Tuesday, July 20, 2010

The Sun Rises in the East

It's a well-known fact that Moldova is polarised into two camps.  One looks west, towards the European Union, while the other looks north-east towards Russia.


These two zones are where almost all of Moldova's attention is focused.  This is where Moldovans go to work, and from where new ideas arrive in Chisinau.  These are Moldova's major export markets and major aid donors.  These are the countries whose languages Moldovans learn in school and whose literature they read as adults.

Which is all well and good, except that Moldova is virtually ignoring the 90% of humanity that doesn't live in Europe.  Here's 2010 population estimates from the UN's statistics division:

Asia              4,167m
Africa            1,033m
Europe             733m
Latin America     589m
North America    352m
Oceania             36m

There's a whole world out there that Moldova has barely touched.  The country only has a single diplomatic representation in the entire Asia-Pacific region (Beijing).  This is a worry, as this of all regions is the one with the greatest capacity to benefit from and absorb Moldova's agricultural and horticultural produce.  This is where the teeming hungry millions are.  This is where the number of wine drinkers is rising rapidly as economic growth brings prosperity to millions of families.

Moldova needs a more significant presence in Asia (and in Africa and Latin America as well).  I'm not talking embassies so much as trade representations, whose purpose is to link Moldovan producers with foreign distributors.  Just two or three people working the phones and doing the rounds of trade fairs in their host countries trying to drum up business.

Now I know this will cost money, but perhaps some governments would be prepared to sponsor Moldovan trade offices as a cheap but effective form of foreign aid.  Why not talk to the appropriate national governments and see if representations can't be set up in Tokyo, Shanghai, Hong Kong, Singapore, Sydney, Toronto, Los Angeles, New York, Sao Paolo, Dubai, Johannesburg and Mumbai?

Moldovans also need to diversify their language and cultural skills in order to address the wider world.  English, Chinese and Spanish would be the key languages to learn in order to make the most of the coming century.  Once again, a programme of schooling in these laguages would be a worthy recipient of foreign aid, being in reality an investment rather than a handout.

The best thing of all about the markets of Asia, Africa and the Americas is that they have little or no skin in the game with respect to Eastern European geopolitics.  They don't care whether Moldova was invaded or liberated.  They don't care whether Moldovans speak Russian or Romanian.  They won't shut down their markets more quickly than you can say Molotov-Ribbentrop.

And that's got to be a good thing.
Posted by Zimbru at 10:41 PM

2 comments:

  1. A very good point, but obviously it is harder to do it than to say it. Unfortunately, most of Moldovan production is hard to export because it is mostly wine- or food-related.
    Now the wine market worldwide is very saturated: even France and Italy are having a hard time with the global decrease in consumption. Also, you can have now great African, South American or Australian wines at very cheap prices. When the Russian wine embargo started, there was an easy thing to do: sell elsewhere. But despite titanic efforts, dozens of expos (including in China), very few cotracts were signed, except, well, in Romania. But Romania has a tiny market compared to Russia. And anyway, contrary popular to the popular belief, Moldovan wine industry has a low profitability, even when if you don't take into account all the State subsidies to this branch.
    About food, well, any country can make its own food. I know we're selling apple juice in Toronto; but we need more than that. With food exports, we'll struggle just like those poor african countries that only export bananas and coconuts. The point is, we desperately need a competitive industrial force. Hand-shakings are nice, trade forums are good, provided you have relevant stuff to trade. And execs know this well: they would have been in Asia and Oceania for a long time now, without the government pushing them from the back, if it was feasible. I guess in most cases it's not.
    Ironically, the Stati family got rich thanks to businesses in emerging countries like Sudan and Kazakhstan. But then again, they do not export anything, and probably don't even pay taxes in Moldova.
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  2. Excellent comment Corneliu. You are 100% right in suggesting that Moldova needs to move away from trying to sell bulk commodities. I would suggest the first step in this process would be to look at foodstuffs with some value added and a high value / weight ratio which would make sense transporting over long distances - e.g. fruit juice concentrates, milk powder, quality wines, speciality nuts etc.. Longer term we need to be talking about the products of the secondary and tertiary sectors, however.
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