that less time and resources (mostly farmers) are
neededtofeedapopulation.Oncethepeoplehasenoughfood,itneedsto
satisfy the next most urgent needs, usually nonfood goods (shelter,
health,clothing,).ThisisMaslowshierarchyofneeds.Andthisnew
demandcreatesnewmarketsforthesegoods.Newsectorsandindustries
cangrow.
Modernizingagriculturetherootsofdevelopment
Progress in agricultural productivity is at the core of the
developmentofnationsandmodernityasweknowit.Withoutitthere
hasntbeenanyothermodelleadingtoeconomicdevelopment,withits
industries, services and financial branches. In developing countries, a
goodshareofthepoorismadeoffarmers.Youseethereasoning?That's
a lot of people to "free" from agricultural labor. And because urban
wagesareconnectedtoruralwages,povertyinruralareasalsotendsto
impactonpovertyincities.Inbothcases,wageswillbelow.
6

Youcan'tdowithoutruralareas
However, there's still the case of the Chinese government who
decidetomaintainthepriceofbasicagriculturalgoodsartificiallylowso
astoputthecitydwellersinabetterpositionandfarmersinaworse
one.Thisisbecause,intheshorttermit'smorestabletohavethebacking
of urban residents after all they live near the places of power (e.g.
presidentialpalace,governmentassembly,etc).Butinthelongrun,mass
scale protests from rurals will erupt and threaten the stability of the
country.
Thecausesofpovertymightbeasdiverseascanbe,youcant
count without the role of agriculture all over the world. Hunger and
poverty have always been the first reason for mass protests and
revolutions throughout the world. In most countries, there has been a
transitiontoanindustrial andserviceeconomyatsome point.Today,
manyoftheserichcountriesenjoyasmall,efficientagriculturalsector
(usuallylessthan10%oftheeconomy)thatproducesenoughtofeedthe
localpopulationandevenexportworldwide.
Aboutwagesandpoverty
Typically if rural workers wages go up, so will that of urban
workers.Peopleincitiesneedhigherwageswhenfarmersmakemore
moneybecausetheyneedtobeabletoaffordthehigherfoodprices.And
that waybusinessescanalsoluremoreruralworkersintoworkingin
betterpayingfactories.Whatdoesitmean?Thatonlyhigherproductivity
will increase salary of rural workers. So farmers that offer a low
productivityarepartlytoblameforthepovertyinruralandurbanareas.
ThenyoumightthinkOhIgotit,letsreinstateslaveryandforcethem
toworktheirbuttsoff!...Hum...no.
Twothingswillhelpraisetheproductivity.First,themorelanda
farmerhasaccessto,thehigherhisproductivity.Soyouneedasmuch
land per farmer as possible. Never seen those images of American
farmersaloneintheirtractorscoveringacresofland?Theresareasonto
it.Thesecondfactorisalsoincludedinthisimage:thetractor.Youneed
tomodernizetheagriculturalsector!
Agriculturetotacklethecausesofpoverty
Improvingthosetwoaspectsisthebestwaytofightoneofthe
main causes of poverty. In the case of smallish countries, or with

restricted arable land, technological progress is therefore the key to

alleviate poverty. Even if it might be a counterintuitive argument,
modernizingtheagricultureisanessentialpartofanyplantomodernize
andindustrializeaneconomy,andtackleoneoftheoriginalcausesof
poverty.
Theeffectofcorruption
Ifyougotintoanaccidentandhavenootherchoicebuttobribe
yourwayoutofthehospitaltogeteverytestandtreatment,you'llsure
feelprettyfrustratedandhelpless.Especiallywhenyoujustcantafford
it.Sameifyouwanttostartabusinessbutthelocaladministrationasks
yousomespecialfeesinordertodeliveryourlicence.Orisitthecity
runwaterpipesinyourbuildingthatbroke?Easy,therepairmanwill
comeeitherin30daysortomorrowifyoucanaffordit. Thelistis
endless.
V.TheWorldBank(WB)actionsforfightingpovertyaround
theworld
The World Bank is an international financial institution that
providesloanstodevelopingcountriesforcapitalprograms.Itcomprises
two institutions: the International Bank for Reconstruction and
Development (IBRD), and the International Development Association
(IDA).TheWorldBankisacomponentoftheWorldBankGroup,which
ispartoftheUnitedNationssystem.
The World Bank Groups mission is carved in stone at our
Washingtonheadquarters:OurDreamisaWorldFreeofPoverty.This
missionunderpinsallofouranalytical,operational,andconveningwork
inmorethan145clientcountries,andisbolsteredbyourgoalsofending
extremepovertywithinagenerationandpromotingsharedprosperityina
sustainablemanneracrosstheglobe.
Therehasbeenmarkedprogressonreducingpovertyoverthepast
decades. The world attained the first Millennium Development Goal
targettocutthe1990povertyrateinhalfby2015fiveyearsaheadof
schedule,in2010.Despitethisprogress,thenumberofpeoplelivingin
extremepovertygloballyremainsunacceptablyhigh.

 Accordingtothemostrecentestimates,in2012,12.7percentof
theworldspopulationlivedatorbelow$1.90aday.Thatsdown
from37percentin1990and44percentin1981.
Thismeansthat,in2012,896millionpeoplelivedonlessthan
$1.90aday,comparedwith1.95billionin1990,and1.99billionin
1981.
Progresshasbeenslowerathigherpovertylines.Over2.1billion
peopleinthedevelopingworldlivedonlessthanUS$3.10aday
in2012,comparedwith2.9billionin1990soeventhoughthe
shareofthepopulationlivingunderthatthresholdnearlyhalved,
from66percentin1990to35percentin2012,fartoomanypeople
arelivingwithfartoolittle.
Moreover,whilepovertyrateshavedeclinedinallregions,progress
hasbeenuneven:
East Asia saw the most dramatic reduction in extreme poverty,
from80percentin1981to7.2percentin2012.InSouthAsia,the
shareofthepopulationlivinginextremepovertyisnowthelowest
since1981,droppingfrom58percentin1981to18.7percentin
2012.PovertyinSubSaharanAfricastoodat42.6percentin2012.
Chinaaloneaccountedformostofthedeclineinextremepoverty
overthepastthreedecades.Between1981and2011,753million
peoplemovedabovethe$1.90adaythreshold.Duringthesame
time,thedevelopingworldasawholesawareductioninpoverty
of1.1billion.
In2012,justover77.8percentoftheextremelypoorlivedinSouth
Asia (309 million) and SubSaharan Africa (388.7 million). In
addition,147millionlivedinEastAsiaandPacific.
Fewerthan44millionoftheextremelypoorlivedinLatinAmerica
andtheCaribbean,andEasternEuropeandCentralAsiacombined.
Theworkisfarfromover,andanumberofchallengesremain.Itis
becoming even more difficult to reach those remaining in extreme
poverty,whooftenliveinfragilecontextsandremoteareas.Accessto

goodschools,healthcare,electricity,safewaterandothercriticalservices
remains elusive for many people, often determined by socioeconomic
status,gender,ethnicity,andgeography.Moreover,forthosewhohave
beenabletomoveoutofpoverty,progressisoftentemporary:economic
shocks,foodinsecurityandclimatechangethreatentorobthemoftheir
hardwongainsandforcethembackintopoverty.Itwillbecriticalto
findwaystotackletheseissuesaswemakeprogresstoward2030.
VI.WBstrategyandresults
TheWorldBankGroupsfirstgoal,toendextremepovertywithin
a generation, has the specific target of decreasing the global extreme
povertyratetonomorethan3percentby2030,sinceasmallamountof
frictionalpovertyislikelytopersist.Thisispossiblebutchallenging,and
businessasusualwillnotbeenoughtoreachthattargetgoingforward.It
willbeimportanttopromotegrowththatissustainedandinclusive,to
createmoreandbetterjobs,andtodevelopeffectivesafetynetprograms
toensurethatthemostvulnerablecanpersevereinthefaceofshocks.
Whileeconomicgrowthisvital,thequalityofthatgrowthalsomatters.
Thesecondgoal,topromotesharedprosperityineverycountry,is
measuredbythegrowthinincomeamongthebottom40percentofthe
incomedistributionineachcountry,butbroadlytranslatesintoafocuson
the welfare of the least welloff in each country. This goal works
alongsidethepovertygoal,andincludesastrongemphasisontackling
persistent inequalities that keep people in poverty from generation to
generation.
Thereisnosilverbullettoendingpoverty,andstrategiestoreachthe
least welloff must be tailored to each countrys context, taking into
account the latest data and analysis and the needs of the people. To
succeedinreducingpoverty,countriesneedtodothreethings:
Growinaninclusive,laborintensiveway.
Investinthehumancapitalofpeople,especiallythosewhoare
unabletobenefitfrombasicservicesduetocircumstancesbeyond
theircontrol.

10

 Insurepoorandvulnerablepeopleagainsttheshocksthatcanpush
them deeper into poverty things such as severe weather,
pandemics,foodpricevariability,andeconomiccrises.
TheWorldBankGroupworkstoendpovertyinanumberofways
from funding projects that can have transformational impacts on
communities,tocollectingandanalyzingthecriticaldataandevidence
neededtotargettheseprogramstoreachthepoorestandmostvulnerable,
tohelpinggovernmentscreatemoreinclusive,effectivepoliciesthatcan
benefit entire populations and lay the groundwork for prosperity for
futuregenerations.Someexamples:
Grow
AlargescaleruralroadsprojectinIndiathathelpsconnectrural
familiestourbanmarkets,betterschools,andcleanerwater;
Acrosscuttinganalyticalreportthathelpedsetanewstandardfor
measuring poverty in Haiti, and aids the government in better
targetingprogramsandpolicies
Poverty and Social Impact Analysisfor example, ontrade
barriers in Africato help partner governments and other
stakeholders understand what impact proposed policies and
programsmayhaveonpoorpeople,andoninequalityofincome
andopportunity.
Invest
AskillstrainingcourseforadolescentgirlsinRwandathatteaches
thevitaltechnicalandlifeskillstosucceedintheworkplaceandin
theircommunities;
Data and analysis oninequality of opportunities among children
acrosstheworld,helpingclientcountriesincorporatetheresearch
intheirfiscalanalysisanddevelopmentofsocialprograms.
Indepth maps in countries such asAfghanistan,Bangladesh,
thePalestinianTerritories,andVietnamthatshowwhereeconomic
diversityandgapsinservicesexistwithinacountry.This,aspart
11

ofthepovertyassessmentprocess,helpspolicymakersbettertarget
policiesandprogramstoreachandbenefitthepoor.
Insure
AruralelectrificationprojectinBangladeshthatusessolarpower
systems to keep the lights on for millions of families, tackling
climatechangeandbasicservicedeliveryatthesametime.
Highfrequencydatacollectioninitiatives,suchasinLiberiaand
Sierra Leoneduring the Ebola crisis, to complement traditional
householdsurveysandhelpidentifyurgentpublicneeds.
A public finance reform program in the Dominican Republic,
includingConditionalCashTransferstoimprovesocialprotection
forthepoor.
VII.CooperationofRepublicofMoldovawithWB
A decade ago, the Republic of Moldova proclaimed its
independenceandsteppedonthepathofradicalchangesthatledtothe
formationofamarketeconomyinthemid90swhilechangesbecame
irreversible.Asaresultofthereforms,theRepublicofMoldovaachieved
some progress: reform of the property structure, introduction of the
national currency,reformof thebankingfinancialsystem,agricultural
reform,andthecreationofthelegalandinstitutionalframeworktoensure
thefunctioningofthemarketeconomy.
After 10 years of transition, GDP has dramatically reduced,
constitutingin1999only34%ofthe1990level.In2000thisnegative
evolution stopped, the economy having clear trends of stability and
socialeconomicrevivalGDPincreasedthisyearby2.1%ascompared
tothelastyearandtheindustrialoutputby7.7%.
TheRepublicofMoldovathroughitsparticipationtogetherwith
over 140 world states, various international and intergovernmental
organizationstotheUNConferenceforEnvironmentandDevelopment,
committeditselftothetransitiontosustainabledevelopment,elaboration
andimplementationofthestrategiesandactionplansadequatetothis
option.
12

In2001theGovernmentoftheRepublicofMoldovaapprovedthe
shorttermStrategyforsocialeconomicdevelopmentoftheRepublicof
Moldova(until2005)adocumentrelatedtotheeconomicpolicyofthe
country, which sets the priorities, objectives and measures for its
implementation aimed at creating a competitive market economy, in
accordancewiththeprinciples,norms,mechanismsandinstitutionsof
developedcountries.
Theachievementofthesocialobjectivesispossiblethrough
ensuring of a sustainable economic growth which will require the
involvement into the financial and human structures and flows at the
regional,Europeanandgloballevelaswellasthecreationofacoherent
andstablelegislativeframework,harmonizedwiththeinternationalone
andfocusedonthecreationofabeneficialentrepreneurialandinvestment
environment.
Inordertoensurethecompetitivelyofthenationaleconomyonthe
globalmarket,thepositiveaspectsofglobalizationandtheadvantagesof
theadherencetotheWorldTradeOrganizationandtheStabilityPactfor
theSouthEasternEuropewillbeefficientlyused.Theeconomicsituation
oftheRepublicofMoldovaduringthelast2yearsregisteredanincrease
intheeconomicoutput.Therearetrendsofachievingsocialeconomic
stability thus the major objectives, outlined in the Action Plan of the
GovernmentEconomicrevivalcountryrevival,beingachieved.
The improvement of the economic growth manifested mainly
throughtheincreaseofGDPin2001by6.1%ascomparedto2.1%in
2000. 75% of GDP comes from the private sector, which shows the
expansiontrendofthesector.Theinflationrateconstituted6.3%atthe
endof2001ascomparedtoDecember2000.Theexchangerateofthe
MoldovanLeuwasmainlystable,registeringaslightdepreciationby6%.
Stability of the exchange rate of the national currency was mainly
determinedbytheincreaseofexports,increaseoftheindustrialoutput
andrelativestabilityofprices.Accordingtopreliminarydata,theshareof
theincomeofthebudgetwasachievedat90%ascomparedtoannual
expectations.
As compared to 2000, incomes increased by 5.3%. Taking into
accounttheincomesandavailablefundingresources,costsworth89.5%
13

of annual plans were funded from the budget. The external debt
administeredbytheGovernmentattheendof2001constituted699.8
million USD, GDP constituting 47.4%. At the same time, it is worth
mentioningthatalongsidewiththeseeconomicprogresses,povertyisa
seriousproblemintheRepublicofMoldova,whichiscausedbyboth
internalandexternalfactors.
Moldovaisaffectedbythelackofitsownenergyresourcesandthe
increase of their prices up to the global standards, the Transnistrian
conflictin1992aswellasanumberofnaturaldisastersthatledtothe
halving of GDP. Floods of 1992 and 1994 and the draughts in 2000
shouldbementionedinthiscontextaswell.Environmentalproblemsin
Moldova are related to the excessive use of the recyclable natural
resources,ononehandbytheglobaldeteriorationofthequalityof
environment.Thereductionoftherecyclingcapacitiesoftheresources
andtheenvironmentpollutionaffectshumansecurity.
AtChisinau,23May2013,PrimeMinisterdesignateIurieLeanca
mettheWorldBankCountryDirectorforUkraine,BelarusandMoldova,
Qimiao Fan, the governments communication and media relations
department has reported. The World Bank's Country Manager for
Moldova, Seck Abdoulaye, also attended the meeting. The officials
discussed the World Banks activity in Moldova and the bilateral
cooperationprospects.
LeancapraisedtheWorldBanksactivitycarriedoutinMoldova,
stressingthattheprojectsimplementedwiththeWorldBankssupport
targeted many priority areas for Moldovas social and economic
development. Leanca underlined the importance of ensuring the
continuityoftheirimplementation,inspiteofpoliticalinstability.
The acting government takes all measures so that the state
institutions focus on achieving the set goals. The joint projects,
implementedwiththeWBssupport,includingtheeducationreform,the
infrastructure modernization, the healthcare systems development are
significantlyimportantforthepopulationandwewillmakeeffortsto
implementthemsothatpeoplecouldbenefitfromtheresults,Leanca
said.Inthiscontext,theofficialsagreedtosignafinancialassistance
agreementinthenearestperiod.Theagreementstotalamountisof10
milliondollarsandismeantforagriculture.

14

Leancastressedthatallformalitiesinthisrespecthadbeencleared
up. Thus, the abovementioned agreement will be signed very soon,
allowingfarmerstogetcompensationsforthelossesinflictedduetothe
2012drought.TheofficialsalsoapproachedtheWorldBankMoldova
cooperationprospectforthenextperiod.QimiaoFanspecifiedthatthe
currentpartnershipstrategywithMoldovawasfortheperiod20092013.
Fan underscored that the WB opted for the elaboration of a new
partnershipstrategyfor20142017.
TheWorldBankwillcontinuetoprovideassistancetoMoldovas
developmentandthefuturecooperationstrategywillfocusonthreekey
directions:
1) supporting economic reforms, improving the investment
environment, increasing economic competitiveness and improving the
financialsector;
2)promotingsocialprojects,consolidatinghumancapacitiesand
thoserelatedtoeducationandhealthcaresystems;
3) providing assistance in the climate risks management, which
alsoimplyassistancefortheagrofoodsectordevelopment.
FanalsoconfirmedtheWBswillingnesstofurtherbackthepublic
administrationreform,aswellastheprojectsmeanttoimprovepublic
financemanagement,plusmanyotheraspectsimportantforMoldovas
sustainabledevelopment.
VIII.WBstrategyandresultsinRepublicofMoldova
Moldovaseconomicperformanceoverthelastfewyearshasbeen
relativelystrong,aidedbyimprovedfiscal,monetaryandexchangerate
policy. Moldova experienced the highest cumulative GDP growth,
relativetotheprecrisisyearof2007,intheregion.However,growthhas
beenvolatilebecauseofclimaticandglobaleconomicconditions.Real
GDPgrewby7.1percentin2010and6.4percentin2011.In2012,GDP
contractedby0.7percent,astheeconomywashitbyadroughtinduced
contraction in agriculture (22.3 percent) and the Eurozone crisis. In
2013,growthrebounded,drivenbyarecordharvest,withGDPincreasing
by9.4percent.Duetotheweakeconomicactivityofmajoreconomic

15

partnersandRussiantraderestrictions,growthdeceleratedtoastillstrong
4.7percentinJanuarySeptember2014,y/y.
However,economydecreased3.7percentinthethirdquarterof
2015. Due to a bad harvest, agriculture decreased 17.4% and on the
expendituresidetheinternaldemandwasweakduetolowremittances.
Nonetheless,goodeconomicperformanceinthefirsthalfoftheyear,
maintainedMoldovasGDPgrowthpositive,increasing0.5percent,y/y,
inJanuarySeptember2015.
The existing macroeconomic framework is considered broadly
adequate,eventhoughmacroeconomicrisksassociatedwiththefinancial
sector, vulnerabilities to external and climatic shocks, institutional
weaknesses and related slippages in the implementation of
macroeconomic and structural reforms will continue to be substantial
overthemediumterm.EuropeanintegrationanchorstheGovernments
policyreformagenda,butpoliticaltensionsandweakgovernancepose
riskstoreforms.
Moldovas recent economic performance reduced poverty and
promotedsharedprosperity.Thenationalpovertyandextremepoverty
rates,usingnationalpovertydefinitions,fellfrom30.2percentand4.5
percent in2006to16.6percentand0.6percentrespectively in2012,
makingMoldovaoneoftheworldstopperformersintermsofpoverty
reduction.Similarly,consumptiongrowthamongthebottom40percent
ofthepopulationoutpacedaverageconsumptiongrowth.
Despiteasharpdeclineinpoverty,however,Moldovaremainsone
ofthepoorestcountriesinEurope.Themostvulnerablegroupsatriskof
povertyinMoldovaremainthosewithloweducationlevels,households
withthreeormorechildren,thoseinruralareas,familiesrelyingonself
employment, the elderly, and Roma. Additionally, the reduction in
remittancescouldnegativelyimpactconsumptionandpoverty.Moldova
performswellinsomeareasofgenderequality,yetdisparitiespersistin
education, health, economic opportunity, agency and violence against
women.Humantraffickingisaseriousproblem;Moldovaisasource,
and to a lesser extent a transit and destination country, for both sex
traffickingandforcedlabor.

16

Considering the fragile economic and political external

environment the pace of reforms must beaccelerated. Keychallenges
includefightingcorruption,improvingtheinvestmentclimate,removing
obstacles for exporters, channeling remittances into productive
investments,anddevelopingasoundfinancialsector.Moldovaneedsto
improvetheefficiencyandequityofitspublicspending,inparticular
through better management of public capital investments, which are
crucialforhighergrowth.Administrativeandjudicialreformsremaina
challenge for improving public sector governance, which is a
preconditionforEuropeanintegrationandeconomicmodernization.
Moldova'sNationalDevelopmentStrategy(NDS)Moldova2020
sets seven strategic priorities. These are justice and fight against
corruption; national education system aligned with labor market
requirements; pensions; business environment; roads infrastructure;
accessibleandinexpensivefinance;andenergyefficiency.TheNDSis
intendedtoprioritizestateinterventionstodelivertheoverarchinggoalof
bringingaboutqualitativeeconomicdevelopmentandpovertyreduction.
It was adopted by the Parliament as national law. The NDS and its
consolidatedactionplanincludesomemeasurestoreduceinequalityand
address key crosscutting themes, such as social inclusion and gender
equality,environmentalpreservation,climatechangeanddisasterevents,
and reintegration of localities from the left bank of the Nistru River
(Transnistria).
Aligned with the NDS, the World Bank Group (WBG) Country
Partnership Strategy (CPS) for FY1417, discussed by the Board on
September5,2013,willprovideMoldovawithUS$570millionoverthe
nextfouryears(US$450milliononIBRD&IDA[InternationalBankfor
Reconstruction and Development & International Development
Association, together known as the World Bank] terms, plus US$120
millionIFC[InternationalFinanceCorporation]commitments). Itwill
supportMoldovainreducingpovertyandboostingsharedprosperityby
capturingthefullbenefitsofopennessandintegrationwiththeEuropean
Unionandthebroaderglobaleconomy.Threepillarsareproposed,which
willhelpMoldovadiversifyandexpanditsendowmentofinstitutional,
human,andnaturalcapital:

17

 IncreasingCompetitiveness:continuedinstitutionalreformsfora
businessenablingenvironmentandgovernance,accesstofinance,
transparencyinthefinancialsector,andtargetedactivitiestohelp
improvecompanies'competitivenessareneededtoreducebarriers
andtotranslateeconomicopennessintoconcretebenefitsofmore
jobsandhigherincome.
Enhancing Human Capital and Minimizing Social Risks: the
wideninggapwithEU28ineducationandhealthoutcomesneeds
to be progressively closed. Demographic challenges need to be
addressed, and vulnerabilities can be tackled by strengthening
socialprotectionsystems.
PromotingaGreen,CleanandResilientMoldova:thedebilitating
effectsofclimaticeventsonagricultureandrurallivelihoodsneed
to be addressed, natural resource management improved, and
energy security and efficiency achieved to ensure sustainable
development.
The CPS has governance and gender lenses, and a calibrated
engagement inlocalitiesfromTransnistriawillbeconsidered inclose
consultationwiththeauthoritiesoftheRepublicofMoldova.
This CPS continues to address governance issues at the country,
sectorialandoperationallevelsacrossthestrategy.Interventionswillbe
pursuedtoimprovethebusinessenablingenvironment;enhancepublic
administrationreformandqualityofpublicservicedelivery;andimprove
publicfinancialmanagementandprocurementsystems.TheCPSwilluse
agovernancefiltertoensurethatgovernanceissystematicallytackledin
alloperations(analyticalandadvisoryactivitiesandlending);itwillalso
supportenhancedinvolvementofCivilSocietyOrganizationsthroughthe
GlobalPartnershipforSocialAccountabilitytowhichMoldovahasopted
in. At the operational level, WBG will ensure the highest fiduciary
standards in projects it supports while helping the Government to
strengthen country systems. This CPS is informed by a gender
assessment,theoutcomesofwhichwillbediscussedattheconceptstage
of each relevant new operation (analytical and advisory activities and
lending).

18

The World Banks current portfolio includes seven investment

projects. Total commitments amount to US$162.2 million. The
disbursementratioforFY14sofaris26.2percent(asofApril7,2014),
andwas28.5percentattheendofFY13.TheongoingIDAportfoliois
broad ranging, with the highest concentration of operations in human
development and agriculture and rural development, as well as in the
financialandprivatesectors.TrustFunds(TFs)providecofinancingto
IDAoperations,financecarbonoperations,andprovideotherformsof
support, including for AAA. The size of the active TF portfolio is
US$35.8million.
AlongsideIDAandIBRDresources,IFCoperationsinMoldovawill
continuetofocusoninvestmentandadvisoryactivitiesthatenableprivate
sectorgrowthanddiversification.IFCplansanannualfundingenvelope
ofaboutUS$30million.IFCexposureasofJune30,2013,isUS$90.3
million in 18 clients across the financial, manufacturing, agriculture,
telecommunications, water, and energy sectors. The net exposure of
MIGAinMoldovaattheendof2012amountedtoUS$17.8millionin
fourprojects.Allprojectsareinsupportofforeignbanks'subsidiariesin
the country, including microfinance organizations and leasing
operations.MIGAscontinuingsupporttotheseprojectssignalsMIGAs
efforts to underwrite projects in Moldova, encourage inward foreign
directinvestment,andaddtotheWBGsstrategyofencouragingprivate
sectordevelopmentinthecountry.
WithWorldBanksupport,someofMoldovasdevelopmentresults
include:
FINANCIALSECTOR
The World Bank is actively engaged, , in supporting the
authoritieseffortstodeepentheleveloffinancialintermediationin
Moldova,throughtechnicalassistanceandinvestment/policylending
whilemakingthesectormoreresilienttopossibleshocks.Overthe
past four years, the World Bank has built a strong dialogue with the
MinistryofFinance,theNBM(addfullnamebeforeabbreviation),and
the National Commission of Financial Markets (NCFM). The World
Bankprovidedsupporttotheseauthoritiesindraftingamendmentstothe
CapitalMarketLaw,withtheaimofenhancingthesafetyandefficiency

19

ofthecorporatesecuritiesregistrationfunction.Theselegalamendments
arependingparliamentaryapproval.Likewise,theWorldBankstartedto
work with financial sector authorities in order to provide technical
assistancetoreviewandstrengthenlegislationaimedatconsolidatingthe
enforcement powers of financial sector regulatory agencies. To
complementthoseefforts,theWorldBankiscurrentlyputtingtogethera
contingencyplanningandcrisissimulationexercise,tobedeliveredby
the World Bank Vienna Financial Sector Advisory Center (FinSAC).
Thatexercisewillbefollowedbytechnicalassistancetoreformthebank
resolutionframework.
BUSINESSREFORMS
The World Bank has been working closely with the
GovernmentofMoldovatohelpimprovetheinvestmentclimate.To
make it easier to dobusiness, as part of the Competitiveness
Enhancement Project (CEP), in 2008, the government introduced the
Regulatory Impact Assessment methodology as mandatory for the
development of all new laws and regulatory acts affecting business
operations.Inaddition,businessownersarenowabletovoicetheirviews
throughacommitteesetuptoaddressnewlegislation.In2013,theCEP
fundedthedevelopmentoftheRegulatoryReformStrategyandaction
plan,andtheWorldBankreport(EconomicandSectorWork[ESW])on
PolicyPrioritiesforPrivateSectorDevelopmentstronglyinformedthe
201314Roadmapdevelopedbythegovernment.Additionalfinancing
under the CEP provided US$22.5 million in loans to exportoriented
enterprises,andthegovernmenthasestablishedarevolvingfundfrom
repaymentsoftheoriginalcreditline,fromwhichanadditionalUS$7
million in loans has been made available. A matching grants scheme
helped Moldovan businesses obtain international quality certifications,
suchasInternationalOrganizationforStandardization(ISO)andHazard
AnalysisCriticalControlPoint(HACCP),andacquirerelevantbusiness
developmentservices.
EDUCATION
TheWorldBankfinancedQualityEducationinRuralAreasof
MoldovaProject(QERM)madeasignificantcontributionbyjump
starting education reforms;contributing to revisions of the lyceum
20

curricula and the development of associated guides; providing

teaching/learningmaterials;equipping1,190schoolswithequityschool
grantsand304schoolswithqualitygrants,helpingstudentsinpoorrural
schools; and supporting participation in international assessments.
Furthermore,theprojectsupportedtheinitiationofperstudentfinancing
inthesector,initiallyintwopilotrayons(districts)andnationwidesince
January 2013, thereby promoting efficiency in the use of resources,
educationplanning,andmonitoring.
SOCIALPROTECTION
Moldovaisontracktoachieveamorecostefficientspending
mix of its social assistance programs,and World Bank support is
instrumentaltosustainingtheseefforts.TheGovernmentcontinuespolicy
reforms and invests in improving benefits administration and
management information systems. The reforms aim to integrate the
overall social safety net into the platform provided by the expanded
targeted Ajutor Social program. The World Bank is supporting these
effortsviatheStrengtheningtheEffectivenessoftheSocialSafetyNet
Project.Pursuingaresultsbasedfinancing(RBF)approach,theUS$37
millionIDAcreditcofinancestheinterimtransitionalcostsofexpanding
theAjutorSocialprogram,whileconsolidatingotherbenefits.Theproject
isalsoinvestinginimprovingtheadministrativeefficiencyofthesocial
safety net, as well as strengthening institutional roles and capacities,
operating procedures and systems, and communications activities to
reduce resistance and generate support for reforms. Another ongoing
Bank operation, the Health Services and Social Assistance Project,
supports the creation of a modern management information system to
improvetheadministrationofsocialassistancebenefits.Thetwoprojects
complement each other and closely coordinate activities to achieve
tangibleresults.
HEALTH
TheWorldBanksupportshealthcaremodernizationthrough
theimplementationoftheHealthServicesandSocialAssistanceProject
(200713), which promotes capacity building in policy development,
implementation, financing, and management and upgrading of health
services.AnadditionalUS$10.2millionwasapprovedunderthisproject
21

in December 2011 to strengthen primary health care quality and

availabilityacrossthecountry.In2013,theWorldBankembarkedonthe
preparationofanewprogramforresultstosupporthealthtransformation
implementationfor201417.ThenewoperationwillsupportNCDrisks
reductionandhealthcareefficiencyenhancement.
AGRICULTURE
TheWorldBankscurrentsupporttothesectoriscomprised
of five projects.The Moldova Agriculture Competitiveness Project
(201217,totalfinancingUS$25.4million)seekstoaddressthecritical
competitiveness agenda by promoting market access for farmers and
supportingtheirintegrationintocomplexsupplychains.Toachievethis,
project activities will support: (i) strengthening country capacity to
managetheincreasinglysophisticatedfoodsafetyagenda;(ii)increasing
the number of farmer organizations and improving the postharvest
infrastructure;(iii)promotingtheadoptionofsustainablelandpractices
byfarmers;and(iv)ensuringastrengthenedresponsebytheauthorities
tosoildegradationchallenges.
ENERGY
Support to the sector includesthe Energy Sector Reform and
Efficiency Improvements Technical Assistance project, funded by the
GovernmentofSweden(1.8milliongrant),whichsupportsMoldovain
identifying the investments and measures needed to address : (i) the
securityandreliabilityoftheenergysupply,and(ii)theefficiencyof
bothenergyproductionandconsumption.TheWorldBankispreparing
theDistrictHeatingEfficiencyImprovementProjectforFY15tosupport
the above sector reforms. The project will finance: (i) priority
investments in the district heating system to improve the energy
efficiency, quality, and affordability of the heat supply (International
BankforReconstructionandDevelopment[IBRD]US$40million),and
(ii)debtrestructuringandthefinancingofdebtrepayment(IBRDPartial
CreditGuaranteeUS$80million,IBRDallocationUS$20million).The
WorldBankisalsoconductingaPowerMarketOptionsSectorNoteto
provide the Government with guidance on power market options, the
investmentsrequiredtoincreasethesecurityofMoldovaselectricpower

22

supply,andhowtoeffectivelyintegratetheelectricpowersectorintothe
energycommunitymarket.
ENVIRONMENT
Moldova has made important progress in protecting the
environment.Ithassuccessfullyimplementedprojectsaimedatstopping
and reversing soil degradation, while also contributing to global
objectivessuchasaplannedreductionofCO2emissionsby4.3million
tonsoverthenext10years.Ithasalsomade progressin reducingthe
existing quantities of obsolete pesticides contaminated with persistent
organic pollutants by liquidating 1,272 tons of such substances.
Furthermore, close to 100 percent of the countrys stock of
polychlorinated biphenyls (PCBs) has been accounted for, through a
national inventory, while the country disposed some 17,300
contaminated capacitors. . Going forward, the Country Partnership
Strategy(CPS)forFY1417hasadedicatedpillarsupportingagreen,
clean,andresilientMoldova.Thepillarwillaimto:(i)boostadaptation
and resilience to climate change; (ii) improve natural resources
management;and(iii)increaseenergyefficiencyandsecurity.
IX.Conclusion
Definingandmeasuringpovertybarelykicksoffthegame.Only
by understanding causes can the main business begin of designing,
implementing and evaluating interventions. In designing poverty
programmes,itiswisetorespectthevisionofpovertyarticulatedbypoor
peoplethemselves.Insomecases,thismaymeanimplementingmeasures
toincreaseincome.Butinothers,theprioritymaybetoreducevariability
of income, or strengthen womens autonomy by improving the legal
system,orimprovetheservicethepoorreceiveathealthcentres.Variety
ofthiskinddoeslittletohelpgeneratemeasuresofinternationalprogress.
To succeed in reducing poverty, countries need to do three
things:
1.Growinaninclusive,laborintensiveway.
2.Investinthehumancapitalofpeople,especiallythosewhoare
unabletobenefitfrombasicservicesduetocircumstancesbeyondtheir
control.
3.Insurepoorandvulnerablepeopleagainsttheshocksthatcan
pushthemdeeperintopovertythingssuchassevereweather,pandemics,
foodpricevariability,andeconomiccrises.
23

X.Bilbliography:
http://www.worldbank.org/en/topic/poverty/overview
http://www.worldbank.org/en/news/pressrelease/2013/07/23/improve
livesworldpoorworldbankgroupdeliversnearly53billionsupport
developingcountriesfy13
http://webarchive.nationalarchives.gov.uk/
+/http:/www.dfid.gov.uk/pubs/files/securityforall.pdf
http://www.globalissues.org/article/4/povertyaroundtheworld
http://www.poverties.org/causesofpoverty.html
http://www.odi.org/sites/odi.org.uk/files/odiassets/publicationsopinion
files/3095.pdf
http://mondediplo.com/1999/09/06poverty
http://www.un.org/esa/agenda21/natlinfo/wssd/moldova.pdf
http://www.moldova.md/en/newslst/1211/1/4100/
http://www.worldbank.org/en/country/moldova/overview#1

24