Moldova Offers Returning Citizens Grants to Establish Small Businesses

Advocates say the new scheme for returnees could become a model for struggling economies across the globe

Youngsters ride past a sign written in Russian, that advertises price cuts in Chisinau, Moldova., on August 22, 2018.
Roveliu Buga,AP

In a bid to kick-start hope and growth, the poorest country in Europe has found a way to lure home migrant workers and embed a small pocket of entrepreneurship in once-communist Moldova.

Be it hairdressing or nut farming, car services or internet cafes, thousands of Moldovans who had migrated West in search of opportunity have repatriated and used a pioneering grant scheme to set up small businesses.

Advocates say the scheme could be copied in sub-Saharan Africa or postwar Syria, as poor and unstable states seek new ways to coax back their brightest and best.

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“We probably don’t end all the issues of migration with this but it helps to make use of a population which could develop agriculture, or other businesses in rural areas,” said Viorel Gutu, Moldova’s former deputy minister of agriculture.

Migrants who returned launched everything from car services to hair salons, remembered Gutu, who was involved in implementing the program and now works for the United Nations Food and Agriculture Organization.

Unable to find the crucial finance he needed to expand his nascent nut-growing business, Igor Golban felt he had no option but to leave his Moldovan home and try his luck as a migrant worker.

In 2013, he swapped the orchards and vineyards of landlocked Moldova to work at a northern German farm growing sea buckthorn.

His hard work paid off. Within months, Golban returned home and invested the savings sent home in his beloved nut business.

He now earns more in Europe’s poorest country from exporting organic walnuts, hazelnuts and almonds than he did working in the region’s largest economy. He would not say how much money his operation makes, but the 37-year-old employs nine full-time workers and 14 more during the two-month harvest: “all Moldovans, all locals,” he said proudly.

Key to his success was the government grant of 10,000 euros ($11,262) that meant he could modernize his 32-hectare (79-acre) farm, Golban told the Thomson Reuters Foundation.

“The program helped very much. It helped many of those who return ... and they create new job opportunities,” he said. “A lot of the money earned abroad is returning to the Moldovan economy.”

The grant scheme had its detractors when it launched in 2010 with European Union funding and UN expertise.

It is only open to those who send money home and their immediate kin — remittances account for nearly a quarter of Moldova’s gross domestic product — and many locals resented rewarding those who left and returned to go into business.

But as the plan created jobs and enterprises to fill the economic void left by the collapse of the Soviet Union, it became a model to watch.

Known as PARE 1+1, a similar scheme is being piloted in Tajikistan, where remittances make up almost 30% of GDP. Other countries and regions may follow suit.

For the UN migration agency, such schemes are the best shot at getting people to head home and invest enough hope, money and opportunity that people stop leaving.

“If migrants do not have concrete and positive livelihoods scenarios back home after the return, very likely they would try to go back to countries of destination,” said Ghenadie Cretu, a coordinator with the UN’s International Organization for Migration in Moldova.

The EU, together with IOM, has been ramping up efforts to usher home European-bound Africans who get stuck in transit in places such as Algeria and Libya.

Cretu said the Moldovan program could be adapted for such migrant crises, and could even work in a place like Syria when post-conflict rebuilding begins.

Under PARE 1+1, migrants or their families setting up small businesses using remittances receive matching grants of up to 10,000 euros.

Since 2010, more than 1,250 businesses have benefited, more than half in food and agriculture, according to official figures. They have created about 3,200 new jobs.

Nearly a decade on, the program has approved grants totaling 249 million Moldovan leu ($14.5 million).

Still, that is only a small fraction of Moldova’s remittances each year from migrant workers. In 2017, migrants sent back $1.7 billion, according to Costin.

Successful applicants get training on how to run a business before they receive the grants and mentoring support.

“For us, the most important is that we can earn here, we earn well, we can set up good working conditions for locals,” said Golban.