The pandemic is taking place against a backdrop of sustained socio-economic trends in the Republic of Moldova, including decreasing population due to emigration and slowing down of economic growth. Persons belonging to vulnerable groups in Moldova are disproportionately affected by the crisis and the losses due to the rising income and non-income inequalities.
COVID-19 is putting a lot of pressure as well on business. Every second interviewed company in August-September operated partially, or closed, temporarily or even permanently. Economic sectors including HoReCa and manufacturing, that are predominantly represented by small and medium-sized enterprises (SMEs), which are largest employers in business, are facing decrease in sales, various uncertainties and decrease in demand, as well as shortage of liquidities.
Still, the current crisis is equally an opportunity for change and requires collaborative efforts, engagement with citizens and the private sector, a re-thinking of the development, paradigm and exploration of new opportunities for development. These could range from the digitalization and modernization of the public services and businesses, to new skills and modern education system, greening the economy, implementing the elements of good governance, accelerating the fight against corruption.
These are among the main conclusions of the socio-economic impact assessment of the pandemic crisis, led UNDP Moldova, conducted with UNFPA, in collaboration with the State Chancellery and in close collaboration with the rest of UN System organizations. PwC is the contracted partner to conduct this study. Proposed policy recommendations were consulted with national authorities and development partners.
“The Socio-Economic Impact of COVID-19 on the most vulnerable groups and economic sectors provides ‘food for thought’ and has already ignited several multi-stakeholder policy dialogues and debates, underlying the potential and ambition for recovery, but also the enthusiasm for building new partnerships for development and coagulating efforts to overcome the multiple COVID-19 induced challenges,” noted Dima Al-Khatib, UNDP Resident Representative for the Republic of Moldova.
The report reveals on the impact of COVID-19 on seven vulnerable groups:
- Shifting their living habits in order to protect the family from the infection with the virus have affected more women than men. Women have allocated more time to housework, as well as monitoring and assisting their children during remote schooling. 6% of surveyed women experienced domestic violence (mainly physical and emotional), all filed complaints.
- The inability of children to continuously attend school will likely contribute to a further inequality of educational performance between pupils from socially advantaged pupils and socially disadvantaged ones.
- Poor households have seen high job losses, aggravating tight budgets. They are reducing food in response to the pandemic, despite having a poorer diet. 1 in 5 poor households reduced health and education expenses in order to cope with the pandemic fallout.
- NEET (Not in Education, Employment, or Training) young people are at greater risk of social exclusion compared to the rest of the population because they neither develop their skills through education, nor they accumulate experience by engaging in the labour market. 37% of NEET youth did not have sufficient person protective equipment (PPE) during the pandemic period.
- The older people displayed more feelings of loneliness and concerns about the healthcare system. These are even more vulnerable than before pandemic. The older people had the loosest understanding of prevention measures, but also most difficulties
in procuring PPEs.
- Returning migrants have been forced to return home or re-evaluate their work prospects, with many of them losing their jobs.
- Freelancers have seen decline in sales, restricted access to raw materials and decline in domestic demand and have serious concerns about declines in liquidity/cashflows.
“There is no easy fix in overcoming the pandemic and building back better, but it is in the power of Moldovan people to overcome it united across different ages, regions and sectors. Building bridges between generations – intergenerational solidarity – blended with strong collaboration between different sectors can make the difference in the lives that we may save and in the wellbeing of the most in need,” said Nigina Abaszada, UNFPA Resident Representative for the Republic of Moldova.
Five economic sectors, so as education and health as core public services, were radiographed to capture the vulnerabilities exacerbated and/or triggered by the pandemic crisis:
- The hardest hit economic sector remains accommodation and food services, as most hospitality venues were forced to close in spring. Hospitality employees were among the most affected in the overall economy especially the ones working in the urban areas. The average number of employees decreased in the 2nd quarter of 2020 (compared with the similar period of 2019) with more than 60%.
- Non-food wholesale and retail trade was severely impacted especially during lockdown, due to demand decrease, supply issues and decrease in production and non-food goods consumption.
- Transportation was affected mainly due to the reduced passengers’ mobility and reduced demand for goods. By comparison to July 2019, the passengers’ traffic was reduced by almost 49%. The average number of employees within this sector also decreased in the 2nd quarter of 2020, compared with the similar period of 2019, by 15.7%.
- Sales in manufacturing were affected by the dynamic of the external markets in the first two months of 2020, followed by a massive dropdown during the lockdown period (March-April), with a negative peak in April, with almost 50% decrease linked to quarantine period in the EU states.
- The main challenge faced by agriculture is related to the drought that affected the country this year, corroborated with the poor irrigation infrastructure system. This led to a decrease of vegetal production by 26.8% in semester one of 2020 compared with the similar period of the last year.
- The healthcare system is the most affected in terms of capacity and medical staff due to the current evolution of COVID-19 pandemic in Moldova. The medical personnel are overwhelmed and exposed to burnout in day-to-day activities.
- Education: Although the schools and universities adapted to remote learning, the COVID-19 pandemic is disrupting learning for an entire generation and school closures affect disadvantaged populations much more severely.
The study proposes a series of policy recommendations, among them being:
Targeted for vulnerable population:
- Establish a system of telehealth services to benefit the most vulnerable groups in COVID-19 context;
- Professional reconversion for NEET youth and returning migrants population;
- Increase in social support payments and expansion of the social protection coverage to the most vulnerable persons currently unable to access social benefits;
- Safeguarding the most vulnerable, the older persons, with increased social support, by hiring additional social assistants and/or food aid;
- Domestic violence response program;
- Bridge to learning for vulnerable children;
- Increase household resilience by developing their ability to save through financial education and discipline.
Tageted for economic sectors:
- Support for reintegrating and recruiting workforce;
- Support for teleworking and working in shifts in factories;
- Deferral of tax and social contributions payments for companies witnessing a drop in incomes;
- Credit payment deferral for SMEs;
- Providing preferential interest loans and governmental guarantees for SMEs;
- Deferral of deadline for submitting financial statement and audit reports;
- E-commerce and transportation & storage support measures.
“We encourage the public authorities to use the respective report in their policy-making process, expressing our confidence that it will equally serve as a basis for new dialogues with the development partners, local communities, the private sector and social innovators, to coagulate efforts and multiply the positive effects thanks to the implementation of recovery measures,” stated Adrian Ermurachi, Deputy Secretary-General of the Government of Moldova.
The recommendations of socio-economic impact assessment will be used to develop post-COVID-19 recovery measures and programmes to build forward better and safeguard the progress towards achieving the nationalized Sustainable Development Goals (SDGs).
The assessment was conducted during May – October 2020 and was conducted using available studies, data available of the National Bureau of Statistics, a survey of Magenta Consulting, part of the UNDP study – conducted during August-September 2020 among 390 citizens and 450 companies – so as alternative sources of data, including big data and micro-narratives.
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