Poverty levels in Moldova would be much higher had it not been for remittances, World Bank experts say

Poverty levels in Moldova would increase without the contribution of Moldovan workers abroad via means of remittances, Willem van Eeghen, senior economist for the Middle East and North Africa Region at the World Bank (WB), stated at the presentation of the Report "Migration and Remittances: Eastern Europe and the Former Soviet Union", which took place in Chisinau on Tuesday, September 18. According to the WB official, Moldova heads the top of European and ex-USSR countries whose volume of remittances make a large part of the GDP. Eeghen mentioned that the 900 million USD transferred in remittances to Moldova in 2005 represented approximately 30% of the GDP. Without this money, the income of the state would suffer a considerable decline, as the consumer’s demand would decrease, and thus fewer construction projects would be initiated, etc. “Remittances are currently extremely important for the state’s economy and it would suffer dramatically if remittances would stop being transferred” the WB official mentioned. Speaking about the real amount of remittances which come into Moldova, the WB economist says that it is very difficult to produce an estimate, as besides remittances transferred via the banking system there is also the unofficial way of transferring money by individuals. Willem van Eeghen says that remittances are benefic in terms of poverty reduction, as well as economic sustainable growth. In the latter case, however, migrants will invest in the state’s economy if the investment climate is favourable; if not, money will be used for consumption only. The report also underlines that other benefits of the remittances include the fact that 36% of the acquired income are sent from the origin country, 26% intent to initiate a business upon their return, 70% of the returning migrants are trying to improve working conditions, acquiring diverse skills and abilities, while abroad. Although the wave of eastern migrants to the west is elevated, there is also a considerable flow of immigrants from ex-Soviet countries to Russia; there is also the USA which is the largest migrant recipient country in the world. According to WB estimations, the number of migrants in Russia is estimated to be from 1 to 10 million people. The forecasts of the WB show that in the next few years the number of immigrants in Europe and Central Asia could increase, among these Moldovan citizens would represent a considerable number.