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moldova

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  MOLDOVA

REPUBLICAN REFERENCE

Area (sq.km)
33,700

Population
14,350,000

Principal
ethnic groups

Moldovans 64.5%
Ukrainians 13.8%
Russians 13.0%

Capital
Kishinev
(Chisinau)

Currency
Leu (plural: Lei)

President
Vladimir Voronin

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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: 254

The Moldovan republic has one of the most seriously afflicted of the post - Soviet economies, down to a third of its 1991 level. It suffered a civil war in 1992 that effectively saw its most developed region, the TransDnestr province on the left bank of the River Dnestr, secede, with its largely Russian and Ukrainian population. This was a heavy blow to the economy, plagued by the other usual post - Soviet maladies already, cronyism among a corrupt elite, gross red tape and a residue of attitudes hostile to a market economy.
The one thing that Moldova achieved was the creation of a sort of democracy. This was demonstrated in March of 2001 when the communists got back in on 50.1% of the vote, who then elected their leader Vladimir Voronin as president. Curiously, the US and the EU welcomed this development. Not without reason. At least there is a chance that a new regime will not be corrupt!
Voronin has, indeed, done well. As a son of Trans-Dnestr himself, with a Russian origin, he sees himself as the one man who might re-unite the country. At first his idea was to stand in elections against the entrenched and thoroughly corrupt leadership of Trans-Dnestr under its president, Igor Smirnov. He wisely refrained from that, for while Moldova may be democratic, Trans-Dnestr is only in name. Smirnov won 85% of the vote in being re-elected on December 9th.
What Voronin has done instead is to make conciliatory gestures towards the Russians, re-introducing Russians into the school curriculum as a compulsory subject (so is the native Romanian, the language of 20% of Moldovan citizens). There have been protests in Chisinau against this move by supporters of right - centrist parties attached to the Romanian heritage of Moldova. But at least they were allowed to take place. That Moldovans should know some Russian is not an outlandish idea, given history and the presence of so many Russians in their midst.
Voronin's other line of approach to heal the feud with Trans-Dnestr has been to use the good offices of Russia. His intermediary here is Russian First Deputy Foreign Minister, Vyacheslav Trubnikov. But the intransigence of Smirnov is making it difficult to conduct negotiations.
The one really effective way to lure the Trans-Dnestrians back would be to get the economy moving in the right direction - poverty and unemployment are the key problems.
Such was the verdict of the President of the Parliamentary Assembly of the Council of Europe, Lord Russell-Johnston, speaking on January 18th after a two-day visit. The PACE president noted that the new ministers are pragmatists, without much in common with old-style communists. As for Voronin, he said that the world has changed when a communist and a bourgeois liberal like himself could find so much in common!
Certainly Voronin's high standing in the West is a trump card. It is not just a question of aid and credit, although the World Bank and IMF are now closely involved, but of attracting foreign investment to what is in natural terms a rich country, the orchard of its part of Europe. Paradoxically, it may be the modern communists who purge Moldova of the ills of old-style communism and anchor their country to the West.

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FINANCIAL NEWS

Poverty, unemployment key problems for Moldova - PACE


President of the Parliamentary Assembly of the Council of Europe (PACE), Lord Russell-Johnston, has said he believes that a high level of poverty and unemployment are the key problems for Moldova. Speaking at a press conference on January 18th summing up outcomes of his two-day visit to Chisinau, he called these problems shocking and presenting a real reproach to the government, who is aware of these problems, reports New Europe. 
The PACE head noted that the cabinet members do not have too much in common with former communists and are chiefly pragmatics. As for Moldovian president, Vladimir Voronin, he seems to have a kind soul, the PACE president said, adding that he told Voronin that the world has truly changed if a Communist and a bourgeois liberal can find a common language. 
Talking on Moldova's relations with its neighbours, the PACE head noted that it makes no sense for Romania to make claims to Moldova, for if the people wanted reunification with Romania, they would have done it long ago, while in fact they do not. The PACE president has agreed with the Moldovian leadership's judgement concerning the situation in Transdnestra, a region he branded as a hotbed of tension and instability with a corrupt regime supplying arms to conflict areas. 
The PACE president also said he believes that good relations between Moldova and Russia would contribute to the resolution of the Transdnestran problem. He said he hopes that Russia would influence and even, if need be, press the Tiraspol administration for solving this problem.

World Bank suspends customs project funding

The World Bank has suspended financing projects under the development strategy for Moldavian customs, Interfax News Agency quoted sources in the Moldavian government as saying on February 8th.
On February 6th the government was supposed to discuss and approve a development strategy for Moldovan customs until 2005. The strategy was to be presented by Andrei Stratan, who was appointed national coordinator for the implementation of the strategy two months go. Several projects were mapped out on the technical supplies of customs. An understanding was reached that the World Bank would disperse about US$9m in grants. In addition, there was a possibility of getting US$4m from the US government. However, the government did not approve the strategy and fired Stratan.

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FOREIGN INVESTMENT

EBRD to increase investment in Moldova


The European Bank for Reconstruction and Development (EBRD) is one of the largest investors in Moldova and "we intend to continue to increase our investments in the republic," according to EBRD President Jean Lemierre, who completed his first visit to Moldova on 25th January, ITAR-TASS News Agency has reported.
A complex situation has taken shape in the republic in view of growing poverty and the need to repay foreign debts, Lemierre said. In keeping with the approved strategy, the EBRD will render assistance to Moldova primarily in lending credits to small and medium-sized businesses, in the privatisation process and in energy projects.
It is essential for Moldova to create a favourable investment climate to attract foreign investments. The EBRD intends to support the privatisation processes in the power and telecommunication sectors and increase investments in the production sector, specifically in the development of small and medium-sized businesses, Lemierre pointed out.
The EBRD chief did not give exact data on the amount of the EBRD investments in Moldova this year, pointing out that "they will depend on the quality and effectiveness of projects suggested by the republic."

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