Tuesday, July 15, 2014

The Poorest Country in Europe - Revealed

Europe often evokes romantic thoughts of Buckingham Palace, The Champs-Elysees, or a posh ski resort in Switzerland or Austria. The other day, I was thinking about how many people are limited when thinking about Europe - limited in the sense that they are only thinking about "Old Europe."

Of course, there are many countries in Europe that are characterized as emerging markets, most notably those in the Balkans and the former communist states of Eastern Europe. Poverty, corruption, and crime is rife, nevertheless, they are surely part of Europe.

That got me wondering: What's the poorest country in Europe? It would be interesting to do a bit of research and find out what has held this country back in relation to its neighbors. Was it economic mismanagement, war, or some other reason? Here's what I discovered .

So what's the poorest country in Europe? The answer, not so surprisingly, is the Republic of Moldova. Moldova has a per capita GDP of $3400. That's strikingly lower than its closest European competitors, Kosovo, ($6400) Ukraine, ($7200) and Bosnia and Herzegovina, ($8200).

Moldova is not a member of the European Union, Eurozone, or NATO. Although Moldova borders Romania, Moldovans cannot travel to EU countries without a visa. This isolation has contributed to Moldova's dire economic situation.

Moldova has no natural resources and is heavily dependent on agriculture for exports. Moldova is torn between East and West, with trading partners divided between Western Europe and Russia, Ukraine, Belarus, and Kazakhstan. Although Moldova is making progress towards integration with the European Union, it's still far off.

Furthermore, Moldova has a breakaway region that is supported by Russia. This region, called Republic of Transnistria, is made up of mostly Slavic people. The region has been independent from Moldova since the breakup of the Soviet Union.

If the global economy grows, Moldova will benefit as foreign remittances increase. Many Moldovans work in Russia or other parts of Europe and send money to their families in Moldova. As Moldova further integrates with Europe, the economy will see a boost as exports increase and the government has access to more European sponsored loans. Lastly, Moldova has to find a way to ease tensions with Transnistria, if only to calm the fears of foreign investors. Until then, keep enjoying that fine Moldovan wine, surely one of Moldova's most appreciated exports!

Romania, Moldova, Village houses Poster
Romania, Moldova, Village houses Poster by ExploreRomania
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