Republic of Moldova: challenges and prospects on the accession to the Customs Union: Russia–Kazakhstan-Belarus vs. concluding the Deep and Comprehensive Free Trade Agreement with the European Union

Abstract

As of its independence, the economy of the Republic of Moldova can be characterized as a long and troublesome process of transition to market economy, which mostly caused the gradual loss of the production potential that once existed and the creation of strong dependence on exogenous growth factors, determined by the evolution of the main economic partners. The growth pace of the previous decade which, on one hand, represented a hopeful sign of national economy recovery, on the other hand proved as extremely prone to various shocks, both external and internal, and the economic growth reflected a relatively high degree of asymmetry in time, characterized by strong slowdowns in growth. The reforms implemented during the transition period failed to establish viable institutions required for the operation of the market economy. These and the business environment, accordingly, signal a series of shortcomings. Despite the promoted liberalization policies, the investments are very law, while the economy is in critical need of such investments.