Negative effects of labor force migration might deepen next years

Negative effects of the massive migration of labor force from the R. of Moldova could grow deeper with each passing year, the authors of the National Report on Human Development 2006 warn. The report emphasizes upon the fact that the migrating persons become younger. Hence, lacking own families, they have weaker relations with the country and as a result often allow the possibility of settling in a foreign country. As concerns economy, the role of migration is determined by the fact that almost 20% from the labor resources work abroad, and the income transferred by emigrants in 2005 represented 30% of the GDP. According to the research, above 80% from the Moldovan emigrants send money home and about 70% transfer more than a half of their earnings. Transfers partially finance the trade deficit and favor the rapid raise of salaries in some branches of the national economy, where a deficit of workforce can already be observed. This currency flows reduced the dependence of the Government on conditioned loans, offering it a certain share of independence in its macroeconomic policy. Other positive effects for economy come from the fact that about 21% of the income received from emigrants is kept in the banking system. Only 7% from the income transferred in the country are actively invested, mostly in economic entities of small and medium size (shops, bars, repair workshops), and 8% from the income had been used for repaying debts contracted by households. The report has been worked out by the “Expert-Grup” Independent analytic centre and the "ADEPT" Association for Participatory Democracy.