Historically, the region now encompassed by the Republic of Moldova was poorly developed. Economic activity was principally agricultural, rural poverty was endemic, and the urban economy, such as it was, was based almost entirely on commerce, food processing, and the production of consumer goods. Development prior to the mid-eighteenth century lagged for a variety of reasons, but principally because of limited resources and political instability. The region of Moldova was relatively backward in comparison with the rest of Romania.
The Economy in the Soviet Period
Under Soviet rule, the Moldavian ASSR (1924-40) experienced considerable industrial development between the two world wars, particularly in and around Tiraspol, the site of new manufacturing activity. After World War II, substantial industrialization occurred throughout the Moldavian SSR (1940- 91), especially in Chisinau, but with a continuing focus on Transnistria as well. In addition to further developing the foodprocessing industry, the government introduced the textile, machine tool, and electronics industries.
Until independence, Moldova's economy was organized along standard Soviet lines: all industry was state owned, as were commerce and finance. Approximately one-third of all enterprises were subordinate to the economic ministries of the Soviet Union, and two-thirds were subordinate to republic-level authorities. Agriculture was collectivized, and production was organized principally around state farms and collective farms.
The Moldavian economy, robust in the 1970s, slowed down somewhat in the early 1980s and contracted sharply in 1985, mainly as a result of declining activity in the wine sector, a casualty of Gorbachev's antialcohol campaign. In the late 1980s, the economy briefly regained strength and grew faster than the economy of the Soviet Union as a whole.
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