The fate of democratic and economic transformations
depends on the political will of governments. A success-
ful example of transformation is the case of Moldova.
Moldova is one of the first countries in the NIS to imple-
ment an ambitious mass privatization program, which
was the centerpiece of its economic reforms. In less than
two years, Moldova privatized about 2,000 SOEs, which
make up two-thirds of its industrial base; and 3.5 million
citizens out of a population of 4.5 million have become
shareholders. At the same time, in an effort to develop
capital markets, Moldova inaugurated the Chisinau
Stock Exchange and created the basic capital market
infrastructure. About 95 percent of the shares traded on
the stock exchange are the shares of privatized SOEs.
Moldova also pursued a tight monetary policy which was
in line with the recommendations of Milton Friedman,
whom I met personally to discuss the challenges facing
our country. The effective introduction of the national
currency and maintenance of its stability (in the summer
of 1995 the Moldovan Leu was the first currency from the
former Soviet Union to be recognized as convertible) has
helped cut the budget deficit and reduce inflation from
2,800 percent in 1993 to 24 percent in 1995. These policies
stopped the economic decline and created the appropri-
ate framework for development.

The emergence of private companies and stock mar-
ket infrastructure in Moldova has opened the way to for-
eign capital inflows into the economy, a key factor for
technology transfer, the creation of new jobs, and an in-
crease in the export capacity. Moldova is joining the glo-
bal economy. This is critical because at the end of the
twentieth century we are all neighbors even if we do not
have common borders. According to the projections of
the World Bank, 1996 will bring Moldova a growth of 6 to
8 percent in GDP. Overall, the program was rated by the
experts of the World Bank and the International Mon-
etary Fund as the best program in the NIS and an effec-
tive model for other reformers to follow.

In this context, the book authored by Michael McLindon
is valuable not only because he has done an admirable

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