1. Introduction 1 International links of economies of individual coun- tries in the time of globalization are very important. This is particularly visible in the case of small coun- tries, such as the Republic of Moldova. The country takes 135th place in the world and 32nd in Europe in terms of area (33,846 km2), in terms of population (4,055,000 people on 01 Jan. 2016) 129th and 29th, respectively (Сокиркэ, Мытку, 2016), and in terms 1 The project has been financed from the funds of the Na- tional Centre for Science allotted on the basis of decision DEC-2011/01/B/HS4/03234. of GDP (6,551  m US dollars in 2015) 150th and 39th, respectively (http://data.worldbank.org). The latter data suggest that the country has little relevance for the world economy. The question arises whether it is really so: what is the nature of foreign economic relations of Moldova and what changes has it under- gone in the years of independence? The objective of the study is, therefore, to show foreign econom- ic relations of Moldova and their changes in terms of trade balance (export and import of goods) and foreign direct investment. Those links are also im- portant regarding the research on integration and disintegration processes in newly created states in the post-Soviet area. Therefore, the study covers Journal of Geography, Politics and Society 2016, 6(2), 59–67 DOI 10.4467/24512249JG.16.013.5458 ForeIGn economIc lInkS oF the rePublIc oF moldova and theIr dynamIcS In 1991–20151 Cezary Mądry (1), Vitalie Sochircă (2) (1) Institute of Socio-Economic Geography and Spatial Management, Adam Mickiewicz University, Bogumiła Krygowskiego 10, 61–680 Poznań, Poland, e-mail: cezary@amu.edu.pl (corresponding author) (2) The Faculty of Biology and Soil Science, Moldova State University, 65a M. Kogalniceanu bl. 3, Chisinau MD-2009, Moldova, e-mail: sorchirca1970@gmail.com citation Mądry C., Sochircă V., 2016, Foreign economic links of the Republic of Moldova and their dynamics in 1991–2015, Journal of Geography, Politics and Society, 6(2), 59–67. abstract The paper presents changes in foreign links of the Republic of Moldova in the field of trade balance (import and export of goods) and capital ties in the form of foreign direct investment. The focus was not only on the value of turnover but also on its branch structure and geographical directions. The most important determinants forming these relationships, in particular, the natural, historical, political, and institutional ones have also been presented. The collected data show the changes that have taken place during Moldova’s independence, with the starting point being 1991, the year in which Moldova regained inde- pendence. In this way the directions of economic integration of the country could be demonstrated. key words Moldova, foreign trade, trade balance, export, import, foreign direct investments. 60 Cezary Mądry, Vitalie Sochircă the period of 1991–2015, taking into account earlier conditions. The data do not include parts of Moldova called the Transnistria Republic. 2. natural and economic determinants Natural conditions of Moldova mark out this coun- try for the development of agriculture. In the north of the country, on the Bălți Steppe, there is mainly chernozem, in the central part, on the slopes of the Kodry hills range rarely reaching above 400 m asl, there is mainly podzol (Barański, 1953). Common is also loess. The moderately continental climate is characterised by mild winters (the average tempera- ture in January ranges from -5°C in the North to -3°C in the South) and warm summers (from +19°C to +22°C in July, correspondingly) and moderately low rainfall (from 550  mm in North-West to 400  mm in South-East) (Maryański, 1987). The development of agriculture affects the low degree of afforestation accounting to 6% of the country’s surface. The traditional form of farming – herding – since the Tsarist period has been increasingly replaced by growing crops and by a slow development of indus- try, mainly the food-processing one. In the early So- viet times a division into three agricultural regions appeared: the northern one with a predominance of wheat and sunflower crops, the central one with fruit, tobacco and vineyards crops, and the southern one with a predominance of wheat crops and sheep breeding (Barański, 1953). As N.  Barański writes (1953, p. 370), “the main export goods” of Moldova were then grapes, wines, fruits, nuts, wheat, leather and canned goods. Due to its different socio-eco- nomic circumstances, Moldova did not become part of any of 18 major economic regions of the Soviet Union (Ławriszczew, 1969). Later corn became popu- lar, taking up 44% of the cereal crops area, with the ever popular wheat (40%). The sugar beet was intro- duced in the south of the country, and around the country the sunflower was planted. It was, however, fruit farming that determined the agricultural speci- ficity with 170,000 hectares of orchards and 240,000 hectares of vineyards, which accounted for 22% of the wine-growing area in the entire USSR (Maryański, 1987). As part of Gorbachev’s fight against alcohol- ism, most of the vineyards were cut, but the wine- making traditions in Moldova have survived and the crops have been quickly restored. Intense development of agriculture and a lack of natural resources (only limestone was mined on an industrial scale) resulted in the development of industries complementary to agricultural pro- duction. As part of the processing industry it was: wine-making (Chişinău, Tiraspol, Rîbnița, Bălţi), fruit and vegetable processing (Tiraspol, Bendery, Grigo- riopol), sugar (Rîbnița, Bălţi) and oil (Bălţi, Ataki, Bendery). The engineering industry developed in Chişinău (a tractor plant), light industry in Bednary (silk factories), fur industry in Bălţi, where there were long leather processing traditions (Maryański, 1987). Today the disused limestone mines have been con- verted into wine-production plants and are especial- ly used to store Moldavian wines. 3. historical overview The Republic of Moldova is the legal heir of the Mol- davian Soviet Socialist Republic (MSSR), founded on 2 Sep. 1940 as a federal republic of the USSR. Previ- ously most of these regions were part of Romania; however, on the basis of the Molotov-Ribbentrop Pact, they were occupied and annexed on 28 July 1940. Following the outbreak of warfare between Germany and the Soviet Union, these lands along with the areas between the Dniester and the Boh were again incorporated into Romania (Demel, 1986). After the war, the border from July 1940 was restored, recreating the MSSR, with numerous adjustments to borders with the Ukrainian Soviet Socialist Republic (Demel, 1986; Maryański, 1987; Stępniewski, 2011). If the creation of the MSSR is taken as a point of reference, since then three stages can be distin- guished in shaping international ties of the country: 1) 1940–1991, when Moldova was part of the USSR (except the period of World War II); 2) 1991–2014, includes a period of independence until signing an agreement of association with the EU; 3) from 2014 to today, i.e. the period of independ- ence since signing the above-mentioned agree- ment. Being part of the USSR, Moldova’s economic ties mainly focused on other federal republics. In the years 1988–1991 as much as 87.8% of Moldova’s trade of goods was with the USSR. The remaining 12.2% was mainly aimed at countries of the socialist bloc (Народное хозяйство..., 1992). The collapse of the USSR exposed numerous problems of the country. The economy proved to be non-market and inefficient. Social, cultural, political, administrative, etc. problems became apparent. In- ternal separatist trends were an important problem: creation of the Transnistria Republic in 1990 and the war fought for it with active participation of the Russian Army (Mâtcu, Sochircă, 2001) as well as the emerging autonomy of Gagaúzia. Foreign economic links of the Republic of Moldova and their dynamics in 1991–2015 61 De facto since the beginning of the 1990s it was necessary to build the state of Moldova from the scratch, creating appropriate legal bases (including adoption of the constitution), the state authorities, the army and other state power ministries, the na- tional bank, currency and seeking recognition both within the country (among the population) and abroad. Regarding foreign economic links, the priorities involved: • preserving the existing links and developing new ones; • adapting export and import to new realities; • balancing foreign trade; • attracting foreign direct investment; • increasing the competitiveness of the economy and commodity production. In the international arena various opinions about developments in Moldova can be found. According to some observers, after the Baltic States, Moldova is the most Europeanised post-Soviet country: Ro- manian, one of the official languages of the EU, is de facto the official language, 70% of citizens support integration with the EU structures, more than half of export goes to countries being its members, most economic expatriates work in the EU and, finally, this organization is the main founder of the political and socio-economic changes in Moldova. However, the Soviet burden is indicated, along with weak demo- cratic traditions, a lack of a longer period of own statehood, low legal awareness and poorly devel- oped civil society (Stępniewski, 2011). 4. Foreign links in the context of international organizations and agreements The development of foreign relations of Moldova was marked by accession to international agree- ments and organizations. The most important ones are presented in table 1. In the early years of independence, Moldova sought to maintain economic links with post-Soviet countries, in particular with those which were part of the Commonwealth of Independent States (CIS), including first of all with Russia. This cooperation played an important role for the Moldovan economy but did not develop it. Over time, the significance of the CIS began to dwindle, while cooperation with neighbouring countries developed, especially those belonging to the Organization of Black Sea Econom- ic Cooperation (BSEC), primarily with Romania and Ukraine. Joining the WTO in 2001 was an important mo- ment for Moldova. The most difficult area of eight- year-long negotiations was the agricultural econ- omy – the most important branch of the country’s economy, especially the rules of subsidising agricul- tural production. Moldova agreed to reduce this aid by 16% over 4 years. It also ratified most of the sec- tor agreements concluded in the framework of the WTO, except for those to related to the wine industry – the key one for Moldova’s export. In the first years after joining the WTO, the situation in agriculture worsened: the growth rate of the branch plunged, although after 2004 the situation began to level off. By joining the WTO Moldova wanted to gain ac- cess to wider agricultural markets, especially for its main export good – wine. The objective has been largely fulfilled. Export has doubled, especially out- side the CIS countries (http://trade.ecoaccord.org). The accession of Moldova to CEFTA in 2007 also had a big significance for the country’s economy and foreign trade. Besides, the member states also share a common goal – joining the EU, which is connected with adaptation of the law to its standards (www. cefta.int). So far the agreement concluded between the Republic of Moldova and the European Union on 27 June 2014 on nuclear energy has the greatest significance not only for Moldova’s foreign links but also for the development of the country (http://lex. justice.md). The agreement on integration of Moldova and the EU provides for the adoption by Moldova of a number of EU legal solutions in almost all spheres Tab. 1. Moldova’s membership in selected international organizations No. Organization The date of accession The total number of members 1. United Nations (UN) 2 Mar. 1992 193 2. Organization of the Black Sea Economic (BSEC) 25 June 1992 12 3. Commonwealth of Independent States (CIS) 8 Apr. 1994 9 4. Food and Agriculture Organization of the United Nations (FAO) 1995 194 5. World Trade Organization (WTO) 26 July 2001 162 6. Central European Free Trade Agreement (CEFTA) 26 July 2001 6 (7) Source: Сокиркэ, Мытку, 2016; www.cefta.int. 62 Cezary Mądry, Vitalie Sochircă of life, including in the field of free trade. Moldova’s strategic objective is, however, full membership in the EU. This event will open new prospects for the country’s economy (by expanding the market, stim- ulating investment, changing the law, etc.), its mod- ernization and a free flow of the population. 5. Foreign trade Foreign trade plays the basic role in Moldova’s inter- national links. The main data in this regard are pre- sented in tab. 2. On their basis, we can list the follow- ing trends: 1) The volume of export had a rising trend with a peak in 2013 (2,428.3 million US dollars), with a temporary dip in 1998-1999, which was con- nected with the financial and economic crisis of the world economy, in particular in countries that were major trading partners of Moldova, espe- cially in Russia. The latest drop in the volume of export taking place in 2014–2015 (by 19% com- pared to 2013) is associated both with a crisis in Russia and with the internal economic crisis in Moldova caused by stealing USD 1 billion from fi- nancial reserves of the National Bank of Moldova (http://jurnal.md). 2) The volume of import had a rising trend, with a peak also in 2013 (USD  5,492.4  million) and a temporary drop in 1998–99 and 2009. The causes were similar as in the case of export – the economic crisis in Moldova›s major trading part- ners (Russia and Ukraine). The latest fall in turn- over in 2014–2015 (by 27.4% compared to 2013) is a result of the economic crisis in Moldova and the armed conflict between Russia and Ukraine. Until then these countries were among the top three trade partners of Moldova. 3) The trade balance throughout the whole pe- riod is negative, with an average level of USD 2,445.2  million in 2005–2015, and in some years exceeding USD 3  billion, which accounted for 50% of the GDP. 4) The ratio of import to export (in %) had a decreas- ing trend from 96.4% in 1991 to the minimum at 32.5% in 2008. In the first years of independence (1991–1995) the average value of coverage was 83.4%, and in the last five years (2011–2015) 44.3%. Such a large imbalance in the trade balance brings a number of threats for the economy. It is somewhat mitigated by an influx of money from Moldovan eco- nomic emigrants mostly working in the EU and Rus- sia, and by grants from the EU and the USA. Howev- er, one can observe an increase in foreign debt of the country and increasingly common and deeper pau- perisation of the society due to financial inefficiency of the state (low wages in the public sector, low pen- sions, insufficient funds for education, health, etc.). In 1991 in the structure of export of the farm and food production prevailed: alcoholic drinks, canned food, juices, cigarettes, sugar, meat and meat prod- ucts, fresh, frozen and dried fruits and vegetables (Fig.  1). The second place was taken by exports of the light industry products. Both branches together accounted for 79% of export. Compared to that time, on average, the share of agricultural products slight- ly decreased in the period 2010–2015, while the share of light industry products quite a lot (Fig.  2). Their total share amounted to 62%. The reason was Tab. 2. Selected data on foreign trade of Moldova in 1991–2015 (in millions of USD) 19911 19921 19931 19941 1995 1996 1997 1998 1999 2000 2001 2002 export 8.1 65.0 701.9 2318.5 745.5 795.0 874.1 631.9 463.4 471.5 565.5 643.8 import 8.4 92.9 909.2 2733.9 840.7 1072.3 1171.2 1023.7 586.4 776.4 892.2 1038.0 trade balance -0.3 -27.9 -207.3 -415.4 -95.2 -277.3 -297.1 -391.8 -123.0 -304.9 -326.7 -394.2 coverage index2 96.4 70.0 77.2 84.8 88.7 74.1 74.6 61.7 79.0 60.7 63.4 62.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 export 789.9 985.2 1090.9 1050.4 1340.0 1591.1 1283.0 1541.5 2216.8 2161.9 2428.3 2339.5 1966.9 import 1402.3 1768.5 2292.3 2693.2 3689.5 4898.8 3278.3 3855.3 5191.3 5212.9 5492.4 5317.0 3986.8 trade balance -612.4 -783.3 -1201.4 -1642.8 -2349.5 -3307.7 -1995.3 -2313.8 -2974.5 -3051.0 -3064.1 -2977.5 -2019.9 coverage index2 56.3 55.7 47.6 39.0 36.3 32.5 39.1 40.0 42.7 41.5 44.2 44.0 49.3 1 data in millions of the Moldovan lei (MDL); 2 coverage index = (value of import/ value of export) x 100. Source: Статистический ежегодник … 1995, 2001; www.statistica.md Foreign economic links of the Republic of Moldova and their dynamics in 1991–2015 63 not so much the mentioned reduction in subsidies for agriculture as the embargo on some products imposed on Moldova by Russia. Also the percentage of sales of energy, minerals and metals declined. By contrast, the share of metals, machinery and equip- ment, chemical industry products (paraffin-cosmet- ic, pharmaceutical), furniture, glass, etc. increased. The reason was the arrival of foreign investors. This structure, however, still reflects specialisation of economy towards agriculture. In terms of value, the export of most goods increased. The most important export commodity of Mol- dova is alcohol products: wine, sparkling wine, “divin” – an equivalent of cognac, spirit, liqueurs, vodkas, etc. The mean share of those goods in the total value of exports in 1997–2014 was 20.3%, i.e. about USD  201.5  million per year. This percentage decreased in the last decade, mainly due to the fi- nancial crisis in Russia in 1998 and the imposition of an embargo on Moldovan exports by Russia (Fig. 3). The maximum volume of the share of alcoholic products in exports was in 1998 (33.1%), and the minimum one in 2015 (7.9%). Broken down by types of drinks in 1998 it was respectively: wine – 109.3 mil- lion litres (of which 92.8% to Russia), sparkling wine – 5.5 million litres (90.1% to Russia), natural wine wort – 24.7 million litres (52.5% to Russia), vodkas, liqueurs and other spirits – 0.4 million litres (57.9% to Russia). The imposition of the Russian embargo significantly affected wine producers and resulted in a need to redirect exports, mainly to the EU and Chinese markets, but with little success. In addition, producers increased their offer by shifting some of the production to juices and selling fresh grapes and raisins. Currently, the walnut is becoming an increas- ingly important export commodity. In this respect, Moldova ranks first among exporters in Europe and fourth in the world (Сокиркэ, Мытку, 2016). According to data from 2014–2015, the biggest Moldovan exporters are Draexlmaier Automotive (car parts), Floarea soarelui (vegetable oils; factories in Bălţi), Tirotex (textiles, in Tiraspol), Südzucker- Moldova (sugar, in Drochia and others), Moldabela (carpets; in Ungien), Moldovan Metallurgical Plants (in Rybnica), Natur Bravo (canned foods; in Cupcini, Floreşti and others), wine production plants: Cricova, Mileştii Mici, and others. In the goods structure of imports of Moldova, on average in the period of 2010–2015 machinery, de- vices and metals had the largest share, then energy and mineral resources: petroleum products (petrol, diesel oil, mazut, and others), natural gas, coal and electricity (Fig.  4). This specificity results from the Fig. 1. Export from Moldova with a breakdown by goods (in % of total exports in 1991) Source: www.statistica.md Fig. 2. Export from Moldova with a breakdown by goods (in % of the total export, on average in 2010–2015) Source: www.statistica.md 64 Cezary Mądry, Vitalie Sochircă absence of natural resources and from certain indus- tries in the economy of Moldova. 6. Foreign debt Permanently persistent negative trade balance is fi- nanced with foreign debt. According to data of the National Bank of the Republic of Moldova, its gross value in 2015 was about USD  6.38  billion, which represented 98% of the country’s GDP. In absolute terms, the biggest debt was in 2013: USD  6.67  bil- lion, but with a greater GDP this resulted in less rela- tive debt (83.6% GDP) (http://bloknot-moldova.md). In fact, most of the debt stems from the sale of gas by Russia to the so-called Transnistria Republic. The companies operating there do not settle their ac- counts, and Russia charges the debt to Moldova. 7. directions of foreign trade Currently, Moldova maintains trade relations with over 100 countries. The major trading partners are EU countries (especially Romania, Italy, Germany and Poland) (Fig.  5), which account for over 50% of the value of foreign trade, including more than 60% of the volume of exports. Agricultural produce, shoes, tricot, car parts, etc. are sold to these countries, and machinery and equipment, chemical industry prod- ucts, etc. are purchased from them. Traditional trading partners also include Russia, Ukraine, Belarus and Turkey, to which mainly agricul- tural produce is exported and crude oil, chemicals, electricity, coal, garments, knitted fabrics, light in- dustry products, etc. are imported. 8. Foreign direct investment The total value of foreign direct investment (FDI) lo- cated in Moldova since regaining independence is less than USD 3 billion. According to the World Bank data, the value of FDI per capita in Moldova is about USD  300. For example, in other post-Soviet coun- tries – Georgia and Armenia – this value exceeds USD  1,000 per person, in neighbouring Romania USD 3,000 and in Estonia USD 10,000 (http://capital. market.md). Foreign capital is located in all major branch- es of the economy but most often in com- munications and the IT industry (especially in Fig. 3. Participation of alcoholic products in the total volume of exports (in %, on average, in particular years) Source: www.statistica.md Fig. 4. Import in Moldova with breakdown by goods (in %, the mean for 2010–2015) Source: www.statistica.md Foreign economic links of the Republic of Moldova and their dynamics in 1991–2015 65 mobile telecommunications), the power industry, the light and food industry, the banking system, and construction. Among investors, 52% of the invested capital falls to the EU countries, 11.8% to the CIS countries, and 36.0% to other countries (table 3). The example of Ukraine, however, shows that the Russian capital lies behind most companies registered in Cyprus (Mądry, 2002). According to data of the Ministry of Justice of the Republic of Moldova, 1,600 companies with the Ro- manian capital operate in the country. Among the major investors are: Rompetrol, Petrom, Romstal, Metro Cash&Carry. The value of money invested by them was 497 million Moldovan lei (MDL). Fig. 5. Directions of foreign trade of Moldova per country (in %, the average for 2013–2015) Source: www.statistica.md Tab. 3. Cumulated foreign direct investments in Moldova (as of 01 August 2016) No. Country The number of enterprises The number of enterprises with foreign capital in the total number of enterprises (%) The value of investments in million MDL 1. Netherlands 160 2 2,289 2. Italy 1,228 12 1,724 3. Cyprus 303 3 1,447 4. Russia 951 9 1,146 5. Germany 404 4 683 6. USA 379 4 544 7. Great Britain 232 2 516 8. Romania 1,600 16 497 9. Turkey 1,126 11 297 10. Ukraine 970 9 250 11. France 225 2 137 12. Bulgaria 173 2 51 13. Israel 298 3 43 14. Syria 231 2 10   Other 1,946 9 2,614   Total 10,226 100 12,248 Source: www.cis.gov.md 66 Cezary Mądry, Vitalie Sochircă The Netherlands are a leader in terms of the value of investments (MDL 2.3 billion, i.e. 18.7% of the to- tal FDI). The number of enterprises with the Dutch capital is 160, and these are mainly companies be- longing to the food processing industry, banking, transport and retail trade. A Dutch holding company Easeur Holding BV, which is a majority shareholder (80%) in the Giurgiulești International Free Port (in the Cahul region), is one of the biggest foreign inves- tors in Moldova. Romania, Turkey, Italy, Russia and Ukraine have the greatest impact on local markets –investors from these countries deal in billions of euros in compa- nies from the power industry, banking, insurance, retail trade and industry (http://capital.market.md). 951 companies with the Russian capital operate in Moldova, with the capital of 1,146 million lei. The biggest ones include Lukoil, Moldovagaz and Mol- davian Power Station (known as Moldavskaya GRES) in Dnestrovsc, Transnistria, as well as Topaz, several banks and wine production plants. Germany takes fifth place in terms of the number of foreign companies (404) with a total capital of 683 million lei. The largest German companies in Moldova include TirexPetrol (crude oil processing), Dräxlmaier Group Automotive (BMW car parts manufacturer), Mercedes Benz, Knauf (producer of construction ma- terials), and Sudzuker-Moldova (sugar mill). The biggest French companies include bank Mobiasbancă (Groupe Société Générale), Lafarge- Holcim company and Orange – a company operat- ing in the telecommunications market. Overall, 225 companies with the French capital operate in Mol- dova, with a total value of investments being 125.5 million lei. The remaining larger companies operating on the Moldovan market include Moldcell (with the Moldovan-Turkish capital, in the mobile telecommu- nications industry) and Gas Natural Fenosa (a Molda- vian-Spanish electricity company). Relatively small involvement of foreign capital stems from investment barriers of a political, so- cial, infrastructural and economic character. They include: a) political uncertainty as to the strategic political objectives and the unresolved territorial dispute with Transnistria; b) deep interference of the state in business activi- ties and frequent government interventions; c) weak, inefficient, corrupt and unjust judicial sys- tem, involved, among others, in the case of ap- propriation of the majority shares packages of some enterprises important for the economy; d) the quality of manpower, poor knowledge of for- eign languages; e) poor development of infrastructure; f ) small size of the market, with simultaneously large grey zone; g) effects of the economic crisis from the turn of the century and the susceptibility to the influence of political and economic turmoil in Russia and Ukraine. In order to encourage investors and stimulate eco- nomic development, free economic zones have been created in Moldova – investment areas with tax exemptions. Their number has increased in re- cent years. The largest of these is the Expo-Business Chişinău zone in Chişinău. The others include zones in the cities of Ungien, Bălți, Taraclia, Otaci, Vulcănești and Tvardița. 9. conclusions In the global period of growth in the importance of trade and capital links (despite slumps in the recent years), Moldova is situated on the outskirts of the in- terests of markets. However, foreign economic links are important for Moldova, in particular during the transition from the Soviet centrally-controlled to the market economy. The structure of export of goods is closely con- nected with the country’s economic specialization, still formed in the Soviet era. The agricultural charac- ter of the country determines the exports of mainly foods and the production of light industry. These are lowly-processed and non-tech goods. This means relegation of the country to the periphery of the Eu- ropean economy and little possibility of bridging the gap. On the contrary, this imbalance is increasing, which entails pauperisation of the society. Despite growing and prevailing trade relations with the EU countries, Moldova’s economy is still characterised by strong links with post-Soviet coun- tries. Economic crises in Russia and Ukraine, political decisions and armed conflicts each time have a neg- ative impact on Moldova’s GDP and export. The import structure indicates complementa- rity to national production (energy and energy re- sources) and filling in the Moldovan market niches, especially in technological and financial fields. The directions of links in this respect also indicate a high dependency on post-Soviet countries, especially Russia (mainly in the field of energy resources), and in terms of transit on Ukraine and Transnistria. The deep imbalance in the trade balance results in an increase in the state debt, poverty and, con- sequently, massive economic migration of mainly young people abroad. Paradoxically, their earnings reduce the imbalance in the balance of payments; Foreign economic links of the Republic of Moldova and their dynamics in 1991–2015 67 however, in a longer perspective, they are not a solu- tion and do not reduce the debt of the central budg- et. The unresolved conflict with Transnistria deepens the trade balance and the current account deficit by charging the unsettled by Transnistria accounts to the government in Chișinău. This increases the Moldovan authorities’ vulnerability to external po- litical pressure. The imbalance of payments is only slightly miti- gated by the influx of FDI, as the capital links of Moldova are maintained at a low level. Among the existing ones, one should note the increasing share of the western capital, but adding the Russian and Cypriot2 investment, investors from these countries take first place in terms of the capital invested in Moldova (in total 21.2%) and second place in terms of the number of enterprises (12.3%). Only subjects from historically and culturally close Romania have a larger number of companies with foreign capital in Moldova; however, the value of the capital invested by them gives these investors only eighth place. The industry structure of FDI shows a resem- blance to the structure of Moldova’s economy. For- eign investment does not significantly contribute to the diversification of its structure; on the contrary, one can expect its consolidation, with minor adjust- ments, mainly in the mobile telecommunications in- dustry (hence the increased import of devices) and the engineering one (production of car parts). Clear political objectives (economic integration with the EU or with post-Soviet countries) would certainly accelerate the economic growth and the develop- ment of the country and increase commercial and capital contacts with foreign countries. This choice is a choice of civilisation for Moldova. references Barański N., 1953, Geografia gospodarcza ZSRR, WZWS, Warszawa. 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