Friday 20th of September 2024
| China to invest in Moldova |
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| Written by Natascia |
| Friday, 28 May 2010 12:20 |
  Poor countries without natural resources, such as the Republic of Moldova is not usually a candidate for investment, especially from the third world's economic powers. However, China shows an increasing interest in ex-Soviet country, poorer than many countries in Africa, international analysts say. Last year, China signed an agreement for the Republic of Moldova borrow a billion dollars, the biggest loan ever received by the country, something that economists and struggles to explain it. "It is true that Chinese exporters are trying to diversify the destinations. But I would have expected to go toward traditional markets for exports, given that Moldova does not have the necessary infrastructure. In fact, not much has happened," said Duncan Innes-Ker, an analyst at the Economist Intelligence Unit said. The economic crisis has seriously affected the Republic of Moldova, which depends largely on the money earned by those who left to work abroad. This revenue represents a third of gross domestic product, being placed third in the world, from this point of view. But last year, Moldovans working abroad sent home a third less money than in 2008, according to central bank. Republic of Moldova is in great need of money. Estimates for the economy are the worst. According to the CIA, "there could be a modest recovery in 2010, but remains vulnerable to political uncertainty, poor administration, bureaucratic interests, higher fuel prices, bad weather conditions for agriculture and foreign investor skepticism, as well as the illegal separatist regime in the Transnistrian region. What does, in fact, China? Moldova is in an almost desperate situation, but has some clear advantages, and China has seen, certainly potential. Even if the only official language is Moldovan, most people speak Russian fluently, and thousands of people travel frequently to Russia to find a job. Agriculture represents one fifth of the country's economy, but given the legacy of Soviet education system, literacy level is above the U.S.. In addition, Moldova is in the first half of the deck on the technological potential developed by the World Economic Forum, which include 134 countries. Part of the money from the loan, which is currently negotiated with the new Government, the agreement being signed as before, will be used for infrastructure projects designed to create high-tech industries. But, more importantly, the loan can "buy" influence. "China is practicing a new foreign policy. Begins to realize the advantages of being a superpower," said Lilit Gevorgyan, an analyst at IHS Global Insight. Thus, in Eastern Europe, China began "rounding" of Russia by building financial ties with the poor around. In addition to Moldova, the Asian country has offered $ 1 billion aid to Tajikistan in June 2009 and in March, the Chinese central bank agreed to an exchange worth 2.93 billion dollars to Belarus . "Strengthening its position in the court of Russia, China offers a big advantage in its negotiations with Moscow," said Duncan Innes-Ker. China will need any help in negotiating contracts for oil and natural gas, given that Russia supplies about 8% of her oil and Gazprom is in advanced talks to supply gas. Besides Russia, China has great commercial interest in developing relations with the European Union and the Republic of Moldova is just one step - at least geographically - by it. Given the production base in Moldova, this location would be perfect to significantly reduce the costs of China's export to EU. Thus, China will focus on the sectors of agriculture, wine and textiles. "Textiles is one area in which the Republic of Moldova remained competitive at European level and, of course, is a sector in which China is the major player globally," said Franklin Steves, political counselor at the European Bank for Reconstruction and Development. Moreover, given the low labor costs, Moldova has managed to "steal" a few investors in textiles and Romania. Even if the Republic of Moldova receives between 2007 and 2010, a sum of 210 million euros from the EU, China overshadow any mortgage financing. The Prime Minister, Filat, the country should receive $ 2 billion from Western countries, representing $ 1.5 billion in loans from international financial institutions in 500 million dollars from the United States. But so far only received 93 million dollars from the IMF pledged a loan totaling 574 million dollars, and Russia promised the former Communist government a loan of 500 million dollars, which was not unlocked yet. Source: ziare.com |
| Last Updated on Friday, 28 May 2010 13:15 |
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