Home / Analysis of the economic situation and development potential, January – May 2008
22.09.2008
Analysis of the economic situation and development potential, January – May 2008
 

INTRODUCTION

This document contains a comprehensive analysis of the economy of ATU Gagauzia and was elaborated for learning about the basic tendencies and potential for region’s development. The project was carried out in the framework of “Economic analysis of the Autonomous Economic Unit of Republic of Moldova and its potential for development». The project was implemented by Independent analytical center Expert-Grup in January-June 2008 with financial support of LGI-OSI program (Initiative for reforming the local administration and Open Society Institute (Budapest)) and Soros-Moldova Foundation. Project beneficiary – Executive committee of ATU Gagauzia.
The research structure and research issues were touched upon so that the document is found useful for strategic planning and development of the Gagauz autonomy. The research starts from general presentation of the gagauz economy compared to the development level of other regions Republic of Moldova: Chisinau, developing region (DR) North, DR Center, DR South (having in mind that there is not valid statistical data for urban areas across the Dnester as well as for Bender – DR Transnistria – were not included in the analysis). Authors examined region’s contribution to industrial and agricultural output, importance of investments and basic fragile sectors of regional economy.
The second most important role authors give to appraising socio-economic situation in the Gagauz autonomy. The subject of analysis is income, standard of living, education and healthcare. Authors examine these indicators in relations to economic processes.
The third chapter covers research on human resources of the Gagauz autonomy and stars from a general demographic analysis. Migration, which has an important role in the economic development of the region, constitutes also a topic for research. There is a further analysis of the structure of human resources from the point of view of economic participation and employment structure by industry. This chapter resumes with discussion on labor remuneration and labor efficiency.
The fourth chapter reflects the endowment of Gagauz autonomy with natural resources, which can be used for economic purpose. Authors gave attention to the use and protection of mineral, wind and sun light resources. This is why there is a separate chapter dedicated to natural resources: most important sectors of Gagauz economy – agriculture and industry – to a great extent depend on quality of natural resources.
The next chapter deals with capital resources of the region. A separate place in it is given to banking sector, which is made of branches of main banks from Republic of Moldova. The need for separate understanding of the situation in capital resource area is motivated by the fact that majority of companies, included in the research considered that access to capital was one of the main obstacles to development.
Despite the superficial statistical data, there is a separate chapter on regional infrastructure, partly transport, energy and digital one.
In chapter seven there is a general analysis of the situation in the agricultural sector of Gagauz autonomy. Chapter eight contains analysis in the plant growing sector (by sectors), and chapter nine – reveals the situation in the livestock growing sector.
The logical chain of this research brings to food industry, which represents the key branch of the Gagauz autonomy. All aspects related to this industry were included in chapter nine. There has been an analysis made of the main sectors of the economy as well: winemaking, canned food production, pastry and bread making.
ATU Gagauzia has a non-food sector which plays a limited role. The non-food industry is represented by few textile companies, together with machine building enterprises and companies for producing construction materials. The analysis of their situation was included in chapter eleven.
Chapter twelve examines the service and trade sector of the Gagauz autonomy. It contains information on general situation registered in the sector, its qualitative and quantitative endowment with labor force. The authors determined the main obstacles which obstruct the sector growth and diversification.
There has been a short presentation of the business climate at the regional level made in chapter thirteen. There are also issues regarded which companies face in developing their business.
There is a separate chapter (14) for a comprehensive SWOT analysis of the regional economy. The reason for including SWOT analysis into separate chapter is because it combines all important areas and sectors of the autonomy. The authors have outlined weak points and threats for ATU Gagauzia as well as ways to overcome these obstacles. While analyzing the strong sides and opportunities for the region authors emphasized ways to overcome these obstacles and suggested solutions for exploring the opportunities.
To explore the existing potential for development in every important chapter of this report there have specific recommendations made, targeted at regional administration and Gagauz companies. The general recommendations have been combined into separate chapter (15).
When elaborating this document authors used statistical data, submitted by regional authorities. Much data is not aggregated on the regional level and could be found in publications of the National bureau of statistics. The group who was working on this research used additional documents for collecting data, necessary for analysis: regional sociological survey (conducted by CBS-AXA with participation of 540 respondents. The survey is representative for regional level (with error margin 4%), business survey (CBS-AXA, 120 respondent companies), local surveys conducted in communities (conducted by Expert-Grup, 20 respondent mayor councils), and survey in the bank sector of the region (conducted by Expert-Grup, 7 respondents).
While preparing this research at the initial phase of the project, there were 3 focus groups conducted in Comrat (with participants from non-governmental organizations, producing companies and representatives of the local public administration).  Also, there have been 4 trips to urban centers of Gagauzia (Budjac, Kirsova, Baurci, and Svetlii). Especially useful were 8 interviews with directors of several companies from and 3 interviews with representatives of educational institutions from the region.
Authors are grateful to all public administration bodies ATU Gagauzia, which submitted statistical data, provided their insights over project results and contributed with significant logistical and analytical support for accomplishing the project. Authors are exceptionally thankful to VItalie Kiurkciu and his team, head of the Economic, trade, service and foreign development division of ATU Gagauzia. It is necessary to mention, that authors are responsible for analyses and conclusions made in this report.
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