In March 1993, the Moldovan government inaugurated the Program of Activity of the Government 1992–95 to make the transition to a market-oriented economy. The first stage focused on stabilization, including price liberalization, and the second stage concentrated on economic recovery and growth, including privatization, agrarian reform, infrastructure development, social protection, and trade reform. However, the government was slow to institute privatization in the agricultural sector. Although the government backed privatization, freed prices and interest rates, and removed export controls, economic growth was difficult. By 1998, Moldova's economy stood at one-third its 1989 level. In large part, this decline is due to unfavorable circumstances: the Transnistrian conflict, the collapse of the Soviet Union, the near-total loss of the grape crop in 1997, and the Russian 1998 financial crisis.
As of 2002, close to 2,000 small, medium, and large enterprises had been privatized, as were 80% of all housing units. Nearly all of Moldova's agricultural land is privatized as well. In 2000, Moldova negotiated a three-year $147 million Poverty Reduction and Growth Facility (PRGF) Arrangement with the International Monetary Fund (IMF), to expire in December 2003. Moldova joined the WTO in 2001. That year, the government adopted laws to combat money laundering and the financing of terrorism. The economy had turned around: spurred by industrial growth and a good harvest in 2001, real gross domestic product (GDP) growth increased by 6%. Nevertheless, Moldova carries a heavy external debt burden, and depends upon international financial support, including from the private sector.