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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: 264 - (01/01/03)

The Moldovans are reconsidering their lot and not without reason. Everybody seems to be totally ignoring them. 

The Cinderella of Central/Eastern Europe
Moldova's neighbours and near neighbours are all being made a fuss of by the West at the moment. Russia is of course a perennial in this respect. But Ukraine and Belarus, its fellow FSU states to the west, are now the butt of savage criticism in Western circles and capitals. President Lukashenka of Belarus and 50 henchmen are being barred from visiting the EU, while President Kuchma of Ukraine is being cold-shouldered, as at the Prague meeting of NATO in November. It is as if Belarus and Ukraine have assumed the mantle of being the bad boys for the West on the European continent, which Moscow abandoned along with the Warsaw Pact and the Soviet Union.
Countries to the north and west of Moldova are by contrast being welcomed with open arms by NATO and the EU. Slovakia and Romania, as also Bulgaria and the Baltic state, are due for NATO inclusion by 2004. The Baltic states and Slovakia are due for inclusion, along with Slovenia, Cyprus and Malta, in the EU by May of 2004. Only Moldova is being neglected, the Cinderella of the show.

Voronin makes his pitch at November Prague summit of NATO
The president of Moldova, Vladimir Voronin, may be unabashedly communist, elected by a parliament in April of last year that has been dominated by the victorious Communist Party of Moldova of which he is the leader. So is the government since elections in March 2001. But the EU and the US were immediately supportive, aware that the previous government had been implicated deeply in corruption, the bugbear of any reform effort.
The communists are at least avowedly committed to clean governance. They have an uphill task. Voronin sees the unsolved issue of TransDnestr, the ethnic Russian and Ukrainian enclave on the left bank of the River Dnestr, as a large part of the problem.
TransDnestr is a Russian or rather CIS military base, a hangover from Soviet times, led by an unreconstructed Soviet thug in its 'president,' Igor Smirnov. His true soul - mate is President Lukashenka of Belarus. While the latter aspires to a reunion with Russia in a mini-USSR, Smirnov has retained a mini-USSR in TransDenstr all along, one of the Brezhnevite vintage, replete with Russian and Ukrainian gangs marketing 'army surplus' and other choice items. Smirnov did apply for TransDenstr to be allowed to join the Russian-Belarus Union. His letter to Moscow went unanswered.
TransDnestr used to account for one third of the Moldovan economy, being its industrial heartland. Its de facto secession since Moldova's independence in 1991 has seen Moldovan GDP plunge to one third of its pre-independence level.
Voronin is putting his hopes on NATO to rescue Moldova from its plight. He was invited to attend the 46-member North Atlantic Partnership Council on the second day of the November Prague meeting of the organisation.
"NATO's expansion closer towards the Moldovan boundaries will contribute to the TransDnestr settlement," Voronin said, referring to the Prague summit ruling on enlargement. "I said at the summit of the North Atlantic Partnership Council that TransDnestr is a zone that is posing a real threat to the regional security of southeastern Europe. International organisations, including NATO, should understand that the TransDnestr issue does not just involve political separatism. The criminal component has outweighed the political aspects," he said. "The production and smuggling of arms and dual-use materials, and the formation of the offshore black market in TransDnestr pose a threat to South Eastern Europe." 
The Moldavian president admitted that he is more concerned about the real threat of global terrorism than NATO enlargement. He said that it is possible to prevent the threat only through the immediate consolidation of all of the international community's forces. "Moldova firmly supports the fight against any forms of terrorism," Voronin stressed.

The economy is shaping up
Moldova may have the poorest economy in Europe, having taken over this unenviable distinction from Albania in the last few years. But its economy is now showing signs of a certain improvement.The budget deficit is down to 0.8% of GDP, with foreign debt management taking up 31% of all state spending. But it is benefiting from the third tranche, US$10m, of a SAC-3 credit from the World Bank, to cover the deficit. GDP is due to grow by 6% in 2003 and inflation to be in the 5-6% range by next year. 

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ENERGY

Dnestre plant balks at Moldovan electricity exports to Romania

The Romanian company Electrica has not started importing Moldovan electricity into Romania yet. According to earlier reports by Moldovan media citing the Moldovan Energy Ministry, the delay was caused by technical problems like the breakdown of a transformer station.
At the same time, the acting director of the Cuciurgan power plant [controlled by Moldova's breakaway Dnestre region], Ivan Degtyar, told Olvia-Press web site that the project's implementation is questionable since there has been no agreement signed between Moldova and the power plant.
According to Degtyar, "first Moldova tried to implement this project without involving the Cuciurgan power plant. This proved to be impossible due to certain particularities of the energy supply system. The Moldovan Energy Ministry is currently holding talks with the Dnestre industry ministry on including the Cuciurgan plant in on this project."
Ivan Degtyar noted that "the Dnestre side is not satisfied with the economic conditions put forward by Moldova. This is why the issue of including the Dnestre region in on the project remains unsettled."

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FINANCIAL NEWS

Moldova reports sharp rise in US trade

Moldovan-US trade totalled US$72m in the first 10 months of 2002, which is 73 per cent higher than the same period last year. The USA ranks sixth among Moldova's main trade partners, Infotag News Agency has reported.
Moldovan exports to the USA, mainly textiles and horticulture products, totalled US$26.7m in the first 10 months of 2002 (up 31 per cent over last year). US imports to Moldova rose by 12 per cent (increasing to US$45.4m in 2002), the Economics Ministry's press service reported.
Since 1995, Moldova has been included in the list of countries benefiting from a general system of trade preferences with the USA. This has allowed Moldovan products exported to the USA to be partially or completely exempt from customs duties.
According to Economics Ministry data, half of the technical aid received by Moldova so far has come from the USA. Since 1993, the US government has given Moldova US$200m worth of technical assistance, particularly for the development of energy, agriculture, a tax system, local self-administration and health.
A Moldovan-US intergovernmental committee for economic cooperation and investments has been set up to develop relations between the two states. The first meeting of the committee is scheduled for next spring.
US companies have already invested more than US$52m in Moldova. Chisinau is interested in further investments in radio-electronics, manufacturing of consumer goods, technological equipment and the processing of agricultural products.

Moldova releases inward investment figures

Foreign investments into Moldovan companies totalled US$14.6m in January-September 2002. The biggest investors were Holland (US$7.4m), Germany (US$1.5m), Cyprus (US$1.2m) and the USA (US$1m), Infotag News Agency has reported.
According to the data of the statistics and sociology department, foreigners invested mostly in energy, gas and water companies (46.6 per cent), the processing industry (21.8 per cent), wholesale and retail trade (10.7 per cent) and transport and communications (9.9 per cent).
A total of 2,570 companies with foreign investments were registered in Moldova in early October, including 904 foreign-owned companies.
In January-September, exports by companies with foreign capital reached US$104.2m, which makes up 23.1 per cent of Moldova's total exports, and imported goods worth US$233.9m, or 32.5 per cent of total imports.

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