Moldova Poverty wages on the door step of Europe
When we think of the Fashion Clothing Industry, we generally think of France, Germany Italy. The thought that Eastern European can produce talented fashion designers, does not come straight to mind. But I hope my article can educate and inform much more people that creativity and quality does travel beyond the confines of Europe. Moldova is one such country that encompasses the workforce needed to fuel companies such as
Multitexlondon. Who are providing Fashion clothes throughout Europe? Stefan Cel Mare, formely known as Lenin Boulevard, is in the very centre of Chisinau, the capital of the Republic of Moldova. Between government buildings in the north and hotels at the southern end of the street huddle all the important institutions and agencies as well as the boutiques of well-known brands like Hugo Boss, adidas or Puma.whoever wants to be successful or wants to participate in the meagre fruit of the Moldovan economy has an address here.
Female employees, students, women who moments earlier were crammed together in one of the mini buses bringing them from the districts of Botanica or nearby the city centre, surprise by there elegance. Most popular are jackets made of soft, black leather with a business-like blouse worn with formelly but generously cut trousers.people in Moldova spend an average of 7% of their income on clothes (against 6% in Germany).
With the collapse of the East European COMECON (see Annexe @bottom of this article) market at the beginning of the transformation period ( 1989 -1991), the sewing machines came to a grinding halt. Times have changed since this bleak period and now pockets of business are appearing all over the place, two blocks from Boulevard Stefan Cel Mare toward the east, there can be heard once more the sounds of the machines from the factories of lonel and Steau Reds, former textile conglomerates which have since been privatised and divided into smaller companies.Today, there are about 50 comapnies in the whole country producing mostly garments and some textiles. They rae Italian, Turkish or German owned and financed.
The Republic of Moldova is the poorest country in Europe. The average income is 300 per year. Survival on such a low income is impossible even in the Republic of Moldova. In 1999 already, the cost of a basket of basic commodities, was three times higher than the average income. Many Moldovans only manage to survive because they have relatives in the countryside who help them out with food grown on their own small farms. Furthermore, 800,000 people left Moldova in the past 10 years to go to the West and contribute remittences which are a vital for the famillies they have left behind at home.
Like all other states of the former Soviet Union, Moldova has experienced a dramatic economic declie.1993 and 1994 were marked as being the black years as in any other former socialist country; in 1993 alone, the GDP declined by more than 30%. Production broke down and inflation soared to 116% in 1994. Most of the former state companies had to close. This was only the beginning, another crisis came in 1998 when the Russian market collapsed the only market of importance that remained for Moldovans products after the break down of the COMEDON. The countries GDP declined even further and Moldova was on the edge of bankruptcy.
The country was bailed out by the usual International creditors. This enatiled a high level of dependance on, the likes of the International Monetary Fund (IMF), which imposed sanctions such as an unprecedented fiscal adjustment and tight monetary policy to contain the external market shock effect. This meant a severe cutback in social spending in order to reduce inefficieny in the social sectors. Fifty hospitals were closed, education and health next to be imposed of cuts by a third and school fees were brought back.ten percent of public employees were dismissed. Although there has been a slight recovery in the economy since 2000, the Moldovan economy has still not reached its 1990 level. Moldovas Garment Industry
Moldovas garment industry is the countries second most important industry after wine. Its main customer is Italy, which buys 32% of Moldovas exports, followed by Germany with 32% and the USA with 16%.compared to neighbouring Romania, Moldova has a small but increasing share of the
European Unions market in garments. Until recently, the advice to source from Moldova as a tip given only to adventurous entrepreneurs. Close to the Black sea, the country was, historically speaking, a kind of plaything between East & West at least until it became part of the Soviet Union.
When the socialist system collapsed, Moldova again oscillated back and forth between Europe and the old Soviet structures. The fact that one of the borders remains unrecognised by its neighbours and that teh country has been let since 2001 by Vladmir Voronin, a communist president, at least in theory, this of course is perceived to be as an instability. In foreign policy terms, this makes Moldova an almost no-go area for foreign direct investment. But foreign direct investment is not needed for production under the OPT system. Though Moldova is still seen as a difficult country, buyers are increasingly sourcing from there. Of course cheap labour costs pay there part, according to the IMF, labour costs in Moldova are lower than in China.
Exploiting Poverty
Contrary to other country studies, there has been no systematic research carried out. If you were to ask garment workers in Moldova about their woking conditions, they spontaneously decry the very low wages:the legal minimum wage in Moldova in Feb 2004 was 26 a month. This figure has not changed although its 2008.
For Vsevolod Barbaneagra, vice president of the Trade Union Confederatia Sindicatelor din Republika Moldava (CSRM) affiliated to the ICFTU, the wage situation has been dramatic since 1997:we need living wages! At the moment wages are 60% below the subsistence level in Moldova.
In the countryside, sewing in a factory is a kind if seasonal work which women do in the Winter. Women work on the farm in the summer and in the winter apply for work in a factory, either in the rural areas or in one of the urban centres. Those who are employed all year round are in any case forced to compliment their meagure wage through some form of subsistence farming. My cousin ( Antonina S) is based in a Moldovan sewing factory, and the testament of the working conditions is so bad, that when i asked her about raising these issues with the appropiate group authority, a union such as Solidaritate, she just laughed at me and indicated that speaking out is not a wise thing to do.
So not only is she working in very poor conditions, on top of that she has no representation to look out for herself and her co-workers, whom are all on poor wages and long hours. She is working for a local sewing factory, owners being Georgeta Mir and her father Ieahia Mir. They own a new, industrial-size enterprise called Actual Confectii, which employs 40 people and has the capacity to expand. They have recently won a contract with a Milan based fashion giant Max Mara to produce clothing line for 3,000 pieces in three styles. My cousin said that they had to work extremely hard for that order on the miserly amount of money they were paying.
Not only that the underhand cheek of what they did with the excess garment remnant was to feed their own Boutiques by utilising the cut-off material and getting the workers to make new clothes lines from all the patterns that were given to them by Max Mara. They then sell these clothing garments, labelled up as Max Mara items and keep the proceeds. At the same time they pay us next to nothing for this extra work, knowing that the psychology of it is, if you dont like it, there is always someone to take your place. Georgeta and her family were able to utilize the funding and backing from the USA project into countries that struggle to make any achievement into developing industrious jobs, a fund generated grant. The objective of this project:-
Competiveness Enhancement & Enterprise Development (CEED)
Implementer: Chemonics International Inc.
Project period:09/2005 - 09/2010
The Competitiveness Enhancement and Enterprise Development Project (CEED) is a market demand driven project that seeks to enhance the competitiveness of Moldovan private sector enterprises within the global market with an emphasis on: 1) textile and apparel; 2) information and communications technology; and 3) winemaking. CEED will work to establish a business environment that stimulates sustainable economic growth and promotes capital investment. CEED will also stimulate effective private/public dialogue and pursue transparency, international codes and performance standards.
Over time, CEED will catalyze the establishment of apex trade organizations that will benefit from efficient and effective relationships within sector supply chains and value chains. The goals of the project are to develop new and better paying jobs for Moldovan citizens and to increase revenues for the targeted sectors.
Workers quit their jobs in protest
Employers in Moldova and Romania often complain about workers changing jobs too often. The reason for this is simple:the only way workers have to register their protest against bad working conditions is to leave their job, which dosent exactly give them much power. Many workers see their job in the garment industry only as a temporary solution before looking for another, better occupation. Many dream of a well paid work in Western Europe, maybe in Italy or Germany.
Trade Unions in Moldova
Trade unions in Moldova are divided into two confederations: CSRM and Solidaritate. CSRM presence mostly in heavy industrial factories.
Solidaritate Principally of the garment industry. In Moldova, one cannot really say that trade unions effectively represent garment workers interests. The weak link being that most of the delegates that make up the union are from the company, and can be seen to be the advocates of the Companies long term interest, than of the workers.
Conclusion and prospects
Although labour legislation in Moldova is in keeping with ILO standards, it is basically not enforced. Many workers do not know their rights and are not used to demanding them. A major reason lies in the limited access of trade unions to the garment industry also the lack of a properly developed independant womens movement. There are some womens groups, but only one is dealing with conditions in the garment industry. The difficulty is that civil society in Moldova is only just emerging from an age when displays of resistence and activism were prohibited. The culture within which a dynamic civil society is able to develop, is still in the process of taking shape and is further hampered by the lack of financial support for the work on labour issues. The are funded projects by USAID to help women gain Technical and personal help with guaranteed jobs, but as with everything to do with information, it's know by very few people. This opportunity should be made public to everyone and not the select few. If success and improvement in the economy is to be uplifted, by this aid then it's a responsibility by All whether government, ofiicials or those in higer echelon of Business should make mae sure the People are informed to get the opportunity to improve not just themselves but the Moldovan economy.
Annexe
COMECON - Economic organization from 1949 to 1991, linking the USSR with Bulgaria, Czechoslovakia, Hungary, Poland, Romania, East Germany (195090), Mongolia (from 1962), Cuba (from 1972), and Vietnam (from 1978), with Yugoslavia as an associated member. Albania also belonged between 1949 and 1961. Its establishment was prompted by the Marshall plan. Comecon was formally disbanded in June 1991. It was agreed in 1987 that official relations should be established with the European comunitty, and a free-market approach to trading was adopted in 1990. In January 1991 it was agreed that Comecon should be effectively disbanded.
When we think of the Fashion Clothing Industry, we generally think of France, Germany Italy. The thought that Eastern European can produce talented fashion designers, does not come straight to mind. But I hope my article can educate and inform much more people that creativity and quality does travel beyond the confines of Europe. Moldova is one such country that encompasses the workforce needed to fuel companies such as
Multitexlondon. Who are providing Fashion clothes throughout Europe? Stefan Cel Mare, formely known as Lenin Boulevard, is in the very centre of Chisinau, the capital of the Republic of Moldova. Between government buildings in the north and hotels at the southern end of the street huddle all the important institutions and agencies as well as the boutiques of well-known brands like Hugo Boss, adidas or Puma.whoever wants to be successful or wants to participate in the meagre fruit of the Moldovan economy has an address here.
Female employees, students, women who moments earlier were crammed together in one of the mini buses bringing them from the districts of Botanica or nearby the city centre, surprise by there elegance. Most popular are jackets made of soft, black leather with a business-like blouse worn with formelly but generously cut trousers.people in Moldova spend an average of 7% of their income on clothes (against 6% in Germany).
With the collapse of the East European COMECON (see Annexe @bottom of this article) market at the beginning of the transformation period ( 1989 -1991), the sewing machines came to a grinding halt. Times have changed since this bleak period and now pockets of business are appearing all over the place, two blocks from Boulevard Stefan Cel Mare toward the east, there can be heard once more the sounds of the machines from the factories of lonel and Steau Reds, former textile conglomerates which have since been privatised and divided into smaller companies.Today, there are about 50 comapnies in the whole country producing mostly garments and some textiles. They rae Italian, Turkish or German owned and financed.
The Republic of Moldova is the poorest country in Europe. The average income is 300 per year. Survival on such a low income is impossible even in the Republic of Moldova. In 1999 already, the cost of a basket of basic commodities, was three times higher than the average income. Many Moldovans only manage to survive because they have relatives in the countryside who help them out with food grown on their own small farms. Furthermore, 800,000 people left Moldova in the past 10 years to go to the West and contribute remittences which are a vital for the famillies they have left behind at home.
Like all other states of the former Soviet Union, Moldova has experienced a dramatic economic declie.1993 and 1994 were marked as being the black years as in any other former socialist country; in 1993 alone, the GDP declined by more than 30%. Production broke down and inflation soared to 116% in 1994. Most of the former state companies had to close. This was only the beginning, another crisis came in 1998 when the Russian market collapsed the only market of importance that remained for Moldovans products after the break down of the COMEDON. The countries GDP declined even further and Moldova was on the edge of bankruptcy.
The country was bailed out by the usual International creditors. This enatiled a high level of dependance on, the likes of the International Monetary Fund (IMF), which imposed sanctions such as an unprecedented fiscal adjustment and tight monetary policy to contain the external market shock effect. This meant a severe cutback in social spending in order to reduce inefficieny in the social sectors. Fifty hospitals were closed, education and health next to be imposed of cuts by a third and school fees were brought back.ten percent of public employees were dismissed. Although there has been a slight recovery in the economy since 2000, the Moldovan economy has still not reached its 1990 level. Moldovas Garment Industry
Moldovas garment industry is the countries second most important industry after wine. Its main customer is Italy, which buys 32% of Moldovas exports, followed by Germany with 32% and the USA with 16%.compared to neighbouring Romania, Moldova has a small but increasing share of the
European Unions market in garments. Until recently, the advice to source from Moldova as a tip given only to adventurous entrepreneurs. Close to the Black sea, the country was, historically speaking, a kind of plaything between East & West at least until it became part of the Soviet Union.
When the socialist system collapsed, Moldova again oscillated back and forth between Europe and the old Soviet structures. The fact that one of the borders remains unrecognised by its neighbours and that teh country has been let since 2001 by Vladmir Voronin, a communist president, at least in theory, this of course is perceived to be as an instability. In foreign policy terms, this makes Moldova an almost no-go area for foreign direct investment. But foreign direct investment is not needed for production under the OPT system. Though Moldova is still seen as a difficult country, buyers are increasingly sourcing from there. Of course cheap labour costs pay there part, according to the IMF, labour costs in Moldova are lower than in China.
Exploiting Poverty
Contrary to other country studies, there has been no systematic research carried out. If you were to ask garment workers in Moldova about their woking conditions, they spontaneously decry the very low wages:the legal minimum wage in Moldova in Feb 2004 was 26 a month. This figure has not changed although its 2008.
For Vsevolod Barbaneagra, vice president of the Trade Union Confederatia Sindicatelor din Republika Moldava (CSRM) affiliated to the ICFTU, the wage situation has been dramatic since 1997:we need living wages! At the moment wages are 60% below the subsistence level in Moldova.
In the countryside, sewing in a factory is a kind if seasonal work which women do in the Winter. Women work on the farm in the summer and in the winter apply for work in a factory, either in the rural areas or in one of the urban centres. Those who are employed all year round are in any case forced to compliment their meagure wage through some form of subsistence farming. My cousin ( Antonina S) is based in a Moldovan sewing factory, and the testament of the working conditions is so bad, that when i asked her about raising these issues with the appropiate group authority, a union such as Solidaritate, she just laughed at me and indicated that speaking out is not a wise thing to do.
So not only is she working in very poor conditions, on top of that she has no representation to look out for herself and her co-workers, whom are all on poor wages and long hours. She is working for a local sewing factory, owners being Georgeta Mir and her father Ieahia Mir. They own a new, industrial-size enterprise called Actual Confectii, which employs 40 people and has the capacity to expand. They have recently won a contract with a Milan based fashion giant Max Mara to produce clothing line for 3,000 pieces in three styles. My cousin said that they had to work extremely hard for that order on the miserly amount of money they were paying.
Not only that the underhand cheek of what they did with the excess garment remnant was to feed their own Boutiques by utilising the cut-off material and getting the workers to make new clothes lines from all the patterns that were given to them by Max Mara. They then sell these clothing garments, labelled up as Max Mara items and keep the proceeds. At the same time they pay us next to nothing for this extra work, knowing that the psychology of it is, if you dont like it, there is always someone to take your place. Georgeta and her family were able to utilize the funding and backing from the USA project into countries that struggle to make any achievement into developing industrious jobs, a fund generated grant. The objective of this project:-
Competiveness Enhancement & Enterprise Development (CEED)
Implementer: Chemonics International Inc.
Project period:09/2005 - 09/2010
The Competitiveness Enhancement and Enterprise Development Project (CEED) is a market demand driven project that seeks to enhance the competitiveness of Moldovan private sector enterprises within the global market with an emphasis on: 1) textile and apparel; 2) information and communications technology; and 3) winemaking. CEED will work to establish a business environment that stimulates sustainable economic growth and promotes capital investment. CEED will also stimulate effective private/public dialogue and pursue transparency, international codes and performance standards.
Over time, CEED will catalyze the establishment of apex trade organizations that will benefit from efficient and effective relationships within sector supply chains and value chains. The goals of the project are to develop new and better paying jobs for Moldovan citizens and to increase revenues for the targeted sectors.
Workers quit their jobs in protest
Employers in Moldova and Romania often complain about workers changing jobs too often. The reason for this is simple:the only way workers have to register their protest against bad working conditions is to leave their job, which dosent exactly give them much power. Many workers see their job in the garment industry only as a temporary solution before looking for another, better occupation. Many dream of a well paid work in Western Europe, maybe in Italy or Germany.
Trade Unions in Moldova
Trade unions in Moldova are divided into two confederations: CSRM and Solidaritate. CSRM presence mostly in heavy industrial factories.
Solidaritate Principally of the garment industry. In Moldova, one cannot really say that trade unions effectively represent garment workers interests. The weak link being that most of the delegates that make up the union are from the company, and can be seen to be the advocates of the Companies long term interest, than of the workers.
Conclusion and prospects
Although labour legislation in Moldova is in keeping with ILO standards, it is basically not enforced. Many workers do not know their rights and are not used to demanding them. A major reason lies in the limited access of trade unions to the garment industry also the lack of a properly developed independant womens movement. There are some womens groups, but only one is dealing with conditions in the garment industry. The difficulty is that civil society in Moldova is only just emerging from an age when displays of resistence and activism were prohibited. The culture within which a dynamic civil society is able to develop, is still in the process of taking shape and is further hampered by the lack of financial support for the work on labour issues. The are funded projects by USAID to help women gain Technical and personal help with guaranteed jobs, but as with everything to do with information, it's know by very few people. This opportunity should be made public to everyone and not the select few. If success and improvement in the economy is to be uplifted, by this aid then it's a responsibility by All whether government, ofiicials or those in higer echelon of Business should make mae sure the People are informed to get the opportunity to improve not just themselves but the Moldovan economy.
Annexe
COMECON - Economic organization from 1949 to 1991, linking the USSR with Bulgaria, Czechoslovakia, Hungary, Poland, Romania, East Germany (195090), Mongolia (from 1962), Cuba (from 1972), and Vietnam (from 1978), with Yugoslavia as an associated member. Albania also belonged between 1949 and 1961. Its establishment was prompted by the Marshall plan. Comecon was formally disbanded in June 1991. It was agreed in 1987 that official relations should be established with the European comunitty, and a free-market approach to trading was adopted in 1990. In January 1991 it was agreed that Comecon should be effectively disbanded.
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