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World Bank Document Report No.: 19846MD MOLDOVA: POVERTY ASSESSMENT Public Disclosure Authorized TECHNICAL PAPERS October 1999 Poverty Reduction and Economic Management (ECSPE) Eastern Europe and Central Asia Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CURRENCY EOUIVALENTS (as of July 30, 1997) Currency Unit = Leu (plural Lei) 1 Leu = US$0.22 US$1 = 4.60 Lei (as of May 13, 1999) Currency Unit = Leu (plural Lei) 1 Leu = US$ 0.09 US$1 = 10.85 Lei WEIGHTS AND MEASURES Metric System FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CIS - Commonwealth of Independent States ECA - Europe and Central Asia FSU - FormerSoviet Union GDP - Gross Domestic Product GNP - Gross National Product IMF - in.ternationalMonetary Fund OECD - Organization For Economic Cooperation and Development PPP - Purchasing Power Parity TACIS - Technical Assistance for Commonwealth of Independent States UNDP - United Nations Development Programme Vice President: Johannes Linn (ECAVP) Country Director: Roger Grawe (ECC07) Sector Director: Pradeep Mitra (ECSPE) Sector Manager: Hafez Ghanem (ECSPE) Task Team Leader: Arup Banerji (ECSPE) Team Members: Jeanine Braithwaite, Elena Nickulina, Doreen J. Duff (ECSPE); Nora Dudwick (ECSSD); Robert Ackland (consultant); Hermine de Soto (consultant); David L. Lindauer, (consultant) Table of Contents Technical Paper I Poverty in Moldova: The Social Dimensions of Transition By Hermine G. De Soto and Nora Dudwick Technical Paper II Poverty in Moldova: Pilot Results For February 1997 By Jeanine Braithwaite Technical Paper III Poverty in the Republic of Moldova in May and August 1997 By Robert Ackland Technical Paper IV Labor and Poverty in the Republic of Moldova By David L. Lindauer Technical Paper V Human Capital and Poverty in the Republic of Moldova By Robert Ackland I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ PREFACE This is a companion volume to the Moldova Poverty Assessment (1999), and contains the technical papers that are the basis for the report. The report was written at the request of the Government of Moldova, which is its primary audience. It aims to provide a detailed analysis of the situation regarding living standards in the country, and provide a framework for policy for the Government's emerging social assistance program. The main report concentrates on analyzing the results for the Right Bank of Moldova. These technical papers also present evidencefor Transnistria. TECHNICAL PAPER I POVERTY IN MOLDOVA: THE SOCIAL DIMENSIONS OF TRANSITION June 1996 - May 1997 by Hernine G. De Soto The World Bank and Nora Dudwick The World Bank The views contained herein are those of the authors only, and do not represent the opinions of the World Bank nor of its Board of Directors, nor of any individual country member, nor federal, nor local government. Poverty in Moldova: The Social Dimensions of Transition TABLE OF CONTENTS ACKNOWLEDGMENTS......................................... iv EXECUTIVESUMMARY ................................. ,. v INTRODUCTION......................................................................................................................... 1I Research objectives............................ Research methodology............................ 2 Interview sites and choice of households ............................ 3 WHAT IS POVERTY?................................. 5 Comparisonswith the past ................................. 5 Insecurity and shame ................................. 6 Generational differences ................................. 6 Who became rich and who became poor?................................... 7 Conclusions................................. 8 THE MATERIALDIMENSIONS OF POVERTY................................. 9 Hunger................................. 9 Comparing past and present ................................. 9 Cutting back ................................. 10 Food vulnerability:pensioners and children ................................. 11 Housing conditions................................. 12 The problem of utilities................................. 12 Heating and cooking................................. 12 Paying for utilities and services................................. 13 Water and waste ................................. 14 Poverty and ill health................................. 15 Paying for hospitalization................................. 15 Chronic or serious illness................................. 16 Folk healers ................................. 16 Dentistry................................. 17 Maternal and child health................................. 17 Abortions................................. 17 The cost of childbirth................................. 17 Child health................................. 18 Conclusions................................. 18 EDUCATION................................. 19 Education and poverty.................................. 9 Deteriorating infrastructure;inadequate teaching materials............................................. 19 Rising school absenteeism.............................................. 20 Teaching: declining salaries and prestige; rising workloads................................. 21 The role of bribes.......... 21 i Technical Paper I How students see their future................................................... 22 Education in Romania ................................................... 23 Conclusions ................................................... 23 THE AGRICULTURAL SECTOR ......................................................... 24 The impact of land reform ......................................................... 24 Restructuring the collective: Background ......................................................... 24 Working conditions on collective farms ......................................................... 25 Farm worker - farm management relations ......................................................... 27 Leaving the collective farm: fears and intimidation .............................................. 28 Farm reorganization ......................................................... 31 Attitudes toward American assistance: the experience of Maiak .......................... 31 Zavoieni Peasant Farmers Association, Manta village .......................................... 31 Private farming: risks ancl benefits ......................................................... 33 Changing attitudes and interests ......................................................... 35 Conclusions: Who privatizes? ......................................................... 36 SUBSISTENCE FARMING ......................................................... 37 Farming on household plots ......................................................... 37 The importance of husbandry ......................................................... 37 Marketing crops ......................................................... 38 Stealing ......................................................... 39 Urban gardening ......................................................... 39 Conclusions ......................................................... 40 CHANGING LIVELIHOOD STRATECLES.......................................................... 41 Introduction ......................................................... 41 Formal employment ......................................................... 41 Finding and keeping jobs ......................................................... 42 Youth unemployment ......................................................... 43 Employrnent, illness, and disability ......................................................... 43 Women: juggling jobs and child care responsibilities .......................................... 44 Informal employment ......................................................... 44 Buying and selling ......................................................... 45 Small-scale retail vending ......................................................... 46 Petty enterprises ......................................................... 47 Capitalizing on skills and hobbies ......................................................... 47 Renting out rooms .......................................................... 48 Selling vouchers ............. 49 Illicit formnsof income-generation.......................................................... 49 Prostitution ......................................................... 49 Bribes ......................................................... 49 Begging ......................................................... 49 Theft .......................................................... 50 ii Poverty in Moldova: The Social Dimensions of Transition Labor migration................................................... 50 Changing attitudes and risks................................................... 52 Attitudes toward business................................................... 52 The role of "connections".................................................... 52 Borrowing and lending................................................... 53 Conclusions................................................... 54 SOCIAL ASSISTANCE......................................................... 55 Introduction: Social assistance in the past......................................................... 55 The state as provider: retention of old attitudes......................................................... 55 Late and haphazard payments......................................................... 56 Obstacles
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