Economic expert Valeriu Prohnitski considers the economic destabilization faced by Moldova will result in social destabilization that leads to poverty. In case of mass poverty ,as at the end of the 1990s and the beginning of the 2000s, the families with more than three children, the people working in agriculture and pensioners will be the most affected. He made such statements in the international conference MACRO-2015 “Promotion of economic and social security amid major risks”, IPN reports.
Valeriu Prohnitski said that a powerful discrepancy between the calculated poverty index and the poverty perceived psychologically by the people has become more evident after 2010. This shows that the poverty line about which they speak in Moldova is no longer representative and does not reflect the real state. “The people need money not only in order to exist physically, but to also form part of society. This national poverty line is artificial. If we raise the ceiling from 1,196 lei to 1,300 lei, poverty rate rises from 12% to 21%. Besides an army of poor people, we have other vulnerable people who become poor too immediately after shocks appear,” he stated.
According to the expert, if remittances hadn’t existed in 2013, the poverty rate would have been 30%. If social benefits hadn’t been provided, the poverty rate would have been 15%, not 12% as the authorities say. To cope with the challenges, the country needs better educated entrepreneurs, technology and skilled labor force. “Not many new businesses are started in Moldova. This is a sign that the people do not become involved in risky businesses. In our country, at least 24% of the companies had been told to pay bribe for being allowed to work. In two key areas – agriculture and food industry – the volume of investments is very low, but the activity in the two sectors can reduce the poverty rate the most,” he said.
Valeriu Prohnitski noted that if we face mass poverty, several scenarios are possible. If Russia and the EU recover economically, emigration from Moldova, especially by young people, will intensify. This will exert increased pressure on public finances and the political elites will become even more corrupt. Another scenario is that the economies of Russia and the EU will remain anemic and the current oligarchic system will be preserved in Moldova. The ideas of democratization and independence will be compromised. The people will want to renounce independence only to have incomes to live on. New hotbeds of separatism can appear. According to the third scenario, a ‘national hero’ will appear and will remove the oligarchs. This will introduce a more excessive government and will reduce bribery in hospitals and schools, but will also centralize it.
The expert said that poverty can be reduced from down to up and vice versa. The down to up scenario envisions that the people will take their fate in their hands, while civil society will review its role. The up to down scenario will be possible if the donors review their country strategy.
