Analysis of Trade Relations Between Republic of Moldova and Austria in The Period 2005

ANALYSIS OF TRADE RELATIONS BETWEEN REPUBLIC OF MOLDOVA AND
AUSTRIA IN THE PERIOD 2005-2015
ABREVIATION..................................................................................................................................................................3
INTRODUCTION AND OVERVIEW.............................................................................................................................5
CHAPTER I. ADVANCING BILATERAL TRADE BETWEEN THE REPUBLIC OF MOLDOVA AND THE
AUSTRIA............................................................................................................................................................................7
1.1. Trade and economic cooperation framework............................................................................................................7
1.2. Dynamics of the bilateral trade................................................................................................................................11
1.3. Current trade relations.............................................................................................................................................30
CHAPTER II. BILATERAL TRADE BY ECONOMIC SECTOR.............................................................................42
2.1. Bilateral trade from the Austria point of view and experience of Austria companies............................................42
2.2. Direct investment relations......................................................................................................................................45
2.3. Identifying potential niches for further trade development.....................................................................................48
CHAPTER III ATTRACTING AUSTRIA DIRECT INVESTMENT TO THE REPUBLIC OF MOLDOVA......51
3.1. Austria investment in Moldova - current status, Austria willingness to invest in Moldova...................................51
3.2. Relative intensity of bilateral FDI...........................................................................................................................52
3.3. Identifying potential investment projects................................................................................................................54
CONCLUSIONS...............................................................................................................................................................59
SOURCES.........................................................................................................................................................................60
2
ABREVIATION
CEI Central European Initiative
CoE Council of Europe
CSO Civil Society Organisation
DAC Development Assistance Committee (of the OECD)
DC Development Cooperation
DCA Austrian Federal Act on Development Cooperation
DCFTA Deep and Comprehensive Free Trade Agreement
EC European Commission
EP Eastern Partnership
EU European Union
EUSDR EU Strategy for the Danube Region
FDI Foreign direct investment
GDI Gross National Income
GoM Government of the Republic of Moldova
IFI International financial institutions
HRBA Human rights based approach
IM Indirect Management (delegated cooperation)
MD Republic of Moldova
MSMEs Micro, small and medium-sized enterprises
NGO Non-Governmental Organisation
ODA Official Development Assistance
OECD Organisation for Economic Co-operation and Development
OeEB Oesterreichische Entwicklungsbank (Development Bank of Austria)
OeKB Oesterreichische Kontrollbank
OSCE Organisation for Security and Cooperation in Europe
PCD Policy Coherence for Development
PMO Prime Minister’s Office PPP Public-Private Partnership
RCC Regional Cooperation Council
SDG Sustainable Development Goals
SEE South East Europe
3
UBA Umweltbundesamt (Environment Agency Austria)
UN-CRPD United Nations Convention on the Rights of Persons with Disabilities
UNDP United Nations Development Programme
UNICEF United Nations International Children’s Emergency Fund
UN SC United Nations Security Council
USD United States Dollar
VET Vocational education and training
WKÖ Wirtschaftskammer Österreich (Austrian Federal Economic Chamber)
ZAMG Zentralanstalt für Meteorologie und Geodynamik (Austrian Central Institute for
Meteorology and Geodynamics)
4
INTRODUCTION AND OVERVIEW
The 1955 Austrian State Treaty ended the four-power occupation and recognized Austria as
an independent and sovereign state. In October 1955, the Federal Assembly passed a constitutional
law in which "Austria declares of her own free will her perpetual neutrality." The second section of
this law stated that "in all future times Austria will not join any military alliances and will not
permit the establishment of any foreign military bases on her territory." Since then, Austria has
shaped its foreign policy on the basis of neutrality.
In recent years, however, Austria has begun to reassess its definition of neutrality, granting
overflight rights for the UN-sanctioned action against Iraq in 1991, and, since 1995, contemplating
participation in the EU's evolving security structure. Also in 1995, it joined the Partnership for
Peace, and subsequently participated in peacekeeping missions in Bosnia. Discussion of possible
Austrian NATO membership intensified during 1996. ÖVP and theTeam Stronach aim at moving
closer to NATO or a European defense arrangement. SPÖ and FPÖ, in turn, believe continued
neutrality is the cornerstone of Austria's foreign policy, and a majority of the population generally
supports this stance.
In February 2000, Austria's foreign relations cooled down when the ÖVP formed a coalition
with the FPÖ after the 1999 election. European governments imposed diplomatic sanctions, and the
United States called home its ambassador.[1] The diplomatic sanctions were lifted in September
2000, after a three-member panel assessed human rights and political life in Austria. [2] In November
2000, the United States and Austria normalized their relations.[3]
Austrian leaders emphasize the unique role the country plays as an East-West hub and as a
moderator between industrialized and developing countries. Austria is active in the United Nations
and experienced in UN peacekeeping efforts. It attaches great importance to participation in
the Organisation for Economic Co-operation and Development and other international economic
organizations, and it has played an active role in theOrganization for Security and Cooperation in
Europe (OSCE).
Vienna hosts the Secretariat of the OSCE and the headquarters of the International Atomic
Energy Agency, the United Nations Industrial Development Organization, and the United Nations
Drug Control Programme. Other international organizations based in Vienna include
the Organization of Petroleum Exporting Countries, the Organization for International Economic
5
Relations (OiER) and the International Institute for Applied Systems Analysis. Recently, Vienna
added the preparatory commission for the Comprehensive Test Ban Treaty Organization and
the Wassenaar Arrangement (a technology-transfer control agency) to the list of international
organizations it hosts.
Austria traditionally has been active in "bridge-building to the east," increasing contacts at
all levels with Eastern Europe and the states of the former Soviet Union. Austrians maintain a
constant exchange of business representatives, political leaders, students, cultural groups, and
tourists with the countries of central and eastern Europe. Austrian companies are active in investing
and trading with the countries of central and eastern Europe. In addition, the Austrian Government
and various Austrian organizations provide assistance and training to support the changes underway
in the region.
The aim of the study was to investigate and assess the impact of foreign aid of Austrin on
Moldova socioeconomic development.
6
CHAPTER I. ADVANCING BILATERAL TRADE BETWEEN THE REPUBLIC OF
MOLDOVA AND THE AUSTRIA
1.1. Trade and economic cooperation framework
Austrian-Moldovan relations are foreign relations between Austria and Moldova. Both
countries established the diplomatic relations on March 25, 1992. Austria is represented in Moldova
through its embassy in Bucharest(Romania) and through an honorary consulate in Chişinău.
Moldova has an embassy in Vienna and an honorary consulate in Innsbruck.
The prospect of closer cooperation Austria with the European Union is seen as the driving
force for reform efforts in the countries of the South Caucasus and Black Sea Regions.
Today, Georgia,Armenia and Azerbaijan, but also Moldova, are in the midst of sweeping economic
changes. Most of the population is still struggling with severe poverty and high unemployment.
Poor infrastructure, idle branches of industry, extremely small-scale farming, barriers in transport
and business, corruption and political and territorial conflicts pose general problems that need to be
solved.
In keeping with the EU Neighbourhood Policy, linking the Black Sea Region with the
Danube Region is a major concern of Austrian foreign policy. Cooperation between Austria and
South Caucasus began as long ago as 1988 with relief measures after the earthquake in Armenia.
Since 2004, the Republic of Moldova has been a priority country of Austrian Development
Cooperation (ADC) and South Caucasus numbers among the key regions of ADC as of 2006.
Beginning in 2011, Austria has been realigning its engagement in South Caucasus. Based on
bilateral programmes for Armenia and Georgia, Austrian Development Cooperation concentrates on
promoting agriculture and forestry in the border regions. Austrian operations in Moldova attach
priority to water supply and sanitation and economic development and employment promotion with
a focus on vocational training. Improving the climate for business investment, transferring know-
how for modernising and raising agricultural production and promoting modern and efficient
administrative capacities and competitive enterprises will contribute to higher local creation of
value, create new jobs and in turn improve the standard of living of the population.
In 1996, the President of Moldova, Mircea Snegur, visited Austria. In 1997, Petru Lucinschi,
President of Moldova, participated inSalzburg at the Economical Summit of central and eastern
7
Europe.[1] In 1999, Petru Lucinschi met with Benita Ferrero-Waldner, State Secretary to the Austrian
Federal Ministry of Foreign Affairs. He said that there were bright prospects for Moldova and
Austria to expand their bilateral mutually beneficial cooperation, and spoke up for more active
Austrian investment in privatized Moldovan enterprises and for creating the legal framework to
broaden the bilateral interaction.1
In 2003 Vladimir Voronin, President of Moldova, participated at the 10th meeting of the
heads of states from Central Europe in Salzburg, Austria, at a meeting that gave leaders from
countries across the continent the chance to exchange ideas on an equal footing2
In July 2007, Austrian State Secretary Hans Winkler met the Moldovan Deputy Foreign
Minister, and stated that Moldova's course of reform was also in Austria's Interest.3
In January 2008, Vladimir Voronin met the director general for external economic relations
at the Austrian Federal Economy and Labour Ministry Johann Sachs on a visit to Moldova. They
discussed the recent successful meeting of the Moldovan-Austrian intergovernmental commission,
and possibilities of developing Moldovan-Austrian trade and cooperation in renewable energy,
agriculture and tourism4.
They noted that official data show that Moldova's exports to Austria went up by 50% and
Austria's exports to Moldova by 80% in the first nine months of 20075
Treaties and policy statements
Austria and Moldova have agreed on various treaties covering subject such as bilateral
foreign trade relations6, transport, promotion and protection of Investments and avoidance of double
taxation7.]
1 http://nl.newsbank.com/nl-search/we/Archives?
p_product=NewsLibrary&p_multi=BBAB&d_place=BBAB&p_theme=newslibrary2&p_action=search&p_maxdocs=2
00&p_topdoc=1&p_text_direct-0=0F99F98B9B19CBFB&p_field_direct-
0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM
2 http://www.radio.cz/en/section/curraffrs/central-european-heads-of-state-meet-in-salzburg
00&p_topdoc=1&p_text_direct-0=11A77D99A7D9ACE8&p_field_direct-
4 http://www.moldpres.md/default.asp?Lang=en&ID=80613
5 http://www.moldpres.md/default.asp?Lang=en&ID=80321
00&p_topdoc=1&p_text_direct-0=0F97DC39C8DC0723&p_field_direct-
7 https://www.bmeia.gv.at/europa-aussenpolitik/voelkerrecht/staatsvertraege/bilaterale-staatsvertraege/suchergebnisse/?
tx_bmeiadb_piresults%5BsearchType%5D=bilateralTreaty&tx_bmeiadb_piresults%5Bq-partner
%5D=115&cHash=252a1872d11efe989b3e6cccd94f67fd
8
In July 2000, Benita Ferrero-Waldner, minister of foreign affairs of Austria, expressed
optimism about negotiations to define the Transnistrian legal status based on political stability in
Moldova and its territorial integrity.8
In April 2006, Ursula Plassnik, foreign minister of Austria, said that Moldova is a neighbour
and a partner of the community of E.U. values. Austria saluted progress in strengthening the
macroeconomic situation, improving human rights and reducing corruption. Although recognizing
Moldova's aspirations for entry into the E.U., she noted that this would take time. In October 2008,
at the signing of an Austro-Moldovan agreement on development cooperation, Foreign
Minister Ursula Plassnik said "Austria is a reliable friend and partner of Moldova. The
intergovernmental agreement is designed for Moldova's long-term social, ecological and economic
development and the establishment of cooperation and development relations with Austria.
In 2005 the total volume of the trade with Austria was US$33.56 million, growing steadily.
Austrian companies active in Moldova include Austrian Airlines,[1] Raiffeisen Zentralbank, which
advised the Moldovan government on privatization ofMoldtelecom[14] and the GRAWE
insurance company,[15] one of the leading insurance companies in Moldova.9
The community of development partners in the Republic of Moldova would be honored to

engage in the development policy dialogue with the new Government. This “Briefing Book from
Development Partners” is offered as a first step in such a dialogue and is solely intended to assist
the new Government by providing development partners’ views and proposals that it can use to the
extent it considers useful and relevant. These recommendations are based on Moldova’s existing
policy orientations as set out in the National Development Strategy Moldova 2020, its international
obligations, and the Association Agreement (AA) with the European Union (EU).
Moldova made a formal commitment to accelerate the country’s development by making it
capital-intensive, sustainable and knowledge-driven. With a strategic framework outlining
Moldova’s development path in place, it is now critical to accelerate implementation of the reforms
including those set out in the Association Agenda to move closer to the EU. Need to ensure a stable
economic environment and sound management of public finances Moldova faces significant risks in
the financial sector, which should be addressed as a matter of urgency. A well-regulated and reliable
8 http://www.austria.org/content/view/297/
9 http://www.infotag.md/news-en/562248/
9
banking sector is fundamental to business, people and international investors. At the same time a
robust system of public financial management should be in place to ensure transparency and
accountability of public finances. Moldova should develop a competitive business environment
attractive to new investment. Moldova should also take advantage of new trading opportunities
through effective implementation of the Deep and Comprehensive Free Trade Area (DCFTA).
In recent years Moldova showed considerable progress. However, major inequalities persist,
with costs to society as a whole. Rural Moldova continues to lag behind changes happening in a few
cities in terms of poverty, jobs and access to basic services. Gender inequality also poses a
significant loss to overall socioeconomic advancement. Equity lies at the heart of the future global
Sustainable Development Goals agenda. A focus on overcoming inequalities will accelerate
economic growth and tap into the full human capital potential in Moldova.
The Republic of Moldova is one of five priority countries of the Austrian Development
Cooperation (ADC) in South-Eastern/Eastern Europe, which in turn is one of seven ADC priority
regions worldwide. Bilateral cooperation with the Republic of Moldova began in 2001. Since 2004,
Moldova has been a priority country of ADC. In 2005, the Austrian Development Agency (ADA)
opened a cooperation office in Chisinau which was upgraded to an Embassy in 2007 with an
Ambassador resident in Bucharest.
Peace and security, poverty reduction and environmentally and socially sustainable
development are defined as strategic objectives of ADC in the Austrian Development Cooperation
Act. ADC’s Three-Years Programme 2013-2015 and the bilateral Agreement on Development
Cooperation between Austria and the Republic of Moldova define, in accordance with Moldova´s
goals and policies, particular priorities of bilateral cooperation. ADC activities are aligned with
international commitments including the MDGs and the Paris Declaration on Aid Effectiveness
In 2004 ADC implemented its first bilateral programme in the field of poverty alleviation.
Target groups were children, persons with disabilities, elderly and ill people.
The following priorities have been set for the programmes and projects of ADC in the
Republic of Moldova, based on the ADC Country Strategy 2011-2015:
 The overall goal of the cooperation is poverty alleviation
 The basis of the collaboration is the National Development Strategy 2020
10
Focal areas in the Republic of Moldova are:
 Water/Sanitation in rural areas with a geographical focus on the Southern and
Western parts of the Republic of Moldova
 Vocational Education and training including continuous training with a view to
creating and improving job opportunities that ensure decent and sustainable livelihoods
Non focal area: Governance

Measures to support good governance, including conflict prevention and migration
management, and strengthening civil society, are designed to complement ADC activities in
Moldova.
Gender equality and empowerment of women

ADC will pursue gender mainstreaming - based on ADC policy guidelines for Gender
Equality and Empowerment of Women - an integral aspect of ADC’s approach in Moldova.
By the end of 2012, ADA has spent 10.6 million EUR in the Republic of Moldova, while
the total ODA (including Softloans and multilateral Projects) is about 20 Mio. EUR. Currently,
ADC supports 20 projects (including bilateral projects, NGO cooperation projects, regional projects
including Moldova). Additionally, one multilateral project is being financed by the Austrian
Foreign Ministry.
1.2. Dynamics of the bilateral trade
Austria is a landlocked country of approximately 8.5 million inhabitants in Central Europe.

It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east,
Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west. The territory of
Austria covers 83,855 square kilometres (32,377 sq mi) and has a temperate and alpine climate.
Austria's terrain is highly mountainous due to the presence of the Alps; only 32% of the country is
below 500 metres (1,640 ft), and its highest point is 3,797 metres (12,457 ft). The majority of the
population speaks German, which is also the country's official language. Other local official
languages are Croatian, Hungarian and Slovene.
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Austria is a parliamentary representative democracy comprising nine federal states. The
capital and largest city, with a population exceeding 1.6 million, is Vienna. Austria is one of the
wealthiest countries in the world, with a nominal per capita GDP of $43,723 (2010 est.). The
country has developed a high standard of living and in 2010 was ranked 25th in the world for its
Human Development Index. Austria has been a member of the United Nations since 1955, joined
the European Union in 1995, and is a founder of the OECD. Austria also signed the Schengen
Agreement in 1995, and adopted the European currency, the euro, in 1999.
Austria is a federal republic comprised of nine independent Federal Provinces: Burgenland,
Carinthia, Lower Austria, Upper Austria, Salzburg, Styria, Tyrol, Vorarlberg and Vienna.
The origins of Austria date back to the time of the Roman Empire when a Celtic kingdom
was conquered by the Romans in approximately 15 BC and later became Noricum, a Roman
province, in the mid 1st century AD—an area which mostly encloses today's Austria. In 788 AD, the
Frankish king Charlemagne conquered the area and introduced Christianity. Under the native
Habsburg dynasty, Austria became one of the great powers of Europe. In 1867, the Austrian Empire
was reformed into Austria-Hungary.
The Austro-Hungarian Empire collapsed in 1918 with the end of World War I. The First
Austrian Republic was established in 1919. In the 1938 Anschluss, Austria was occupied and
annexed by Nazi Germany. This lasted until the end of World War II in 1945, after which Austria
was occupied by the Allies and its former democratic constitution was restored. In 1955, the
Austrian State Treaty re-established Austria as a sovereign state, ending the occupation. In the same
year, the Austrian Parliament created the Declaration of Neutrality which declared that the country
would become permanently neutral.
As one of the most prosperous and stable EU Member States, Austria offers its investors
ideal conditions. The Austrian economic system can be characterized as a free market economy with
a strong social focus by also taking into account the weaker members of society. Austria also
features a tried and tested system of economic and social partnership, which has traditionally played
a strong and reconciliatory role in wage and price policies.
Austria is a highly developed industrialized country with an important service sector. The
most important industries are food and luxury commodities, mechanical engineering and steel
construction, chemicals, and vehicle manufacturing.
12
In the field of agriculture, Austria is witnessing a strong trend towards organic farming. With
an overall share of 11.9%, organic farms in Austria occupy a leading position among the EU
Member States. In this organic branch of agriculture, 88.1% of enterprises are dedicated to livestock
farming.
As regards raw materials and energy production, Austria can draw on an abundance of
resources. It has natural resources of iron ore, non-ferrous metals, important minerals and earths.
The constant growth of the industrial sector, however, increasingly requires supplementary imports.
This is also true of fuels, energy resources, and the electricity-generating industry. Austria has its
own resources of petroleum and natural gas. The generation of hydroelectric power is constantly
being expanded, which makes Austria the leader in the field of hydroelectric power in the European
Union.
Austria's industrial and commercial sectors are characterized by a high proportion of
medium-sized companies. Austrian industry covers every branch of manufacturing, from basic
goods to the labor-intensive production of highly processed products. The construction of plants and
systems (encompassing the planning, delivery, and assembly of turn-key production facilities,
including the required know-how and operational expertise) is making up an increasingly important
share. This field is strongly export-oriented, as is the electronics sector (including, for instance, the
production of integrated circuits).
Austria is world-famous for its arts and crafts, most notably fine hand-crafted items,
costumized jewellery, ceramics, and glassware.
Tourism is an essential pillar of the Austrian economy. Austria is a mountainous country
with one of the largest natural land reserves in central Europe.
In the global-political arena, Austria is increasingly becoming an international meeting
point, which is illustrated by the large number of summits and conferences held in Austria. At the
same time, the country's relevance as a vital transit country between the economic areas of Europe
is increasing, especially for European energy supplies, including petroleum, natural gas, and
electricity.
Moldova is seeking rapprochement to the European Union and initialled the EU Association
Agreement at the Eastern Partnership Summit meeting on 29 November 2013 in Vilnius. The
Agreement will be signed end of June 2014.The creation of a deep and comprehensive free trade
13
area (DCFTA) is also part of the Association Agreement. In order to facilitate contacts with the EU,
a visa liberalisation programme with the EU entered into force in April 2014.
Origin of GDP, 2014
The parliamentary elections of 2009 led to a shift of influence, as the Communist Party lost
its absolute majority. In September 2009, four liberal parties formed a pro-European government -
the “Alliance for European Integration” (AEI).
In March 2012 the four ruling parties elected Nicolae Timofti as president of Moldova.
Moldova benefits from the “more for more” principle of the Eastern Partnership. It provides
for a special assistance to the most advances partnership countries by means of ENI, the
partnership’s financial tool. This generous support by the EU will increase due to the elections
scheduled in November 2014.
In order to resolve the conflict around Transnistria, a breakaway region seeking
independence/association with Russia, the 5+2 talks are being held. Some of them were hosted in
Vienna. The term “5+2” relates to the format of these meetings: Moldova and Transnistria as two
parties, the OSCE, Ukraine and Russia as mediators and EU and US as observers. The relations
14
between Moldova and Transnistria remain complicated, in particular due to the crisis in Ukraine
after the referendum and the Russian annexation of the Ukrainian peninsula Crimea.
On 1 December 2005 the EU has created a “Border Assistance Mission” (EUBAM)

following a request from Moldova and Ukraine. This should help secure the Moldovan-Ukrainian
border, especially the Transnistrian section. This mission includes training for local border guards
and has been extended until November 2015.
Moldova is a focal point for Austrian Development Assistance. The Cooperation Agreement
between Austria and Moldova was signed in 2008. Most of the projects focus on water resources
and waste water management as well as professional education. There is also a surge of
humanitarian activities by private Austrian charity organizations.
Completed Projects:
 2002: A humanitarian project to supply medicines to the population of Moldova
(in the amount of 10.000 Euro) with the international organization Pharmaciens sans Frontières.
 2003: Rehabilitation/renovation of the heating system of a dermato-
venerological/HIV AIDS Hospital outside of Chisinau, in the amount of 82.000 €, implemented
by Save the Children Moldova.
 01.12.2004 – 01.09.2005: Rehabilitation of and providing of necessary medical
equipment for 2 intensive care rooms in a TBC Hospital in Chisinau (Spitalul Clinic Municipal
de Ftiziopneumologie Chisinau), implemented by Caritas Austria. The total budget made up
91.900 €, the contribution of ADC was 88.000 €.
 01.08.2005 - 31.03.2006: Construction of the gas pipeline in Creţoaia, rayon
Anenii Noi, implemented by Caritas Austria, having besides as an objective to stop the
migration of the population of the village Creţoaia; due to the gasification realized through this
project small local enterprises could not only restart their activity, but also create themselves
new workplaces. The total budget made up 96.076,36 €, the contribution of ADC 40.131,36 €.
 01.12.2005 – 31.08.2006: Setting-Up a Witness-Protection Program, intended to
provide know-how transfer in the creation of an independent governmental entity responsible
for witness-protection as well to provide know-how transfer in the execution of witness-
protection programs within the Moldovan Ministry of Interior to fight THB. The project was
15
implemented by the Agentur für Europäische Integration und Wirtschaftliche Entwicklung. The
contribution of ADC was 54.504,36 €.
 01.06.2005 – 31.12.2006: Cooperation with the SDC in Water and Sanitation
Sector in the Republic of Moldova. (Phase I). ADC contributed to the Swiss Development
Cooperation WatSan Program for additional projects (in Cărpineni, Drăguşenii Noi, Scoreni and
Călmăţui) to improve the sanitation conditions and drink water supply in Central Moldova
(outside of Chisinau) with 300.000 €.
 01.10.2005 - 31.12.2006: Growing Sustainable Business (GSB) in Albania,
Bosnia and Herzegovina, FYR Macedonia and Moldova, implemented by UNDP. The overall
goal of the project was to broker and facilitate linkages between large businesses, potential
investors and local partners, to strengthen and expand the local MSME sector and facilitate the
development of new products and services which address the needs of the poor, acting as an
interface by the identification of leading investors and inviting them to work in partnership with
local development actors and SMEs. The contribution of ADC was 394.560 €.
 01.09.2006 – 28.02.2007: Elaboration of the Study “Medium Term State Policy
Paper on Training Professionals for National Economy’s Branches”, implemented by the
Moldovan Institute for Public Policy. Following an inquiry of the Moldovan Ministry for
Economy and Trade, the Austrian Development Cooperation together with the Swiss Agency for
Development and Cooperation supported financially the elaboration with 7.128 € each.
 01.12.2005 - 31.07.2007: Durable TBC Treatment, predominantly for children, in
the Republic of Moldova, implemented by Caritas Austria, being a continuation of the project
Rehabilitation of and providing of necessary medical equipment for 2 intensive care rooms in a
TBC Hospital in Chisinau. Besides upgrading of equipment, there was performed also training
of the staff of the Municipal Clinical TBC Hospital in Chisinau, know-how transfer and
awareness raising measures, post curative assistance in form of supply with vitamins and
nutrition for children to be released from the Hospital and their families. The contribution of
ADC was 157.090 €.
 01.12.2004 - 31.08.2007: Agricultural Schools as Centres of Competence for
Regional Education and Training in Rural Areas in Moldova (Phase 1) , implemented by
KulturKontakt Austria. The main objectives of the project, involving 2 pilot agricultural
schools, in Leova and Nisporeni, were to adapt the school program to the existing and
16
anticipated needs in the region, aiming at the skills necessary for developing of self-supporting
farms into micro businesses and the auxiliary services that could be generated around them as
well to develop the schools into centres for regional development in agriculture. The
contribution of ADC was 255.333 €.
 01.07.2006 – 30.09.2007: Support to the Implementation of the National Human
Rights Action Plan for 2004-2008 in the Republic of Moldova, implemented by UNDP. The
contribution of ADC was 100.000 €.
 01.09.2004 - 15.10.07: Children and Youth Protection Program, implemented by
Hilfswerk Austria. In the centre of attention of the program was the fight of such problems as
institutionalization, neglect and abuse of children and youth, trafficking in human beings,
poverty and insufficient education and training, through construction measures and
infrastructure works, promotion of an alternative care of children and youth with special needs,
creation of training opportunities for children, youth and educators and institutional
development of the social sector. Among the main activities were: Developing a Vocational
Education School and a Day Centre for Youth in Grigorauca, rayon Singerei; Developing a
Rehabilitation Day Care Centre for Disabled Children in Dubasari; Improving living conditions,
trainings and technical assistance for the Boarding School and special School for disabled
children in Straseni and the Boarding School for Disabled Children in Tiraspol; trainings for
and building up the personnel for the Small Group Homes in Chisinau. The contribution of ADC
was 648.000 €.
 01.01.2006 - 31.12.2007: Trade Union Education Austria Moldova (TUEDAMO),
implemented by Weltumspannend Arbeiten. This project aimed at further development of social
partnership structures in the Republic of Moldova through cooperation between Austrian and
Moldovan trade unions. Education and training activities for representatives of employees and
active trade union members as trainers of trainers must contribute to the achievement of a
multiplication effect. The contribution of ADC was 45.000,00 €.
 15.07.06 – 31.12.2007: Gender-Responsive Budgeting in Southeast Europe for
Moldova, Albania, Macedonia, Bosnia & Herzegovina, implemented by UNIFEM / Slovak. The
overall aim of the program was to strengthen democratic governance to promote women's
human rights through support to policy planning and budgeting processes to integrate a gender
17
perspective in at least four SEE countries, Moldova, Albania, Macedonia and Bosnia &
Herzegovina. The contribution of ADC was 200.000 €.
 01.07.2007 – 29.02.2008: Relief and Technical Assistance Response to Drought
Crisis in Moldova, implemented by UNDP Moldova. This project constituted a coordinated UN
response to the request for assistance made by the Government of Moldova to the UN in July
2007. It aimed to address primarily the emergency needs created by the severe drought affecting
the country during the summer of 2007 and built on the findings of a joint FAO /WFP
assessment carried out in July and August 2007. The total Austrian contribution made up
100.000 Euro: 50 % (50.000 €) was funded by the Austrian Development Cooperation and 50%
(50.000 €) by the Federal Ministry of Agriculture, Forestry, Environment and Water
Management (BMLFUW).
 15.12.2005 - 30.04.2008: Coordination of Return and Reintegration Assistance
for voluntary returnees to Moldova. (1 st Phase), implemented by IOM. The project aimed at
sustainable return and reintegration of voluntary returnees, Moldovan citizens, having in Austria
the status of asylum seekers, persons granted asylum or having refoulement protection. The
contribution of the ADC referred to reintegration measures (creation of a new small enterprise,
vocational trainings, purchase of a tool kit after successful completion of the training, job
placement assistance etc.) A further crucial element is the extension of the assistance measures
to a number of beneficiaries from the local communities in order to diminish possible tensions
between needy people from the community and the returnees, mainly through income-
generating activities. The contribution of ADC was 255.000 €.
 01.05.2007 - 30.04.2008: Website on Eco-Finance Institutions, implemented by
Aequilibrium Consulting GmbH. In the framework of the project, in Albania, Bosnia &
Herzegovina, Croatia, Macedonia, Montenegro and Serbia (including Kosovo) and Republic of
Moldova, an internet information platform on existing national and international environmental
financing mechanisms has been launched. The contribution of ADC was 43.600 €.
 01.01.2006 - 30.05.2008: Contribution to Investment Compact 2006 – 2008,
implemented by Organisation for Economic Co-Operation and Development. The Investment
Compact initiative of the OECD to promote private sector in Albania, Bosnia and Herzegovina,
Bulgaria, Croatia, Macedonia, Republic of Moldova, Serbia and Montenegro, incl. Kosovo and
Romania in 2006-2008 continued to build on its central objective of improving the investment
18
climate and increasing private sector investment in the region. The contribution of ADC was
400.000 €.
 01.01.2007 - 31.05.2008: Prevention of Trafficking by Organization of
Beekeeping Business and Vocational Training for Unemployed Rural Women, implemented by
ORDSE. The main goal of this project, implemented in the framework of the Call for Proposals
'Initiative against Trafficking in Human Beings with focus on women and girls in SEE'
announced by Austrian Development Agency, was to diminish the trafficking factors by
increasing self-employment opportunities and financial security of young unemployed women
aged 17-30 from rural area, potential victims of human trafficking. The project targeted two
objectives: to endow 20 rural women with beekeeping business skills, that would enable them to
develop their own business, and to support them in developing of sustainable income sources
setting up small bee yards. The contribution of ADC was 39.038 €.
 01.06.2007 - 31.08.2008: Diplomatic Academy Support Programme 2007/2008,
implemented by the Diplomatic Academy Vienna. The aim of the project was to support
trainings and formation activities for public service executives from South-eastern Europe,
Eastern Europe and Central Asia, carried out by the Diplomatic Academy Vienna. The focus of
the scholarships in the study year 2007/08 was the support of employees from public service
dealing in the ADC partner countries with EU affairs. The contribution of ADC was 139.900 €.
 01.02.2008 - 31.08.2008: Support to UNDP Moldova’s Emergency Maize Seed
Distribution, implemented by FAO / UNDP. The main objective of this project was to improve
the food security situation of the drought-affected households in the most affected rayons of
Central, Southern, Northern, Gagauzia and Transnistria regions of Moldova by ensuring the
planting of maize, in the spring 2008 season. Through the project, minimum 100,000 (maximum
173,000) small-scale households in the most affected rayons of those regions of Moldova were
able to plant 0.5 ha of maize on time, with good quality seed, thereby improving their food
security situation. This project was funded 100% by the Federal Ministry of Agriculture,
Forestry, Environment and Water Management (BMLFUW) under the Food Aid Convention.
The contribution amounted to 200.000 Euro.
 01.11.2007 - 15.09.2008: School- and Kindergarten-Feeding Project Cantemir,
implemented by Hilfswerk Austria. The severe drought throughout the Republic of Moldova
during the spring and summer months 2007 caused food shortages and as a consequence the
19
prices for agricultural products were dramatically increased. Many families could not afford to
pay these increased food prices. The menus of school canteens have decreased in nutritional
value. Together with the Primaria Cantemir existing school menus in the city of Cantemir had to
be revised and nutritious meals for 742 school children and 255 kindergarten children in the city
of Cantemir throughout the school year 2007-08 have been ensured in the framework of the
project: on the one hand the expenses which so far had to be paid by the parents were taken over
and on the other hand the total amount available per pupil/child has been increased in order to
be able to provide high-value food. The Primaria Cantemir continued to pay its existing share of
canteen expenses. The contribution of ADC was about 40.000 €, of the Lichtenstein
Development Service (LED) about 60.000 Euro.
 01.01.2007 - 31.12.2008 Development of a Pedagogical Model (Inclusive
Educational Concept) in Moldova, implemented by Hilfswerk Austria. This project intended to
create a pedagogical, social and financial model for the inclusion of children with disabilities in
primary and middle schools in the Republic of Moldova. It was intended to identify best
practices in the international field and adapt these strategies to the particular needs of the
Moldovan education system. Moreover, the project’s ultimate goal was aimed at the reallocation
of state funds assigned for general educational needs for the inclusion of children with special
needs in the mainstream educational institutions. The contribution of ADC was 50.000 €
 01.01.2008 - 31.12.2008 Know How Transfer Center XVII (2008), implemented
by Österreichischer Städtebund. The Know-how-Transfer Center (KTC) was created
in 1992, in order to offer to the towns and communities in the new states of Central and Eastern
Europe, Central Asia and Caucasus region a contact point for administrative cooperation with
Austria. The scope of KTC was to provide with the know-how of the Austrian public
administration existing on federal, counties’ and communities’ level as well as with the know-
how of universities and institutes (in form of seminars, study tours, counselling or expertise) to
public servants and decision makers from South European countries, including from the
Republic of Moldova. Contribution of ADC was 350.000 €
 01.12.2006 - 31.12.2008 Empowerment for Prevention of Trafficking,
implemented by: Catholic Relief Services. Catholic Relief Services (CRS) and the local
partners in Bosnia and Herzegovina and Moldova implemented a two-year project in the
framework of the Call for Proposals 'Initiative against Trafficking in Human Beings with focus
20
on women and girls in SEE' announced by Austrian Development Agency. The project goal
being empowerment of young women and girls to make safe life choices. In addition, the
project will build alliances at the local level of business partners, local NGOs, local
governments, and local employment offices to identify opportunities for creating and sustaining
employment opportunities where young women receive technical skills training and guaranteed
employment. Contribution of ADC was 378.984 €
 01.02.2008 - 31.05.2009 Support to the Gender Task Force of the Stability Pact:
SEE Women MP Exchange 2008/2009, implemented by Gender Task Force, Regional Center for
Gender Equality. The primary target group was women Members of Parliament in Southeast
European Parliaments including in the Moldovan Parliament. The objective of the project was
to increase the political participation of women MPs in decision making processes and their
expertise in Gender Mainstreaming, in view of the EU integration or integration into European
structures respectively. Networks were to be established together with NGOs, authorities and
national experts. The implementation of CEDAW (Convention on Elimination of All Forms of
Discrimination of Women) was to be particularly supported. Contribution of ADC was 106.000
€
 01.12.2005 - 31.12.2008 Support of the SEE Countries to Set-up Police
Capacities to Dam-Up THB, Haulage and Illegal Migration, Implemented by Agentur für
Europäische Integration und Wirtschaftliche Entwicklung. With this programme, implemented
by the experts of the Criminal Intelligence Service Austria, a regional approach was being
pursued, in order to assist Albania, Bosnia & Herzegovina, Bulgaria, Croatia, Moldova,
Macedonia, Serbia and Montenegro, incl. Kosovo, and Romania in the creation of their own
efficient structures to fight TBH and illegal migration. The aim of the project was mainly to
strengthen the police authorities in this field. Contribution of ADC was 1.900.200 €
 02.10.2008 - 30.06.2009 REPARIS – Strategic Partnership - Kick-Off-Phase,
Implemented by Centre for Financial Reporting Reform – Europe and Central Asia Region –
The World Bank. The Road to Europe: Program of Accounting Reform and Institutional
Strengthening (REPARIS) was a regional programme aimed at creating a transparent policy
environment and effective institutional framework for corporate reporting. The program was
designed around the introduction, implementation, and effective enforcement of relevant
portions of the EU acquis communautaire with a view to contribute to foreign direct and
21
portfolio investment, foster private and financial sector developments, improve the business
environment and investment climate, and facilitate potential integration into (or harmonization
with) the European Union. The Program is designed for the Southeastern Europe and the
Republic of Moldova. Contribution of ADC was1.038.000 €
 01.01.2008 - 31.12.2008 Postgraduate University Course in “Peace and
Development Studies”, implemented by European University Center for Peace Studies . The
main objective of the university course 'Peace and Conflict Studies' was to promote a culture of
peace and non-violence as well as economic and social development. The concrete project goal
was to train scholars from Africa, Asia, and Latin America, SEE (including from the Republic
of Moldova) and NIS in the field of peace, security and conflict transformation. The university
course was designed for university graduates at the beginning of their professional life or
having already relevant work experience and aiming at having a career in the field of peace and
development or willing to integrate the peace perspective into their work. Contribution of ADC
was 76.928 €
 01.09.2008 – 31.08.2009 Humanitarian Aid to Vulnerable Families and Their
Children After Floods in Moldova. After severe floods in July and August 2008, the ADC
contributed to a UNICEF programme which targeted specifically the needs of families and their
children and benefited approx. 10.000 evacuated persons. Measures included psycho-social
assistance for children to decrease post-traumatic symptoms, measures to avoid increased
school-drop-out rates in affected areas, measures to avoid water-borne diseases in affected
areas. Contribution of ADC was 150.000 €
 01.11.2006 - 31.10.2009, International Summer School and Distance Learning:
Centre for Peace Initiatives, Democracy Changes and Conflict Resolution. Implemented by:
Hilfswerk Austria. Through confidence-building measures, this project brought people
from the both sides of the Nistru together, fostering the process of re-integration between the
Republic of Moldova and the region of Transnistria which in 1992 declared independence. The
annual summer school and distance-learning programme, co-financed by the ADC, represented
an international academic programme for university students from both parts of the country.
Courses were offered in the fields of international relations, political science, conflict resolution
and democratisation. The programme was implemented in cooperation with the Diplomatic
22
Academy Vienna, the OSCE and the Moldovan Academy of Science. Contribution of ADC:
191.250 €
 01.10.2007 - 30.09.2010, Balkan Case Challenge 2008 – 2010. Implemented by:
World University Service (WUS). The Balkan Case Challenge was an annual case study based
competition and recruitment event with the aim of furthering excellent students from 11 South
Eastern Europe countries, including from the Republic of Moldova, by strengthening links
between higher education and economy with a special focus on student recruitment and the
employability aspect. The participants were put to the test in the following four disciplines: Law
Moot Court, Business Case Competition, Model European Council and Information
Communication Techniques Case Competition. Case studies are becoming a standard feature of
academic education, because of the learning experience the students gain by putting their
theoretical knowledge into practice. Additionally, case studies train oral presentation skills,
analytical skills, creativity, critical and systemic thinking, contribute to awareness raising and
the problem solving capabilities, and develop soft skills in team-work and communication. And
these skills represent standard professional qualifications that employers look for when
reviewing job applications. Therefore it is important that the case study method is promoted and
fostered as a modern practice-oriented method of learning at the universities in South-Eastern
Europe. Contribution of ADC: 1.390.500 €
 01.02.2008 - 31.07.2010, Coordination of Return and Reintegration Assistance
for voluntary returnees to Moldova - 2 nd Phase. Implemented by: IOM. The project, originally
started in 2005, aimed at the sustainable return and reintegration of Moldovan citizens, who
have had the status of asylum seekers, recognised refugees or persons enjoying refoulement
protection in Austria and were voluntarily returning,to Moldova. The ADC financed
reintegration measures for the benefit of about 150 persons. These measures included, among
others, support with the establishment of small businesses, vocational training, and job
placement assistance. Another crucial element was assistance measures to local communities in
order to diminish possible tensions between people from the community and the returnees,
mainly through income-generating activities. Contribution of ADC: 261.400 €
 01.12.2009 - 30.09.2010, Rehabilitation of Water Supply and Sanitation in the
Town of Cantemir – 2 nd Phase (Capacity Building). Implemented by: Posch & Partners. The
region of Cantemir is among the most disadvantaged in the Republic of Moldova. In the past,
23
the population of the City of Cantemir benefited from running water of bad quality only for a
few hours per day. The ADC therefore contributed € 1,14 Mio. (2006-2009) to the rehabilitation
of the water supply infrastructure in the City of Cantemir which was put into operation in June
2009 and ever since has been providing safe drinking water to the households of Cantemir. The
second project phase focused on strengthening the capacities of the municipal water
management organisation Apa Canal, including technical and management know-how but also
efficient tariff setting and collection, in to ensure sustainable, professional operation of the
water supply infrastructure. Contribution of ADC: 82.000 €
 01.07.2010 – 31.12.2010, Social Centre in Tirnova. Implemented by: Concordia
Austria. The main goal of the project was to build and to establish a Social Centre for older
people in the town Tirnova, in the north of the Republic of Moldova, with a wide range of
services offered to the older people in Tirnova in order to improve their situation. A number of
150 persons benefitted from the new services, activities and opportunities. Contribution of
ADC: 500.000 €
 01.10.2007 - 31.03.2011, VET Centre in Grigorauca and Rural Development – 2nd
Phase. Implemented by: Hilfswerk Austria. The Vocational Education and Training (VET)
Centre in Grigorauca, created in 2004 through the Children and Youth Protection Program by
Hilfswerk Austria and co-financed by ADC continued to provide high-level VET courses for
young people in the region (sewing and tailoring, hairdressing, operating tractors, PC operation,
accounting, metal and wood processing). The overall objective of the project was to reduce
poverty in 5 rayons of the central region of Moldova through rural development and job
creation Contribution of ADC: 814.611 €
 01.03.2009 - 31.10.2011, Investment and Action Plan for the Implementation of
the Moldovan National Water Strategy. Implemented by: OECD HQ. The objective of this
project was to provide support to the Government of Moldova (GoM) in developing an
Action/Investment plan for the water supply and sanitation sector and to effectively link it to the
medium-term expenditure framework (MTEF) in the Ministry of Finance. The
Action/Investment Plan formulated concrete measures, including a timeline, to ensure the
financing and implementation of priority water supply and sanitation infrastructure projects.
Contribution of ADC: 234.900 €
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 2007 – 201, Building Institutional Capacity of the MFAEI with a focus on
regional cooperation. Implemented by: UNDP. This project, implemented by UNDP and largely
financed by the Austrian Federal Ministry for European and International Affairs (FMEIA),
aimed at the strengthening of institutional capacities in the Moldovan Ministry for Foreign
Affairs and European Integration (MFAEI) so that it can operate its functions and tasks more
efficiently, especially in the field of negotiations for a new Partnership and Association
agreement with EU. Contribution of FMEIA: 500.000 €
 01.02.2008 - 31.12.2011, Consolidating the Legal and Institutional Foundations
of Social Dialogue in the Countries of Western Balkans and Moldova. Implemented by:
International Labour Organization (ILO). The project was implemented as part of the
ILO-Program „Decent Work for All“ and aims, inter alia, at strengthening social dialogue and
tripartism as a tool of good governance and promotion of decent work for men and women in
the sub-region. The target group of the project were the national tripartite social partnership
institutions and the staff of national labour conflicts resolution institutions. The focus of the
project was to consolidate the institutional and legal foundations of social dialogue and to
promote an effective culture of social dialogue. Among the main activities of the project was a
training program for tripartite constituents of the social dialogue, sharing of good practices and
experience from other countries and networking on the regional level. Contribution of ADC:
1.500.000 €
25
In implementing this Country Strategy, ADC will focus on the following in relation to this
priority area: Strengthening the rule of law and applying human rights principles (equality and non-
discrimination, participation and inclusion as well as transparency and accountability) by
supporting, inter alia: institution building and capacity development (parliaments, judiciary system
and police, supreme audit institutions); strengthening or establishing equal access to justice for all,
especially marginalised and vulnerable groups such as elderly people, children, adolescents, persons
with disabilities and members of minority groups; supporting advocacy on behalf of disadvantaged
groups; supporting transparency and anti-corruption measures by integrating and strengthening civil
society, trade unions and employers; as well as supporting the partner country in implementing
international human rights commitments, including the recommendations of the Universal Periodic
Review process and CEDAW. However, governance also plays an important role in poverty
alleviation by continuing and strengthening social protection programmes for elderly people and
children, who depend on Austrian NGOs’ social assistance programmes because of the high levels
of migration, especially in rural areas.
26
As far as the rule of law is concerned, the Austrian Federal Ministry of the Interior (BMI)
assumes a key role in combating crime and corruption, while the Federal Ministry of Justice (BMJ)
is active in strengthening an independent, efficient judicial system. In this regard, it is worth
mentioning the Austria-MD intergovernmental agreement on police cooperation (Agreement
between the Austrian Federal Government and the GoM on Cooperation in Combating Crime,
signed on September 25, 2010, effective February 1, 2011, Federal Legal Gazette III No. 99/2011)
and the Europol-MD operational cooperation agreement, which facilitates the exchange of personal
data in combating serious and organised international crime and terrorism. Under a long-term
OSCE project, military advice and support of capacity and institution building in the armed forces is
undertaken by the Austrian Federal Ministry of Defence and Sports (BMLVS). Its key aspect is
critical reduction of risk and application of international standards in storing weapons and
ammunition. This issue is extremely sensitive for MD in political terms. In particular, inadequate
storage of obsolete ammunition poses a major real threat with regard to unlawful proliferation on
the one hand, as well as personnel deployed, the civilian population living nearby and the
environment on the other. Cooperation in this field started in 2013. The European Commission
classifies economic governance/competitiveness as a central challenge. One of the important
objectives of governance is to strengthen, modernise and digitalise institutions by improving quality
and quantity of public services, notably the access to these services for citizens. This goal is to be
reached by combating corruption, reducing the administrative burden and establishing
eGovernment. Education and training measures for adults in general, and administrative officers in
particular, serve the purpose of professionalising public administration at all levels, eventually
democratising society as a whole and modernising the country. Austria will support the GoM’s
planned implementation of police and pension reforms. Austria supports MD’s integrity through
confidence-building measures in Transnistria and Gagauzia. Conflict prevention in the context of
the Ukrainian conflict and the problems in EU-Russia relations require close cooperation with the
CoE and OSCE and donors involved in MD peace building. It is also possible for MD to engage in
cross-border cooperation with neighbouring districts in Western Ukraine (Chernivtsi) and Southern
Ukraine (Odessa). Austria is to support such cooperation along the lines of the EU’s cross-border
programmes. Implementation of UN SC Resolution 1325 and its follow-up resolutions is to be
accounted for in this context.
27
EcoNet VI: Promotion of Development and Networking of Training Firms in SEE and
Moldova. Implemented by:KulturKontakt Austria. Contribution of ADC: 2.231.261 € (Time-
frame: 04.01.2010 – 31.12.2013)
In the framework of this project, selected VET commercial schools in Croatia, Bosnia and
Herzegovina, Montenegro and the Republic of Moldova, benefit from virtual training firms, which
simulate real business life. The aim of the project is to expand the Austrian success model of
training firms and to integrate this hands-on teaching concept in the medium-term in the respective
curricula.
In parallel, reforms regarding the training of teachers and development of curricula are
fostered. The overall objective of the project is to improve the quality of education and thus increase
the chances of young people, attending a training firm, to find employment.
Specific Training for Government Employees from SEE, Danube Region and Black Sea
Region: Diplomatic Academy of Vienna. Implemented by: Diplomatic Academy Vienna.
Contribution of ADC:380.150 € , Time-frame: 01.05.2012 - 30.06.2013
The overall objective of this project is to support the cooperation of countries of Eastern and
South-eastern Europe with the European Union, either to foster their accession processes or to
increase their cooperation in the framework of the European Neighbourhood Policy and the Eastern
Partnership.
To this end, the know-how and capacity of public officials regarding the European Union
and its functioning shall be strengthened through targeted training measures. In this context, special
focus shall be put on the different EU cooperation programmes and structural reform funds, in order
to enable public officials to fully benefit from the opportunities offered by the EU.
Capacity Development in Healthcare. Implemented by: Verein der Freunde der American
Austrian Foundation. Contribution of ADC: 750.000 € . Time-frame: 01.07.2011 - 30.06.2014
With the support of its Austrian academic partners, the American Austrian Foundation is
organising a postgraduate further training program for doctors from Armenia, Azerbaidschan,
Moldova and Georgia, consisting of the following modules:
- One-week medical seminars in Salzburg, one-month medical observerships in Austrian
hospitals, 1½-2-days satellite symposia, organized in home countries of observers.
28
In the four countries, depending on the local situation, the establishment of special Medical
Units (one per each country) in medical institutions is going to be supported by the project. In these
Units, especially vulnerable population could find advice and training in the fields, facing the most
serious challenges in the health sector of their countries.
Support of the CEI: Conveying EU-Integration Know-How: Implemented by: Central
European Initiative – Trieste. Contribution of ADC: 300.000 €. Time-frame: 01.12.2010 -
31.12.2013
The Central European Initiative (CEI) is an international organization composed of 18
Member States (9 EU and 9 non-EU Member Countries), including the Republic of Moldova. The
Republic of Moldova held the CEI Presidency for one year as of November 2007.
The CEI was established in 1989 as an intergovernmental forum for political, economic and
cultural cooperation among its Member States, its main aim being to help transition countries in
Central Europe come closer to the EU.
In view of EU enlargement, in 2004 the CEI established the Know-how Exchange Program
(KEP) as an instrument for co-financing and promotion of technical assistance aid between
institutions in CEI Member States.
Within the present KEP following thematic blocks are to be considered: European
Integration, Capacity Building and Market Economy, Infrastructure Planning and Development,
Agriculture, Energy, and Environment and CEI Plan of Action.
Climate Forum East. Implemented by: Austrian Red Cross. Contribution of ADC:
220.000,00 € (20% of the total project budget). Time-frame:01.01.2013- 30.06.2015
The goal of the project is to strengthen the capacity of Civil Society Organization networks
to participate effectively in policy dialogue with local authorities, EU institutions and international
organizations on Climate Change Adaptation across six Eastern Partnership (EaP) countries:
Armenia, Azerbaidzhan, Belarus, Georgia, Moldova and Ukraine.
The project aims at establishing the Climate Forum East (CFE) consisting of 120
environmental, socio-economic and humanitarian CSOs from the EaP region. The Climate Forum
East will build a regional discussion platform involving also stakeholders from public sectors,
universities, research and hydro-meteorological institutes as well as international organizations.
This will enable a multi-stakeholder dialogue on climate change adaptation across the EaP region
29
and contribute to new partnerships, increased transparency and enhanced contribution of Civil
Society to climate policy dialogues.
ENVSEC: Transforming Environmental and Security Risks into Cooperation in the
South Eastern European Region (Phase II); and Climate Change and Security in Dniester
River Basin. Implemented by: OSCE. Contribution of ADC: 1.300.000 €. Time-
frame:01.12.2012 - 31.12.2015
The objective of this project is the reduction of environment and security risks, and an
increased cooperation on environment and security issues both between and within countries. It will
cover Albania, Bosnia-Herzegovina, F.Y.R Macedonia, Kosovo, Montenegro, and Serbia in the SEE
region and Moldova and Ukraine in the Dniester River Basin. The beneficiaries include policy and
decision-makers as well as experts of relevant Ministries, local government, agencies and civil
society.
One of the project components aims for management of trans-boundary risks from
hazardous activities, sustainable management of shared natural resources, and regional cooperation
on environmental governance through participatory and informed decision making and
implementation processes, as well as trans-boundary climate change adaptation in SEE. The other
project component will increase adaptive capacity of the countries sharing the Dniester river basin.
STAR-Initiative (Strengthening Auditing and Reporting in Eastern Partnership
countries). Implemented by: Centre for Financial Reporting Reform - The World Bank.
Contribution of ADC: 1.200.000 € . Time-frame: 15.11.2012 - 31.12.2013
Countries of the Black-Sea/South-Caucasus area including Armenia, Azerbaijan, Belarus,
Georgia, Moldova and Ukraine are faced with common challenges. They share the key
development goals of economic diversification, an improved investment climate and the reduction
of their costs of doing business, as well as strengthening financial sector and improving access to
international markets.
Therefore the overall development goal of the program is to support the development of a
market-based economy through enhanced corporate financial reporting standards and practices,
providing investors, lenders, relevant public authorities and other users with accurate financial
information for business and administrative decisions.
The proposed regional program is modeled after the current Road to Europe Program for
Accounting Reform and Institutional Strengthening (REPARIS), which has been implemented since
30
2008 for the Western Balkan countries, and is based on a balanced mix of joint (regional) activities
and in-country reform advice and capacity-development support that has been tested over time and
has proven capable of yielding results.
1.3. Current trade relations
Combating Crime, signed on September 25, 2010, effective February 1, 2011, Federal Legal
Gazette III No. 99/2011) and the Europol-MD operational cooperation agreement, which facilitates
the exchange of personal data in combating serious and organised international crime and terrorism.
Under a long-term OSCE project, military advice and support of capacity and institution building in
the armed forces is undertaken by the Austrian Federal Ministry of Defence and Sports (BMLVS).
Its key aspect is critical reduction of risk and application of international standards in storing
weapons and ammunition. This issue is extremely sensitive for MD in political terms. In particular,
inadequate storage of obsolete ammunition poses a major real threat with regard to unlawful
proliferation on the one hand, as well as personnel deployed, the civilian population living nearby
and the environment on the other. Cooperation in this field started in 2013. The European
Commission classifies economic governance/competitiveness as a central challenge. One of the
important objectives of governance is to strengthen, modernise and digitalise institutions by
improving quality and quantity of public services, notably the access to these services for citizens.
This goal is to be reached by combating corruption, reducing the administrative burden and
establishing eGovernment. Education and training measures for adults in general, and
administrative officers in particular, serve the purpose of professionalising public administration at
all levels, eventually democratising society as a whole and modernising the country. Austria will
support the GoM’s planned implementation of police and pension reforms. Austria supports MD’s
integrity through confidence-building measures in Transnistria and Gagauzia. Conflict prevention in
the context of the Ukrainian conflict and the problems in EU-Russia relations require close
cooperation with the CoE and OSCE and donors involved in MD peace building. It is also possible
for MD to engage in cross-border cooperation with neighbouring districts in Western Ukraine
(Chernivtsi) and Southern Ukraine (Odessa). Austria is to support such cooperation along the lines
of the EU’s cross-border programmes. Implementation of UN SC Resolution 1325 and its follow-up
resolutions is to be accounted for in this context.
All ADC interventions are based on the following principles: (i) ownership, (ii) do no harm,
(iii) equity, equality and non-discrimination, (iv) participation and inclusion, (v) accountability and
31
transparency, (vi) empowerment, (vii) sustainability. The human rights based approach (HRBA) is
the overarching principle underlying ADC. For this reason, the HRBA is reflected in the form of a
comprehensive, fundamental approach in all areas of intervention, well beyond specific spheres of
action. It is applied in all phases of planning and implementation of programmes and projects and in
the political dialogue.
ADC interventions under this Country Strategy focus on gender equality and social
inclusion/promotion of social protection of disadvantaged and marginalised population groups,
notably persons with disabilities and the elderly. Even though MD has ratified the UN Convention
on the Rights of Persons with Disabilities (UN-CRPD) and even though the GoM recognises the
“integration” of persons with disabilities as constituting a challenge, the situation of persons with
disabilities remains very difficult in MD. Due to physical barriers, poor infrastructure and health
services as well as lack of education and job opportunities, persons with disabilities are often
affected by extreme poverty and continue to be exposed to discrimination and social exclusion,
particularly in rural areas. The precarious situation of elderly people also requires particular
attention. Especially in rural areas, old people are often the grandchildren’s reference persons as
parents emigrate in search of jobs. In this regard, the focus is on social and economic protection as
well as development of health and care services in particular. Elderly people should have the same
access to prosperity and social participation as all other members of society. Specific support
programmes barely exist; statutory assistance reaches target groups to a very limited extent only.
Bilateral projects in Moldova
Rehabilitation of the water supply system in the Rayon Nisporeni
Implemented by: Municipality of Nisporeni
Contribution of ADC: 3.5 mln €
Total project budget: 11.3 mln €
Time-frame: 01.11.2010 – 31.07.2016
The Municipalities of Nisporeni, Vărzăreşti and Grozeşti, located in the central-western part
of the Republic of Moldova, are among the socio-economically most disadvantaged regions, also in
terms of water supply and sanitation infrastructure. Currently, the water supply system does neither
offer sufficient water to meet the population’s demand nor does the water available satisfy drinking
water standards.
32
The rehabilitation of the water supply system in the Municipalities of Nisporeni, Vărzăreşti
and Grozeşti is supported by a consortium of three donors: the European Union (5 million EUR),
the Austrian Development Cooperation (3.5 Mio. EUR) and the Swiss Development Cooperation
(800.000 EUR). The responsible Moldovan authorities, Municipalities of Nisporeni, Vărzăreşti and
Grozeşti, Rayon of Nisporeni, the Moldovan Ministry of Environment also support the project,
which is fully in line with Government strategies, and committed funds of about 2 million EUR.
The Austrian Development Agency is acting as a lead-donor.
The water supply infrastructure will be designed to immediately service the Municipality of
Nisporeni and the villages of Vărzăreşti and Grozeşti, with a current total population of approx.
23,000. The production capacity and basic infrastructure (pumping main, storage capacity) will
however be designed to supply about 30 villages with a total population of about 60,000 in the
future.
The project covers the following three components: the establishment of the water supply
infrastructure, the creation of an institution capable of operating, managing and maintaining water
supply infrastructure in a sustainable manner and last but not least, the implementation of priority
sanitation measures comprising the elaboration of studies to further develop sanitation solutions for
the project area.
Cooperation with the Swiss Development Cooperation (SDC): Water and Sanitation
Project (WatSan) in the Republic of Moldova (Phase I and Phase II)
Implemented by: Swiss Development Cooperation
Contribution of ADC: 2.100.000 € (for two phases)
Time-frame: 01.12.2009 – 31.05.2015
The overall goal of the project, which is now on its second phase of implementation, is to
contribute to improved quality of life and public health of the population in rural municipalities of
the Republic of Moldova (with a total beneficiary population of approx. 60.000 inhabitants) by
increasing sustainable access to safe drinking water and environmental sanitation.
The project aims also at establishing good practices of local good governance, by improving
planning and management capacities of the local authorities and water and sanitation services
operators in providing qualitative services to the population.
During the first phase of the project about 30.000 inhabitants have already been provided
access to safe drinking water and environmental sanitation.
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Improving water management and protection of water-related ecosystems in the Lower
Dniester Ramsar Site
Implemented by: BIOTICA Ecological Society
Total project budget: 358.512 €
Time-frame: 01.12.2012 – 30.11.2014
This project aims at improving water management and mitigating the environmental risks in
Lower Dniester area in favour of using an ecosystem services approach and sustainable
development.
The water and ecosystem management in the Lower Dniester Ramsar Site is to be
introduced as a model for a wider context, sustaining a wetland of international importance, while
the local water supply of the Talmaza village (about 5.000 inhabitants) will be improved.
The project is being implemented in partnership by four Moldovan NGOs, equally active on
the both banks of the Dniester River.
Agricultural Schools as Centres of Competence for Regional Education and Training in
Rural Areas in Moldova
Implemented by: KulturKontakt Austria
Time-frame: 01.09.2010 - 31.08.2013 (Phase III)
Since 2004, the ADC has contributed to the transformation of the vocational schools in
Nisporeni and Leova into regional centres of competence in agriculture.
This third and last project phase aims at developing these two schools into regional centres
of competence in “viniculture and oenology” and “farm machinery technology and vegetable
gardening”. Two new training profiles for “viniculture and oenology” and “farm machinery
technology and vegetable gardening”, as well as the corresponding curricula and teaching materials,
are to be developed within the project. The long term goal is to create best practises for the reform
and modernisation of vocational education and training in agricultural professions capable of
responding to economic needs and necessities of the region and thereby fostering regional
development.
34
VET Schools as Training Providers for Water and Sanitation Related Professions in
Moldova
Implemented by: IFCP (Professional Capacity Building Institute)
Time-frame: 01.12.2010 - 31.05.2013
The main purpose of the project is to support training and capacity development in order to
respond to the human resources demand in in the water sector. Two VET schools will strengthen
their capacities in providing demand - driven initial and further training in occupations relevant for
Water and Sanitation Sector (WSS). By the end of the project, the selected institutions will offer
training packages for the two occupations and three specializations related to WSS and a MoEd
decree will entitle the two VET schools to implement the training packages on a regular basis. Two
selected trainers will receive additional training and coaching, and go on a study tour to Austria for
an exchange of experience with similar training centres and companies cooperating with them. The
updated curricula will be piloted in at least one long-term training course for each of the two WSS
related occupations and one to two short-term courses for the same occupations. The school
management teams and staff will be supported in the development of services, such as tailor-made
training courses, for adults, which could become the school’s second source of additional income
and one of the preconditions for the long-term sustainability of the project.
Advancing Quality in ICT Vocational Education in Moldova
Implemented by: Educational Centre PRO DIDACTICA and
National Association of Private ICT Companies (ATIC)
Time-frame: 01.12.2012 - 31.05.2015
The overall objective of the project is to contribute to the harmonization of ICT education in
Moldova with labor market demands.
As a target group for the envisioned project have been selected 5 VET institutions - 3
colleges (specialty: Informatics and Computers) and 2 vocational schools (specialty: Computer
operator) which will represent geographically all the country (North, South, Centre).
The expected results of the project are:
35
 Improved, updated curricula for ICT specializations, relevant for market needs
developed in beneficiary institutions with involvement of ICT companies’ representatives.
 Improved practical skills of IT students updated to labor market demands through
enrollment of trained students in private sector
 Awareness about the possibility to get a Career in ICT at a VET institution raised.
The curricula developed within the project are going to be reviewed at different levels and
submitted for approval to the Ministry of Education. All developed and updated curricula modules
will be disseminated at country level in vocational institutions with ICT specialization. The good
practices of the pilot schools will be disseminated.
HOPE for the Children of Moldova – Support to the Institute of Oncology in Chisinau
Implemented by: HOPE´87
Time-frame: 01.08.2010 - 31.03.2013
The “Institute of Oncology” is the only institution for cancerous diseases in the Republic of
Moldova. The institute has a capacity of 500 beds in the clinical department of which 40 beds are
reserved for children with cancer, who receive treatment in the hospital. The Institute is faced with
major shortcomings and therefore not capable of living up to the needs of its smallest patients, i.e.
children suffering from malignant tumors living in the Republic of Moldova. There is a great lack of
experience and therefore knowledge about the special pedagogical and educational needs of
hospitalized children in general and those suffering from malignant tumors in particular. If
educational support is available at all, teachers are not accordingly trained and they have no guiding
principles they can refer to when working in hospitals with children suffering from malignant
tumors.
The project aims at improving the know-how and the experience of specialized medical,
educational and psychological personnel, at increasing their chances of employability on the
Moldavian labour market, at raising the chances of survival for children for which bone marrow
transplantation is the only effective method of treatment.
It aims furthermore at facilitating the process of reintegration of children into school and
social life after finishing the treatment process in the hospital. To meet these needs, an Education
Unit in the Institute of Oncology is to be established. This Education Unit is going to offer
36
educational and pedagogical activities and psychological support for children and youth up to 18
years old, who are under long-term medical treatment at this Institute.
Return and Reintegration Assistance for Voluntary Returnees to Moldova (Phase III)
Implemented by: International Organization for Migration (IOM)
Time-frame: 01.07.2011 - 30.06.2013
The Austrian Development Cooperation finances the sustainable return and reintegration of
voluntarily returning Moldovan citizens. The International Organization for Migration (IOM) will
complement and strengthen the existing procedures for voluntary return and reintegration in
Moldova in order to create a smooth transition to a sustainable return system. This intervention
represents a continuation and completion of previous and ongoing efforts in this area through
sustained and institutionalized activities of migration management and through well-established
international best practices.
Direct target groups or beneficiaries of the project are Moldovan nationals, who are taken
back under the EU-Moldova re-admission agreements, as well as those who are returning
voluntarily. 50 Moldovan citizens will be assisted in the return and reintegration. At the same time,
up to 30 government officials, who are working in the field of socio-economic reintegration should
benefit from training and capacity developments.
CHAP Projects financed by the Austrian Federal Ministry for European and
International Affairs
National Cleaner Production Programme (NCPP): Republic of Moldova
Implemented by: UNIDO: Cleaner and Sustainable Production Unit
Contribution of FMEIA: 500.000 €
Time-frame: 2011 - 2014
The National Cleaner Production Programme (NCPP) in the Republic of Moldova has been
established in 2009. It is designed to foster the domestication and the institutionalization of
knowledge, expertise and service delivery capacity for Resource Efficient and Cleaner Production
(RECP) in Moldova, and the implementation of RECP practices, technologies and policies in the
country.
37
The currently project’s aim is to improve resource productivity and environmental
performance of enterprises and other organizations in Moldova and thereby to contribute to
sustainable industrial development. The focus of the NCPP in Moldova will be on food and
beverage industries, construction materials and municipal services (schools, hospitals, district
heating, waste and sanitation services), as these are sectors generally considered most promising for
vitalizing the economy and improving quality of life for Moldovan people.
Concretely, a network of 15 national RECP experts will be created, in around 100 companies
will be implemented RECP methods, practices and technologies, a National Strategy on RECP will
be developed and promoted. It is also foreseen to develop, to pilot and to evaluate the key policy
instruments for training and capacity building for implementation, monitoring and enforcement.
NGO Cooperation Co-Financing Instrument
Child rights - now
Implemented by: Caritas Austria with Caritas Moldova
Time-frame: 01.11.2012- 31.10.2014
The proposed project will take place in Moldova, Belarus and Ukraine and is aiming at
strengthening the capacities and enlarge the knowledge of the partners in the care of children being
placed in institutions and in vulnerable families.
Central element of the project will be the empowerment of the partner in education,
development, protection and participation of children. The focus has to be placed on strengthening
the family, and overcoming the vulnerability of families which has been increasing during the
transition years. This will be achieved by means of exchange of experience with other partners,
training, knowledge management, competence development and adoption of innovative pedagogical
methods. Thus, the members of the partner organization will be enabled to adapt their child projects
according to the requirements of the Convention on the Rights of the Child, improve the impact of
their work in child projects and become equal partners for state authorities in the field of child care
and protection.
Centre for crisis intervention for children in Tiraspol “Petruska”
Implemented by: Caritas Austria with Caritas Moldova
38
Time-frame: 01.07.2010 – 30.06.2013
The Centre focuses its activities on the reintegration of children from socially vulnerable
families, providing a shelter for street children. The beneficiaries of this centre are children from
vulnerable families from Tiraspol, aged 5-17 years old. This project contributes to the improvement
of the physical and psychosocial health condition of children, of the school results and of the
relations child-parent. The centre also offers support to children from families with insufficient
income. One of the main goals is to help parents with difficult material circumstances in terms of
providing their children with healthy nutrition, medicines, hygiene items, school supplies and
clothing. The beneficiaries have the possibility to get involved in pedagogic – educational and
cultural activities: daily assistance in doing homework, puppet theatre, computer literacy,
educational classes, visits to the museums, thematic festivals, libraries, excursions.
Centre for social inclusion in Edinet, Republic of Moldova
Implemented by: Pro mente Oberösterreich with AREAP (Regional
Association for Adult Education)
Time-frame: 01.08.2011 - 31.07.2014
The Psychiatric Hospital in the Rayon Edinet is a long-term psychiatric care unit for 350
patients. The conditions in this psychiatric hospital are characterized by inadequate infrastructure
and insufficient therapeutic and educational support. One of the aims of the project is to diversify
the work therapy offer and recreational activities for the patients of this hospital, through opening of
a leisure area, workshop for wood, pottery and textile in its premises.
Within the project there will be establish a "Centre for Social Inclusion" in Edinet, so that
former patients of the hospital as well as persons with mental problems will have the chance to
benefit from different qualitative and adequate educational services and therapies. This should lead
to a direct improvement of the situation of people with special needs.
Trade Union School Moldova
Implemented by: weltumspannend arbeiten with National Trade Union
Confederation from Moldova
39
Time-frame: 01.08.2012 - 31.07.2014
The final goal is the formation of an adult education program, the Trade Union School of
Moldova, as a permanent education program of the National Trade Union
Confederation from Moldova.
Through a long-duration course (one year) and with the methods of project- and experience-
orientated work, the participants will be authorized to work on the modernization of the Moldovan
Trade Union. The target groups of the project are multipliers in factories, trade unions and the civil
society.
Day-Care Centre for the Elderly in Straseni
Implemented by: AMINA with Neohumanist Association
Time-frame: 01.01.2010 – 31.12.2012
The “Răsărit” (“Sunrise”) Day-Care Centre in the City of Straseni provides care and
support for the most disadvantaged seniors, including single persons, sick and disabled
person, collaborating closely with different actors in the municipality, including the
authorities, to raise awareness about the challenges faced by the elderly and cooperatively
develop measures to tackle them.
For this reason, Austria will contribute its expertise in the fields of education – vocational
education and training (VET) in particular – and social inclusion/social protection through concrete
projects and measures related to “inclusive VET”, “work assistance“, young people’s training
programmes, “personal assistance at the workplace”, or provision of support to guidance centres for
people with special needs, “inclusive workplaces” as well as “support and care delivery to elderly
people”, for MD to benefit as best as possible from Austria’s expertise in inclusive education,
especially when it comes to the inclusion or integration of disadvantaged young or elderly people
with disabilities so that they may find a way into working life. Together with MD, Austria’s Federal
Ministry of Labour, Social Affairs and Consumer Protection (BMASK) and the Federal Ministry of
Education and Research (BMBF) act as chairs in the EUSDR’s “investments in people and skills”
priority area. The BMASK maintains a social attaché’s office in MD. The social attaché’s activities
focus on transfer of knowledge in labour and social affairs, networking with European and
40
international institutions as well as public authorities and NGOs on the ground; support and
guidance in selected cases and preparation of social policy reports. Support is also provided in
preparing and implementing bilateral, European and international projects managed by the Ministry
of Social Affairs, with a view to strengthening the European social model and improving local
social standards. Thus the activities undertaken by the BMASK contribute significantly to
development in MD and are complementary to strategic goals and measures concerning labour and
social matters under the 2016 – 2020 Country Strategy for Moldova. Greater attention must be paid
to supporting the active participation of women in political and socio-economic processes at all
levels. In this context, the application of gender-responsive budgeting is supported at national and
decentralised level. Austria provides expertise to the partner country in order to keep social and
political tensions under control and safeguard political stability and security in MD. At the same
time, the aim is to improve the investment climate and the general business environment and to
strengthen people’s confidence into their country’s future in order to avert necessity-driven
emigration, brain drain and capital outflows. While experts from the BMLVS/Austrian Armed
Forces (ÖBH) help to improve the safety of ammunition depots in MD, they contribute to security
in MD at the same time.
Awareness-raising among the population, among policy-makers and the civil service,
combined with the protection of human rights and minorities, the rule of law and good governance,
are the fundamental requirements for democracy and stability as well as successful social inclusion,
gender equality, hence sustainable development in MD.
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CHAPTER II. BILATERAL TRADE BY ECONOMIC SECTOR
2.1. Bilateral trade from the Austria point of view and experience of Austria companies
The priorities are in line with the strategic goals of EU development policy from 2014 to
2020 for MD, which focuses on the following themes: 1) human rights, democracy and good
governance and 2) inclusive and sustainable growth for human development. In particular, this
includes reducing inequality of opportunity and supporting education – notably vocational
education and training – so that people acquire the knowledge and skills required by the job market
and enabling them to become active members of a changing society and competitive at national,
regional and international level. 3.1 Equal opportunity in education, focusing on labour market
oriented socially inclusive vocational education and training (VET).
VET has been a priority for Austrian (ADA, BMBF, BMASK, BMWFW, private sector)
engagement in MD for some time. Austria is one of the main actors in MD and contributes
significantly to VET reform by providing advice on strategic reform issues, by enhancing the
quality of vocational training at schools and encouraging on-the-job learning. Austria’s VET
interventions and efforts to promote hands-on, job market oriented and highquality education and
training by including all relevant stakeholders help to reduce the high unemployment rate,
especially among young people, making an essential contribution to economic development in MD.
Qualified people have better opportunities and are more competitive on the job market.
They contribute to their country’s economic development, consequently helping to reduce
migration. For this reason, the aim is to continue Austria’s successful VET engagement and focus
on capacity development – teacher training and further training in particular –, modernisation of
curricula, increased involvement of the private sector, social inclusion and gender equality,
professionalisation of jobs and promotion of entrepreneurship over the next five years, in order to
meet the objective of sustainable employment. These measures are particularly effective if synergies
42
can be built with other ADC priority themes, something actively promoted by Austria. The aim is to
increase equality of opportunity in career choices by addressing gender-specific stereotypes. To
strengthen employment and decent work, economic development and social cohesion, Austria
supports MD in its efforts towards a fundamental VET reform. Based on Austria’s high-quality
vocational education and training system and experience in policy learning, Austria also provides
guidance on strategic issues relating to VET reform. Austria also contributes to enhanced equality of
opportunity in the education system by supporting the implementation of inclusive education in MD
- by building capacities for relevant guidance and counselling structures, for example.
As far as migration and development cooperation are concerned, and in the light of
developments in Transnistria and Gagauzia, including their repercussions at all levels in MD,
increased cooperation with MD – a country of both origin and transit of migrants in the Danube-
Black Sea Region – is planned on development and migration policy issues (readmission agreement
between the EU and MD, effective since 1/1/2008) in order to support security, prosperity and
peace. To reduce poverty and high unemployment in rural areas, Austria supports vocational
education and training in the agricultural sector, for example.
To enhance both the quality and the practical relevance of vocational education and training,
Austria provides guidance to the relevant Moldovan ministries (Education, Agriculture, Finance) on
the issue of income generation by VET schools. These measures are based on previous Austrian
activities and lessons learnt in this sector. Another focus is on strengthening women’s/girls’ access
to the labour market as well as social inclusion, particularly of persons with disabilities and elderly
people; building on positive experiences with pilot projects, lessons learnt are planned to be
transferred to other schools as well.
With its educational coordinator in Chisinau, the Austrian BMBF is a major partner for
MD’s education sector, notably in the field of VET. To strengthen hands-on vocational training in
support of Austria’s businesses in the country, the aim is to draw on the expertise of the Federal
Ministry of Science, Research and Economy (BMWFW) and the Austrian Economic Chamber
(WKÖ). Together with colleagues from other countries of the Black Sea region, young civil
servants from MD regularly attend special courses held by the Diplomatic Academy of Vienna.
These courses are financed by ADA and are also planned for the next years.
Water, Environment and Climate Change Whereas the Country Strategy 2011 – 2015
focused on infrastructures for clean water supply and wastewater disposal, this Country Strategy -
43
in conformity with the relevant national approaches - aims to develop a long-term, sustainable
“water governance” perspective focusing on capacity development and improvement of
management capacities at national, regional and local level; another focus will be environmental
sustainability of new water projects and their climate change resilience. Moreover, better
coordination between all institutions (ministries, agencies etc.) of relevance for Moldova’s water
sector will be pursued. Integrated and coordinated cooperation in, and among, the national, regional
and local levels as well as between institutions must focus on improvement of cooperation and
functionality of the system by eliminating fragmentation, overlap of competencies and
responsibilities as well as planning problems.
The point is not only to work out new laws, directives and standards, including their
consistent practical application by improved coordination and cooperation between the central
government and local authorities; the point is, above all, more innovation, energy efficiency as well
as ownership and management expertise, especially at the levels that are essential for services to
citizens and citizens’ equal access to improved public services. The accelerating climate change and
its consequences pose enormous challenges to MD.
Over the last years, recurring drought, floods and other natural disasters incurred
tremendous consequential costs both economically and socially. Environmental damage caused by
erosion and pollution threaten MD’s potential for development. Climate change scenarios predict
more frequent periods of drought and decreasing water availability for agriculture and hydropower.
For this reason, Austria will support appropriate adaptation measures, a strategy for their
implementation and funding as well as improved meteorological data for modernised early warning
systems. The general awareness of the importance of environmental protection and climate change
(climate protection and climate change adaptation) for the sustainable development of the country,
notably its agricultural potential, can only be strengthened by increased integration of civil society,
trade unions, employer organisations and the private sector as well as transparent, responsible
policy at national, regional and local level.
Austria should contribute with its internationally recognised environmental expertise for the
sustainable development of MD not only in the priority sector of water, environment and climate
change, but also in relation to rural and urban regional development – within the context of the
Federal Government’s climate finance strategy, for example. The BMF-cofinanced urbanisation
programme and the World Bank’s “Danube Water Program” as well as rural development
44
programmes could be illustrative examples in this context as they reflect the principles of
sustainability and statutory obligatory environmental impact assessments.
The Development Bank of Austria (OeEB) and OeKB are other important actors in
implementing the focus on water, environment and climate change. A cooperation agreement
between the Austrian Central Institute for Meteorology and Geodynamics (ZAMG) and MD’s
weather service, financed by the World Bank and UNDP for the purpose of issuing early warning
reports, will be an important climate change adaptation measure.
2.2. Direct investment relations
Austria contributes its comparative strengths to these partnerships and aims to specialise in
those areas in which it is in a position to add maximum expertise and value to the partner country.
In addition to increased development effectiveness in accordance with Busan, Austria will continue
to adhere to the Paris Declaration indicators (aid effectiveness), such as increased untying of aid,
use of country systems and transparency of funding.
Moldova and Austria will intensify bilateral economic cooperation and the process of
attraction of Austrian investments in the national economy. The agreement was reached during the
meeting of Minister of economy Stefan Bride and Austrian Ambassador in Moldova Gerhard
Riviera. According to the press service of the Economy Ministry, the sides discussed opportunities
for the promotion of Austrian investments in Moldova and strengthening economic cooperation
between the both states. The parties noted good cooperation in the economic sphere, which is
confirmed by the dynamics of trade between the two countries, in particular, the growth of
Moldovan exports to Austria by 24% in 2014, also the two sides stressed the necessity to strengthen
cooperation and highlighted the opportunities that have arisen in connection with the signing of the
Association Agreement and free trade area with the EU.
Stefan Bride thanked for the constant support that Austria provided to our country by
providing soft loans for the development projects of public services, as well as in the field of
management of waste and wastewater, vocational education and training, implement, especially in
the rural areas. Gerhard Rieger noted that Austria is interested in strengthening relations with
Moldova, stressing the importance of expanding business partnerships between the two countries,
which required greater cooperation between the Commerce Chambers. Austria encourages
45
investment in Moldova through funding of the Austrian and European companies interested in
business development in Moldova. Austria is one of the largest investors in Moldova, the total
amount of investments into share capital at the end of the third quarter of 2014 amounted to more
than $60 million to the economy Minister due to the Austrian Embassy in our country for the
support in organizing the round table in Bucharest, which goal is the promotion of the investment
potential of Moldova among Austrian companies from Romania. 10
To ensure policy coherence as well as the whole-of-government approach to ADC activities
in MD, all potential governmental and non-governmental DC actors in the partner country have
been requested to join forces developing the Country Strategy from the very beginning – in both
Chisinau and Vienna. In this way, continuous coordination and consultation in Austria allow
identifying, coordinating and implementing potential synergies for ADC’s engagement in MD in a
collaborative way.
The Coordination Office for Technical Cooperation Chisinau run by ADA is not only
important for Austria’s coordination at home but also for project implementation, establishment and
continued improvement of relations with government offices, local and regional authorities of the
partner country as well as coordination with other bilateral and multilateral donors on the ground.
For ADA to fulfil its role as a Federal Agency for development cooperation, it is imperative for all
Austrian DC actors in MD to take active part in Austria’s coordination of its DC engagement at
whole-of-government level, and to do so in a collaborative and egalitarian way.
This includes participation in regular consultations with the partner country’s Government,
especially with the Prime Minister’s Office (PMO), which is responsible for coordination of DC
activities, as well as the line ministries responsible for ADC priority areas and cross-cutting matters.
In addition to Austria’s bilateral DC engagement in MD under the 2016 – 2020 Country Strategy,
ADA also provides funding for cooperations with with civil society organisations, business
partnerships and cross-border projects including MD as well as regional projects that also benefit
Western Balkans countries and MD, thereby fostering regional cooperation. Furthermore,
cooperations with ADA are also open to other Austrian DC actors, including the following
ministries: BMF, BMWFW, BMBF, BMI, BMJ, BMLVS; UBA (Federal Environmental Agency);
the Austrian state governments (Länder); NGOs and the private sector. In accordance with its
10
http://www.infomarket.md/en/investment/Moldova_and_Austria_will_intensify_bilateral_economic_cooperation_and_t
he_process_of_attraction_of_Austrian_investments_in_the_national_economy
46
business strategy to end 2017, MD is a priority country for the Development Bank of Austria
(OeEB). By supporting the implementation of economically sustainable and developmentally sound
private sector projects – notably in the areas of Renewable Energy and Resource Efficiency as well
as support to local MSMEs – OeEB is in a position to contribute to poverty reduction in MD. In
particular, by providing funding, OeEB is in a position to contribute to the development of
renewable energy sources and private sector development, notably MSMEs.
Available instruments are investment finance and equity as well as funding for project-
related measures from advisory programme funds. All of the above is complemented by projects
supported by the BMF in cooperation with IFIs, notably the World Bank, in the following sectors:
water/energy, urbanisation, infrastructure, investment climate, stability and management of the
financial sector, reform of financial reporting and tax reform. Austria thus contributes significantly
to inclusive growth, reduction of social and regional inequality and, generally speaking, to stability
in MD. To date, Austria has supported MD by providing soft loans. MD continues to be in a
position to receive tied aid credits in accordance with relevant OECD criteria. This Country
Strategy, including its results matrix, is adjustable to any new conditions and developments in MD.
Upon consultation with the GoM and the donor community, it can be revised accordingly upon
inter-ministerial coordination, following evaluation and consultation with all Austrian DC actors.
The Busan recommendations for development effectiveness are addressed, inter alia, by
consistent capacity development in MD, by contributing to multi-donor initiatives such as the World
Bank’s and by supporting the know-how exchange programme (KEP) set up by the Central
European Initiative (CEI). The new Country Strategy is inspired by the Europe-2020 Strategy, the
RCC’s SEE 2020 Strategy (based on EU-2020), the EUSDR and the National Development
Strategy as well as the relevant sector strategies of the GoM.
In Austria, the Country Strategy is based on the 3YP, the Regional Strategy for the Danube
Region/Western Balkans, the IFI Strategy of the BMF and the OeEB’s business strategy to end
2017. Republic of Moldova – Country Strategy 2016–2020 | page 14 Donor coordination in MD is
in the hands of the GoM/State Chancellery, on the one hand, whose role must be strengthened in the
interest of a permanent dialogue with the donor community, also in sectoral working groups; and
the EU Delegation and/or the United Nations on the other.
On the Austrian side, coordination of all governmental and non-governmental DC actors in
MD is regularly undertaken by their representative offices in Chisinau under the direction of the
47
Coordination Office for Technical Cooperation Chisinau run by ADA. In Austria, ADC in MD is
coordinated within the framework of the six-monthly interministerial meetings called by the
BMEIA; these meetings are also entrusted with the implementation of the Country Strategy as well
as continuous evaluation of DC projects, in addition to the ex-post evaluations jointly managed by
BMEIA and ADA.
Foreign Direct Investments in Moldova
2.3. Identifying potential niches for further trade development
Moldova is one of the poorest countries in Europe. Its gross national income is USD 2,550
(GNI per capita PPP USD 5,580)3 a year. A considerable portion of the working population is active
in the informal sector. It is estimated that approximately twenty percent of the population live below
the absolute poverty level. Due to the international economic crisis, internal political crises,
increased problems for the country’s territorial integrity (Transnistria, Gagauzia) aggravated by the
conflict between Ukraine and Russia, as well as massive labour migration, poverty in MD remains a
fundamental, multifaceted problem which affects rural regions in particular. MD posts the highest
labour migration figures in Europe.
During the last decade, more than a third of the workforce has emigrated abroad.
Remittances of Moldovan emigrants total up to one quarter of the GDP. However, the country lacks
skilled workers at home due to massive migration into the EU and Russia. One of the main
priorities of Moldova’s foreign policy is to bring the country as close as possible to the EU. The
legal basis for EU-MD relations is the EU Association Agreement, which was signed and ratified in
2014, and the Deep and Comprehensive Free Trade Agreement (DCFTA) for the private sector,
48
which was also signed in 2014. On 28 April 2014, visa-free travel to the EU was made possible for
Moldovan citizens. Corruption remains one of MD’s major problems.
The Transparency International Index 2013 ranks MD 103rd among 175 countries. The fight
against corruption will only succeed through professionalism and transparency of the judicial
system, enhanced awarenessraising among the general public, in public administration and the
business sector. It is thus one of the priorities of the National Development Strategy (“Moldova
2020”) as adopted by Parliament on 11 July 2012. The long-term strategic plan embraces the
following priorities: vocational education and training, transport, the financial sector, economic
affairs, energy, pension reform, the judicial system, agriculture and rural development. Based on the
goals and principles governing the Austrian Federal Act on Development Cooperation (DCA) and
the Three-Year Programme (3YP) on Austrian Development Policy, this Country Strategy –
together with the Regional Strategy for the Danube Region/Western Balkans, the IFI Strategy of the
BMF and the OeEB business strategy – reflects the strategic priorities for the State-level
engagement of all Austrian governmental and nongovernmental DC actors in MD as agreed with the
partner country.
In addition to peacekeeping, human security, environmental preservation and the protection
of natural resources as a basis for sustainable development, poverty alleviation is the ultimate
strategic goal for Austria’s engagement in the field of development cooperation in MD. In this
context the overarching fundamental basis for ADC is the human-rights-based approach (HRBA).
Gender equality is consistently taken into consideration as a cross-cutting issue. The UN
Development Goals provide a common framework for action in development cooperation. True to
the spirit of the “Agenda 2030 for Sustainable Development” and the Sustainable Development
Goals (SDGs), the sustainability principle is to be applied in a balanced way in three pillars as
follows: social, environmental and economic issues.
Theme of the Agenda 2030 – “leave no one behind” – is to be taken into account by paying
special attention to gender equality and integration of disadvantaged population groups, including
people with disabilities, children and ethnic or religious minorities. The SEE 2020 Strategy of the
Regional Cooperation Council (RCC), the EU Eastern Partnership Initiative (EP) and the EU
Strategy for the Danube Region (EUSDR) are the strategic framework of reference for building a
partnership for reform with MD in the field of development cooperation. This is complemented by
49
the 3YP, the Regional Strategy for the Danube Region/Western Balkans and the international
development policy commitments entered into in Paris, Accra, Busan and Mexico.
Over the next five years, Austria’s foreign and development policy focus in MD is as
follows:
1. Supporting MD’s EU pre-accession process
2. Supporting regional cooperation within the RCC, the EUSDR, the Black Sea Region and
the Eastern Partnership 3. Supporting the reform process in MD by institutional and human capacity
development and promotion of sustainable development and social inclusion as well as
strengthening the rule of law, accountability and the application of human rights principles
4. Supporting good governance and strengthening reform as well as capacities of planning
and implementation in public administration
5. Supporting MD’s territorial integrity through confidence-building measures in
Transnistria and Gagauzia.
Economic growth and sustainable development require competitiveness and innovation as
well as support of the private sector by means of increased commitment of MD. Contributions
towards meeting these objectives for modernisation are to derive from increased engagement of the
Austrian private sector and its strong and productive SMEs, in synergy with advocacy groups and
the wealth of expertise shared by Austria’s governmental and non-governmental DC actors in MD
in ADC thematic areas of priority, as described further below. In strengthening planning and
implementation capacities in public administration, the regional administrative levels (cities and
local communities) as well as strong local self-government – key factors of development in a
modern, a modern state aligned to the EU – assume a special role and are of particular importance
in this context.
Trade Balance (2014) and Total Trade forecast (2018) Trade Volume in 2014:
50
CHAPTER III ATTRACTING AUSTRIA DIRECT INVESTMENT TO THE
REPUBLIC OF MOLDOVA
3.1. Austria investment in Moldova - current status, Austria willingness to invest in
Moldova
After the collapse of the USSR and the declaration of its independence on 27 August 1991,
the Republic of Moldova passed through a complex stage of transition to the market economy and
experienced a significant economic recession.
The economic crisis in Moldova lasted for 10 years (from 1990 to 1999). During this period
the GDP decreased almost by three times. Since 2000 the economy has been on the rise. This period
is characterized by a steady recovery of the production output, which had a partly impact on poverty
reduction. During the period 2000-2005 the GDP in real terms increased with 43 percent.
Consequently the poverty rate decreased with 41.3 percent.
The country continues to maintain macroeconomic stability. Inflation reduced from 44% in
1999 to 10% in 2005. Besides, the national currency exchange rate remained rather stable while the
currency reserves increased substantially.
o be productive and committed to building a future in Moldova, people throughout its
territory need purposeful participation – having their say and contributing to policy and public
service design and delivery as co-producers of their own development. In this context, there is a
need to ensure inclusiveness and promote cohesion of society, and take an approach that engages
people on both banks of the Nistru River. Engaging people in new ways can be a crucial dimension
51
of the public administration and decentralization reform. International experience shows that
openness, innovation and people’s involvement not only make public policies and services more
relevant and efficient, but also increase the society’s sense of ownership and common purpose. Civil
society should be further empowered to play its vital watchdog role.
Today’s multifaceted development challenges require solid institutional coordination and a
“whole-of-government” approach. Moving to genuine implementation of the Government’s
program and prioritized investment will require a robust institutional coordination mechanism. This
includes an effective coordination mechanism for external assistance linked to a sound medium-
term planning and budgeting framework. Implementation of the AA and the public investment
program should be nested within such an approach.
3.2. Relative intensity of bilateral FDI
Following years of an extremely dynamic development, Austria’s economic relations with
Eastern European countries – the Russian Federation, Ukraine, Belarus and Moldova – have been
significantly affected by the crisis in the Ukraine and the economic sanctions on Russia imposed by
the European Union on 1st August 2014. Thus, the trade volume with this region reached just under
€ 7bn in 2014 after € 8.4bn in 2013.
Cumulative FDI Stock (mil. USD)
Austrian-Russian bilateral relations, which had been traditionally excellent, have been
tangibly affected in the wake of Austria's obligation to go along with the restrictive measures
imposed by the EU. At some € 3.2bn, Austrian exports suffered a decline by 8 percent in 2014. This
negative trend continued in the first six months of 2015: compared to the same period the year
before, the decline amounted to as much as 37.4 percent. In support of Austrian companies in their
endeavours to enter alternative markets, the internationalization initiative "go international" of the
52
Federal Ministry for Science, Research and Economy and the Austrian Economic Chambers was
topped up by additional € 2.5mn. This special support programme runs until the end of 2015. And
Austrian companies have stepped up their efforts to operate in the Russian market by establishing
local production facilities there.
Advantage Austria offers support to Austrian companies interested in export. When it comes
to marketing products and services, establishing networks with international partners and providing
first-hand market knowledge, ADVANTAGE AUSTRIA helps you to get a foothold on the global
markets.
Information - driving your business forward. It doesn’t matter if you are a first-time
exporter or an export pro, our experts have information on countries, industries and specialist topics
such as internationalisation, export financing, technology, trade fairs and the flow of goods.
Coaching - the perfect support for your foreign business. Our global network with over
100 locations enables us to give you comprehensive support: we evaluate your business potential,
put you in touch with potential clients and partners, organise your business trips and – where
necessary – we will even intervene with public authorities or partners.
FDI stock in geographic distribution (equity)
The Austrian paper industry can look back on a successful year 2015. A total of 24
companies in the sector, employing 8,000 staff, produced some 5 million tons of paper, cardboard
and paperboard, representing a growth of 2% on 2014. The industry more than made up for a dip in
53
domestic consumption with increased exports, principally to neighbouring EU states, South
America and the Near and Middle East. The export ratio for 2015 was 87%, with a turnover of EUR
3.8 billion.
Production increased in every category, from graphic papers (+0.2%) to specialty papers
(+1.5%). The packaging sector performed particularly well, rising 4.9%.
The sector is making investments and optimising its use of wood as a raw material to expand
its bio-refinery business. Many companies have long since moved on from producing only paper
and cellulose and now manufacture a wide range of innovative fibre and chemical products. Textile
yarns and new applications such as fibre-reinforced plastic components, chemicals and food
additives are all made from by-products of cellulose manufacturing.
The paper industry has also been a pioneer in energy efficiency and climate protection for
many years. The sector already covers 90% of its primary energy requirements of 14,400 GWh with
on-site generation using highly efficient power plants, and CO 2 emissions per ton of paper have
been reduced by 40% since the 1990s.
The 3rd session of the Austrian - Moldavian Joint Commission for Bilateral Foreign
Economic Relations will be held in Chişinău from 8 to 10 October 2014. The Austrian Side of the
Joint Commission will be chaired by Director General for Foreign Economic Relations Mr. Franz
WESSIG and the Moldavian Side will be chaired by Vlad LOGHIN, Deputy Minister for
Agriculture and Food Industry. The plenary session will take place on Thursday, 9 October 2014.
During the plenary session the following topics will be addressed: Agriculture, Finance,
Development Cooperation, Tourism, Infrastructure, Food Processing, Energy and Vocational
Training.
3.3. Identifying potential investment projects
Trade relations between the EU and the Republic of Moldova are an important factor in
economic growth of the Republic of Moldova. Over the last years, bilateral trade between the
European Union and Republic of Moldova has been growing very fast, thanks to the EU decision to
open its market unilaterally to the Republic of Moldova in 2008, through the so called Autonomous
Trade Preferences.
54
Since 2008, the European Union (EU) has progressively become Moldova’s main trade
partner for import and export, with today’s share approaching a half of Moldova's total annual
foreign trade (46.4%).
This trend is set to continue with the recent conclusion of the Association Agreement which
includes the Deep and Comprehensive Free Trade Area (DCFTA) between the EU and Republic of
Moldova. The Agreement, which has created a new and closer political and economic relationship
between the EU and Republic of Moldova, is applied since 1 September 2014.
Key Facts:
- Bilateral EU-Moldova trade grew in 2014 by 8%, largely due to the strong growth of
imports from Moldova. Total trade amounted to EUR 3.5 billion or EUR 272 million more than in
2013. EU imported from Moldova goods to the value of EUR 1.16, up by an impressive 20%or
EUR 197 million since 2013. The value of agricultural imports from Moldova grew even more
strongly, by 31% in 2014. EU exports to Moldova remain stable, growing by a mere 3% or EUR 75
million, reaching EUR 2.35 billion in 2014.
- The EU exports to Moldova consist mainly of machinery and equipment and mineral fuels,
as well as transport equipment and chemical products. Those products constitute also the main EU
imports from the Republic of Moldova, together with textile and clothing products, and animal and
vegetable products, including fats and oils, as well as beverages.
Despite domestic obstacles to development (Transnistria, Gagauzia1 , migration), foreign
policy related issues (Ukrainian crisis, problems with Russia) as well as social and economic
challenges (downturn in exports to Russia), MD has made remarkable progress over the last few
years. MD ranks 114th out of 187 countries on the 2014 Human Development Index. The signature
and provisional entry into force of the Association Agreement and the Deep and Comprehensive
Free Trade Area (DCFTA) with the European Union as well as EU visa liberalisation in 2014 were
significant achievements at the international level. However, further steps towards EU accession
and future socially, economically and ecologically sustainable development require continued
reform, especially in the areas of governance, rule of law, anti-corruption and democratisation. MD
has been considered a priority country for Austrian Development Cooperation since 2004. Between
1997 and 2014, Austria’s official development assistance (ODA)2 to MD totalled EUR 37.61
million, of which EUR 12.95 million were contributed from ADC funds.
Republic of Moldova: geo - economic favorable position
55
Benefits for Moldova
The DCFTA offers a variety of advantages, both for Moldovan society and for businesses.
1. DCFTA is beneficial for Moldova in terms of national income growth. In the short run,
the DCFTA is expected to lead to an increase in national income EUR 75m for Moldova, in the
longer run, the estimated change in national income for Moldova would be about double that
figure (EUR 142m). Relative changes in national income of Moldova should translate to an
increase in GDP of +5, 4 % in the long run. Majority of this increase will result from lowering of
sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT) which account for
62 million EUR. The second most important contribution for Moldova in the short run originates
from services trade liberalisation, amounting to 28 million EUR.
2. DCFTA will boost trade between the EU and Moldova. Exports are estimated to increase
by +15% and +16 % in the short and long run respectively, with imports increasing by 6% and 8
% respectively. This implies that the DCFTA is expected to relatively improve the trade balance
for Moldova in the short run. In the long run, for Moldova reduction of non- tariff measures
should result in reaping the benefits amounting to EUR 283 million.
3. Stronger domestic rules will improve the safety of consumer products and therefore of
consumers in general. The DCFTA, by providing more stable and predictable trade regime, based
56
on EU legislation, is expected to boost the inflow of EU FDI to the country, creating more
enterprises and strengthening the competitiveness of the economy and individual sectors.
4. Wages in Moldova are projected to increase by 3, 1 % and 4, 8 % over the short and
long run respectively. Meanwhile, consumer prices are expected to decrease by about 1,0% and
1,3% over the short and long run respectively, mainly due to increased competition of imports.
This implies that on average purchasing power of Moldovan citizens will increase, especially in
the long run.
Moldova’s comparative advantages
Fiscal incentives
A. Incentives when starting a business  No minimum capital requirement when starting a
business.  VAT refund for capital expenses on long-term investments, except for housing and
57
vehicles VAT and customs tax exemption for assets to be included in the share capital of the
company
B. Benefits when operating 12% Corporate Income Tax – since 2012, with incentives for
investors  Double Taxation Avoidance Agreements (DTAA) with 44 countries  Employers will
not pay taxes for the sums spent for food, transport and training of employees
C. Incentive when exporting Companies importing raw material benefit from VAT and
custom tax vacation if they subsequently export the final product within 180 days.
58
CONCLUSIONS
Although the social and economic situation in Moldova has improved in recent years,
widespread poverty remains a problem.
The current problems in the Republic of Moldova began with the collapse of the Soviet
Union, when the rather small Moldovan economy was abruptly cut off from its traditional, primarily
Russian sales market. The effective secession of the Russian-speaking region Transnistria from the
Republic of Moldova in 1992, where most of Moldovan industry was located, has further weakened
Moldova's economy and lead to political instability. Since gaining independence in 1991, the
formerly prosperous Soviet republic thus declined to become one of the poorest countries in
Europe.
The most important employment sector in the country is agriculture which potential is not
yet fully exploited. For lack of income opportunities, over a million people have left Moldova, who
make a major contribution to Moldova's gross national product through remittances.
Through rural and regional development measures, administrative reforms and
improvements in the economic framework, the Moldovan government seeks to reduce poverty. The
"National Development Strategy of the Republic of Moldova for 2012-2020" is the current basis for
long-term and sustainable development of the country and Austrian Development Cooperation
support contributes to implementation of this national strategy.
Austria supports the Republic of Moldova and gears its cooperation with the country to the
strategy of the EU Action Plan under the European Neighbourhood Policy. Above all, the Austrian
Development Cooperation seeks to contribute to reducing poverty and creating new opportunities in
rural areas. The Republic of Moldova has been an ADC priority country since 2004. Austrian
activities there concentrate on water infrastructure and management, economic development and
employment promotion through vocational training.
59
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Analysis of Trade Relations Between Republic of Moldova and Austria in The Period 2005

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ANALYSIS OF TRADE RELATIONS BETWEEN REPUBLIC OF MOLDOVA AND

AUSTRIA IN THE PERIOD 2005-2015

The community of development partners in the Republic of Moldova would be honored to

Non focal area: Governance

Gender equality and empowerment of women

1.2. Dynamics of the bilateral trade

Austria is a landlocked country of approximately 8.5 million inhabitants in Central Europe.

Origin of GDP, 2014

On 1 December 2005 the EU has created a “Border Assistance Mission” (EUBAM)

2.2. Direct investment relations

2.3. Identifying potential niches for further trade development

3.3. Identifying potential investment projects

Moldova’s comparative advantages

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