Can Moldova get worse?

What happens when the economy hits rock-bottom? Everyone starts digging. So goes the Moldovan joke, and the Moldovans should know. The Russian financial crisis of 1998 knocked Moldova's feeble agrarian economy flat on its back. Things surely could not get much worse. They did. The IMF reckons the economy has shrunk by 60% since ex-Soviet Moldova, wedged between Romania and Ukraine, became independent in 1991. Under a corrupt and incompetent political elite, it is now the poorest country in Europe.

Moldovan salaries, when paid at all, are tiny: officially, $30 a month on average, and maybe $20 more in undeclared income. Most rural people are destitute: farm labourers earn 80 cents for a day's back-breaking work. Doctors in towns receive little more, and can provide drugs only to patients with money. Many teachers have to close school early, so they can work in the fields to feed their families.

In Soviet days, Moldova, whose indigenous people are ethnic Romanians, produced good scientists: a quarter of the country's earnings came from high-tech plants serving space and submarine programmes. All that has now gone. The economy is held together now by subsistence farming, some wine sales and money sent home by emigrants. Leaving is the obvious way ahead for the country's brightest and best. By some estimates, 600,000 Moldovans-a seventh of the remaining population-have left already, to work in Russia or, less legally, in Greece, Italy, Turkey or Portugal. A sign of the general desperation is the wistful way Moldovans talk of moving to a better life in Romania, itself one of post-communism's biggest flops. Few people, however, now talk of Moldova joining up with its ethnic big brother; the Romanian government would not want it.

The past 12 months have been gloomy for the country's would-be reformers. Though Moldova's land and electricity had been privatised earlier, the collapse of Ion Sturza's centre-right coalition last autumn dashed hopes of privatising the mismanaged state wine and tobacco industries. It also strengthened the Communists, parliament's strongest block. They oppose privatisation and prefer the idea of a future union with Russia to that of one with the EU, let alone with Romania.

The issue of Transdniestria, a largely Russian-speaking secessionist sliver in the north, remains unresolved. Russia has agreed to pull out the 2,000-odd troops it stations there by 2003, but the Moldovans and Transdniestrians cannot agree on how to live together. That suits the Transdniestrians, who have been building their own Lilliputian Soviet-style state on the proceeds of contraband, notably petrol and guns.

Yet Moldova remains surprisingly orderly. For all their poverty, most people still pride themselves on education, hard work and tolerance. Perhaps too much tolerance: until May, when riots broke out over an attempt to end free bus and tram travel for students in Chisinau, the capital, the government had faced remarkably little public strife.

"We make very good sheep," says one student in Chisinau, "What we need is a shepherd." President Petru Lucinschi sees himself as just the man, and has been seeking to add to his powers by decree. Most observers, not least the World Bank and the IMF, would welcome any change that empowered someone actually to make decisions. But Mr Lucinschi, a wily former Communist who was a member of the last Soviet Politburo in Moscow, must first win the presidential election due in December. That will be difficult, since his natural supporters, the peasants, now despise him, and old allies in Chisinau have deserted him.

Meanwhile, Moldova's new prime minister, Dumitru Braghis, likens his job to running a fire brigade. "There are fires everywhere. Put one out, and another starts up." Fingers crossed, he says the economy should grow this year, if the weather helps. But the real question is not rain or drought: it is whether Moldova, with its failing social system, its need to import energy and manufactured goods, and its weak national identity, is a viable country at all.