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moldova

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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

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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: 267 - (27/03/03)

Moldova is the most destitute country in Europe and in a worse shape, precisely by being in the heart of Europe, than very poor countries in Central Asia. For a humanitarian tragedy is unfolding.

Humanitarian disaster
The population know that there are countries just over the way where people lead infinitely better lives than they do. They are desperate in a way that Central Asians are not to get a slice of the action. They are selling their body organs to get cash to live or to smuggle themselves abroad. They are engaging in human trafficking, whereby young women mostly are gulled or forced into going westwards to end up in Western Europe's sex industry.
For those with a few more opportunities, higher up the social scale, corruption is the obvious route. It is widespread, indeed endemic to how things are done. The society is rotten from top to bottom.

Communists as saviours
Back in March 2001 the old Communist Party of Moldova got into power, winning a clear 50% of the vote to parliament, which then duly elected its leader to the presidency, Vladimir Voronin. After all the situation is a revolutionary one, with highly disreputable sharks battening on the population and a breakdown of public morality and legality. Actually, the situation is not really so revolutionary because not enough people believe in the alternative on offer, communism. Indeed, not even the communists themselves do any more, not at least the leadership of the party. The vital ingredient of a new idea has been missing.
Nevertheless, the communists can offer a new practice. Bought up as idealists with a populist message, they are genuinely less likely to be corrupt. They have passed measures to alleviate the worst of the situation.
At first their popularity rose even higher as the public began to see them as true saviours. Voronin's personal rating reached 73% in opinion polls, which it would not do today. For the communists did not have a new five-year plan to unroll after all. They are following the usual mantra of transition, while not unfortunately making it work. Last Year demonstrations against the regime became widespread, especially among hard-core anti-communists, Orthodox believers who hanker for re-union with Romania and became alarmed at certain signs of new Russification creeping in. Voronin is himself ethnically Russian.

The China card
Voronin's solution to the predicament is to seek partners abroad other than just the Russians, realising how divisive that ploy is. In February he went to China and Vietnam, playing up his communist credentials for all they are worth, among the few countries left where they are not an embarrassment. The trouble is they are too far away to be of much immediate use to Moldova.
Still, it is flattering to be an ally of such a mighty country as China, which is no conceivable threat to Moldovan sovereignty. Chinese president, Jiang Zemin, paid a visit to Moldova in 2001. The Chinese like to have small far-away states as faithful allies. The Celestial Empire imagined it had many, even England when George III sent Lord Macartney to Peking. Mao's China carried on the tradition, with Albania under Enver Hohxa as the chosen admirer. Now it is the turn of Moldova.
This could reap benefits for Moldovans down the road. China is sending medical experts, technicians of all sorts and businessmen, which could all pay off in time. The Chinese are well aware that Moldova is still a sort of outpost of Russia and Ukraine, with Russians and Ukrainians dominating Trans-Dnestr enclave, traditionally the industrial heartland of the country, with one third of the economy and one of the most corrupt policies in the whole world.
So there it is, Voronin has an idea of genuine novelty to offer his people after all - to become China's Hong Kong in the modern Russian empire!

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CREDIT RATINGS

Fitch upgrades long-term rating to B-

International rating agency Fitch has upgraded Moldova's long-term foreign currency rating to B- (B minus) from DD. The removal of Moldova from the default rating range reflects the completion in late 2002 of a restructuring of the country's sole Eurobond. Roughly US$40m out of an initial amount of US$75m was restructured, the remainder having been bought back in a series of government operations in 2001. 
However, Fitch comments that the new ratings remain constrained by a number of factors. The country is highly indebted, and its debt-servicing burden is still large, dominated by repayments to multilateral organisations and bilateral creditors. Moldova is extremely dependent on capital flows from international financial institutions to support the balance of payments and help finance the budget deficit. The IMF has still not been able to complete the second review under a three-year US$147m Poverty Reduction and Growth Facility.

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ENERGY

Moldovan president notes "constructive" talks with Russian gas giant

A delegation of the Russian joint-stock company Gazprom made a two-day visit to Moldova. Talks mainly focused on identifying ways to pay off Moldova's running and overall debts to Gazprom. Aleksandr Ryazanov, the deputy head of Gazprom's executive board, who headed the Russian delegation, met Moldovan President, Vladimir Voronin, on 4th March, Moldova One TV has reported.
Among other subjects for discussion was the restructuring of old debts, paying off liabilities and reducing the price of gas purchased by Moldova. In this regard, President Voronin underlined the importance of identifying a solution that would be mutually acceptable for both sides. He also mentioned that besides the economic aspect of the problem of supplying Moldova with natural gas, there is also a political aspect. This aspect is based on the fact that Russian-Moldovan relations are of strategic importance to Moldova. The president also mentioned the constructive nature of talks, during which Ryazanov put forward several ways to resolve the problems raised. Voronin said all the proposals will be sent to the government and to the management of Moldovan state gas company, Moldovagaz, for examination. These proposals will serve as a basis for elaborating and signing all the necessary documents, some of which contain ways to reduce the price of natural gas.
Speaking about current debts to Gazprom, Vladimir Voronin said the present management of the Moldovagaz company had sufficient mechanisms to improve the situation in this field.
During this meeting, Aleksandr Ryazanov said he wanted to contribute to implementing the programme of building gas supply networks in Moldova.

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FOREIGN ECONOMIC RELATIONS

Moldova, China sign joint communiqué to strengthen cooperation

A number of agreements between Moldova and China were signed during the visit of Moldovan President, Vladimir Voronin, to China. He said, "Mutual projects now rest on a legal base," ITAR-TASS News Agency has reported.
During his five-day visit, the Moldovan President met President of the PRC, Jiang Zemin, and General-Secretary of the Communist Party of China, Hu Jintao.
The sides expressed the intention to strengthen inter-party cooperation and noted "uniform stands on many international questions," specifically the peaceful settlement of the Iraq crisis.
Beijing and Chisinau noted the mutual striving to interact in the setting up of joint ventures and exchange of students. Moldova has closely studied the Chinese experience of creating special economic zones.
The joint communiqué and the documents on cooperation in the field of agricultural technologies, traditional medicine and training of medical personnel were signed as a result of the meeting.
China gave to Moldova a gratis credit of 10m yuan (US$1.2m). The Moldovan President also met the Premier of China's State Council, Zhu Rongji, and head of Chinese parliament, Li Peng.

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