San José State University
Department of Economics
Thayer Watkins
Silicon Valley
& Tornado Alley

Economic History of Moldova

The origin of the people of Moldova is the same as that of the Romanians. Romania and Moldova are one nation separated into two parts by geopolitics.

In very ancient times, cerca 2000 BCE, a people known as the Dacians settled in the area where the Danube River empties into the Black Sea. By the period around 500 BCE Greeks had established trading colonies on the Black Sea coast at places like the mouth of the Danube. These Greek colonies traded with the Dacians. The Romans in the days of the Empire took control of the Dacians and their territories. The fortifications which the Romans built in the area were the northern frontier of the Empire in the region. Since it was the northern border the Roman gave special attention to Dacia. Many Dacians learned Latin and consequently the Romanian language is descended from Latin. Romanian is a Romance language, along with Italian, Spanish, Portuguese and French.

Because of the attacks by invaders from the east and north, such as the Slavas and the Petchenegs, the Romans in 271 A.D. withdrew leaving the Dacians at the mercy of those invaders. The Slavs were not marauding invaders; they came to settle. The Dacian and Slavic immigrants merged but the language remained a Romance language, but with a large number of Slavic words which were incorporated.

The social structure of the area was feudal with feudal lords called voivodes. The voivodes were not able to stop the invasions which arose as a result of the rise of Geghis Khan. Many of the inhabitants fled to refuges in the Carpathian Mountains of what is now northeastern Romania.

The Mongol-Turk invaders withdrew from eastern Europe because of power struggles within the Mongol Empire. After the Mongol overlords left, one of the voivodes, Bogdan, came out of the Carpathian Mountains and took control of the territory along the Moldova River that is now Moldova.

A century or so later the feudal lords of Moldova feuded among themselves while the Ottoman Turks were conquering sections of southeastern Europe. The Ottoman Turks gained control of Moldova but demanded only tribute and left its administration in the hands of the powerful Moldovan land owners.

In the late 1300's a family of the name Basarab came into control of the eastern part of Moldova. That family ruled the area for a few generations and so the territory came to be known as Bessarabia. Later the name Bessarabia was applied to all of Moldova.

In the later 1400's a Moldovan prince, Stephen, organized a Moldovan resistance to the Turk control. Prince Stephen, known in Moldovan history as Stephen the Great, tried to resurrect the local culture and economy. But Stephen died and the other Moldovan lords could not maintain the resistance once again submitted to Ottoman overlordship. This situation prevailed for two centuries.

In the early 1700's the Ottoman Empire was suffering defeats and local lords in Moldovan saw the opportunity to overthrow Ottoman overlordship. In 1711 a Moldovan prince, Dimitri Cantemir, sought the aid of the Czar Peter the Great of the Russian Empire in gaining independence of Moldova from the Ottoman Empire. This Russian aid was formalized in the Treat of Lutsk which stated the Moldova was an independent state under the protection of Russia. In the confrontation between the Russian and the Turks the Turks won.

To regain and maintain control in Moldova the Ottoman Sultan replaced the Moldova administrators with Greeks. The Greeks were to administer the Ottoman overlordship and promote trade. In effect, the Greeks were to function as merchant-princes.

The Russians invaded Moldova five times over the century after the 1711 treaty. They were able to occupy Moldova but not defend their conquest. It was during this time that the Russians began to look upon Bessarabia (Moldova) as their territory. In the Treaty of Bucharest of 1812 Russia finally gained possession of Bessarabia proper and half of the rest of Moldova. Initially Russia granted a degree of local autonomy in its Bessarabian possessions. But from about 1830 there was an increasing attempt to Russify Moldova.

With the defeat of the Russian Empire by Germany and the Austro-Hungarian Empire, Moldovan nationalist declared independence (January 24, 1918). By the end of 1918 Moldova had opted to join Romania in union. The Treaty of Paris of 1920 confirmed the unification of the Romanian states. The Russian Empire resurrected in the guise of the Soviet Union never accepted the unification.

In the alignment of nations in the 1930's Romania was an ally of National Socialist Germany. Germany and the Soviet Union signed the Molotov-Ribbentrop German-Soviet Nonaggression Pact in August of 1939. In September of Germany invaded Poland commencing World War II. The Soviet Union invaded Poland from the east thereby partitioning Poland between Germany and the Soviet Union.

In June of 1940 the Soviet Union demanded that Romania cede Bessarabia (Moldova). In August the Soviet Union combined the territory ceded by Romania with a strip of the Ukraine and called it the Moldavian Soviet Socialist Republic. In compensation for the territory taken from the Ukraine it was given a northern section of Moldova and more importantly the section of Moldova which lies on the Black Sea coast.

When Gemany and its allies invaded the Soviet Union Romania occupied Moldova and re-united it with the rest of Romania. But with the defeat of Germany, Soviet troops occupied Moldova and the Soviet Union under Joseph Stalin re-established the Modovan Soviet Socialist Republic and granted the southern part of Moldova to the Ukraine. These actions were formalized in the treaty signed between the Soviet Union and the Communist leaders of Romania.

The actions of Joseph Stalin and his Communists in the matter of asserting medieval Russian claims to Bessarabia illustrates once again that the Communists were simply feudalists operating under a different label and with a different rhetoric. Stalin carried out a program of "resettlement" of Moldovans to other parts of the Soviet Union and the migration of ethnic Russians and Ukrainians to Moldova. After Stalin's death in 1953 Nikita Khushchev ended the Stalinist resettlement program. But the Russification program of immigration continued and Russian was the official language of Moldova and the Cyrillic alphabet was its alphabet. Moldovans were prohibited from using the colors of the Romanian flag in their flag.

The ethnic mix of Moldova about 1990 was:

Ethnic Mix of Moldova

Mikhail Gorbachev began easing the severe social and economic restrictions on life in the Soviet Union. Hardline Communists feared that Gorbachev was too weak to rule the Soviet Union and attempted a coup d'etat in the summer of 1991. Soviet generals ordered the Moldovan government to declare a state emergency, but instead the Moldovan leaders went on television urging Moldovan to protect Moldova from some military takeover. When the coup failed the Soviet Union fell apart. On August 27th, 1991 the Moldovan legislature declared Moldova to be an independent nation.

Times have not been easy for Moldovans since independence but generally progress is being made. Moldova has a climate conducive to agricultural production. Moldovan cooperative farms grow wheat, barley and corn. There are fruit orchards and vineyards. Moldova is a major producer of wine. Moldova also produces sugar beets.

Industry tends to be the processing of agricultural products. The non-agricultural industry was immediately after independence manufacturing sited along the Dniester River on the eastern border of Moldavo by the Soviet authorities. They put the plants there and staffed them with Russian and Ukrainian immigrants as part of their Russification program.

The major political problem of Moldova is that of the ethnic minorities. About one fourth of the five million population is Russian and Ukrainian. They object to the efforts of the Moldovan government to reverse the cultural Russification imposed during the Soviet era. The Russian and Ukrainian groups have tried to declare an independent state.

There is a small but notable subpopulation of Christian ethnic Turks concentrated around the city of Komrat. They number about one hundred fifty thousand and clamor for an autonomous state.

Moldova has good relations with Romania, but the situation is clouded by the poor economic condition of Romania as a result of the decades of control by the Communist government of Nicolae Ceausescu. The government that replaced Ceausescu was made up of former Communist Party officials who were ruthless and inept in the same pattern as Ceausescu. Moldova got little help from Romania, in fact Moldova had to help Romania economically.

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