Services account for 20% of foreign trade. Economic analysis by Info-Prim Neo

The structure of Moldova’s foreign trade more and more resembles that of the European countries, with the services accounting for 20% of the foreign trade in 2007. The export of services came to USD 646.10 million, as opposed to the value of goods exports of USD 1.360,73 billion. According to preliminary data of the National Bank of Moldova, the balance of services in the balance of payments last year was 19.65 million USD, a fourfold increase compared with last year’s balance. Moldova becomes an exporter of services given that the export of services in 2007 rose by 32.2%, as against 22.5% in 2006, at a time when the exports of goods increased at a lower rate, influenced by the Russian ban. The services in telecommunications and transport contributed to the rise in the export of services. In particular, the passenger transportation services rose by 47.0%. Though Moldova starts to develop the potential of a sector that becomes an important factor in the economic growth, this sector’s share in the balance of trade is rather low. [A more and more important growth factor] The services become a more and more important factor of economic growth. In 2001, they made up about 49% of the gross value added, while in seven years they made up over 61%. The telecommunications and construction sectors are developing considerably. The transportation services, though lagging behind, are in high demand abroad owing to their quality and compatibility of prices. The value of services in the last seven years increased 3.48 times, up to 32.612 billion lei, while the production of goods rose almost two times slower. If Moldova developed the tourism sector faster, the share of services in the balance of payments would grow even more. [What services does Moldova export and where?] The export of services in 2007 grew by 30.8% influenced by the general development of the foreign trade. The service sector in the Community of Independent States develops slower (+24.5%) than in the rest of the world (35.8%). The yearly balance of services is in surplus both in the trade with the East and with the West. The balance of transportation services last year ended in a surplus of 47.4 million USD. This is the segment with the highest share in foreign trade, but also the segment that has constantly developed for the past few years. The Moldovan transport companies provide services on the whole territory of the CIS as well as in the West. The export of transportation services in 2007 rose by 30.5%, to 292.01 million USD. The freight transportation services accounted for 75.7% of this. The transportation services provided to Moldova’s resident population by non-residents totaled to 244.61 million USD. The freight transportation services accounted for 66.8% of this, amounting to 163.37 million USD. The passenger transportation services took the second position. They saw the highest growth rate among the exported services. As a result, the deficit fell by 35.5%, to 48.80 million USD. The export of communication services came to 82.52 million USD, while the import of such services to 35.84 million USD. This sector in the past few years has constantly seen a trade surplus: 32.09 million USD in 2005, 42.19 million USD in 2006 and 46.68 million USD in 2007. The export of communication services includes the export of postal and courier services (sales of stamps, the press, correspondence, lease of mailboxes, parcel delivery) and the export of telecommunication services (fixed-line and mobile telephony, telex, fax, cable TV, Internet etc.). The communications in the past few years have grown at a higher rate than the Gross Domestic Product and this tendency is expected to persist the next years too, following larger investments in the given area. [Tourism and export of services] The collections from tourism services in 2007 rose by about 46%, to 413 million lei. Last year, Moldova was visited by 149,900 people (persons that traveled without using travel agencies’ services). This is by 17,000 people more than in 2006. These people crossed Moldova’s borders or its territory. The number of Moldovans that traveled via Moldova rose from 50,800 in 2006, to 53,383 in 2007. The number of foreign tourists that came to Moldova to holiday, on business or for other professional purposes increased insignificantly. “The uncompetitive prices, especially as regards the relation between the quality and price, as well as the poor infrastructure discourage the coming of foreigners to Moldova,” experts consider. The total collections from tourism activities exceeded 412 million lei, while the returns rose from 33 million lei in 2006 to 40 million in 2007. The Moldovan tourism is developing, but it grows only due to outgoing and internal tourism. Outgoing tourism means in fact import of services. Therefore, Moldova is a country that imports tourism, the number of outgoing tourists being about sixfold higher than the number of ingoing tourists. The number of foreigners coming to Moldova had decreased considerably during the last four years, from 26,100 people to 14,700 in 2007. According to a recent report of the World Economic Forum, Moldova takes the 98th position out of 130 countries by tourism competitiveness. So, in order to earn money from tourism, Moldova should enhance its competitiveness first.