Fantastic explanation about Moldova itself, plus it also gives me clues to other questions I've always had, like what in the world happened to Russia? Why don't I ever see large, modern farm equipment in the fields? Oh, my international bond mutual funds work differently ...
You probably can't answer how my host family managed to get those lovely apple trees on one of their three, widely spaced allotments. 😉 But the question of why all those families who laboriously grow tomatoes in their market gardens can't get together and 1) combine transportation and sales; and 2) resurrect the old tomato sauce factory—might be in your wheelhouse. M
My partial answer to the tomato question so far is that 1) no one trusts each other (which I take to mean that contract law is not up to the task of forming this type of cooperative business) and 2) The Soviets had things like tomato sauce running on lateral dependencies between countries. Moldova had the tomatoes but not the factories for making the glass jars, the lids, the labels etc. (This clue came from a tour guide in Armenia.)
Firstly, I completely agree on your partial answers. Cooperatives here smack of "collective farms" and contract law is no where up to snuff to handle disputes. Even if it was, I don't think you'd see that many people buy a tractor together and those that did are most likely to operate on a handshake anyhow.
A second issue with the tomato problem is even more disheartening sadly. Babushka can sell on the side of the road all she likes - it's not legal, but no one cares. But small holders can't get into supermarkets or other shops easily. The amount of paperwork required is enormous and out of reach for small farmers. A collective group could do this in theory but we fall back on all the other problems mentioned above.
As to canning, I think the story is basically what you said plus MASSIVE SCALE!!! Near my house in the village there is an old cannery. The complex is so large as to be hard to describe. The place of course was sold off for parts when it went out of business so all that's left is a building. These lateral relationships you mentioned were premised on massive scale and specialization. I don't think anyone could bring them back even with millions and millions of dollars.
Now, none of that means small factories couldn't exist. I have a friend of mine working on this idea right now and I'm keeping tabs on the project. I think there is ample room for experimentation and innovation in this area :)
My impression of the cannery in my village was that it was fairly small (a ruin surrounded by walls up on the river bluff, so I didn't get much of a sense of it.) There's probably all sorts of space and equipment scattered around the country. Keep us posted.
Thank you, David, for your insightful thoughts on a possible Moldovan bond market. The greatest challenge I have had over the years in trying to scare up FDI [Foreign Direct Investment] into Moldova is a lack of clear law, or at least the policing of any such law, and thereby clear and realistic exits of any investments. I agree that finance for business expansion is a huge challenge. Investors are very wary of what could happen to their cash inside Moldova.
Hey Jim! thanks for the thoughts. Yes I agree there are serious challenges in FDI rooted in the economic and political challenges in Moldova. But when I think of something like a small bond market, I am thinking more as an investment instrument for people in Moldova as well. There is often a mis-conception that people in developing countries need outsiders to invest in them because they have nothing to invest themselves. That is absolutely untrue in Moldova's case. There are many well to do people investing their money in stock and bond markets around the world. For investors who are less sophisticated, or less well off, Moldova has real estate. People buy a plot and develop it piecemeal over years to maybe one day sell. The piecemeal nature of this investment is inefficient because they cannot put the property out for rent. So as a real estate investment it is less of what we think traditionally and more a case of "storing value in soil and stones rather than banks."
The basic issue is that people don't want cash since it's not doing anything for them and the currency is volatile. I think that theres a very good case to be made for investment instruments designed to allow local companies to raise money, and for local people to invest.
Now, would it work? No idea. But the market is there from both ends.
Right, absolutely dead right, David. There is most definitely a market from both ends. Very interesting what you say about Moldovans themselves being potential investors, both in-country and also perhaps in the diaspora.
David, thank you, again. First, let me say that I have learned more about the politics and economy of Moldova since you started Moldova Matters than I ever found on my own. I deeply appreciate your efforts. My wife and I moved here almost three years ago. Her ex husband died and since he didn't remarry, She and her son were legal owners of the apartment. While cleaning the apartment, We founds those stock certificates that you mentioned. She pretty much told me the same story about the rigged game. Still, I was left wondering if they still had some monetary value and wondered how to find out about this. Do you have any thoughts about how to find out whether or not these stocks have any current value. Hey, I could use an extra 1000 lei for wine, cognac or a visit to 'The Smoke House'.
Hey Mike! I'm so glad you're finding Moldova Matters helpful!
So I think there will be a different answer based on whether or not you have Stock Certificates of "Vouchers." But either way I assume they have little values except maybe to collectors. I can look around though - can you send a picture to my email dave.in.moldova@gmail.com ?
Well, as usual, I should have waited until I could have asked my wife about these vouchers. We talked about these after She arrived home and I was assured that they are not only worthless now but they were nearly worthless when they weren't worthless. I will ask her about sending the pictures though. Archival history is going to make a comeback amidst all the other concerns facing Moldova. Thanks.
Fantastic explanation about Moldova itself, plus it also gives me clues to other questions I've always had, like what in the world happened to Russia? Why don't I ever see large, modern farm equipment in the fields? Oh, my international bond mutual funds work differently ...
You probably can't answer how my host family managed to get those lovely apple trees on one of their three, widely spaced allotments. 😉 But the question of why all those families who laboriously grow tomatoes in their market gardens can't get together and 1) combine transportation and sales; and 2) resurrect the old tomato sauce factory—might be in your wheelhouse. M
My partial answer to the tomato question so far is that 1) no one trusts each other (which I take to mean that contract law is not up to the task of forming this type of cooperative business) and 2) The Soviets had things like tomato sauce running on lateral dependencies between countries. Moldova had the tomatoes but not the factories for making the glass jars, the lids, the labels etc. (This clue came from a tour guide in Armenia.)
Hey Connie - thanks for the comments!
Firstly, I completely agree on your partial answers. Cooperatives here smack of "collective farms" and contract law is no where up to snuff to handle disputes. Even if it was, I don't think you'd see that many people buy a tractor together and those that did are most likely to operate on a handshake anyhow.
A second issue with the tomato problem is even more disheartening sadly. Babushka can sell on the side of the road all she likes - it's not legal, but no one cares. But small holders can't get into supermarkets or other shops easily. The amount of paperwork required is enormous and out of reach for small farmers. A collective group could do this in theory but we fall back on all the other problems mentioned above.
As to canning, I think the story is basically what you said plus MASSIVE SCALE!!! Near my house in the village there is an old cannery. The complex is so large as to be hard to describe. The place of course was sold off for parts when it went out of business so all that's left is a building. These lateral relationships you mentioned were premised on massive scale and specialization. I don't think anyone could bring them back even with millions and millions of dollars.
Now, none of that means small factories couldn't exist. I have a friend of mine working on this idea right now and I'm keeping tabs on the project. I think there is ample room for experimentation and innovation in this area :)
My impression of the cannery in my village was that it was fairly small (a ruin surrounded by walls up on the river bluff, so I didn't get much of a sense of it.) There's probably all sorts of space and equipment scattered around the country. Keep us posted.
Will do!!
Thank you, David, for your insightful thoughts on a possible Moldovan bond market. The greatest challenge I have had over the years in trying to scare up FDI [Foreign Direct Investment] into Moldova is a lack of clear law, or at least the policing of any such law, and thereby clear and realistic exits of any investments. I agree that finance for business expansion is a huge challenge. Investors are very wary of what could happen to their cash inside Moldova.
Keep up the good work! Jim.
Hey Jim! thanks for the thoughts. Yes I agree there are serious challenges in FDI rooted in the economic and political challenges in Moldova. But when I think of something like a small bond market, I am thinking more as an investment instrument for people in Moldova as well. There is often a mis-conception that people in developing countries need outsiders to invest in them because they have nothing to invest themselves. That is absolutely untrue in Moldova's case. There are many well to do people investing their money in stock and bond markets around the world. For investors who are less sophisticated, or less well off, Moldova has real estate. People buy a plot and develop it piecemeal over years to maybe one day sell. The piecemeal nature of this investment is inefficient because they cannot put the property out for rent. So as a real estate investment it is less of what we think traditionally and more a case of "storing value in soil and stones rather than banks."
The basic issue is that people don't want cash since it's not doing anything for them and the currency is volatile. I think that theres a very good case to be made for investment instruments designed to allow local companies to raise money, and for local people to invest.
Now, would it work? No idea. But the market is there from both ends.
Right, absolutely dead right, David. There is most definitely a market from both ends. Very interesting what you say about Moldovans themselves being potential investors, both in-country and also perhaps in the diaspora.
Set up right, a valuable example/lesson/template in anti-corruption... the concepts need to penetrate the social consciousness one by one.
David, thank you, again. First, let me say that I have learned more about the politics and economy of Moldova since you started Moldova Matters than I ever found on my own. I deeply appreciate your efforts. My wife and I moved here almost three years ago. Her ex husband died and since he didn't remarry, She and her son were legal owners of the apartment. While cleaning the apartment, We founds those stock certificates that you mentioned. She pretty much told me the same story about the rigged game. Still, I was left wondering if they still had some monetary value and wondered how to find out about this. Do you have any thoughts about how to find out whether or not these stocks have any current value. Hey, I could use an extra 1000 lei for wine, cognac or a visit to 'The Smoke House'.
Hey Mike! I'm so glad you're finding Moldova Matters helpful!
So I think there will be a different answer based on whether or not you have Stock Certificates of "Vouchers." But either way I assume they have little values except maybe to collectors. I can look around though - can you send a picture to my email dave.in.moldova@gmail.com ?
Well, as usual, I should have waited until I could have asked my wife about these vouchers. We talked about these after She arrived home and I was assured that they are not only worthless now but they were nearly worthless when they weren't worthless. I will ask her about sending the pictures though. Archival history is going to make a comeback amidst all the other concerns facing Moldova. Thanks.
My wife found one of these original vouchers. If you would like, I'll get it scanned into a file and send it to you. Please let me know.