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Page 1: National Human Development Report - CISR Home … National Human Development Report CONTENTS Foreword 3 Introduction 6 EXECUTIVE SUMMARY
Page 2: National Human Development Report - CISR Home … National Human Development Report CONTENTS Foreword 3 Introduction 6 EXECUTIVE SUMMARY

NationalHuman Development

ReportRepublic of Moldova 1999

TRANSITIONAND HUMAN SECURITY

UNITEDNATIONSDEVELOPMENTPROGRAMME

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UNDP Moldova Office

Søren TejnøIrene StavenskiSvetlana Alexandrova

Researchers and Experts

Andrei Cantemir - CISR Pavel Cojocaru - UNDPLilia Caraºciuc - CISR Sergiu Chirca - ASEMAnatol Gudîm - CISR Alexandru Dicusar - ASMSilvia Caraivanova - ASEM Tamara Golenco - UNDPAndrei Munteanu - CISR Oazu Nantoi - IFIon Pârþachi - ASEM Mihai Paiu - MESAurelia Pripa - TACIS Mihail Peleah - MLSPFAnatol Rojco - ASM Gheorghe Russu - CSPOctavian ªcerbaþchi - CISR Gheorghe Singur - ASMBaron Subaºi - ASM Sofia ªuleanschi - MERIrene Suhomlin - USAM Andrei Timuº - ASMDorin Vaculovschi - ASEM Elena Vutcariov - DSASNicolae Vizitei - USLM

International Consultants

Maarten Keune, ILO-CEET, BudapestConstantin Zaman, CASE-WarsawJoao Guimaraes, Institute of Social Studies, The Hague

English Language Editor

Ethel Hetherington Perina

Cover page design

Ion Axenti

Cover page

Vasile Movileanu - �The Creator�

The views expressed herein are those of the authors of the report and do notnecessarily reflect the views of the United Nations Development Programmeor the Government.

UNDP MoldovaStr. 31 August 131, 2012 Chiºinãu, Republic of Moldova

ISBN 9975-9581-0-9

Contributors to the MoldovanHuman Development Report 1999

CZU 009 (478)=20N 26

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And if you do not learn from the

past, the past will be the future.

In order not to recreate history,we have to look at our experience.How many generations does it take togenerate experience? In principle ittakes only one, because the young gen-eration of today will be the leaders oftomorrow.

This year the National Human De-velopment Report argues that humanbeings are the first priority in the de-velopment process � economicgrowth and the economy itself beingno more than a means towards achiev-ing human development. A. Schopen-hauer wrote, �man�s inner wealth ismore important than the objects heowns.� However, in a post-socialistcountry where several generations havelived with the expectation of a bright-er future, one cannot ignore an ex-amination of economic developmentsunder the current conditions of tran-sition.

The foundations of sustainable hu-man development should be laid down

�If you do not think about thefuture, you cannot have one.�

John Galsworthy

FOREWORD

Søren TejnøResident Representative, UNDP, Moldova

today, and many of them � such asemployment opportunities, householdincome, and social protection � arefactors of an economic nature. As onecomponente of human security, eco-nomic security stresses capacity to sus-tain life and the creativity of the eachindividual, family or community. Con-versely, the multiplication of suchproblems as poverty, starvation, dis-ease, illiteracy, crime and xenopho-bia can have serious consequences forhuman security.

1999 is the UN Year of the Elderly.Therefore, we are paying homage to theelderly citizens of Moldova. There is awealth of wisdom to be drawn fromthem, a pool of resources and experi-ences that should not be forgotten.

Moldova has been going throughsome rough times, creating a new coun-try, a new economy and a new defini-tion of human development and secu-rity. The present report contributes tothis process. But without a dialogue be-tween generations, we might repeatmistakes that should not repeated.

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National Human Development Report

CONTENTS

Foreword .........................................................................................3

Introduction .....................................................................................6

EXECUTIVE SUMMARY............................................................................................ 9

CHAPTER 1

HUMAN SECURITY IN THE CONTEXT OF SUSTAINABLEHUMAN DEVELOPMENT ........................................................... 15

1.1. New UNDP Concept of Human Security .......................................... 15

1.2. Economy in Transition: Threats to Human Security .......................... 19

CHAPTER 2

TRANSITION. PROFILE OF HUMANSECURITY IN MOLDOVA ........................................................... 24

2.1. Economic Reforms: Expectations and Realities ................................. 24

2.2. Human Security in Moldova: Macroeconomicand Social Parameters ......................................................................... 29

CHAPTER 3

RISING SOCIAL INEQUALITY.................................................... 33

3.1. Economic Insecurity of Different Social Groups ............................... 33

3.2. Changes in the Income Distribution Pattern and Increasein Disparities: the �Newly Rich� in Relation to the �Newly Poor� .... 40

3.3. Differentiated Access to Goods and Social Services ........................... 45

CHAPTER 4

INDIVIDUAL RESPONSIBILITY AND THE WIDENINGOF HUMAN OPTIONS ............................................................... 49

4.1. Decentralization as a Premise for the Enhancementof Individual Responsibility ................................................................. 49

4.2. Private Initiative, Entrepreneurship: Forms, Dynamics,and Social Implications ....................................................................... 51

4.3. Women Under New Social Conditions: First Experiencein Enterpreneurship ............................................................................. 56

4.4. The Impact of the Shadow Economy ................................................. 59

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CHAPTER 5

PROBLEMS IN MAINTAINING HUMAN SECURITY ................. 65

5.1. Social Protection of the Disabled. Human Securityof the Elderly ....................................................................................... 65

5.2. Social Protection of the Employed ..................................................... 73

5.3. Public Health Security ......................................................................... 81

5.4. Access to Education ............................................................................ 87

5.5. Cultural Environment .......................................................................... 94

5.6. Food Security .................................................................................... 100

5.7. Ecological Security ............................................................................ 104

5.8. Increase in Personal Insecurity ......................................................... 110

CHAPTER 6

ON THE WAY TO SUSTAINABLEHUMAN DEVELOPMENT ......................................................... 114

CONCLUSIONS ......................................................................... 117

ANNEXES:

HUMAN DEVELOPMENT INDEX AND ITS BASICCOMPONENTS .......................................................................... 122

A. A Technical Note on the Statistical Measurementof the Human Development Index in Moldova ............................... 122

B. TABLES. Selected Indicators of Human Development ................... 128

Abbreviations used in this paper ..................................................... 136

Bibliography ................................................................................. 137

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National Human Development Report

This is the fifth annual National Hu-man Development Report for the Re-public of Moldova, prepared at the in-itiative of the UNDP-Moldova office.A common idea, which unites all thesereports, is that positive human devel-opment must be sustainable. The real-ization of this concept in all countriesin transition is marked by certain spe-cial characteristics.

Since the beginning of the �90s theRepublic of Moldova - a new state insouth-eastern Europe - has been strug-gling with a three-fold task: consolida-tion of the State, transition to a marketeconomy and the reinforcement of civilsociety. In order to accomplish this taskit has been necessary to thoroughly re-vise the legal system, to carry out massprivatisation, to develop entrepreneur-ship, and to launch structural reformsin the real sector of the economy andin social services. The ultimate goal ofall these measures is to lead the coun-try out of the transformational declineit has been experiencing and to movetowards sustainable development.

Previous reports focused on differ-ent aspects of these questions: have theconcept of sustainable human develop-ment as applied to Moldova, consoli-dation and integrity of the state, thetransition to a democratic society, hu-man rights, and the role of the state inachieving social cohesion. Each year,starting in the mid-1990s, the HumanDevelopment Index (HDI) and its com-ponents - relating to the level of life ofthe population, health, education, em-ployment, the environment, etc. � havebeen assessed for Moldova.

Today, after eight years of inde-pendence, the Republic of Moldova hascome close to traditional democraciesin terms of the organization of the state,public pluralism and individual liber-

INTRODUCTION

ties. However, human beings cannot liveon spiritual liberty alone. The economicresults of reforms are, unfortunately,very poor.

The human costs of transitionproved in many respects to be too high.Following the crisis of 1991-1992 (withthe collapse of the centralized econo-my, hyperinflation, unemployment, lossof the population�s savings), the eco-nomic depression of 1993-1996 andweak growth in 1997, Moldova, againstmost expectations, was again hit by crisisin 1998, which put the economy on theedge of default.

A general awareness has been grow-ing in the country of the fact that thislatest crisis poses a real threat to hu-man security in all its aspects � eco-nomic, social and personal. Hence, afundamental aspect of the crisis of 1998is that a real threat has emerged to theeconomic security of the country. Mostindicators, both economic and social,are at a critical level. It is already obvi-ous that in the next few years econom-ic insecurity will be the very factor whichmay block the human developmentprocesses in Moldova.

Given these circumstances, the 1999Human Development Report is focusedon the questions which are at presentmost crucial for Moldova: transition,human development and human secu-rity. The Report has the following struc-ture and logic:

Chapter 1 - deals with the UN con-cept of human security, with newthreats globalisation is creating, andit examines one of the main aspectsof this problem in the context ofeconomies in transition.

Chapter 2 - provides an estimationof the reforms� results in Moldova atthe macroeconomic level and from

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the perspective of the population�ssocial and economic security.

Chapter 3 - deals with the same prob-lem, but at a micro-level, focusingon the broadening of inequality andon the differring situation of socialgroups. Chapter 4 focuses on indi-vidual responsibility and private ini-tiative as a new phenomenon in self-preservation during the transition.

Chapter 5 - indicates the main prob-lems insuring human security: socialprotection, the security of publichealth, access to education, the cul-tural environment, food security, andecological and personal security.

Chapter 6 - presents some elementsof a policy for future and strategiesfor sustainable human development.

Conclusions and an Annex presentand record changes in human develop-ment in Moldova in the last five years,using the HDI and various coefficientsnormally used in UNDP reports.

This year�s report was prepared bya team formed by the Centre for Stra-tegic Studies and Reforms (CISR).Care was taken to preserve continuity

with the work of leading authors ofthe previous reports. Thus it was possi-ble to readily complete the present re-port by relying on the experience ofthe authors, of international consult-ants, as well as on the research capac-ity of CISR partners: the Academy ofSciences, the Academy of EconomicStudies, the UNDP project �Moldo-va-21�, and on the papers and statisti-cal data of various government depart-ments and agencies (the Ministry ofLabour, Social Protection and Family,the Ministry of Economy and Reforms,the Ministry of Health, the Ministry ofEducation and Science, the Ministryof Culture, and theDepartment of Sta-tistical Analysis and Sociology).

The authors wish to thank Mr. SørenTejnø, UNDP Resident Representativeand UN Resident Coordinator inMoldova, and his colleagues for theircommitment and support in the prepa-ration of the Report.

Anatol Gudîm,Project Coordinator

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Geography Between 45°28' and 48°28' degrees latitudeArea: 33700 km2

Population: 4.3 million inhabitantsFrontier countries: Romania and UkraineBasic dataCountry name: MoldovaOfficial name: Republic of MoldovaLanguage: RomanianData code: MDNational capital: ChiºinãuIndependence: 27 August 1991Admitted to UN membership: 2 March 1992Constitution adopted: 29 July 1994

Republic of Moldova

Legislature: Parliament, 101 deputies electedfor 4 years

Last elections: 1998 (legislative) and 1996(presidential)

Next elections due: 2002 (legislative) and 2000(presidential)

Type of government: Parliamentary/presidentialNational currency: Moldovan Leu:

1 US$ = 8.32 MDL, end-1998

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The National Human DevelopmentReport - Moldova 1999 has beenwritten with regard to human security,which has deteriorated in the countryas a result of dramatic trends thatbecame apparent during this periodof transition. Most economic andsocial indicators in Moldova havereached critical levels, considerablyaffecting human potential andincreasing social inequality.The National Human DevelopmentReport detects symptoms of risingsocial stress and points toward theneed to increase the responsibilityof state structures in the promotionof social policy.

Human Security in the Context ofSustainable Human Development

The concepts of human developmentand human security are related and in-terdependent, but not identical. The lat-ter derives from the former, in the sensethat without security development is notpossible. Human development is a broadernotion, defined by the UNDP as �a proc-ess of expanding human choices by ena-bling people to enjoy long, healthy andcreative lives;� it requires a decent stand-ard of living and acceptable education andhealth care.

In conditions of human security, peo-ple can make free choices without unduerisk, in the certainty that they will not bedeprived in the future of the possibilitiesthey currently enjoy. Human security asunderstood by the UN has the followingcomponents: economic security, food se-curity, health security, ecological securi-ty, personal security, public security andpolitical security.

The events of the last seven years ofreform in Moldova, and particularly thoseof 1998, have shown that a standard neo-

EXECUTIVE SUMMARY

liberal approach to reform, focused ex-clusively on macroeconomic stability,needs to be replaced by a new and morebalanced policy, oriented towards sustain-able human development.

Unfortunately, in Moldova as in mosttransition countries, the reforms did notmeet the expectations of the population.Threats to human security have emerged.

In December 1998, for the first timesince the declaration of independence,the Council for the National Security ofMoldova discussed problems of economicand social security, as well as threatsbrought about by globalisation (the re-gional financial crisis, illegal migration,increasing crime rate, drug-related prob-lems, etc.) and by the impact of domesticfactors such as unemployment, uncertainincome, uncertainty of health care, cul-tural and environmental degradation, aswell as rising personal insecurity and thesocial tensions that threaten political sta-bility.

Economic Security Profile of theRepublic of Moldova

The purpose of any reform is to real-ize improvement. The reforms imple-mented in the transition countries aimedat improving the population�s standard ofliving. Unfortunately, this has not yet tak-en place. The Human Development In-dex for the Republic of Moldova shows anegative trend during the transition peri-od.

The first steps of the reforms wereencouraging: monetary control, liberali-zation of prices, trade and enterprise op-erations, property reform, etc. led to asubstantial reduction in inflation and tothe stabilization of the national currency.At this stage, in the spirit of the neo-liberal model, the basic focus was onmacroeconomic and financial stability.

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Yet the expected miracle did not hap-pen. The promises to bring economic re-form to a swift conclusion and to create a�popular capitalism� based on toughmeasures in the financial sector, on �egal-itarian� privatization for patrimonialbonds, and on the system of investmentfunds proved to be illusion.

It soon became clear that establish-ing a well-functioning market economyis not just an idea, however important,but plays a crucial role in raising the stand-ard of living of the population and in pro-viding a basis for sustainable, equitableand democratic development. In Moldo-va, as in other transition countries, eco-nomic stagnation followed the reforms,and as GDP fell by half, the inequality inthe distribution of income (as measuredby the Gini coefficient) increased two-fold.

In their response to nationwide opin-ion polls, people indicated human inse-curity as one of their most difficult prob-lems, and made particular reference toaspects such as economic security, threatsto health and personal security.

An assessment of human insecurityin the Republic of Moldova has beenmade with a dual focus: that of macr-oeconomic indicators (economic securi-ty of the state) and that of social param-eters (at individual or household level).

The country�s human security situa-tion is ultimately reflected in its indica-tors of social health. In Moldova all suchindicators (standard of living, income dif-ferentiation, the degree to which culturalneeds are met, respect for individual rightsand freedoms, crime rate, dynamics ofbirth rate, death rate and natural growth,life expectancy) reached and went belowminimum acceptable levels. A particularlyserious problem is that of poverty.

The value of an aggregate index ofhuman (socio-economic) security calcu-lated for Moldova is approximately one-third of what it would have been if eco-nomic, social and political life in the

country took place under normal condi-tions.

Rising Social Inequality

Various social groups experienced thetransition period, and the general fall inhuman security that has accompanied it,in different ways. Moldova, as other tran-sition countries, has seen the emergenceof the so-called �new rich�, and a mid-dle class is in the process of formation.However, about half of the population isconsidered to be poor.

An analysis of economic security atthe household level shows that incomesof the population are affected by insta-bility, which ultimately leads to their ero-sion. Official statistics indicate that in 1998the real average income per capita shrankby 13%; its total value was approximately1/5 of the income available in 1990. Thedeepening vulnerability of individual in-comes is mainly caused by a substantialreduction in the share of salaries in thestructure of income (33.8% in 1998), andby the rising share of irregular sources ofincome (currency operations, leasingapartments, and others). Even if incomesin the private and informal sector aremuch higher than those in the public sec-tor, the provisional nature of many jobsexposes the employees in those sectors toa high risk.

In 1998 the average wage in Moldo-va covered only 52.9% of the minimalconsumption budget. The relatively lowlevel of salaries is due to a great extent tothe nature of economic activities, partic-ularly the proportion of people employedin the rural sector (39.8% in 1998).

Inflation has had a negative impacton the value of real wages. In 1998 theaverage real wage was half that of 1990.If the wage is converted into its US$equivalent, the Republic of Moldova ranksseventh among the 12 CIS countries.

Incomes in kind are typical for house-hold budgets. In fact, they predominatesince they make up 64.1% of total incomes.

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Social stratification becomes increas-ingly more pronounced, which has a neg-ative impact upon living standards andfosters the expansion of poverty. On av-erage, between 1995 and 1998 the Ginicoefficient went up by 15.4%, reaching avalue of 0.44 at the beginning of 1999.The �new rich� category comprises en-trepreneurs in the service sector, special-ists in the financial-banking sector, em-ployees of insurance institutions and en-terprise managers. �New poor� are mainlypublic sector employees (education, cul-ture, medicine), workers in the agricul-tural sector, young families and the un-employed.

This polarization of living standardsis taking place against the background ofa general worsening of the social situa-tion. Most of the population assess thecurrent economic system as unfair interms of distribution of social wealth andfeel that it favours the rise of incomesonly for the �new rich� and for crimi-nals, while it harms the material interestsof the overwhelming majority of the pop-ulation. The situation is also aggravatedby the fact that in these conditions of masspoverty, when the bulk of the populationcannot maintain even the modest stand-ards of living that they used to have notlong ago, the so-called �new rich� en-gage in conspicuous consumption andflaunt their wealth. This irrational behav-iour cannot fail to cause social antago-nism, especially if the dubious origin ofmany incomes is taken into account. Astabilizing factor that might help attenu-ate social costs would be the creation ofa dynamic and flexible social structure,capable of facilitating the developmentand consolidation of a middle class. Themiddle class could play a key role in thestabilization of social conditions in theRepublic of Moldova.

Individual Responsibility and theExpansion of Human Choices

When the capacity of the state to meetthe social needs of the population is limit-

ed, individual self-employment and pri-vate entrepreneurship appear as new in-dividual strategies for ensuring economicsecurity, as an instrument of self-preser-vation in difficult times. The reform ofproperty and of private initiative hasmodified the employment structure inMoldova: during 1995-1998 the share ofemployees in public enterprises fell from34% to 26%, whereas the share of privateenterprises grew from 60% to 66% andthat of jointly-owned enterprises grewfrom 6.4% to 8.0%.

The data in the household budgetsurveys show that in the country as a wholeover 40% (and in rural areas over 60%),of incomes come from self-employment,individual activities, etc. In most casesthis means the shadow economy. In 1998,formal wages and state payments (pen-sions, stipends, etc.) made up about 40%of the total income of the population. Therest were incomes from private deals orother activities.

Female employment constitutes an-other important aspect of this situation.Most women are either unemployed orare employed in the shadow economy.Women are income earners in single-par-ent families or in families with many chil-dren.

Self-employment is the main expla-nation for the low level of recorded un-employment. In 1998 the total numberof unemployed (defined according to ILOstandards) was about 167 thousand. Yet,the number of formally recorded unem-ployed was 28 thousand, as of January 1,1998 and 32 thousand, or 2% of the eco-nomically active population, as of Janu-ary 1, 1999.

Although individual entrepreneurshipcontinues to increase in significance, itfaces a series of economic, financial, andadministrative obstacles: a heavy fiscalburden, limited and difficult access toforeign markets, excessively long regis-tration procedures for enterprises, legaluncertainty, bureaucracy, corruption andlack of managerial experience.

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Official estimates place the share ofthe shadow economy in GDP at 16-18%;other estimates indicate no less than 60%.The social impact of the shadow econo-my manifests itself on the one hand inthe creation of jobs and additional in-comes; on the other hand, the budget failsto get much needed revenue. Thus it isnecessary to develop legal, economic andadministrative measures designed to re-duce informal employment. Private ini-tiatives must take place within the frame-work of existing legislation.

Problems of MaintainingHuman Security

The Report analyzes the various ele-ments necessary to human security: so-cial security, health care, access to edu-cation, cultural milieu, food security, en-vironmental and personal security.

In the context of the social protec-tion of those who are unable to work,particular attention needs to be paid tothe security of the old. In 1998 the re-form of the system of pensions waslaunched at last. Currently the pensionsystem in Moldova covers about 758 thou-sand citizens, or approximately one-fifthof the population. Of these, 560.4 thou-sand people receive an old-age pension(including 150.9 thousand with privilegedpensions), 109.2 thousand receive inva-lidity pensions, and 40.6 thousand receivepensions for the loss of the main incomeearner.

In October 1998, the Parliament ofthe Republic of Moldova approved a newlaw on state pensions. This law marks thebeginning of the shift from the old pen-sion system, based on the principle of thesolidarity of generations (which is not onlyinefficient but, in the current conditions,acts as a disincentive due to excessivelyhigh taxes), to a new system, based onthe principle of personal contributions toone�s own future pension. The new sys-tem presupposes to some extent the free-dom of individuals to choose their owntype of pension, giving them the possi-

bility to join both the state pension sys-tem through mandatory insurance, andprivate pension funds by way of volun-tary insurance, and thus to raise theirpensions substantially. The size of thepension will depend both on individualcontributions and on the allocation oftaxes to the pension fund. In this waythe new system guarantees social equityand at the same time contributes to en-hancing motivation. Thus through its ef-ficiency and fairness the new pension sys-tem is consistent with the new principlesof the market economy.

It is necessary to increase social sup-port for children and the disabled, be-cause those social groups are most vul-nerable to the negative impacts of transi-tion. In 1998 every third family with chil-dren was affected by poverty.

The economic insecurity of individ-uals able to work has given rise to specialproblems: lack of confidence in the fu-ture, part-time employment, salary ar-rears, reduced possibilities for the youngand for individuals with low qualificationsto enter the labour market.

As a consequence of increasing un-employment, the costs of the Unemploy-ment Fund grow every year. Yet, overthe period 1996-1998, the total volumeof the Unemployment Fund correspondsto only 0.13-0.14% of GDP, which is farless than in most countries with marketdriven economies. Leaving aside the ar-tificial decrease in the number of thoseeligible to receive unemployment bene-fits, the average monthly size of calculat-ed indemnities in 1998 amounted to only79.5 lei per individual, which does notguarantee a minimum level of subsistence.

Some important trends can be notedin the adaptation of the unemployed tothe market economy and in the improve-ment of their material position, with re-gard to training and professional improve-ment of the able-bodied population andto participation in public works. About12% of registered unemployed have re-ceived professional training in compliance

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with the guidelines of the unemploymentoffices. Yet, the percentage of those whoreceived such training that later becameemployed is insignificant: only 31.5% in1998. The situation in relation to publicworks is even worse. During 1998, only1360 unemployed were involved in pub-lic works, or 2.2% of the total number ofregistered unemployed. It is worth men-tioning that over 90% of the funds tar-geted to fund public works are generatedby enterprises. The contribution of localbudgets accounts for less than 10%, andthat of the Unemployment Fund for lessthan 1%.

Health constitutes a key element ofhuman security. The current health caresystem in Moldova proved to be ineffi-cient with respect to promoting the qual-ity of medical services. The precariousstate of public health requires that thehealth care system be restructured. Ahealth promotion policy should stress pri-mary medical care rather than care at thetertiary level. In general, the strategy ofMoldova in the field of health care shouldbe founded on the following pillars: re-structuring of the network of medical serv-ice facilities; consolidation of the networkof emergency aid; legalization of the pro-vision of services for fees; decision as tothe set of health services to be fundedfrom the state budget; and institutionalreform and consolidation of the capaci-ties of medical institutions.

An adequate education is one of thefundamental dimensions of human de-velopment. In a situation of limited pos-sibilities within the public budget, the al-ternative sphere is expanding in Moldo-va: 163 private educational institutions ofall levels are currently operating. Educa-tional reform has started. Efforts will fo-cus on ensuring the quality of education-al standards in compulsory education;diversifying financial sources, updatingand modernizing the educational con-tents: curricula, plans, and textbooks; re-form of the assessment and examinationsystem; accreditation of public and pri-vate educational institutions; and elimi-

nation of the monopoly over the elabo-ration and publication of textbooks.

The cultural environment is a set ofcultural conditions and factors that to-gether form the spiritual environment inwhich the activities of the human com-munity take place. The modern interpre-tation of the notion of culture, in the broadsense of the word, as �an integral formu-la for human living�, comprises all as-pects of human development. Politicaland civic culture, consumption and mor-al culture, ecological culture � these andother aspects characterize the culturalenvironment of the country. The reportprovides an assessment of the legal frame-work of culture, of the current situationof culture-related infrastructure and thepossibilities of funding it from the statebudget, and of actions and initiativesunder the new conditions.

Food security in Moldova is satisfac-tory at the national level (state reserves,price dynamics of basic foods, etc.).However, the situation is different at thelevels of various social groups, familiesand individuals, as well as for separategroups of foods. According to data basedon the Household Budget Survey, in 1998less than 10% of the population (namely,the wealthier groups) were able to main-tain a consumption level similar to thatin 1990. At the same time, about 10% ofthe population consumed less than 1500calories, which represents, according toFAO, the limit of malnutrition. The av-erage consumption per capita in the Re-public of Moldova amounted to 1980 cal-ories, whereas the FAO-establishedthreshold is 2500 calories. Although itrepresents an important index, the ener-gy value of the consumed products doesnot provide information about the quali-ty of nutrition. According to FAO rec-ommendations, the ratio of proteins, fatsand carbohydrates should be 1-1-4. Inthe Republic of Moldova the ratio is 1-1.2-5.2.

The food problem is particularly se-vere for poor families. The HouseholdBudget Survey indicates that spending on

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food by the poorest 10 percent of thepopulation made up 88.6% of all theirspending, whereas food accounts for46.0% of the spending of the wealthiest10 percent of the population, the averagebeing 64.4% of total spending.

Ecological imbalances in the Repub-lic of Moldova are related on the onehand to the excessive exploitation of re-newable natural resources, and on theother hand to the global degradation ofenvironment quality. Pollution and de-creases in the regenerating capacity of thenatural environment vitally affect humansecurity. The basic problems in the inter-action between man and nature in theRepublic of Moldova are: soil erosion,poor quality of drinking water and lowlevel of forestation. A new man-madethreat that has been growing relates towastes. The country has accumulatedabout 13 thousand tons of toxic waste, or3.3 kg per inhabitant. Only half of thoseare buried. It is important to update therole of ecologically-oriented NGOs, inaddition to legal, economic and admin-istrative measures.

Most personal insecurity in Moldovais caused by the weakness of the state andby lack of economic security � insuffi-cient protection of persons and of prop-erty, the threat of unemployment, socialproblems of the shadow economy, labourmigration, racketeering, smuggling, drugs,and disease.

Towards Sustainable HumanDevelopment

The main lesson of the decade of tran-sition, learned in Moldova by both theGovernment and the population at large,is the need to shift from the tactics ofsurviving towards a strategy of long-termsustainable development that would in-clude not only economic aspects but thewhole range of human life. In November1998 the Government of Moldova, on thebasis of a series of discussions and pre-

liminary researches, approved the firststrategic program entitled �StrategicGuidelines for the Social-Economic De-velopment of the Republic of Moldovauntil 2005�.

Under the aegis of the UNDP theProject Moldova-21 �The Strategy of Sus-tainable Development of the Republic ofMoldova� was developed. Its philosophyis based on the UN declaration of Rio deJaneiro (1992), and it aims at increasingthe capacity of the current generation tomeet its needs without compromising thecapacity of future generations to meettheir own needs, its main principles be-ing environmental protection, conserva-tion of natural resources and increasingthe living standards and quality of life ofthe population.

In 1998 HDI for the Republic ofMoldova, according to the estimation ofthe National Department of StatisticalAnalysis and Sociology, was 0.697 (1993index was 0.718). The main componentsof HDI for Moldova today are: globaldomestic product per capita at purchas-ing power parity � US$ 2042; life ex-pectancy at birth � 67.0 years; literacyadult population � 94.6%. This meansthat the Republic of Moldova, in spite ofthe worsening of the HDI in recent years,still remains within the group of stateswith a �medium level of human devel-opment�. Among 174 countries includedin the UN rating list (Human Develop-ment Report 1999) Moldova is situatedin the 104th place.

The human costs of transition for thepopulation of Moldova have proved tobe too high. Hence, this is implies thenecessity for the state to increase its re-sponsibility and to introduce some cor-rections to the reform policy in order tomove towards a more secure and viablesociety. The Report outlines a series ofpolicy measures that need to be taken inorder to reverse the decline in humandevelopment.