The first article in the series is here
Some territories were formed around industry. Others – around railroads. Others around the processing of agricultural raw materials. Fourths – around border trade, logistics, ports, river hubs, wine-growing areas, cattle breeding, sugar refineries, canneries, grain elevators, repair bases, and markets. And when these functions disappeared, the territories did not become blank slates. They became territories with their economic spine knocked out.
Administrative reform cannot undo this history. You can consolidate districts, create development regions, strengthen mayors, devolve powers to localities, change tax regulations, rename agencies and draw a beautiful new map. But unless the basic economic function of the territory is restored or replaced, all this will not be development reform, but poverty management reform.
A territory does not start anew after every reform. It carries the inertia of previous specialization. This is the main conflict of Moldovan territorial development: the state reforms the administrative shell, but does not work with the economic content.
The flaws of the hybrid economic system
The past of the territory continues to act not as a memory but as a material force. It lives on in infrastructure, the location of enterprises, transportation links, land structure, professional skills, urban planning, social expectations and even in the way people imagine a normal life.
If a town has lived around a factory for decades, when the factory closes, it does not turn into a normal village with a slightly larger population. It turns into a city with an empty industrial framework, excessive infrastructure, people with unclaimed qualifications, falling demand, degradation of the urban environment and a budget that no longer corresponds to the former scale of the territory.
If a district lived around the processing of agricultural raw materials, then after the disappearance of processing enterprises it does not become just an agrarian district. It becomes a territory where raw materials are produced, but the added value goes outside.
If a settlement lived around a railroad junction, then after the degradation of the transportation function it does not become an ordinary point on the map. It becomes a territory that has lost its place in the system of exchange.
Therefore, former industrial, agro-processing and logistics centers cannot be treated only with sidewalk repair, street lighting, grant projects and active civic participation programs. All of these may be necessary, but they are no substitute for an economic core. A beautiful sidewalk without economics is a landscaped road to the departure of young people.
Old industrial and agrarian-industrial areas are often trapped precisely because they have the history, the infrastructure, the buildings, the people, the memory of the former economic scale. But there is no new function that can put it all back together into a workable system. Such an area does not seem to be empty, but it is economically disconnected. It produces something, trades something, receives transfers somewhere, sends someone to work, but it no longer reproduces itself as a full-fledged economic organism.
For Moldova, this is not a theoretical subtlety, but a key to understanding almost the entire territorial problem. The Soviet economic system has disappeared, but the spatial organization of the country has largely remained Soviet.
Cities, roads, industrial sites, districts, engineering networks, professional structure, social expectations – all this was created under one model of economy. Then that model was broken. But instead of a meaningful policy of re-profiling territories, the country received privatization, administrative experiments and donor projects, often unconnected by a single production logic.
This is how the Moldovan economic form emerged: a state with a Soviet spatial structure, post-Soviet deindustrialization, a European normative shell and a raw peripheral economy.
It is not a market in the full-fledged sense. Nor is it a planned economy. Nor is it a European regional policy. It is a hybrid system in which old production functions have been destroyed, new ones have not been created, and administrative reforms are trying to portray development where there is no economic engine.
Decentralization without economic basis
Hence, there are structural contradictions that are not being addressed by any of the current reforms. The authorities talk about decentralization, but the real economic resources remain centralized. Mayors are given responsibility, but they are not given a full-fledged tax base, an investment tool and the ability to shape industrial or agrarian policy. The obligation to maintain the territory is transferred to the local level, but no mechanism is created through which this territory can start working again.
Districts and mayoralties are evaluated by administrative indicators, but not by economic functions: how many inhabitants, what budget, how many schools, how many kilometers of roads. The main question is not asked: what added value does the territory create, where is its production specialization, what does it give to the country, except for the request for transfers.
Moldova declares European integration, but territorial development is too often reduced to grants, infrastructure repair and local projects without industrial logic. European regional policy in its normal form is the alignment of territories through specialization, connectivity, clusters, production chains, human capital and investment infrastructure, not painting the façade of the city hall with the logo of the donor.
Rural and small urban areas are seen as a social problem, not as potential economic platforms. The state thinks about how to maintain a school, an outpatient clinic and a road. But it rarely thinks about how to restore the economic sense of the territory itself. As a result, the territory turns into a service object rather than a subject of development.
Speaking of consequences, they are already happening – and will worsen with each successive reform cycle in which the question of function is not raised. Territories deprived of their economic engine continue to lose population. This is not just a demographic fact – it is structural decay. People leave, businesses shrink, budgets get poorer, services deteriorate, new people leave. Moldova is already living in this cycle throughout the periphery.
An organized form of stagnation
In parallel, concentration in Chisinau is reaching a level at which the capital market itself is beginning to fail: the cost of living is rising, infrastructure is overburdened, the quality of the urban environment is deteriorating, and jobs outside a few sectors remain scarce.
A country in which territories do not fulfill economic functions inevitably turns into a country dependent on two sources of income: remittances from abroad and external donor aid.
This is not an economy. It is an organized form of stagnation with European rhetoric on top. When the number of people sending money home dwindles as the diaspora dwindles and the donor flow begins to be redistributed in favor of other priorities, the Moldovan periphery risks being without both crutches at the same time.
It is therefore crucial to separate the two maps: administrative and economic. The administrative map answers the question of who governs the territory. The economic map answers the question of how the territory lives.
It is possible to have a correct administrative map and a dead economic map. You can have a perfect distribution of powers between the center, the district and the mayor’s office, but if the territory does not produce sufficient added value, it will still depend on transfers, migration, trade, state employees and money sent from abroad.
Today, many Moldovan territories exist in this way. Formally, they have authorities, budgets, development programs, strategies, councils, public hearings. But economically they live on the remnants of the former specialization, on consumption, on budgetary employment, on migrant remittances and on petty trade. This is not development. This is sustenance.
Where reform begins
Normal administrative-territorial reform should begin not with the question of how many districts to leave, but with the question of what economic territories really exist in the country.
Moldova needs not only an administrative grid, but a functional map of development, showing where the real employment centers are located, where industrial sites are preserved, where there is a raw material base, where processing is possible, where transport corridors pass, where labor markets are located, where there is a potential for cross-border trade, where logistics is possible, where territories are already actually connected with each other by daily pendular migration.
Only after that we can talk about borders, powers and budgets. An administrative unit should not be a random historical remnant, but a managerial shell for a real economic territory.
The first operation required is an inventory of lost functions. For each territory it is necessary to answer what it has historically lived on, what function was lost, what is left of the former infrastructure, what human resources are preserved, what raw material base is available, what markets are accessible, what new specialization is realistic and what administrative changes are needed for this specialization.
The next step is the allocation of functional economic zones: agro-industrial, industrial-logistic, cross-border, winery-tourist, university-innovation, energy zones.
This is not a set of beautiful words in the strategy. Such a map should determine where roads go, where personnel are trained, where industrial sites, certification centers and investment tools are located.
After that, the budget policy should be tied to the function of the territory. For an agro-industrial territory, this means investments in production roads, warehouses, water, energy, laboratories and certification. For logistic – transportation links, terminals, customs infrastructure. For tourism – sanitary infrastructure, heritage protection, small businesses, hotel stock and public spaces. For industrial – human resources, energy, land, networks, tax conditions and investor protection.
Role of local authorities
In this model, the role of local government changes. The mayor cannot be only an administrator of garbage, roads and kindergarten. He must be a participant in economic development.
But for this he needs tools: land policy, participation in industrial sites, the right to form project packages, access to investment funds, a link to professional education, and a clear share of taxes from new economic activity. Otherwise, talk about local development will remain an imitation.
At the same time, local authorities themselves will not be able to carry out territorial restructuring. We need a state policy that realizes that the country is not a sum of mayoralties, but a system of interconnected economic territories. Chisinau cannot be the only vacuum cleaner of population, money, personnel and solutions. If the whole country works as an annex to the capital, regional policy is dead before the conversation even starts.
Consolidation alone does not create development. Saving money on officials does not create development either. It reduces costs at most. And sometimes it does not even reduce costs, because instead of an old official there is a new department, a consultant, an agency, a project office and three more people who write a report on efficiency improvement. Moldovan bureaucracy is like borscht in this sense: no matter how much you dilute it, someone will say that there is not enough salt.
First the function – then the border. First economy – then authority. First specialization – then strategy. But we often have it the other way around: first they draw the border, then they give powers, and then they wonder why the territory is not developing. Because authority without an economic base is not power, but a nicely formalized obligation to be responsible for someone else’s poverty.
Development begins when the territory ceases to be a line in the administrative table and becomes an economic organism again.
Case. Comrat: status without function
Comrat is not a random example. It is a territory that has everything formal: the status of the administrative center of Moldova’s only autonomy, its own parliament – People’s Assembly, executive committee, bashkan, Comrat State University, autonomous budget.
And at the same time – a classic set of signs of a depressive periphery. It is this contradiction that makes it a convenient mirror of the entire Moldovan territorial problem.
Historically, Comrat was formed as an agrarian and trade center of the Budjak steppe. In the Soviet period, this function was industrialized: winemaking, canning, food processing, working with fruits, vegetables, grapes, grain, livestock products.
It was not just about agriculture – it was about the value chain. The land provided the raw materials. Processing turned raw materials into products. Industry created employment. The city concentrated human resources, management, transportation and services. The local budget received an economic base. This is how a normal territorial economy works.
Gagauzia had and still has a serious base for this: about 150 thousand hectares of agricultural land, including about 26 thousand hectares of orchards and vineyards. This is not an abstract resource. This is the basis for agro-industrial specialization.
But after 1991, much of this model was destroyed. Processing facilities degraded. Some assets were privatized not as elements of the production system, but as separate property objects. Production was increasingly replaced by trade and service.
According to 2019 data, there were 2,348 economic agents in the city, of which 734 worked in trade, while the industrial base continued to shrink. The agro-industrial sector generates up to 70% of the region’s GRP, but the employment rate in the economy is only 16.1% – that is, there are 3.6 non-employed persons per employed person. The only free economic zone in the region – “Valkanesh” – is not located in Comrat.
If a city with an agro-industrial history turns mainly into a trade and service center, it does not mean modernization, but a reduction of its economic function. It remains a center of consumption and exchange, but ceases to be a center of production. All other figures follow from this.
According to the 2024 census, the population of Comrat will be 19,120 against 20,113 in 2014 – almost minus a thousand people in ten years. Gagauzia as a whole has been losing an average of 0.25% of its population annually. At the same time, 29.2% of the employed work in agriculture, a sector with low added value and high vulnerability to climatic risks: drought in the region recurs every three to four years.
The municipality receives a transfer of 719,400 lei from the ATU central budget, an amount comparable to the cost of one small infrastructural object. The region’s exports amount to only about 80-90 million dollars a year, and these are mostly raw materials and semi-finished products – grain, sunflower, bulk wine – rather than high value-added products.
There is autonomy. There is no economic independence.
The available assets do not add up to a coherent strategy. Comrat State University, founded in 2002, could be an anchor of the knowledge economy, but most graduates leave because there is no labor market for them in the city.
Garment enterprises are embedded in global production chains with orders from Turkish, Italian, Belgian and American firms, but predominantly at the lower end – this is employment without serious local accumulation of competencies.
Turkish investments through the TIKA agency are present, but their real economic effect on the employment structure is limited.
The political status, which in principle should give leverage for negotiations with the center, is realized mainly as a source of institutional tensions rather than as an economic bargaining tool. The R34 highway linking Comrat with Chisinau provides not so much an inflow of resources to the city as a pendulum outflow of population to the capital.
All this means that Comrat does not just need more powers or another regional development strategy. It needs a new economic role – a modern version of an agro-industrial center, not a return to the Soviet model.
Such a role can be built around modern food processing with higher added value: wine, juices, dried fruits, organic products, deep-processed products. It requires agro-logistics as a system of sorting, storage, packaging and certification. It requires cooperation of small producers, so that the Gagauz agrarian model is not reduced to a situation when a small farmer sells raw materials for pennies, and the added value goes to a middleman.
Education should be linked to this function. Comrat needs food technologists, agronomists, logisticians, refrigeration engineers, certification and export specialists, not just a symbol of urban status with graduates leaving in the first year after graduation. An industrial zone should be understood not as a sign by the roadside, but as a prepared site with land, networks, energy, clear rules and a connection to the raw material base.
The export specialization of Comrat can be based on the cultural, linguistic and trade links of Gagauzia with Turkey, the Balkans, Romania and the European market. These are not slogans, but concrete directions under product lines and logistics.
Tourism alone will not save the territory, but as an additional layer to agro-industrial specialization it can work. Wine, cuisine, ethno-cultural identity, rural routes, local brands strengthen the territory only when there is real production behind them.
Finally, agro-industrial processing requires energy. So, the territorial development of Comrat should take into account solar generation, biomass, energy-efficient refrigeration capacities, and agricultural waste recycling. This is no longer the romance of green economy, but a question of competitiveness. If energy is expensive, logistics is poor, certification is inaccessible, and the producer depends on the reseller, no strategy will turn an agrarian area into a strong economic center.
Comrat can be a trade city. But this is a weak role. It can be an administrative center. But it is not enough. It can be a cultural center of Gagauzia. It is important, but it is not enough. The economically strong role of Comrat is a modern agro-industrial, logistic, educational and processing center of the south of Moldova, embedded in export chains and relying on the agricultural base of the region.
It is in this sense that Comrat is not a special case, but a typical one. It is a territory with resources, history, status and institutions – but without a collected answer to the question of its economic function. The answer to this question will not come from Chisinau by itself. But without it, everything else will remain deficit management.
Comrat shows the main point: administrative status can give the territory a voice, but it does not replace its economic motor. Autonomy, university, budget, highway, external relations and agricultural base become resources of development only when they are gathered in a single function. Until this is not the case, the territory continues to live between the memory of a former role and the expectation of a new one. And waiting is not a strategy.
Evgeny Perestoronin,
journalist, economic and political analyst
Dmitri Tereburke,
economist, expert in real estate and territorial development
