Russia-Moldova Bilateral Trade Up 15% In 2019
Russia-Moldovan bilateral trade has increased 15% this year, reaching US$820 million, according to Dmitry Patrushev, Russia’s Minister of Agriculture of Russia and Co-chair of the intergovernmental commission on economic cooperation between Russia and Moldova.
“From January to June 2019, trade turnover increased by 15%, to almost US$820 million. We consider cooperation in the agricultural sector to be one of the most important and promising areas of bilateral cooperation. Over the first half of this year, agricultural commodity circulation increased by 16% – up to US$175 million.” said Patrushev.
This follows an agreement to ease Moldovan exports to Russia at the end of last year. Moldova is a landlocked country, sandwiched between Romania and Ukraine, with a limited access to the Black Sea. Its economy is driven by the service sector, accounting for over 60% of the national GDP yet it remains the poorest economy in Europe in per capita terms. The country is an observer nation to the Eurasian Economic Union and has the potential to become as Eastern European IT hub.
The country is a member of the World Trade Organisation, as well as the Commonwealth of Independent States and the Black Sea Economic Co-Operation. The nation is home to some of Europe’s most sought after wines, and has long been recognized as a quality producer of exclusive and rare vintages. The Moldovan population is about 3 million with a total GDP of US$20 billion. Per capita income is about US$5,657 (PPP)
While the country is landlocked, an agreement reached with Ukraine in 2005 gave Moldova access to the Black Sea via a 600 km stretch of the Danube. It can be expected that this may now be further expanded in terms of facilities. The Giurgiulesti Port has seen a huge increase in traffic over the past three years, and is also operated as a Free Trade Zone, meaning goods destined for the EU can be imported and warehoused – duty free – until called upon for shipment into the EU.Moldova’s position next to the EU, should port facilities expand and it eventually joins the EAEU as a full member, has wide ranging implications. It could provide the EAEU with another direct border with the European Union.
This takes on particular significance when taking into account China, India, and other Asian nations such as Singapore, Iran, and Turkey, which are all in the process of establishing free trade agreements (FTAs) with the EAEU, and if ratified, will bring their goods, duty free, right to the borders of the European Union. Serbia has also recently signed off an agreement with the EAEU.
China is currently in the process of studying its own bilateral FTA with Moldova, and has also loaned the country US$1 billion for IT infrastructure development projects. Moldova has, in time, the potential to become a Southern version of Estonia should it get its development plans right, and learn to coordinate with Chinese and Russian services demand in e-commerce.