How the Austrian Development Agency Assists in Moldova

PeopleOther ♦ Published: May 23, 2022; 17:00 ♦ (Vindobona)

The Austrian Development Agency supports the Republic of Moldova. The Republic of Moldova is characterized by an economy specialized in agriculture. However, the country has many political and economic problems, that need to be addressed.

The Austrian Development Agency supports the eastern European country of Moldova. / Picture: © Wikimedia Commons /Spiridon MANOLIU, CC BY-SA 3.0

The Austrian Development Agency (ADA) tries to support Moldova in terms of development policy. Due to the ongoing unstable political situation, the economic and social situation of the people in the Republic of Moldova has hardly improved in recent years.

The Republic of Moldova is considered poor and the least developed country in Europe. Especially in rural areas, the infrastructure and related services of water, sanitation and waste are poorly developed.

Around 30 years ago, Moldova was one of the more prosperous Soviet republics, with a successful agricultural sector. After independence, however, political and social tensions and economic decline led to the impoverishment of the population.

The war of 1991-92, which resulted from the attempted secession of the Transnistrian region east of the Dniester River from Moldova, also contributed to this. The country, located between Romania and Ukraine, lost its traditional markets in the former Soviet Union, which made the economic situation more difficult.

The problems continue to this day. They are exacerbated by several factors: the 30-year unresolved conflict with Transnistria, repeated sanctions by Russia, the gas crisis that began in the fall of 2021, which has led to a 400 percent increase in gas prices and the highest inflation since 2008 with around 17.5 percent in the last quarter of 2021 (and rising). The country has been affected by the conflict between Russia and Ukraine, which has been ongoing since 2014.

With the massive Russian aggression in Ukraine that took place in February 2022, which, among other things, led to high refugee numbers and a further increase in commodity prices, the situation is further exacerbated.

As reported by, Transnistria has a major Russian population and is described as a Mafia state-owned by one controversial businessman. The Sheriff's company holds everything in Transnistria and is controlled by former KGB Officers, Viktor Gushan und Ilya Kasmaly. The fear of an invasion or military interference by Russia is big in Moldova since the invasion of Ukraine.

Moldova is moving toward Europe and even has an association agreement with the European Union since 2014.

According to the Austrian Development Agency, through the project EU4Moldova of the Local Communities (LOCOMO), the Austrian Development Agency (ADA) supports selected communities in the Republic of Moldova in coping with the economic and social consequences of COVID-19. Together with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Polish Solidarity Fund, the implementation focuses on water management and vocational training.

LOCOMO is a Team Europe Initiative (TEI) and is funded by the European Neighborhood Instrument (ENI).

In Team Europe, the European Commission, European financial institutions, EU member states and their development agencies coordinate their joint initiatives and programs in development cooperation against the effects of the Corona pandemic.

According to the Austrian Development Agency, LOCOMO's total budget is nearly €17.5 million, of which €13.8 million is funded by the European Union (EU). 2.7 million euros come from Austrian Development Cooperation (ADC) funds. The German Federal Ministry for Economic Cooperation and Development (BMZ) contributes the rest.

According to the Austrian Development Agency, ADA is implementing over 10 million euros of this amount. The program will run for four years from the beginning of 2022 to the end of 2025 in municipalities in the three districts of Edineț, Leova and Straseni.

Austria's total official development assistance to Moldova from 2004 to 2020 amounted to 59.30 million euros. Of this, the share of Austrian Development Cooperation (ADC) amounted to 35.80 million euros, according to the Austrian Development Agency.

Moldova has been a priority country for Austrian Development Cooperation since 2004. ADA activities focus on projects in the areas of water supply and sanitation, environment and climate change, and economy and employment. Special attention is paid to vocational training and further education. Young people are to find better-qualified work and prospects in their home countries.

The second focus of the project is on improving the education sector, which will be implemented together with GIZ, according to the Austrian Development Agency. The ADA project team focuses on VET institutions (Vocational Education and Training) as well as political-strategic framework conditions in dual education, especially in the cooperation of national and local institutions in co-designing legislation and political orientation.

"Through improved vocational training, women and men should gain better opportunities in the labor market. This will also create synergies in the water infrastructure sector, as the new infrastructure requires appropriate vocational training for operations management and maintenance," said Friedrich Stift, ADA's Managing Director.

According to the Austrian Development Agency, four vocational training institutions and their pedagogical and administrative staff will benefit from LOCOMO, along with about a thousand students from the vocational training institutions and local businesses. In addition, the training institutions are being networked with the local private sector.

Austrian Development Agency