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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

  

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: 271 - (24/07/03)

The Moldovans are perhaps the small country that has attracted least attention in Europe since the climacteric of 1989-1991. Albania has attracted a lot of attention since 1999 and even Macedonia has done so over the last few years. Moldova has its smouldering conflict in the TransDnestr imbroglio, but that is Russia's problem everyone assumes in the West, not ours.

The new Paris initiative
Well, there is a new policy initiative here that promises to put Moldova on the map in a big way. The Paris - based Institute for Security Studies (ISS) has focused recently on the idea that Russia should be brought into the picture in a much more important fashion into global security matters. The build-up to the Iraq War saw this begin to happen. The ISS has issued a tentative proposal, which is, nevertheless, highly ambitious, for direct EU-Russia cooperation on European security affairs. This would in effect by-pass NATO and the US, although the ISS denies this especially Dov Lynch, its proponent. Moldova would become the test-case for EU-Russian security concord, says Lynch.
This proposal would create an entirely new format for negotiations and post-conflict guarantees in Moldova. It calls for a new body that would be co-chaired by the EU and Russia, and include along with Ukraine, Moldova's other neighbour, Romania. The OSCE would retain a seat at the table, but the EU would take over essential political and security responsibilities in Moldova. The EU and Russia would each, provide troops for a very brief peace-support operation. After that, peace-support and post-conflict garrisons would leave, and TransDnestr's own army would be demobilised.
These ideas are clearly more promising in terms of securing Moldova's membership in the West, and of stabilising the region in the West's interests, than the current joint offer from Russia and the OSCE. That offer would legalise TransDnestr's secessionists in power; allow some Russian troops to remain (as part of an internationalised force of unspecified composition); retain TransDnestr's army, Russian in all but its official name; and place Moldova under mainly Russian political "guarantees," without a direct Western role.
On the other hand, the general context of the ISS proposal would seem to suggest that it regards Moldova as a playground for EU-US competition in Europe. Some American diplomats already view the ISS proposal in this light, complaining that it "excludes" the US. Some may even be tempted to thwart a full-fledged EU role, so as to deny Europe's security and defence policy an early success.
Yet the ISS proposal does advance overall Western interests in this region. The US should pool efforts with the EU to ensure a common success. Then, Moldova would become a test case not for EU-Russia cooperation bypassing the US, but rather a test for Euro-Atlantic cooperation to guarantee the enlargement of the West's interests along its new borders.
The Moldovans would welcome either the OSCE or the ISS solution, getting TransDnestr back. But with their backs to the wall, the corrupt leadership there is going to prove the problem. They infinitely prefer the status quo to either proposal. But Russia calls the ultimate shots, quite literally since the TransDnestr enclave is in all but name Russian/Ukrainian. Putin can make a decisive difference here, which could help to offset his war-mongering image on Chechnya

The communists cooperate with the West
The irony is that Moldova has the only, and probably the last, communist party in Europe - with strong Western approval. The Western institutions were fed up with dealing with the corrupt elements that triumphed after the collapse of Soviet communism in 1991. The return of the communists in March 2001 was even welcomed in hopes that they would be less invidious.

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FINANCIAL NEWS

Moldovan joint ventures receive tax breaks from parliament


Joint ventures in Moldova will receive significant tax breaks following a decision by the country's parliament on 4th July to provide privileged terms for their income tax payments as a step to stimulate investment, Prime-TASS News Agency has reported. 
Joint ventures with a share of foreign funds in their authorized capital exceeding the equivalent of US$1m will be fully exempt from paying income tax during the next three years. 
For the companies, in whose authorized capital the share of foreign investments stands at over US$250,000, the income tax is slashed by 50 per cent. 
The key precondition for a company to enjoy these tax breaks is to reinvest at least 80 per cent of the saved funds either into its own business or to implement government-backed programmes aimed at developing the country's economy. 
The total foreign investment in Moldova's joint ventures and Moldova-based companies with 100 per cent of foreign capital amounted to US$671.2m as of 1st January. 
At the moment there are 1,719 joint ventures with both domestic and foreign capital and 951 companies with 100 per cent of foreign capital in Moldova.

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FOREIGN ECONOMIC RELATIONS

US, Moldova sign economic action plan

The Deputy Prime Minister and Economics Minister, Stefan Odagiu, and US Assistant Secretary of State for European and Eurasian Affairs, Elizabeth Jones, signed an action plan on economic cooperation and investment between the two countries.
According to Infotag News Agency, after signing the document at a news conference, Odagiu said that it stipulates active cooperation in promoting economic reform in Moldova. "Particular attention will be devoted to reform in the banking and finance sectors, as well as to post-privatisation period in the agricultural sector. The USA is ready to assist Moldovan small and medium size companies, to support its energy sector and industry," Odagiu said.
In his opinion, the agreement will have an extensive impact on Moldova's integration in regional and world economics, the creation of a favourable investment climate and on the fight against trafficking. It will be a "real step in strengthening cooperation between Moldova and the USA."
Jones noted that this document should promote the development of comprehensive relations with Moldova, which is of interest to the USA. "The USA is ready to assist Moldova with European integration, which is the top-priority for the Moldova, as demonstrated by the recent and fruitful visit by President Vladimir Voronin to Brussels," she said.

President Voronin calls on Israelis to invest in Moldova

An economic forum of Moldovan and Israeli businessmen has taken place at the Palace of the Republic in Chisinau, Moldovan Radio has reported. Moldovan President Vladimir Voronin delivered a speech at the forum. 
The Radio correspondent reported that more than 40 businessmen, who arrived in Moldova as part of the official delegation led by Israeli President Moshe Qatzav, attended the economic forum. 
Voronin said: "We are interested in investment projects in communications and road construction which would allow us to fully use European corridors and highways which are crossing Moldova. This is a long-term and profitable kind of business. We are also interested in investment in the agricultural sector, in hi-tech production of environmentally friendly goods. Of course, we are looking forward to proposals [of cooperation] in the tourism area, and to the vast experience of your country.
"I have only mentioned the main, strategic areas which are a priority for our economy. But this does not mean that I rule out broad economic cooperation between businessmen from the two countries in other areas as well, on the largest range of issues.
"In any case, I am convinced that our joint activities are only just tarting and that they will not disappoint us. Come here, return here, restore previous relations and contacts. I signed a decree on the introduction of dual citizenship in Moldova on 7th July. This is also stipulated in the constitution. We are ready to restore Moldovan citizenship to those who held it once, but lost it later because they left the country or for other reasons. Today, if there are such wishes, we are ready to do it in a legal, constitutional way."

Russia, Moldova to remove free trade agreement exceptions

Moldova and Russia agreed after nine-month talks to gradually remove all the exceptions from the bilateral free trade agreement, reports New Europe. 
In 2001, Moscow sought to remove 14 categories of goods, which accounted for 47% of Moldavian exports, from the free trade agreement, but negotiations with Chisinau reduced that number to six categories - including sugar, ethylic alcohol, brandy, vodka, tobacco, cigarettes. Moldavian and Russian officials signed on June 27th, in Chisinau, a protocol on cancellation of all the exceptions by the year 2012, BASA reported. 
"I am sure that the seventh session of the Moldova-Russian intergovernmental economic commission will open new directions of our cooperation," Russian Deputy Prime Minister, Minister of Agriculture, Alexei Gorgeyev said. The commission's Russian co-chairman highly appreciated the bilateral cooperation in the humanitarian field and the signature of an agreement on reciprocal recognition of education documents, agreements on cooperation in public health and training of specialists, an agreement between Russian and Moldavian migration services, etc. 
The Russian delegation to the intergovernmental commission includes Deputy Minister of Economic Development and Trade, Yuri Issayev, Deputy Minister of Finance, Mikhail Motorin, Assistant Prime Minister, Vladimir Andrianov, senior officials from Russian state structures, and business people.

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FOREIGN LOANS & AID

World Bank to allot US$5.5m to Moldova to fight AIDS

The World Bank will allot a grant to Moldova to implement an anti-AIDS project. An agreement on this has been signed in Chisinau by Moldovan Health Minister Andrei Gherman and the director of the World Bank office in Moldova, Edward Brown, ITAR-TASS News Agency has reported. 
The grant will amount to US$5.5m, journalists learnt at the Health Ministry's press service. Moldovan doctors hope to get another grant soon, to fight tuberculosis. It will amount to US$4m.

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