Why did Moldova lose much of its manufacturing sector after the collapse of the Soviet Union?

Following the collapse of the Soviet Union, Moldova experienced a significant decline in its manufacturing sector due to several interconnected factors:

• Economic Transition: The country faced the severe economic shock of shifting from a command economy to a market economy, which caused widespread disruption and productivity losses.123
• Loss of Integration: Moldova’s separation from the highly integrated economic systems of the Soviet Union and the Soviet bloc severed established trade and supply chains.1
• Regional Conflict: A substantial portion of Moldova’s industrial base was located in Transdniestria. After this region declared independence in 1990 and a civil war ensued, the area became isolated from the rest of the country. Consequently, the manufacturing potential within that region has remained largely unrealized due to ongoing political tensions and instability.124