FREE GEOPOLITICAL NEWSLETTER

moldova

For current reports go to EASY FINDER

  MOLDOVA

REPUBLICAN REFERENCE

Area (sq.km)
33,843

Population
4,431,570

Principal
ethnic groups

Moldovans 64.5%
Ukrainians 13.8%
Russians 13.0%

Capital
Kishinev
(Chisinau)

Currency
Leu (plural: Lei)

President
Vladimir Voronin

SPECIAL REPORTS

"Special Shi'a Report"

Afghanistan

Axis-of-Evil



NEW BUSINESS
OPPORTUNITIES

a free service

FREE World audit country reports on democracy, corruption, human rights and press freedom
democracy
check


CNN.COM
ELECTION WATCH


Currency converter
currency
converter


Background:
Formerly ruled by Romania, Moldova became part of the Soviet Union at the close of World War II. Although independent from the USSR since 1991, Russian forces have remained on Moldovan territory east of the Nistru (Dnister) River supporting the Slavic majority population, mostly Ukrainians and Russians, who have proclaimed a "Transnistria" republic. One of the poorest nations in Europe and plagued by a moribund economy, in 2001 Moldova became the first former Soviet state to elect a communist as its president.

Update No: 259 - (25/07/02)

Moldova is the one country in Europe that has elected back the communists - and the rich irony is that the US and the EU are rather glad!
The West was becoming very fed up with the deeply corrupt ways of the old regime before March 2001. The communists at least have a theoretical ideal of public morality. Whether they live up to it or not is another matter. But at least they have it. 
The Moldovans have bucked the trend. Everywhere across Europe there has been a right-wing advance, notable now in France, while Socialists, as in Hungary, or New Labourites as in UK, emulate right-wing ideas. But the Moldovans, frustrated by years of right-wing politicians themselves a reaction but who failed to deliver, voted back the communists last year.
They have now been in power for over a year and are even more popular than on election day, when the Communist Party won just over 50% of the seats, voting in a new president, Vladimir Voronin, as is the custom in Moldova. He has been largely a success explaining his 73% approval rating in the polls.

The Putin of Moldova?
Voronin has a harder job on his hands than any other leader in the former Soviet Union. The economy has crashed to one third of its size at independence in 1991. The collapse was further accentuated by the de facto defection of Trans-Dnestr, itself with one third of the national economy, the base of much of the nation's industry
Some Moldovans, ethnic Romanians, yearn for a re-union with Romania, which in pre-war days possessed Bessarabia until it was rudely snatched by Stalin in 1940 (on an agreement with Hitler in the Nazi-Soviet Pact). Many took to the streets to demonstrate against the turn towards Russia and the Russian language which the Communists initiated earlier this year. The struggling Romanians however, have enough on their plate without salvaging the basket-case of Moldova. So do the Russians. The idea of it joining the Russia-Belarus Union is still a pipedream, as indeed is that Union itself.

Economy stumbles
The economy is fitfully growing, GDP rising by 2.1% in 2000, by 4.5% in 2001 and prospectively by 3.5% in 2002. Foreign direct investment is derisory, US$100m in 2000, US$60m in 2001 and provisionally US$235m in 2002, something of an improvement. Moldova is cooperating with the international financial institutions, which it will need to do if more FDI is to be forthcoming, establishing clearer laws for business, a more open judiciary and a level playing field for all. Much remains to be done.

« Top

AVIATION

Air Moldova in Brazil deal

Air Moldova will take delivery of two Brazilian-built jets, the first time the airline has purchased aircraft produced outside the former East Bloc, Infotag reported recently.
Two Embraers 145 aircraft capable of carrying 49 passengers will be added to Air Moldova's fleet of nine planes. The two jets cost US$36m, which was split nearly evenly between Air Moldova and Germany's Dresdner Bank.

Fitch IBCA Lowers Moldova's Rating to "DD"

The Fitch IBCA international agency has lowered Moldova's rating to "DD". Deputy Minister of Finance, Mariana Durlesteanu, who heads the Moldovan delegation to negotiations with main holders of Moldova-issued Eurobond, told INFOTAG that, from the technical viewpoint, the rating lowering is quite a grounded, standard decision. 
Moldova has failed to repay the Eurobond by June 27th, which can be classified as a technical default - the borrower's failure to meet his commitments. 
Local banking experts are saying, however, that nothing special is going to happen, because Moldova now cannot and is not intending to borrow commercial loans from foreign markets. If the IMF Board decides positively on July 10th concerning lending resumption for this republic, the Moldovan Government will be able to obtain credits on the most advantageous terms - with repayment in 30-40 years at an interest rate of 0.75% p.a. 
Despite the rating downgrading from CC to DD, Fitch has kept unchanged the Moldovan national currency rating - CCC, remarking that, in a perspective, the lei's rating may be revised from "negative" to "stable". 
Fitch mentioned as a positive factor and merit for Moldova the restructuring of Eurobond payments. Major bond holders gathered in London on June 25th, and an overwhelming majority of them voted for restructuring, with conditions to be defined by the International Monetary Fund. The Moldovan Ministry of Finance issued the US$75 million Eurobond in 1997. 
INFOTAG has learnt from reliable sources that the Eurobond holders agreed to restructuring of payments within 5-7 years at an interest rate of 7% p.a. Compared with the restructuring terms attained by Ukraine, the Moldovan terms seem really attractive, if one takes into account that 5 years ago Moldova placed the papers at an interest rate of 9.75 per cent. Local bankers hope that the IMF's positive solution on July 10th will open the door for Moldova to the Paris Club for restructuring the country's external debts.

« Top

FOREIGN ECONOMIC RELATIONS

Moldovan foreign minister visit to Italy 

Moldova's Foreign Minister, Nicolae Dudau, made a working visit to Italy on 3rd-5th July to sign a series of bilateral agreements, Basapress News Agency has reported.
Dudau met the Italian Foreign Ministry's state under-secretary, Roberto Antonione, Minister for EU Policy Rocco Butiglione, Labour Minister Roberto Maroni, Chamber of Deputies Vice-Chairman Fabio Mussi and the chief of the parliamentary commission for foreign policy, Gustavo Selva.
The Moldovan minister was to sign agreements on organised crime, double taxation, fiscal evasion and readmission of illegal migrants...

« Top

FOREIGN LOANS

Government to get WB credits


The Moldovian Ambassador to the United States, Mihai Manoli, and the World Bank (WB) Vice President, Joahannes Linn, signed in Washington on June 26th an agreement between Moldova and the bank's International Development Association (IDA) for two credits worth a total of US$40.5m, RFE/RL reported.
Some US$30m will be used to support medium-term economic development and reform, and US$10.5m will be used to fund a rural investment and services project. The credits will be disbursed on standard IDA terms and will be repayable in 40 years, with a 10-year grace period for the rural project. Since Moldova joined the World Bank in 1992, commitments to the country total some US$500m for 15 projects

« Top

 

CUSTOMISED REPORTS

 

INVESTMENT BACKGROUND REPORTS

Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 

For further information email:

reports@newnations.com

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!

To order please click here:
Investment background report

« Top

« Back




Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com