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ACADEMY OF ECONOMIC STUDIES OF MOLDOVA

INTERNATIONAL ECONOMIC RELATIONS FACULTY

INTERNATIONAL ECONOMIC RELATIONS CATHEDRA

Andrei MEGHEREA

TRANSPORT INTERACTION WITH OTHER

NATIONAL ECONOMIC SECTORS AND TRANSPORT

IMPACT ON NATIONAL ECONOMIC GROWTH

LICENCE PAPER

World Economy and International Economic Relations Major

Author:

student in EMREI 295, daily studies

Andrei MEGHEREA

---------------------------------Scientific coordinator:

Doctor in Economic Sciences, Eduard Calancea

--------------------------------

Chisinau2012

Admis la sustinere:

Sef catedra:

Doctor habilitat, Boris Chistruga

_____________2012


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Plan

Introduction ........................................................................................................................... 3

CHAPTER I. Role of Transportation in Contemporary Economy..5

Paragraph 1. Transportation branch-concept,elements,featurres5

Paragraph 2. The Economic Importance of Transportation ................................................ 8

Paragraph 3. International Law in International Transportation...15

CHAPTER II. Transport Infrastructure as a Prerequisite for Economic Growth of

Republic of Moldova ................................................................................................................... 23

Paragraph 1. The Impact of Transport Sector on Economic Growth of Republic ofMoldova ..................................................................................................................................... 23

Paragraph 2. The Quantitative Study:Influence of Transport Sector over other EconomicSectors ...................................................................................................................................... 27

CHAPTER III.Comparative Study of Economic Activity of Transport Sector between

Moldova,Romania and Ukraine ................................................................................................. 32

Paragraph 1.Analysis of Evolution of Transport Sector of Moldova ............................... 32

Paragraph 2. Analysis of Evolution of Transport Sector of Romania .............................. 38

Paragraph 3. Analysis of Evolution of Transport Sector of Ukraine44

Paragraph 4. Common Points between Moldova,Romania and Ukraine.49

Conclusion............................................................................................................................ 52

Bibliography ........................................................................................................................ 54

Annexes ................................................................................................................................ 56


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Introduction

In contemporary society the development of a country depend direct on its international

relations,which are supported by a well developed transport system.The subject Transport

Interaction with other National Economic sectors and Transport impact on National Economic

Growth is one of the most current because now Moldova is in a stage of faster development

and improving of infrastructure by many reforms which is caused by desire for Europian

integration. Transport is one of the basic factor that determine country development and

especiallay development of international trade.It is an important part of production af materials,by their function af moving goods , influence over other branches of economy, in this way is

anticipated and the evolution of other economic sectors of the country. By implementing

different reforms government is elaborating a lot of strategies and ways of improving the

economic power of transport sector in order to supply other sectors with a performant and well

developed transport system.It is widely acknowledged that transport has a crucial role to play in

economic development.More specifically, it has been recognised that the provision of a high

quality transport system is a necessary precondition for the full participation of remote

communities in the benefits of national development: Adequate, reliable and economic transport

is essential, although not in itself sufficient, for the social and economic development of rural

areas in developing countries.

In the first part of the project is well described the role of the transport branch in the

contemporary economy, its economic importance and bringing the international transportation

to the international law.It is almost universally accepted that transport has played a predominant

role in the economy development of all modern civilizations.Production and consumption on the

scale and tempo of today would be inconceivable without a well developed and operated

transport system.Economic involves production,distribution and consumption of goods and

services.People depend upon the natural resources to satisfy the needs of life but due to non

uniform serface of earth and due to difference in local resources,there is a lot of difference in

standard of living in different societies.So there is an immense requirement of transport of

resources from one particular society to another.These resources can range from material things

to knowledge and skills movement of doctors and technicians to the places where is need of

them.


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In the second chapter of the project is accentuated how transport sector influence the

economic growth in the Republic of Moldova and also is reflected its impact on development of

other economic sectors of national economy.First pargraph shows the influence of the transport

sectors on the GDP and External Trade growth.there is described exactly which factor influence

the growth ,the evolution of growth and at the same time how this growth influence the transport

sector development.Second paragraph reveals the interaction and the impact of transport sector

with other economic sectors in Moldova,is shown how they influence each other and by which

factors.

The third chapter is a comparative study between Republic of Moldova and its two

neighbors Romania and Ukraine.In this study are separately described transport infrastructures

of all three countries.In the last part of the chapter is made a common description of all three

infracstructures and there are accentuated all common points and the factors that bind all

tangents between transport sector af the countries.


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CHAPTER I. ROLE OF TRANSPORTATION IN CONTEMPORARY

ECONOMY

Paragraph 1. Transportation branchconcept, elements, features

Transport is the movement of goods and people over a considerable distance and using

specific means. It is noted that this definition excludes from the field of analysis in premises

restricted carriage, and movement of goods within factories or handling of goods in storage

areas.The same sens have and the definition of transport given by M.Tefra: moving people and

goods on a given territory.By territory it is understood in this context, ample space, equipped

with specific facilities.This approach is based on the fact that such movements involved in

adding value.In contrast to these understandings, national accounts include in branch transportonly trips of goods or persons for others. This excludes the following specific activities of

transport:

Carriage performed by companies on their own and which are included in the economic

branch specific for the company's field of activity;

Carriage performed by households on their own and which are included in their final

consumption, both as vehicle purchases and expenditure form for their use;

Activity of transport administration , measured in particular by public expenditure for

investments, maintenance and operation of infrastructure;

Transport is one side of the economic activity of human society, organized to prevail

distances.The transport activity performes moving of goods or people in space in order to

satisfy the material and spiritual needs of human society.Transport is closely linked to human

society and it came along with it.Primitive man moving from one place to another in search of

food and protection against the vicissitudes of nature. Physical limits of the human body in terms

of distances that could be taken down and the amount of material that could be carried, led, in

time, discovering a variety of aids today called "ways and means of transport".They have seen a

continuous quantitative , qualitative and structural development, in step with the development of

production, science and technology, contributing directly to the development of productive

forces, economic growth worldwide.

Transport is not an end in itself but a means to achieve a variety of practice purposes.

Validation of any movement of persons and property in space depends exclusively on purpose,

economic and social effects which are to be obtained.. Primitive man did not move and does not

carry with it the need for no particular purpose, and today's modern life offers us many


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motivations of the movement in time and space of people and goods. Transport affects all socio-

economic aspects of the life and orderly and harmonious development in step with the demands

of their extended reproduction is an important objective of economic policy of the state.The role

and importance of transport can be highlighted by analyzing their relationships with various

economic, social and political activities society members. Transport development, the emergence

of new improved and specialized transportation has eliminated economic isolation has allowed

specialization and exchange activities,formation of national markets and the global market, trade

development domestically and internationally.

Economic aspects. Production of material goods necessary for human existence and growth

of living standards is drawn to the separation of certain objects in their natural environment and

processing, turning them into goods intended to meet the needs of different people.Today the

exchange of products and activities is so developed, so that practically there are no zones and

localities that depend exclusively on locally produced products. Transport made possible more

complete and more efficient exploitation of natural resources of the planet, contributing directly

to economic and social progress of countries of the world.

Developing the exchange of products and activities at national and international transport

by direct contribution highlights the following important economic aspects :

Without transport, the possibility of trade would be strictly limited local market. As

development and improvement of means of transport, the market could be expanded in

the national and international level, increasing its absorption capacity;

Transport made and enables a better balance between supply and demand for various

goods nationally and internationally. Surplus of products in certain areas can now cover

more than poor product demand in other areas;

As the areas that offer similar products to expand, competition among vendors increases

and tends to keep prices at reasonable levels. Each buyer will have a greater number of

potential suppliers who compete among themselves to, and the possibility of higher

pricing arrangements between them is less likely or even excluded;

Social aspectsthat generate transport activity refers mainly to the following:

Free movement of people, sharing ideas and experience contribute to enriching the

universal heritage of thought and human knowledge;

As development and transport improvement expanded tourism activity for rest and

relaxation or therapeutic purposes both internally and internationally. Means of transport


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faster and more reliable, and reasonable prices at any distance transportation, and

stimulate domestic and international tourism development;

Education could have real possibilities for improving by exchange of teachers and

students from various countries;

Residents of sparsely populated areas are not isolated from medical services, professional

staff is something that may move easily, and patients who require more special treatment

and can be transported to the hospital central

Recreational activities, sports, cultural and scientific can be expanded by moving from

one locality to another, from one country to another, due to transport improvement and

development.

Poli tical aspectsthat generate transport development mainly aimed at:

Strengthening the national economy by removing limits on the distance between

economic and social centers and fast moving of stock and persons;

Implementation of the policy for the location of productive forces in the country;

Strengthening national defense against any aggression.

Transportation is a branch of economic geography that studies the spatial distribution and

patterns of transportation networks and traffic flows and the conditions and characteristics of

their development within the framework of the territorial-economic structure of countries and

regions and in relation to the distribution of natural conditions and resources, population, and

branches of the economy. Transportation geography reflects important features of transportation

as a branch of production. These features include the specific ways in which elements of the

natural environment are used as natural lines of communication or as a basis for artificial ones,

the basically linear patterns of transportations spatial distribution, in which it differs profoundly

from the prevailing types of distribution characteristic of industry (in focal centers) and

agriculture (over areas), the universality of transportations technical-economic links with other

branches of the economy, and the special role of transportation as a material foundation of the

geographic division of labor. In contrast to industry and agriculture, which are divided into

branches that differ in their products, raw materials, or stages of processing, transportation is

divided into modes, such as land, water, and air transportation, which are related to the use of

different natural and artificial roadways and to the specific character of price formation (tarriffs

and freight charges), which affects the geographical distribution of the entire economy.


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Paragraph 2.The Economic Importance of Transportation

Like many economic activities that are intensive in infrastructures, the transport sector is an

important component of the economy impacting on development and the welfare of populations.

When transport systems are efficient, they provide economic and social opportunities andbenefits that result in positive multipliers effects such as better accessibility to markets,

employment and additional investments. When transport systems are deficient in terms of

capacity or reliability, they can have an economic cost such as reduced or missed opportunities.

Transport also carries an important social and environmental load, which cannot be neglected.

Thus, from a general standpoint the economic impacts of transportation can be direct and

indirect:

Direct impacts related to accessibility change where transport enables larger

markets and enables to save time and costs.

Indirect impacts related to the economic multiplier effects where the price of

commodities, goods or services drop and/or their variety increases.

The impacts of transportation are not always intended, and can have unforeseen or

unintended consequences such as congestion. Mobility is one of the most fundamental and

important characteristics of economic activity as it satisfies the basic need of going from one

location to the other, a need shared by passengers, freight and information. All economies and

regions do not share the same level of mobility as most are in a different stage in their mobility

transition. Economies that possess greater mobility are often those with better opportunities to

develop than those suffering from scarce mobility. Reduced mobility impedes development

while greater mobility is a catalyst for development. Mobility is thus a reliable indicator of

development.

Providing this mobility is an industry that offers services to its customers, employs people

and pays wages, invests capital and generates income. The economic importance of the

transportation industry can thus be assessed from a macroeconomic and microeconomic

perspective:

At the macroeconomic level (the importance of transportation for a whole economy),

transportation and the mobility it confers are linked to a level of output, employment and income

within a national economy. In many developed countries, transportation accounts between 6%

and 12% of the GDP.

At the microeconomic level (the importance of transportation for specific parts of the

economy) transportation is linked to producer, consumer and production costs. The importance


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of specific transport activities and infrastructure can thus be assessed for each sector of the

economy. Transportation accounts on average between 10% and 15% of household expenditures

while it accounts around 4% of the costs of each unit of output in manufacturing, but this figure

varies greatly according to sub sectors.

Transportation links together the factors of production in a complex web of relationships

between producers and consumers. The outcome is commonly a more efficient division of

production by an exploitation of geographical comparative advantages, as well as the means to

develop economies of scale and scope. The productivity of space, capital and labor is thus

enhanced with the efficiency of distribution and personal mobility. It is acknowledged that

economic growth is increasingly linked with transport developments, namely infrastructures but

also managerial expertise is crucial for logistics. The following impacts can be assessed:

Networks. Setting of routes enabling new or existing interactions between

economic entities.

Performance. Improvements in cost and time attributes for existing passenger and

freight movements.

Reliability. Improvement in the time performance, notably in terms of punctuality,

as well as reduced loss or damage.

Market size. Access to a wider market base where economies of scale in

production, distribution and consumption can be improved.

Productivity.Increases in productivity from the access to a larger and more diverse

base of inputs (raw materials, parts, energy or labor) and broader markets for

diverse outputs (intermediate and finished goods).

The interface between transportation investment and economic development has broad

ramifications that go beyond transportations basic purpose of moving goods and people from

one place to another. Whereas there is no doubt that transportation is essential in the operation of

a market economy, much still needs to be understood about ways in which an efficient

transportation system can improve the productivity of the economy.Transportation also has a

broader role in shaping development and the environment.Policy concerns in the next

millennium will increasingly focus on the effects of transportation on where people live and on

where businesses locate; and on the effects that these location decisions have on land use

patterns, congestion of urban transportation systems, use of natural resources, air and water

quality, and the overall quality of life. Issues of urban sprawl, farmland preservation, and air and

water quality have already pushed their way to the forefront of policy debates at both the


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national and local levels. To make prudent decisions, policy makers must be equipped with the

best information and analysis possible about the interactions among these various factors. The

questions asked by policy makers are two sided. Not only do they want to know

the effect of transportation on additional economic development, they also want to know the

transportation needs of future growth. Transportation analysts must tackle more complex

questions than they did in the past. As the nations transportation system has matured and

competition for government funds has intensified, the issue is not simply where to build another

segment of highway or which airport needs to be expanded. The questions have become more

complex. What mode of transportation is most cost-effective in meeting a regions transportation

needs? How should a state department of transportation prioritize its highway dollars to

maximize economic growth? What is the trade-off between additional growth in an urban area

and the cost of expanding transportation systems to accommodate greater growth? What effect

does the expansion of transportation systems have on the need to invest in other types of

infrastructure? Four factors are important in examining the relationship between transportation

and economic development: (a) relevant type of transportation investment, (b) data necessary to

analyze the economic effect of the investment, (c) appropriate methodology to analyze the

economic effect, and (d) the proper dissemination of the results and education of professionals as

to the economic effects of transportation investment.

Types of Transportation Investment

Future directions in transportation investment can take several paths.

Basically,transportation investment encompasses two forms: capital expansion and capital

enhancement. Expansion includes the construction of additional highway segments; rail lines;

runways; or additional sea, air, rail, or bus terminal capacity using traditional technology.

Highway examples include the addition of lanes to an Interstate highway system, the conversion

of an existing two-lane road to a four-lane limited-access highway, replacement or widening of

bridges, and the extension of an existing road. Airport

examples include runway lengthening, apron (tarmac) expansion, and additional terminal gates.

Enhancement refers to new technologies that can enhance the efficiency of the existing highway

system. Examples include intelligent highway systems, congestion pricing, intermodal freight

facilities, geographic positioning systems, and instrument landing systems, to mention a few

major innovations. Within each of these areas, numerous innovations are being developed.

Policy makers and practitioners need to gain a clear understanding of the effects of these

innovations on economic development through enhanced delivery of transportation services anda more efficient use of scarce resources. Scarce resources may extend beyond transportation


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investment dollars to include land use, air quality, and noise pollution. Moreover, highways, rail

lines, airports, and seaports should and are being considered as a system, where the system goes

beyond the fixed infrastructure, such as a stretch of highway or a rail line, to include the vehicles

that use the infrastructure. The concept ofintelligent highway systems underscores this trend.

Simply put, vehicles are being linked to each other and to traffic control devices to improve the

efficiency of the total highway system. Similar types of innovations in intelligent traffic

management are emerging for air, sea, and rail systems. One important area of research is to

explore the productivity-enhancing innovations that are being introduced into existing transport

systems. A framework should be provided and benchmarks should be established for

understanding the broad economic consequences of these innovations. To be assured that

research encompasses the issues important to decision makers in the new millennium, a

systemwide and regional economic perspective will have to be maintained. Researchers must be

mindful of the direct social effects of transportation investment as well as the economic effects.

Researchers should not neglect the more fundamental issues of understanding the effects of

different attributes of highways on economic development. That is, do we know anything about

the effects on productivity of reducing highway congestion or improving pavement condition?

These attributes are what new technologies are attempting to address. Yet, we do not have solid

empirical evidence of the effects of these attributes. Exploring the economic effects of

components or attributes of highway systems is essential in informing the policy debate and in

aiding the efforts of local decision makers. Our transportation system is mature. The nation has

gone beyond the frontier of building the Interstate highway system and connecting most cities

(markets). We are at the point oftweaking the system with additional lanes and the new

technology discussed earlier. Therefore, the effect of an additional dollar spent on transportation

will be much less, if it is perceptible at all, than in the 1950s and 1960s, when large segments of

the Interstate highway system were constructed. Now and into the foreseeable future, decisions

are required that, from an economic perspective, are much more subtle and harder to measure. At

the same time, the decision makers are being held accountable for their decisions, as they relate

to economic development.Thirty years ago, the question was where to place transportation

infrastructure,particularly highways. Today and in the future the issue goes beyond

transportation. Now the decision is more complex. The question involves the priorities placed on

government money. Should money be spent on transportation, welfare, economic development

per se, defense, or social security? Within the transportation allocation, should more resources be

devoted to highways, intermodal facilities, or bicycle paths?


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Data

Acquiring accurate and comprehensive data on a regular basis is a perennial problem for

analysts and policy makers. There is a sizable gap between data that are available and data

required to answer the questions raised by decision makers. A glaring gap in most studies is the

lack of information on the flows of goods and people. Most analyses of the relation between

transportation investment and economic productivity do not take into account the intensity of use

of transportation systems. Productivity studies, particularly those using production and cost

function frameworks, typically treat all transportation systems as if traffic flows are the same.

This simplified assumption potentially leads to biases in the estimates of the productivity of

transportation infrastructure. Moreover, this approach ignores the very activityshipment of

goodsthat generates the productivity gains. Another deficiency in data collection is the lack of

information that links the location of businesses and households to the location of the

transportation systems that provide

them with services. Most productivity studies are conducted using data that are aggregated by

some level of government jurisdiction. Studies performed at the state or national level fall far

short of establishing a spatial link. It is likely that state-level analyses could attribute the

efficiency gains experienced by a business in one part of the state to an Interstate highway

located in another part of the state. The problem is even more acute for national-level studies.

Furthermore, estimates from state-level analyses do not address the questions that policy makers

or planners have to consider concerning the location and type of future projects. Among regional

and corridor studies, the links between highway benefits and patterns of use are typically

developed, but the net productivity effect is often not measured. Such studies tend to pay more

attention to gross levels of job and income attraction than to the measurement of net productivity

effects. One important direction in coming years is to explore better ways to generate and collect

the data necessary to conduct useful studies. Because important effects go beyond the outcomes

of the transportation system itself, many types of data are needed. These data include

transportation system characteristics, employment, firm-level characteristics,transportation

financing information, commodity flows, and accompanying characteristics of the regions

included in the economic analysis. Furthermore, the data should be both cross section and time

series to improve the reliability of the estimates. One way to generate data is to educate the

decision makers and those in charge of operating the transportation systems as to the importance

of such analysis and its value to them in carrying out their responsibilities. The approach may

prove particularly useful for generating administrative data but may also help in collecting moreregionwide data. Some metropolitan planning organizations have taken considerable initiative in


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this area and have amassed useful and unique data sets. The issue of getting practitioners

involved will be discussed in more detail later.

Methodology

Analytical approaches to estimating the effect of transportation investment on economic

development started out using cost-benefit analysis. More recently, the profession has turned to

production and cost functions as a way to include a wider range of benefits. However, the

profession is only now coming to grips with transportation infrastructure as a spatial concept.

Transportation facilities are located in a specific place, they provide services to businesses (and

households) within a specific geographical area, and their use is directly related to moving goods

and people between two points. Furthermore, because transportation services are provided within

a network (or system), what happens in one place affects what happens in another. Therefore, the

appropriate methodology has to take into account not only the spatial relations as the goods and

people are shipped between two points, but also how these shipments fit into a network (or

system). Current production (cost) function analyses fall short of this goal. They typically do not

incorporate the spatial correspondence, nor do they encompass systemwide effects. Therefore,

the direction for the future is to build models that can provide this more comprehensive view

while preserving the spatial correspondence between transportation infrastructure and economic

activity. There is increasing interest among state and regional agencies in improving analytic

approaches to estimation of equity or distributional effects of transportation on the economic

development of depressed areas. Yet analytic approaches and data needed to access those factors

remain primitive. There remains a clear need to develop a better understanding of how

transportation system enhancements can be used as a tool for expansion of job and income

opportunities in depressed areas. The more comprehensive analytical tools that are needed to

address these efficiency and equity issues should also include components of economic

development, such as changes in employment, openings and closings of businesses, and personal

income (a proxy for gross regional product at the substate level). Some of these variables are

readily available from administrative data compiled by other state and federal agencies. A

concerted effort should be made in the future to elicit the cooperation of various government

agencies to pool these various data. Dissemination and Education Transportation investments are

becoming increasingly complex. Decision makers must take into account a wider range of

factors. These factors include the effects of transportation systems as a stimulant of growth and

as a cost of growth. They also include the effects on the environment and on the quality of life

within the area served by the transportation system. In some cases, the ability to locate atransportation project in a particular place depends on the consent of residents within that area.


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For instance, expansion of Interstate highway spurs through urban areas or the siting of a new

airport

would be highly scrutinized and most likely resisted by local residents. To further complicate the

process, decisions concerning transportation investments are increasingly being made at the local

level. The devolution of responsibility of transportation projects involves many more partners in

the process, which include not only agencies that have traditionally dealt with transportation

projects but also entities that deal with economic development and environmental issues.The

increasing complexity in the decision-making process calls for greater dissemination of

information and expanded educational efforts. At present, the concepts and the studies

concerning the effects of transportation infrastructure on economic development are not that

accessible to this group. Therefore, more effort should be made in the next millennium to make

the analysis and the concepts meaningful to practitioners and decision makers and to educate

them about the value of incorporating these concepts and findings into their operations. Before

analysts will begin to do this, they must appreciate the relevance of these effects to transportation

investment decisions. Giving the various stakeholders an opportunity to express their preferences

for transportation investment is an

integral part of the process of defining these issues. Once the issues are defined, then analysts

must be able to assign costs and benefits to the various effects of transportation investment, so

that informed decisions can be made. This step requires that analysts understand the relevant

research that has been conducted and know how to apply it to specific projects. National

conferences, such as the upcoming economic data conference, and locally facilitated interactions

with state department of transportation and economic development administrators would be

useful venues.


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Paragraph3.INTERNATIONAL LAW IN INTERNATIONAL

TRANSPORTATION

Transportation or Transport Law encompasses federal and state laws governing the

conveyance of passengers or goods, especially as a commercial enterprise, pertaining to both themethod and the means. It includes highways, mass transit, aviation, rail, maritime and motor

carriers. It also covers traffic safety, hazardous materials and pipelines. Public carriers such as

airlines and shipping lines are also subject to state and federal legislation. The laws that govern

drivers are largely state created and governed.

Transport is one of the European Union's (EU) foremost common policies. It is governed

by Title VI (Articles 90 to 100) of the Treaty on the Functioning of the European Union. Since

the Rome Treaty's entry into force in 1958, this policy has been focused on removing bordersbetween Member States and thus contributing to the free movement of individuals and of goods.

Its principal aims are to complete the internal market, ensure sustainable development, extend

transport networks throughout Europe, maximise use of space, enhance safety and promote

international cooperation. The Single Market signalled a veritable turning point in the common

policy in the area of transport. Since the 2001 White Paper, which was revised in 2006, this

policy area has been oriented towards harmoniously and simultaneously developing the different

modes of transport, in particular with co-modality, which is a way of making use of each means

of transport (ground, waterborne or aerial) to its best effect.

Bodies and objectives.European transport policy aims to reconcile the growing mobility

needs of citizens with the requirements of sustainable development. In this regard, it is also

related to the development of the internal market and the opening up of competition, to

conditions for innovation and to the integration of transport networks. The issue of user safety

and protection is also crucial for the transport sector. In addition, different European Union

specialist agencies work towards achieving these objectives,like following:

Roadmap to a Single European Transport Area: Towards a competitive and resource efficient

transport system. In March 2011 the European Commission presented the White Paper

"Roadmap to a Single European Transport Area", a series of 40 concrete initiatives for

the next decade to build a competitive transport system that will preserve mobility,

remove major barriers in key areas and fuel growth and employment. At the same time,

the proposals will abate Europe's dependence on imported oil and cut carbon emissions in

transport by 60 % by 2050. In this White Paper, the Commission sets out to remove major

barriers and bottlenecks in many key areas across the fields of transport infrastructure and


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investment, innovation and the internal market. The aim is to create a Single European Transport

Area with more competition and a fully integrated transport network which links the different

modes and allows for a profound shift in transport patterns for passengers and freight. To this

purpose, the roadmap puts forward 40 concrete initiatives for the next decade, explained in detail

in the Commission Staff Working Document accompanying the White Paper.

Green Paper: Towards a new culture for urban mobility. This Green Paper aims to

initiate the debate on issues specifically related to urban transport and to elicit applicable

solutions at a European level. 60% of the European population is concentrated in urban

areas, with these areas producing almost 85% of the gross domestic product (GDP).

There are numerous issues in these areas, including traffic congestion and pollution, all of

which costs the European Union 1% of its GDP. Faced with these issues, the EU needs

to be able to fulfil the role of encouraging discussion, cooperation and coordinationbetween local communities.This Green Paper is the product of wide public consultation

initiated in 2007. It opens up a second consultation process which lasts until 15 March

2008. With urban mobility being an asset for growth and employment, as well as an

essential condition for a sustainable development policy, the Commission will use the

consultation undertaken to subsequently propose an overall strategy in the form of an

action plan.

White paper: European transport policy for 2010.This document aims to strike a balancebetween economic development and the quality and safety demands made by society in

order to develop a modern, sustainable transport system for 2010.The Commission has

proposed 60 or so measures to develop a transport system capable of shifting the balance

between modes of transport, revitalising the railways, promoting transport by sea and

inland waterway and controlling the growth in air transport. In this way, the White Paper

fits in with the sustainable development strategy adopted by the European Council in

Gothenburg in June 2001. Freight transport logistics in Europe.The aim of this communication from the

Commission is to improve the efficacy of the European transport system through

logistics. It also promotes multimodality as the way to make freight transport more

environmentally friendly, safer and more energy efficient. The communication will be

followed by an action plan in 2007.Globalisation and EU enlargement to the east have

created new challenges for European transport. The fast growth of freight transport

contributes to the economy but also causes congestion, noise, pollution and accidents. At

the same time, transport has become increasingly dependent upon fossil fuels. The


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communication from the Commission states that, without adequate measures, the

situation will continue to worsen and increasingly undermine Europe's competitiveness

and the environment that we all live in. The Commission therefore recommends

modernising logistics to boost the efficacy of individual modes of transport and their

combinations. In particular it recommends a better distribution of traffic towards more

environmentally friendly, safer and more energy efficient modes of transport. The

Commission plans to present an action plan on this subject in 2007.

Cohesion and transport.This Communication aims to develop an efficient and sustainable

European transport system taking account of economic development prospects at regional

level, the enlargement of the Union to include new States and the importance of public

transport.Transport policy plays a major role in strengthening the economic and social

cohesion of the European Union. Firstly, it helps reduce regional disparities, particularly

by improving access to island and peripheral regions. It also has a beneficial effect on

employment, by encouraging investment in transport infrastructure and assisting workers'

mobility.

Internalisation of external transport costs.The internalisation of external costs forms part

of a package of initiatives aimed at making transport more sustainable. It consists of

including external transport costs (pollution, noise, congestion, etc.) in the price paid by

the user, so as to encourage them to change their behaviour.Transport users have to pay

the costs related to the use of their mode of transport (fuel, insurance, etc.). Such costs

are considered private in the sense that they are paid directly by the user. Transport users

also generate external costs, negative externalities (delays as a result of congestion,

health problems caused by noise and air pollution, greenhouse gas emissions, etc.), which

they do not bear directly and which have a cost to society as a whole. The sum of the

private and external costs of transport gives its social cost.Internalisation involves

reflecting the external costs in the price of transport. However, only a price based on the

total social costs will take account of the services used and the consumption of resources.

The aim is to make users more aware of the costs they generate and to encourage them to

change their behaviour in order to reduce them.

Agencies and Bodies

1. Trans-European Transport Network Executive AgencyThe European Commission is establishing the Trans-European Transport Network Executive

Agency (TEN-T EA) to manage and optimise the implementation of the Trans-EuropeanTransport Network (TEN-T).An executive agency for the management of Community action in


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the field of the trans-European transport network (TEN-T) has been established. Its status is

governed by Regulation (EC) No 58/2003. It is managed by a steering committee and a director,

who are both appointed by the Commission.

2. European railway agencyThe European Railway Agency is a driving force in the policy for modernising the European

railway sector. Mutually incompatible technical and security regulations in the twenty-seven

Member States are a major handicap to the development of the railway sector. The Agencys

task is to gradually align technical regulations and to establish methods and common safety

objectives for the whole of Europes railway network.The efficiency of rail transport in the EU is

of crucial importance. However, services offered by railways must be improved in order to equal

the level of services in other modes of transport. Rail policy is still too often centred on national

considerations rather than on the needs of the citizensThe railway industry in Europe is

characterised by a lack of international technical regulation. The creation of an integrated rail

area entails putting in place monitored common technical regulations. Given the difficulties

encountered by Member States in formulating common solutions for safety and rail

interoperability, it has become clear that the most appropriate instrument for creating this area is

an Agency.

The main objectives of the European Railway Agency are to:

1.increase the safety of the European railway system;

2.improve the level of interoperability of the European railway system;

3.contribute towards establishing a European certification system of vehicle maintenance

workshops;

4.contribute towards setting up a uniform training and recognition system for train drivers.

3. European GNSS AgencyThis regulation establishes the European Global Navigation Satellite System (GNSS) Agency,

which is responsible for ensuring the security accreditation of the systems and the operation of

the Galileo security centre as well as contributing to the preparation of the commercialisation of

the systems with a view to smooth functioning, seamless service provision and high market

penetration.This regulation repeals Regulation (EC) No 1321/2004 which had previously

established the European Global Navigation Satellite System (GNSS) Supervisory Authority, a

Community agency. Regulation (EC) No 683/2008, which defines the new framework for the

public governance and funding of the EGNOS and Galileo programmes, sets out the principle of

strict division of responsibilities between the Commission, the authority and the European SpaceAgency (ESA). This regulation grants the Commission certain responsibilities which had


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previously belonged to the authority, such as the management of the programmes. The authority

was renamed the European GNSS Agency. Regulation (EC) No 683/2008 sets out the role and

tasks of this agency. The agency is responsible for the following tasks:

1.ensuring security accreditation;

2.operating the Galileo security centre;

3.contributing to the preparation of the commercialisation of the systems;

4.accomplishing other tasks that may be entrusted to it by the Commission, in accordance with

Article 54(2)(b) of the Financial Regulation, addressing specific issues linked to the

programmes.

4. Accession to the Intergovernmental Organisation for International Carriage by Rail(OTIF)

This is to recommend to the Council to authorise the Commission to negotiate an agreement

setting out the conditions for Community accession to the Intergovernmental Organisation for

International Carriage by Rail.The entry into force in 1985 of the 1980 Convention concerning

International Carriage by Rail (COTIF) marked the birth of the Intergovernmental Organisation

for International Carriage by Rail, known today as OTIF.

This Convention was signed in Bern and amended by the Vilnius Protocol in 1999. The Protocol

is unlikely to enter into force before 2004, according to estimates of the ratification process.

The aim is to establish a system of uniform law applicable to the carriage of passengers, baggage

and freight in direct international traffic between Member States.

5. Maritime safety: European Maritime Safety AgencyThe European Maritime Safety Agency (EMSA) ensures a high, uniform and effective level of

maritime safety and maritime security, the prevention of pollution and response to pollution

caused by ships in the European Union (EU). It is important to take the necessary measures to

ensure the safety of EU shipping and EU ports against the threats of intentional unlawful

acts.This regulation establishes a European Maritime Safety Agency (EMSA) which provides

European Union (EU) countries and the Commission with technical and scientific assistance to

ensure the proper application of EU legislation in the field of maritime safety, monitor its

implementation and evaluate its effectiveness.

6. Civil aviation and the European Aviation Safety AgencyThis Regulation broadens the EUs powers in aviation safety and introduces new rules on air

operations, licences and flight crew training. It also establishes a system of fines for those who

break safety rules. Lastly, it gives greater powers to the European Aviation Safety Agency.he


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Regulation applies to the production, maintenance and operation of aircraft, as well as to

personnel and organisations involved in these activities. It aims to:

1.establish common rules on aviation safety in order to guarantee a high level of passenger

security and ensure that the environment is protected;

2.ensure a level playing field for all stakeholders in the internal aviation market and facilitate the

free movement of goods, persons and services, through the recognition of certificates issued by

the competent authorities;

3.simplify and enhance the efficiency of the certification process, by centralising activities at

European level where possible;

4.promote the European Unions (EU) views on civil aviation safety standards and rules all over

the world.

7. European Energy and Transport ForumThis Decision aims to create a consultative committee consisting of qualified representatives of

the energy and transport sectors whose role is to express an opinion on all Commission

initiatives relating to energy and transport policy. The committee will also act as an observer. It

will comment on competitiveness and changes in the structure of the sectors, taking into account

environmental, social and safety considerations.

The main Transport policies and law are reflected by different types of transport:

Road transport.Road transport is the principal means of transport in the European Union for

both passengers and goods. Today, the European Union has almost one vehicle for every two

residents, and road freight traffic represents more than two thirds of the total tonnage. European

Union action focuses essentially on controlling the multiple costs of road transport. Transport

development must comply with safety requirements as well as environmental protection. In

addition, a number of aspects of transport are the subject of European regulation, whether this is

competition between transport operators, access to the profession, working conditions or the

technical standards of vehicles.

Rail transport.Due to its safety and respect for the environment, the European rail network has

many advantages. Designed for national purposes, rail networks must adapt to the reality of the

single market. Trains and their passengers must be able to cross borders freely within an

integrated area. In order to do this, the European Union is improving the interoperability of

networks by stimulating investment in infrastructures. The Union is also implementing policy to

harmonise passengers rights and working conditions, within the context of the internal market.

Waterborne transport.Waterborne transport covers maritime transport and inland navigation.The European Union encourages growth in maritime transport through a number of actions such


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as the modernisation of infrastructures or the harmonisation of equipment and procedures.

Improving maritime safety and protecting the marine environment are also priorities.

The considerable potential of river transport has largely yet to be tapped. It offers the advantage

of reducing the amount of traffic on roads. The EU is committed to breathing new life into the

sector, particularly through the Naades Action Programme.

Air transport.Among the different modes of transport, air transport has experienced the fastest

growth. However, it must overcome the problem of its infrastructures becoming saturated. The

European Union is therefore committed to modernising and adapting the infrastructure to

increasing passenger flows, whilst also improving their rights and safety. In order to do this, the

Union is working to implement the Single European Sky. Moreover, the introduction of optimum

traffic management technologies will enable the challenges related to economic efficiency,

safety and respect for the environment to be reconciled.

Transport, energy and the environment.Transport is the source of nearly a third of the

European Unions total greenhouse gas emissions. Their reduction, particularly in the context of

the Kyoto Protocol, requires research and the introduction of alternative solutions, specifically in

the road transport sector. The Union has thus defined a policy to promote biofuels and the

reduction of emissions in road and air transport. Shipping also presents the problem of marine

pollution. The Union intervenes to limit pollution caused by vessels, as well as to penalise

malicious conduct.

Intermodality and trans-european networks.The capacity to combine different modes of

transport in a flexible way is one of the cornerstones of the sustainable mobility concept,

which underlies European transport policy.The intermodality of transport, which enables

national transport networks to be integrated, is promoted and implemented through programmes

such as Marco Polo. Trans-European networks, in the form of infrastructure projects of common

interest, also aim to improve the intermodality of transport. Specifically, they aim at stimulating

investment in order to foster the emergence of an integrated transport network covering all of the

Community and encompassing all the different modes of transport.

Mobility and passenger rights.Mobility for all is a key requirement in order to join the

European Economic Area. Transport has a social and cohesive dimension, reducing regional

inequalities, providing access to remote regions and increasing access for disabled persons. A

policy to protect passengers rights, particularly in air and rail transport has been put in place in

order to achieve the goal of mobility for all Passengers must enjoy the same rights throughout

the European Union, without discrimination, regardless of their nationality and that of theirtransport operator.


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International dimension and enlargement.European Union transport policy is not limited to

the Unions borders. It is the subject of a number of agreements with third countries aimed at

converging technical standards and transferring technologies within the framework of

cooperation agreements, specifically the Euro-Mediterranean Agreement. In addition, candidate

countries for accession to the Union must adopt and apply European transport legislation. The

progress of reforms in each country is regularly monitored and assessed as part of the accession

process.


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CHEPTER II.TRANSPORT INFRASTRUCTURE AS A

PREREQUISITE FOR ECONOMIC GROWTH

Paragraph 1. The Impact of Transportatation on Economic Growth of

Republic of Moldova

Economic growth in the Republic of Moldova, accompanied by a poverty reduction

trend, is closely correlated with the flow of remittances and consumption generated by the latter.

Revenues from Moldovans work abroad have fuelled the disposable income of households, thus

leading to an increased aggregate demand for consumption. Constrained by the limited capacity

of domestic production, this demand was largely met by imports of goods and services. The

central government has benefited from this situation, but the trade balance has turned into an

alarming trade deficit.

In addition to the fact that economic growth based on consumption and remittances

exposes the economy to a number of vulnerabilities, there is a greater danger associated with this

model of economic growth, i.e. that remittances will start to decline at one point in time.

Currently, migration decimates families of Moldovan citizens. This in itself is bad enough, but

following the evolution of migration in countries faced with this phenomenon, we anticipate that

Moldovan families will reunite. Unfortunately, if we do not act firmly to create adequate

working and living conditions in Moldova, migrant family reunification will occur outside the

countrywhen remittances will decline.

Two conclusions emerge from the aforementioned:

F ir st conclusion relates to the fact that it will be difficult to maintain the pace of economic

growth, which, in the absence of a structural change of national economy parameters, proves to

be unacceptable from the perspective of Moldovas development agenda.

Second conclusion refers to the actual change of the growth model, namely: the need of

giving up a growth model based on consumption fueled by remittances in favor of a dynamic

model based on local and foreign investments and development of industries exporting goods

and services.

In this context, the National Development Strategy "Moldova 2020" comes to articulate a

vision of cohesive long-term sustainable economic growth, based on a diagnostic study of

constraints to growth. In this regard, it will complement, without replacing, the sectoral approach

that is characteristic for the governance program, the objectives of which are outlined for the

entire governance period.


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In addition to changing the development paradigm of Moldovas economy, we will

continue to count on development partners support. Areas such as health, social protection, and

environmental protection are crucial for the countrys sustainable development. The focus

chosen by the National Development Strategy is to increase the budget coverage of appropriate

policies in these sectors as a result of accelerated economic growth. Such a focus also requires

the sustainability of foreign assistance currently provided to the country.

The first step in analysing a transport system is to characterise which aims are set for the

transport sector in order to contribute to the development of the country and the well-being of its

population. Any transport strategy should be in compliance with the main political, economic

and social goals of Moldovan policy. It should provide a realistic basis for the implementation of

projects in accordance with the global macro-economic and socio- economic orientations of the

country.

Transport is one of the main factors leading to the development of the country, but

unfortunately this is not possible without his interaction with other factors which have also an

important role in economic growth in Republic of Moldova and one of this factor is GDP. Gross

value added produced in the manufacturing sector increased by 6.3% compared to last years, the

positive (1.6%) increase in gross domestic product. In agriculture, hunting, forestry, fishing, fish

farming and industry gross value added increased from the previous year respectively 5.5% and

7.1%, affecting GDP growth by 0.7% and 0.9 % respectively.Gross value added in the goods

sector contributed to GDP at a rate of 26.0% to 25.3% in 2010.Gross value added produced in

services sector in the previous years increased by 5.4%, contributing to increased GDP by 3.2%.

The increase was driven significantly by the increase in gross value added in wholesale activities

and retail and transport and communications, respectively 10.7% and 6.0%.Final consumption

was growing by 6.4% compared to the previous year, reducing positive (by 7.4%) of gross

domestic product rise. The growth was conditioned by the growth of final consumption of

households (by 8.5%). Gross fixed capital formation exceeded the previous year's achievements

in 10,7%, contributing, in the reference period, with 2.4 percent of gross domestic product to rise

and 23.2% in gross domestic product training. The total volume of the internal demand (final

consumption and gross capital formation) was distributed, in the period concerned, at the rate of

82,7% for final consumption and 17.3% for collections to 83.1% and 16.9% respectively in

2010. In real terms, the volume of domestic demand has exceeded by 7.4% the previous year

level.[Annex1]

Another factor that influence country development is External Trade. According to theofficial data of the National Bureau of statistics, exports of goods in October 2011 amounted to


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211,2 million. US dollars, with 15.7% more than in the prevoius month and with 21.4%

compared with October 2010.In January-October 2011 goods exports totaled 1760,9 mln. US

dollars, higher than that in the corresponding period of the year 2010 with 51.6%.Exports of

goods to the European Union countries (EU-27) totalled 871,3 million. US dollars (56,9% more

than in January-October 2010), holding a 49% share in total exports (47.8% in January-October

2010).CIS countries were present in Moldovan exports with a share of USD 41.1% (January-

October 2010-40,3%), which corresponds to a value of 724,1 mln. USD.Imports of goods in

October 2011 totalled 468,4 million. US dollars, with 3.3% less than in the previous month and

by 25.4% compared with October 2010.

In January-October 2011 imports totaled 4162,2 mln. US dollars, higher than that in the

corresponding period of the previous year with 38.3%. Imports from European Union countries

(EU-27) amounted to 1845,5 million. US dollars (36,6% more than in January-October 2010),

representing a rate of 44.3% of overall imports (44,9% in January-October 2010).Imports of

goods from CIS had a value of 1344,6 mln. US dollars (with 39.8% higher than in January-

October 2010), which is equivalent to a share of 32.3 percent of overall imports (31.9% in

January-October 2010).The gap considerably in the evolution of exports and imports has led to

the accumulation of 2011 in January-October of a trade deficit in the amount of 2401,3 million.

US dollars, with 553,1 million. USD (+ up 29.9%) higher than that recorded in the

corresponding period of the year 2010. With the countries of the European Union (EU-27) trade

balance ended with a deficit of 974,2 million. (in us $ January-October 2010 795,0 million.

US dollars), and with CIS-620,5 mil. (in us $ January-October 2010 493,7 million. USD).

Coverage of imports by exports in January-October 2011 was 42,3% compared to 38.6% in the

similar period of the year 2010.[Annex2]

Turning back to the transport is understandable to say that it is on of principal factor that

can direct influence two previosious factor .Acording to the National Bureau of Statistics in

March 2012 the railway companies, Auto , river and air transport 591,500 tons of goods, 41.5%

more than previous month and by 32.8% less compared with March 2011. Turnover of goods in

March 2012 totaled 271.9 million tons-km, 30.6% higher compared with February 2012 and

20.8% lower than the same moIn January-March 2012 the railway companies, Auto, river and air

transported 1,429,700 tons of goods, volume lower than in the similar period of 2011 to 28.9%.

Turnover of goods totaled 659.7 million tons-km, with 20.0% lower compared with January-

March 2011.nth of 2011.

The influence of Transportation on this two factor can be equalized with its importanceon international economic relation of the Moldova. Transport represents an important production


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materials side, who, through their role of movement of merchandises, decisive influence and

other branches of the world economy, including international trade. Being the middle of fleshing

out the material effectively to economic relations between States, international economic

shipments may be considered the circulatory apparatus of the entire world economy.

International transport of goods in Moldova directly contribute to:1.achievement of economic

cooperation agreements between States;2.establishment of distribution as closely as the import

needs of beneficiaries;3.entering the world of all areas of the globe by creating possibilities of

making debt the States International Labour Division;4.physical properties preservation and

conservation, mechanical and chemical and organoleptic characteristics of the goods during their

visit, from suppliers to manufacturers to final beneficiaries.

Deficiencies in public infrastructure is a significant impediment to strengthening the

competitiveness of the Moldovan economy. Tight financing sector throughout the transition

period led to significant damage to road networks, water supply systems and sewage, heating

systems. Despite the application for extension and development of infrastructure, public

investment continued to be low in recent years, making up less than 3% of GDP.

Underdeveloped road infrastructure has an important impact on the mobility of goods and

people, especially in rural areas. This is, also, an impediment to trade, by imposing additional

costs for exporters and importers. At present, transport of Moldova does not hold regional

comparisons. Although road density is about the regional average, paved road density is well

below this level. Almost 75% of national roads and more than 79% of local roads are damaged.

Approximately 400 km of paved roads have lost the pavement and turned the unpaved roads or

country. Rail, which is also an important means of transport is extended but obsolete.


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Paragraph 2.The quantitative study: Influence of Transport Sector over

other Economic Sectors

In 2011 the enterprises of railway, road, river and air transport 9,843,300 tons of goods, the

volume higher than recorded in 2010 by 16.8%. Turnover of goods totaled 3,620.5 million tons-

km, 11.7% compared with 2010.In 2011 automobile enterprises have carried 5,139,900 tons of

goods, 15.6% more than in 2010. Considerable share in total volume of goods transported by car

back Chisinau enterprises (52.3%) and Balti (12.0%) districts: Singerei (9.7%), Straseni (4.5%),

Anenii November (4.1%), Taraclia (2.0%), Causeni (1.8%) and Ialoveni (1.8%).The railway

transport in 2011 was 4.5527 million tons of goods transported, the volume higher than recorded

in 2010 by 18.2%. The main items transported by railway to railway stations in the country

higher rates were recorded in the following commodity groups: cereals and bakery products -

36.1% (2010 - 31.8%), ferrous and scrap iron - 22.8% (2010 - 18.6%), construction materials and

cement - 16.4% (2010 - 14.1%).

Table 2.2.1The volume of goods transported by modes

2011 n % fa 2010

Mrfuri transportate total, mii tone 9843,3 116,8

din care, pe moduri de transport:

feroviar 4552,7 118,2

auto 5139,9 115,6

fluvial 149,1 117,2

aerian 1,6 123,0

Source:National Bareu of Statistics

Table 2.2.2 Number of Pasangers transported by different modes in 2011

Pasageri transportaimii

pasagerin % fa de 2010

Transport public:feroviar* 4347,4 95,0

autobuze i microbuze 114678,6 108,2


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fluvial 122,6 103,2

aerian 700,4 107,9


In 2011 the buses and microbuses carried 114.7 million passengers, 8.2% compared with

2010. Significant share in the total number of passengers transported by buses and minibuses

from Chisinau have transport agents (62.7%) and Balti (8.2%) districts: Transportation (4.8%),

Orhei (3.8%) Ungheni (1.9%), Ialoveni (1.6%), Edinet (1.4%) and Straseni (1.4%).The rail

transport from January to November 2011 were transported 4.3 million passengers, 5.0% less

than the same period in 2010.

Figure2.2.1Evolution of Transport during 2003-2010 ths.lei


As shown in the picture above, there is registered a negative tendency in the transport sector

of the economy. The data are of course affected by the world financial crisis. The world financial

crisis affected the transport sector of the economy by a decrease with 34% from the pre-crisis

period. With an average increase of 4% registered from 2003 till 2007 the transport sector couldbe one of the most affected sectors. Industry has a rate of decrease with 24% while Agriculture

registered a decrease of 19% caused by the crisis. One of the most negative results registered in

the transport sectors is that in comparison to the other economic sectors, the transport sector has

a very low rate of recovery after crisis. The level of industrial outputs registered an increase of

24% in 2010, while the agricultural sector increased with 49%, exceeding even the pre-crisis

level.

34319.0 34700.9 36410.038250.1

40794.2 39793.6

25988.5 27781.2

0.0

10000.0

20000.0

30000.0

40000.0

50000.0

2003 2004 2005 2006 2007 2008 2009 2010

Transport

Transport


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Figure2.2.2 Evolution of Industry during 2003-2010 ths.lei


The evolution trend of the industry looks similar with the evolution of the transport sector

only from 2003 till 2006. In 2006 the industry sector was affected by the exports ban to Russian

Federation. From 2006 till 2010, the evolution of the sectors is totally different because of

different elasticity and resistance to macroeconomic factors like World Crisis. Could be said that

the exports ban influenced industry more than the crisis, while the ban has no effects over the

stable evolution of the transport sector, which was highly affected by crisis.

Figure 2.5 Evolution of Agriculture during 2003-2010 ths.lei


15964.117591.1

20770.2

11370.7

26173.529988.4

22643.9

28140.1

0

5000

10000

15000

20000

25000

30000

35000

2003 2004 2005 2006 2007 2008 2009 2010

Industry

Industry

1035411819 12688 13734 12825

16503

13300

19873

0

5000

10000

15000

20000

25000

2003 2004 2005 2006 2007 2008 2009 2010

Agriculture

Agriculture


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The evolution trend of the agriculture is more similar with the evolution of the industry, but

almost no similarities with the transport sector. The agriculture trend is common with transport

trend only from 2003 till 2006 years. After that, the evolution of agriculture is totally different.

In comparison to transport sector of the economy, the agriculture sector registered a very

good trend after the world crisis. The slope of the evolution trend from 2009 till 2010 shows the

highest historical growth. The growth of the transport sector is significant.

What is specifically for the transport sector is that there are no many factors that will

influence the sector. This mean that the transport sector is a very good, no risk for investments

industry, but with a slow growth.

Another economic sector that it is influenced by Transportation sector is Tourism

Sector.

Tourism is an important sector of world economy and has a continuous increasing trend

internationally. The tourism industry encompasses a wide range of public and private enterprises

that generate economic and social benefits of new jobs for different categories of employees,

providing job opportunities especially for women.Moldova should promote effective as a tourist

destination of international tourist markets. Tourism industry is highly fragmented, consisting of

various small and large, both in the public sector, as well as the private sector. Performance them

requires coordination, investment, training and marketing, resulting in coordination of

government, local government, businesses and communities.In such a way transport influence

tourism activity direct by different means of transportation.

Air transport. Air is the preferred way of foreign tourists visiting the country. Airlines of

Moldova, together with foreign companies, passenger transportation services by scheduled and

charter, providing direct links to about 20 destinations, and with transhipment - with most

countries. Recent years have seen a reduction in the number of destinations and flights to CIS

countries, but it is obvious tendency to increase the number of destinations and services for

countries in Western Europe and South America.

Railway Transport. Moldova has international rail routes to Russia (Moscow and St.

Petersburg), Belarus (Minsk), Ukraine (Kiev, Odessa, Nikolaev, Chernivtsi, Kherson, Ivano-

Frankovsk, Krivoi Rog, etc..), Romania (Bucharest, Iasi, Brasov, Cluj, Constanta, etc..), Turkey

(Istanbul), Bulgaria (Sofia), Czech Republic (Prague) and Germany (Berlin). Many routes are

daily.

Car. Moldovan public road network is 10503 km, of which 94% - with hard. Of the total

3669 km form national roads and 6834 km - local roads, their quality, but does not meetinternational standards. Road network of the country traveling about 17 thousand buses and


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minibuses, registered in the country, 35% have a service life exceeding 10 years. They provide

both scheduled passenger travel, as well as specialized.

Shipping (river). In Moldova, the Dniester is navigable only. The river is made trips,

including travel, up to Odessa, where boats run average capacity (200-400 seats) and various fast

ships and boats.

Weaknesses

Much of the road network is in an inappropriate state, including roads that serve as points

of access to tourist attractions.

Road signs are not maintained and are not placed on the entire road network.

Missing road signs for tourists, which indicates both the route, as well as tourist

attractions.

Bus fleet is aging.

Infrastructure bus stations and main railway stations is equipped with modern passenger.

Auto stations do not broadcast explicit information about route / schedule information

and no updates on panels, and so confusing, so foreign visitors as well as local ones.

Car rental possibilities are limited.

Technical condition of the tracks does not meet European standards.

Park trains are old and does not meet international requirements.

Shipping (river) is not used in full measure.

Strategic Directions

Identify the main roads that serve as points of access to attractions and tourist

destinations, to give them priority in the national road development.

Identify the main attractions and tourist routes, installing signs, guides to international

standards.

Develop and implement a program of refurbishment of the main bus stations and railway

stations, providing the facilities for visitors.

Install the main bus stations and improve guidance panels providing information on

routes, timetables and prices.

To encourage passenger car rental.

A review of infrastructure maintenance programs and park railways trains.

Develop water transport (river).


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CHEPTER III.COMPARATIVE STUDY OF ECONOMIC

ACTIVITY OF TRANSPORT SECTOR BETWEEN

MOLDOVA,ROMANIA AND UKRAINE

The length of the combined border of Romania, Ukraine and the Republic of Moldova is

1099.4 km. The border of Romania and the Republic of Moldova is entirely a river border (450

km) but the Romanian-Ukrainian border is complex and is part land border (273.8 km.), part

fluvial (343.9 km) and part marine (31.7 km). Enlargement of the European Union including

Romania as a Member State has created a new situation for the relations between Romania,

Ukraine and the Republic of Moldova. The border between the three countries became in 2007

an external EU border, creating both challenges and opportunities for the border area, in terms of

economic development, environmental matters, or people to people contacts.

I chose Romania and Ukraine to compare with Republic of Moldova because this two

countries continues to remain the main political and economic partners. In this comparation I

want to show how is developing Romanian Transport infrastructure being an European Union

member,and how its development influence Moldovan Transport infrastructure.At the same time

I want to accentuate common points in Ukraine Transport sector with Moldovan one also being

a post soviet country.

Paragraph 1. Analysis of Evolution of Transport Sector of Moldova

Moldova is in an intensive process of road degradation. If 70% of the length of national

roads were in good condition in 1992 then 45% were in good condition in 1998 and only 7% in

2006(Figure1). Although the condition of local roads was less examined, the study of 1,500 km

(out of 6,000 km) of local roads,conducted in 2006, found a bad and very bad condition of about

96% of their length.

Figure.3.1.1Evolution of the condition of national roads during 1992-2010



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Intensive degradation of public roads in Moldova occurred because of insufficient funding

for maintenance and repairs(Figure 2). During 19982006, road funding covered less than 10%

of needs. Allocated funds allowed only the execution of routine maintenance (winter

maintenance, filling potholes, profiling, etc.). Because of failure to conduct average and capital

repairs, over 80% of road length exceeded the established servicing framework.Also, an

improvement in the condition of roads has occurred in the past two years (20102011) in

connection with increased contributions to the road fund (from MDL 241 million in 2009 to

MDL 788 million in 2011). However, these contributions are not sufficient to restore the entire

road network to an appropriate state.

Figure.3.1.2 Finansing of the roads sector during 1990-2011,MDL mln.


The poor condition of roads in the Republic of Moldova has a number of adverse effects.

Households, especially those in rural areas, incur significant additional costs to access social,

health and administrative services and markets because of the poor road network. According to

estimations, the unsatisfactory state of roads implies additional costs for users of approximately

MDL 2.5 billion annually. However, Moldova cannot fully capitalize on the investment potential

because of poor roads that limit accessibility to objects of production, cultural and tourist centers

and markets. Moldova is often avoided because of these reasons as a transit country for cargo

and passengers.Road rehabilitation in Moldova will have a number of beneficial impacts,

contributing to the countrys economic growth. With a strategic location, Moldova plays an

increasingly important role as a border country between the European Union and Eastern Europe

and becomes a commercial hub of transportation in the region, where roads will be rehabilitated

and logistics costs will be lower than in neighboring countries.Given that Moldovas economy is

largely based on agriculture and agricultural products, a solid road infrastructure,

wellfunctioning multimodal road transport and logistics centers allow farmers to sell their

production on local and foreign markets. Rehabilitation of roads in the country have an impact


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on the labor market and contribute to the development of nontraditional sectors, providing

services such as tourism.

Apart from these beneficial implications, better roads directly affect economic growth and

development through more paths, called channels of influence. In the international practice and

Moldovan context, mathematical models are well calibrated to appreciate exactly the effect of

one kilometer of road rehabilitated on expenditures, population and business incomes, time

saved, and accidents. The main benefits, arranged in descending order, are:

Reduced vehicle operating costs (VOC), including fuel and repairs saved as a result of

better roads.

Less time spent on roads, which can be further used for productive or recreation

purposes.

Fewer accidents.

Additional traffic, including international.

Tertiary, less tangible effects, i.e. increased foreign direct investment and tourism as a

result of enhanced country attractiveness.

Road Transportprovides the bulk transport of goods across the country. Now the total length

of roads with rigid surface is over 10 500 km. On these roads are carrying more than 70% of

freight is an essential element of national economic potential of the country they are carrying

most of the raw material, materials, goods, agricultural products, labor, both local and national

and international level, especially with countries like Romania, Ukraine, Russia, Bulgaria

etc.Technological innovations are linked to a transport system faster and more efficiently. This

process involves a convergence in space and time in which a larger amount of space can be

changed with a smaller amount of time. The comparative advantage of the space may be used,

thus a more efficient way.Also, transport contributes to the development of social division of

labor, they are an active factor in attracting the socio-economic life of all localities in the

country, Road transport also have a big impact on different factors that influence economy of

moldova.talking about trade with a strategic location, Moldovan plays an increasingly important

role as a border country between the EU and Eastern Europe could become a hub of

transportation in the region, if not have damaged infrastructure and there would be high costs

logistics, in comparison with neighboring countries.

Moldova's economy is based largely on agriculture and agricultural products, which require

a solid road infrastructure, road transport and proper storage function well. Many farmers have

the possibility to sell their production because of poor access roads to the local market deposits


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and other localities.The low level of road infrastructure severely affect the mobility of goods and

people, especially in rural areas. This is also a significant impediment to the expansion of trade,

by imposing additional costs to exporters and importers: over 30% of responding companies

indicated that transport infrastructure in Moldova became an obstacle to business operations

performed by them during the last fifteen years.Transport costs may affect growth differently.

First, reduce transport costs higher earnings from exports of primary products, reducing the

savings available for investment resources. On the other hand, transportation costs increased

import prices of capital goods declined direct real investment.Looking on poverty of Moldova

is accentuated problem of Households, especially those in rural areas because of poor road

network, supports significant additional costs for access to social services and administrative and

markets household desfacere.Un study conducted in 2003 in communities rural Moldova, has

shown that the most serious problem facing these communities is the poor state of roads and

transport.The modes by which was made these trades can be mentioned in the first road

transport, which since 2000 is posted as a leader in transporting net with a share of over 70%

(71.8% in 2008 and 70 , 5% in 2007) that explaining the advantages of this type of transport.

From all of the goods transported in 2007-2008 only 5.8% have returned to international

transport (in 2006 5.9%), the rest being made at national level. After over goods, in 2008,

international shipments have returned 69.6% (in 2007 68.9%, in 2006 68.4%). For road

freight are registered (in 2008) 115 967 vehicles, most being privately owned.

Rail in M oldovathere are more than 140 years. The late nineteenth century the total length

of railways in Moldova amounted to 857 km, and now it has reached 1 154.2 km, of which the

European gauge (1435 mm) only 13.9 km. Gauge railways in the Republic of Moldova is 1520

mm as well as in other former Soviet republics, China, Mongolia and others. A. This track, being

different from the normal track 1435 mm characteristic of most European states, creates a

multitude of problems in rail traffic, and thus the development of foreign trade of the Republic.

The railways of the Republic of Moldova in recent years carried over 11 million tons of goods

annually . The

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