Switzerland, ILO, Moldova Launch $3.8M Initiative to Boost Jobs, Formalisation, and SME Productivity

The Government of Switzerland, in partnership with the Government of Moldova and the International Labour Organisation (ILO), has launched the second phase of a major employment initiative aimed at transforming Moldova's labour market into a more inclusive, productive, and formal system.

Backed by 3 million Swiss Francs (approximately $3.8 million USD) in funding from Switzerland's State Secretariat for Economic Affairs (SECO), the programme—"Inclusive and Productive Employment in Moldova – Phase II"—will run through 2030 and be implemented by the ILO.

The initiative comes at a critical juncture for Moldova, as the country seeks to align its labour systems with International Labour Standards (ILS) and European Union legislation, while addressing persistent structural weaknesses that continue to constrain economic growth.

Tackling Deep-Rooted Labour Market Challenges

Despite steady reform efforts, Moldova continues to face significant labour market constraints, including:

• Low labour force participation, particularly among women and youth

• High levels of informal employment, especially in sectors like construction

• Weak productivity growth across industries

• Limited institutional capacity in labour market governance

The new phase of the programme is designed to directly address these bottlenecks through policy reform, institutional strengthening, and targeted sectoral interventions.

Building on Strong Foundations from Phase I

The second phase builds on the successes of the first phase (December 2022 – June 2025), which delivered measurable progress in several critical areas.

Key achievements from Phase I include:

• Launch of a National Employment Programme aimed at reducing labour market exclusion among women, young people, and vulnerable groups

• Strengthening of the National Employment Agency, enhancing its service delivery and operational capacity

• Introduction of modern labour market forecasting tools, enabling more evidence-based policymaking

• Advancement of social dialogue mechanisms, leading to the implementation of a national action plan on undeclared work and formalisation

These outcomes have laid the groundwork for deeper reforms and more targeted interventions in the next phase.

Strategic Priorities for 2026–2030

The newly launched phase will scale up efforts and focus on four strategic pillars:

1. Advancing Policy and Legislative Reforms

The project will support reforms in employment, enterprise development, and labour formalisation, leveraging tripartite social dialogue between government, employers, and workers.

2. Strengthening Labour Market Institutions

Efforts will focus on improving governance systems, data-driven policymaking, and institutional coordination to enhance labour market efficiency.

3. Reducing Informality in Key Sectors

A targeted push will address undeclared work in the construction sector, one of the most informality-prone industries in Moldova.

4. Boosting SME Productivity and Job Creation

Recognising SMEs as the backbone of the economy, the initiative will promote productivity growth, better working conditions, and sustainable job creation.

Innovation Through Social Dialogue and Partnerships

A defining feature of the programme is its emphasis on tripartite cooperation—bringing together government, employers' organisations, and workers' representatives to co-create solutions.

This approach reflects a broader shift in development thinking: sustainable productivity and decent work cannot be achieved through policy alone, but require active collaboration across all labour market actors.

Valérie Berset Bircher, Assistant State Secretary for Labour at SECO, underscored this approach:

"Switzerland is convinced that improving SME productivity in a sustainable way and creating better working conditions go hand in hand. However, lasting productivity growth and the creation of decent work cannot be guaranteed by the government policy framework alone. This is also why the project aims to strengthen tripartite social dialogue bodies in Moldova at all levels."

She added that the initiative will help SMEs create jobs, enhance productivity, and improve workplace standards through stronger partnerships.

Strengthening a Strategic International Partnership

The launch also highlights the growing collaboration between Switzerland, the ILO, and Moldova in advancing labour market reforms.

Peter van Rooij, ILO Regional Director for Europe and Central Asia, described the initiative as a key milestone:

"The launch of the second phase marks an important milestone in our partnership with Moldova's tripartite constituents. We will continue supporting evidence-based employment policies, stronger institutions, and effective social dialogue to promote social justice and decent work for all."

Aligning with Broader Development Goals

The programme complements the ILO's broader portfolio in Moldova, which includes initiatives focused on:

• Skills development for the green transition

• Job creation in the care economy

• Reform of labour market institutions

Together, these efforts aim to position Moldova for a more resilient, inclusive, and EU-aligned economic future.

A Long-Term Vision for Inclusive Growth

As Moldova navigates economic transformation and EU integration, the success of this initiative will be critical in ensuring that growth translates into decent work, higher productivity, and reduced informality.

By combining targeted investment, institutional reform, and social dialogue, the programme offers a comprehensive pathway to building a modern labour market that works for all.