How Moldova reacts to COVID-19 and how is it connected with EU-funded support

Over the course of September, the World Bank (WB) in Moldova is conducting an opinion poll aimed at measuring the impact of COVID-19 on local business. A second poll is scheduled for December. Thanks to the poll results, a reflection of the pandemic consequences on the Moldovan economy will be available. Currently, the best depiction of reality is based on data gathered in May by sociologists, on behalf of the WB in Moldova, and from research results generated by relevant European projects. The depiction isn’t that grim, which is gratifying.

A depiction both grim and bright

According to WB in Moldova’s spring findings, a third of businesses transitioned to online activity, a quarter of businesses expanded their goods and services delivery network, while 3% of companies registered increased sales.

According to the May Public Opinion Barometer, about 74% of workers employed in Moldova worked as usual, while only 16.3% worked remotely. During the pandemic, the incomes of 61% of families increased. Meanwhile, the salary of 34.1% of employees dropped.

Clearly, some industries will feel the full force of the blow dealt by the health crisis for a long time to come. The most affected branches are restaurants and hotels, tourism, finance, construction, transport, public services and education. Industrial enterprises and service companies have also registered losses. In these sectors, spring sales decreased by 65% and 53% respectively. However, the Moldovan private sector has showed its ability to adapt to shocks. Still, we have to admit, the private sector did not face the new and unknown challenge alone.

The grant was right on time

Denis Buța from Chișinău is one of the people who survived the pandemic's attack thanks to support provided by the European Union. The entrepreneur was hit by COVID-19 while adjusting Kraft beer production. In January, he received a non-reimbursable loan of 250 thousand lei under the PARE 1 + 1 program and invested the money in equipment. "The grant was right on time. We produced and sold less than planned; however, we managed to penetrate the market", said Denis Buța, who is convinced that European money helped him get his business off the ground during troubled times.

The PARE 1 + 1 program is implemented in Moldova with the financial support of the European Union, as are all the programs and projects referenced in this article.

Angela Sobol from Vărvăreuca village, Florești district, was the first person in Moldova to produce gluten-free cereals, flavors, sweeteners and food coloring. She launched her business five years ago. The business increased its sales by 30% during the pandemic.

The entrepreneur received a grant via the UNDP/AdTrade project and used the money in order to enter one of the largest commercial networks in Moldova. She reviewed her marketing strategy, developed new offers and created an attractive image for her business.

In fact, Angela Sobol started her own business thanks to EU assistance. "Without the first European Union grant, issued for equipment purchase via the "Confidence Building Measures" program, I would not have been able to launch my business", admits the entrepreneur.

Let's double down on learning

The share of small and medium enterprises (SMEs) in the Moldovan private sector is 95%. Almost two thirds of the Moldovan population is employed in SMEs. However, according to United Nations Development Program (UNDP) in Moldova study findings, only half of these companies had developed crisis mitigating strategies, previous to the pandemic. COVID-19 required entrepreneurs to redesign the structure and goals of their business.

"Innovations and the ability to quickly adapt to new conditions are essential elements of sustainable business development. Any crisis, including the new coronavirus crisis, represents an x-ray that displays the company's vulnerabilities", said Vladimir Imbirovschi, CEO of Santino-Ser-vice. His company specializes in plastic product manufacturing and has managed to quickly master e-commerce tools, which allow expanding sales abroad.

The co-founder and administrator of a uniform and protective equipment company, Maria Pleşca, attended every possible master class for small and medium-sized exporting entrepreneurs, organized by UNDP, with the financial support of Sweden. "If you cannot adapt now, your business has no chance of survival. In order to overcome new challenges, we should adhere to expert recommendations", said the entrepreneur.

Despite COVID-19

Entrepreneurs who aimed to save their business in times of crisis, tried to capitalize on any possible opportunity. These opportunities arose where European funding was provided. These opportunities were "discovered" even by those who engage in social entrepreneurship - a very challenging business.

The "Woman and Child - Protection and Support" organization from Criuleni is known for its many projects that support children with disabilities under the age of three. Such children are trained by the organization's specialists as to successfully integrate into kindergartens and schools. The organization has long planned to create an early intervention service, which it succeeded to accomplish, thanks to a European Union grant obtained via the Soros Foundation Moldova and thanks to local administration funds.

Due to the quarantine, the organization had to revise how it provided its service. According to project coordinator, Ina Cazacu, the orgaization created a parent-consultant group, it established an online primary inspection mechanism and it started to individually communicate with each family.

The "Positive Initiative" created mini-farm has also survived the blow dealt by the pandemic. It represents a therapeutic community, composed of 12 people undergoing a long rehabilitation process after drug and alcohol addiction. The financial support of the European Union and the Government of Sweden, obtained through the Eastern European Foundation, contributed to the development of this community. These patients engage in therapeutic agricultural activities in the village of Beriozchi, in the Aneni Noi district. They enjoy farming, they raise animals, produce meat and dairy products, and learn to live in a world without drugs and alcohol.

Stronger together

In order to overcome the consequences of the crisis, entrepreneurs are actively accessing a number of programs and projects. "Businesswomen", "A start for young people", "Supporting SMEs in rural areas", "EU4Digital" - is an incomplete list of opportunities offered during these difficult times to Moldovans by the European Union, in collaboration with international and local partners.

The interest for these programs is growing, although their full potential is not fully utilized. Some of the reasons why people don't tap into the provided support include not knowing about the aid programs and fearing not being eligible for the programs. Unfortunately, often, people don't seek advice, thus miss out on opportunities.

Natalia Uzun, IPN

Disclaimer: This material is produced in the framework of the information campaign “EU-Moldova: Stronger Together”, carried out by the project “Strategic communication and support for mass-media in the Republic of Moldova”, funded by the European Union. The content of the material belongs to the authors and does not necessarily represent the EU’s vision.

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