Moldova Survives Due to Emigrants’ Money

The Republic of Moldova ranks first in a rating regarding the remittances transferred home by migrant workers, compared to GDP. According to the European Bank for Reconstruction and Development (EBRD), Moldova exports labor force equal to 27,1% of the Gross Domestic Product. This year’s Update highlights the growing importance of remittances – or cash being sent home by migrant workers – for economic stability and growth in many transition countries. In many cases the remittance flows exceed foreign direct investment (FDI). The EBRD report also shows that remittances are becoming an increasingly important source of funding in poor countries. Moldova is on the first place in this rating. The money that are sent home by Moldovan migrant workers constitute 27,1% of GDP. It is followed by Serbia and Montenegro, Bosnia-Herzegovina, Albania and Tajikistan, where the remittances worth more than 10 per cent of GDP. On the other hand, the states that recently joined the European Union have a remittance flow under 2% of GDP, despite the fact that the labor force can migrate easier to Western Europe. In the case of Romania, according to NBR statistic data, last year the private transfers constituted 5.6% of GDP. The EBRD report presents that the exact magnitude of remittance flows is difficult to quantify, as many transfers are made through informal channels. The citizens of the Central Europe, former Soviet Union and Balkans that work abroad sent home in 2004 almost 20 billion dollars, mentions the report of the European Bank for Reconstruction and Development (EBRD). „Some of the most important changes the transition brings are the opportunity to live and work abroad”, say the EBRD officials. The report shows that the funds the migrants send home are an important source for the poorer countries.