LocationsIn Moldova, rural tourism puts local economic growth on fast track
July 16, 2024
Half of the village houses of Palanca, at the border with Ukraine have accommodated refugees. One of them is the UNDP-Swiss supported guesthouse Casa Veche (The Old House), belonging to Tatiana and Zaharia Aramă.
Despite sustained economic growth over two decades, Moldova remains among the poorest countries in Europe. Although its economic growth model reliant on remittance-induced consumption has generated growth and has reduced poverty, it had also become less sustainable well before the recent series of overlapping crises. The pandemic, the energy crisis, and the refugee flows caused by the war in Ukraine starkly exposed the vulnerabilities of Moldova’s growth model to shocks. In 2022, the Gross Domestic Product (GDP) of Moldova experienced a decrease of 5% compared to 2021. Spillovers from the war in Ukraine continued to hinder Moldova’s economic growth in 2023, with a modest 0.7% increase.
A few years ago, we saw that while significant efforts have been directed towards stabilizing the macroeconomic situation and improving the business environment at the national level, the local economic development needed a fresh outlook. It was then when we at UNDP crafted the Local Investment Products approach, encouraging communities, especially rural ones, to identify their specialization, the so-called comparative advantage. As expected, the untapped local touristic potential has emerged as one of the most promising niches.
Local tourism can move the needle of Moldova’s economic growth. The country’s winemaking destinations and attractions, fortresses, monasteries, scenic landscapes, and traditional villages attract visitors curious enough to defy “the poorest country in Europe” label and experience the local history and culture.
For this potential to see the daylight, investments are needed to improve infrastructure, access to tourist attractions, develop touristic services and products. All these benefit the local economy and community members overall, due to the services related to accommodation, food, guided tours, local crafts and experiences, provided to the tourists.
There UNDP and its partners - the European Union, Sweden, Czech Republic, Switzerland, United Kingdom, Japan - have supported several touristic entities throughout the country to become more competitive.
Apart from more than 45 guest houses that were offered financial assistance to carry the traditional vibe and national heritage, we also back new trends and unique offerings, such as year-round glamping facilities (a form of camping that includes modern, comfortable amenities), capsule hotels-hostels and agro-tourism innovations.
The support offered by UNDP and partners also boosted the development of connex production activities such as animal growing, agriculture and artisanal manufacturing, leading to the diversification of the touristic packages and preservation of a high number of old houses.
Clustering - the smart way of economic governance at local level
UNDP has embraced the economic clustering approach as one of the main elements for strengthening green, digital, and resilient economic competitiveness.
For that, UNDP has developed a tailored methodology for rural Moldova, seamlessly integrating business micro-clustering and agri-food-tourism value chain development. This approach has proven highly effective in establishing and reinforcing partnerships among stakeholders in tourism destinations. Agri-food-tourism value chain development involves enhancing agricultural, food production, and tourism activities within a targeted region. Its aim is to foster synergies between the agriculture and tourism sectors, thereby boosting economic growth, sustainability, and local development. These partnerships unite the private sector, local and regional authorities, and potential investors, fostering robust tourism ecosystems. Consequently, these ecosystems not only bolster existing businesses but also foster the collective efficiency typical of compact tourist destinations.
Using this approach, UNDP Moldova has facilitated the creation of 3 touristic clusters: Cahul, Ungheni and Dubăsari. These three clusters include 80 touristic entities and serve as platforms for collaboration among local businesses, local public authorities and research & development institutions, thus enhancing their collective impact and market competitiveness.
A notable achievement is the recognition of the Văleni community from the "Via Cahul" touristic micro-cluster as the "Best Tourism Village" by the World Tourism Organization in 2023.
One of the standout successes is the UNDP-driven "Heart of Nistru" touristic micro-cluster, in Dubăsari. The number of visitors surged from zero in 2018 to over 100,000 in 2023, thanks to the development of basic hospitality infrastructure and a large UNDP-driven promotion campaign. Looking ahead, the "Heart of Nistru" cluster is expected to achieve even more in the mid and long term. In 2024 alone, with UNDP support, local stakeholders will launch 9 new accommodation facilities, 5 gastronomic establishments, and 6 tourist entertainment services. This expansion is set to create new jobs and business opportunities, driving substantial economic growth in the region.
The beneficiary regions have received complex technical assistance coupled with training, coaching, consulting, awareness raising and promotion activities. Academic expertise was employed to design and evaluate the impact of tourism initiatives and foster a culture of local entrepreneurship. Customized training programmes focused on the circular economy have been developed, highlighting the role of smart and green technologies in cluster development and the importance of transitioning to a circular economy, considering its socio-economic and environmental impacts. Tourism cluster members regularly participate in international events and exhibitions. Developed partnerships with international organizations integrate tourism with cultural preservation efforts, ensuring that local tourism also contributes to the safeguarding of cultural assets.
To address the employment requirements in the sector, UNDP developed a professional training programme in the field of travel, tourism and leisure, entitled “Developing tourism activities in rural areas”. Initially piloted for the members of the “Heart of Nistru” tourist micro-cluster, the programme has successfully graduated 26 representatives who have obtained the qualification of tourist guest house worker. The course, which aims to develop skills in rural tourism, covers aspects such as leveraging local tourist attractions, organizing rural tourism leisure activities, arranging catering services, and developing marketing strategies. With a total duration of 300 hours of training, equivalent to 10 academic credits, the programme is set to be applied nationwide, enhancing the capabilities of rural tourism operators across Moldova.
Cooperation with local public authorities and reviving cultural heritage - the aces up the sleeve
In this complex and transformative journey, we value our cooperation with the local public authorities that play a key role in identifying and addressing priority needs related to upgrading local infrastructure and public service delivery, thus enhancing the tourist appeal of the regions.
That is why we facilitated the establishment of a dialogue platform between the private sector and local public authorities that encourages regular dialogue to identify the main needs and obstacles faced by local businesses.
At the end of the day, all discussions come to local infrastructure that needs capital investments. We believe that strategic investments in local infrastructure projects, focusing on areas like roads, sanitation, recreation, and cultural heritage, contribute to creating a more appealing and sustainable destination for tourists. Throughout the journey, UNDP Moldova and partners have deployed more than 84 infrastructure projects in 71 localities, with a total budget of 12.2 M USD.
The preservation of cultural assets has been a key focus, combined with support for local artisans, organizing cultural events and maintaining historical sites. With the financial support of the EU, two large-scale (Circus in Chișinău and the Fortress in Tighina/Bender) and 10 small-scale cultural heritage sites from both banks of the Nistru River have been preserved and restored.
Local brands, global trends
In 2021, Cahul and Ungheni regions established their own unique brands, a premiere for the Republic of Moldova, carried out with the financial support of the European Union. The developed visual identities contributed to boosting competitiveness across multiple domains, including tourism, investments, business attraction, exports, external promotion, and the attraction of human capital, benefiting both rural and urban communities, but also economic entities, public institutions and the non-governmental sector.
During the last years, the collaborative efforts between UNDP Moldova, local communities, and various stakeholders have played a pivotal role in transforming Moldova's tourism landscape. From the creation of unique regional brands to the preservation of cultural heritage, the fostering of sustainable tourism practices, infrastructure projects, financial support, and strategic partnerships, these initiatives have not only attracted visitors and investments but have also created a profound sense of pride and identity within the communities involved.
As a final touch, we would quote the World Tourism Organization outlining the tourism development potential: “Rural tourism has a high potential to stimulate local economic growth and social change because of its complementarity with other economic activities, its contribution to GDP and job creation, and its capacity to promote the dispersal of demand in time (fight seasonality) and along a wider territory.”
