(ANALYSIS) In outpouring of Western funding, Moldova to get nearly one billion dollars in financial assistance

The Executive Board of the International Monetary Fund announced this weekend that it would provide nearly 600 million U.S. dollars to Moldova. The loan will be used to fill budget gaps and to help revive the ailing Moldovan economy, which has been heavily affected by the world economic crisis.

The announcement comes in the wake of Prime Minister Vlad Filat's recent visit to the United States, where he signed an agreement with the Millennium Challenge Corporation, whereby Chisinau will get a 262-million-dollar grant it does not have to pay back. The money will be utilized to modernize agriculture and repair roads.

In addition, the World Bank has announced its willingness to provide Chisinau with about 80 million dollars in loans.

The volume of financial assistance Chisinau is going to be receiving, therefore, reaches a whopping one billion U.S. dollars, the largest sum of money the country has ever gotten from the outside since independence. Most of this money comes from the West, which carries an important political significance, especially compared to the situation in the country when the Communists were in power last year.

In 2009, Communist authorities announced that China had offered Chisinau the possibility of negotiating for a one-billion-dollar loan. Moscow was going to provide 500 million U.S. dollars, as well. Had these sums been obtained by Chisinau, the shape of the country's debt would have been considerably skewed in favor of non-Western countries.

Under the current circumstances, however, the pro-Western orientation of the ruling Alliance for European Integration is reflected in the sources of its funding. Moscow did say that it would still be interested in providing financial help to Chisinau, except that the 500 million dollars turned into 150 million after the ruling coalition came to power. Talks seem to be ongoing about this loan, although statements on the topic both in Chisinau and Moscow have been rather anemic.

Whatever the case may be, the IMF's decision, along with assistance from the MCC and the World Bank, is a much needed boost to the current Government, which has to struggle with a staggering budget deficit and rising prices that might anger part of the population.

The next couple of years will most likely be marred by political instability and conflict as Chisinau braces for another early legislative poll. That could prevent some of the money from coming into the country. But, at this point, the economic situation in Moldova does not look as dire.