Maximizing the gains from migration and remittances in Moldova is targeted by a project launched for 2007-2008 by the International Organization for Migration (IOM), Mission to the Republic of Moldova. The project funded by the European Commission will be implemented in partnership with the Ministry of Economy and Trade of the Republic of Moldova and the International Labour Organization (ILO).

According to the World Bank, Moldova is the first in Europe in terms of the size of remittances in proportion to GDP, constituting its one third. According to the National Bank of Moldova, in 2006, Moldovans migrants remitted almost 855 ml US dollars. The recent IOM "Migration and Remittances Survey 2006" shows that over 40% of the population lives in households that receive remittances. The majority of these flows are used to fund basic household consumption, consumer durables, purchase of housing and debt repayment. Very little of these flows, less than 7 percent, are being used to finance business investment and as little as 5 percent are saved in bank accounts.

The European Commission funds 80% of this 1 ml Euros project, titled "Beyond Poverty Alleviation: Developing a Legal, Regulatory and Institutional Framework for Leveraging Migrant Remittances for Entrepreneurial Growth in Moldova". This initiative is part of the strategy of the Moldovan Government to create effective mechanisms for regulated migration and a favourable environment for investment of remittances in Moldova.

The project will develop a national remittances programme for the Government, improve the capacity of civil servants to develop policies related to business environment, facilitate the establishment of the national organization for small businesses and develop information campaigns promoting legal channels of money transfers. Additionally, the project will train migrant workers and their families to start up or improve a business, as well as build linkages between Moldovan Diaspora and its home country.

The project activities also include the elaboration of a business start-up almanac for beginner entrepreneurs and a manual on Financial Services aimed at helping small entrepreneurs to benefit from adequate financial services. Partnerships between financial institutions from Italy, one of the main destination country, and Moldova will be fostered to promote the use of formal transfer channels and use of the remittances in income-generating investments.

"This project begins in the wake of strengthened interest of the Government and the international community to link migration with development. It is a first step in a process that will see more Moldovan migrants returning to Moldova rather than leaving", said Martin Wyss of IOM Moldova.