Moldova’s rich black soil makes agriculture the foundation of its economy. When Moldova was part of the USSR, Soviet central planners made its primary role one of supplying food products to the rest of the Soviet Union. The Moldovan economy suffered from the disruption of trading relationships following the breakup of the USSR. The conflict in the Trans-Dniester region greatly compounded the economic turmoil. Moldova’s light industry, which is highly dependent on trade outside the republic, suffered the most. Moldova has survived many of the most severe hardships of its transformation to a free-market economy; however, the country’s economic vitality remains highly dependent upon the size of its crop harvest. The gross domestic product (GDP), which measures the value of goods and service produced, was $1.2 billion in 1999.
1940 the area used for vegetables, orchards, berries, and vineyards has undergone significant expansion. Viticulture, fruit and vegetable growing, and other specialized farming activities are particularly important, constituting about one-fourth of the commodity output of arable farming. Grapes are Moldova's most important industrial crop, with the largest vineyards found in the southern and central regions. Most orchards are situated in northern and southeastern Moldova. Sunflower seeds, another significant crop, are grown throughout the republic, though the southeastern regions have the largest plantations. Sugar beets, a relatively new crop in Moldova, are cultivated in the north. Moldova also is a major tobacco grower. Vegetables are grown mainly in the southeast.
Moldova enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, wine, and tobacco. Moldova must import all of its supplies of oil, coal, and natural gas, largely from Russia. Energy shortages contributed to sharp production declines after the breakup of the Soviet Union in 1991. As part of an ambitious reform effort, Moldova introduced a convertible currency, freed all prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and freed interest rates. Yet these efforts could not offset the impact of political and economic difficulties, both internal and regional. In 1998, the economic troubles of Russia, by far Moldova's leading trade partner, were a major cause of the 8.6% drop in GDP. In 1999, GDP fell again, by 4.4%, the fifth drop in the past seven years; exports were down, and energy supplies continued to be erratic. GDP declined slightly in 2000, with a serious drought hurting agriculture. Growth should turn positive in 2001.
