Impact of the Economic Crisis on Communities and Vulnerable Groups

Project title: Impact of the Economic Crisis on Communities and Vulnerable Groups;

Implementation period: June 9, 2009  – August 10, 2009;

Funded by: UNDP-Moldova;

Project goal: Assess qualitatively, and to the extent possible, quantitatively, the impact of the international financial crisis and associated economic downturn on Moldovan local communities and identify possible responses that local communities can adopt to cope with the crisis;

Main activities:

• Designed the concept of rapid assessment methodology;
• Undertook a qualitative analysis (focus group in districts of Stefan-Voda, Nisporeni, Rascani, Hancesti and Cahul) with local stakeholders;
• Interviews on the perceived impact of the global financial crisis and domestic economic decline with 10 local public authorities,  20 representatives of the local public services (social protection specialists, medical assistants, family doctors and schools directors) and 123 local companies from the entire country;
• Conducted a representative public opinion poll in July 2009 with 1100 respondents;
• Analyzed the crisis impact on the labor market based on the available quarterly statistical data provided by the National Bureau of Statistics;
• Analyzed the crisis impact on local budgets using statistical data and reports provided by the Ministry of Finance and local authorities;
• Elaborated the report “The impact of the economic crisis on communities in the Republic of Moldova”;
• Presented the report at a national roundtable;

Main outputs and outcomes:

• Concept of the rapid assessment methodology;
• Short report based on the results of the survey and focus groups;
• Report “The impact of the economic crisis on communities in Moldova”;

Project impact:

Global financial crisis resulted in a significant drop of the Moldovan economy, with the GDP declining in the first quarter 2009 by 6.9 percent compared with the first quarter 2008. However, the report showed that the GDP declined by more than 17 percent compared with the expected trend value that the Moldovan economy would have posted if no crisis occurred. Main contagion channels through which the financial and economic crisis affected Moldovan communities were falling remittances, declining domestic and external demand, reduction in the foreign direct investments inflows, shrinking Governmental transfers to local budgets, and increasing unemployment as result of migrants returning home. The report gave policy recommendations to central and local authorities on how to alleviate the impact of the crisis on local communities, with a particular emphasis on vulnerable groups.