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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: 270 - (26/06/03)

Popular president
The Moldovans have a genuinely popular president in Vladimir Voronin, even if he was elected not by them but by parliament. That was just after his party swept to power on just over 50% of the vote just over two years ago, the Communist Party of Moldova.
Curiously, Voronin is popular with the West as well. Brussels and even Washington welcome a change from the crony capitalist bunch in power before, as corrupt as could be. The communists might just be an improvement.

EU to help over TransDnestr
The EU is offering a plan to settle the TransDnestr question, which is bedevilling the country's politics and economic life. The Russian and Ukrainian-dominated breakaway enclave comprised one third of the economy beforehand, but is now effectively independent, although a byword for corruption. Its government is recognised nowhere and it only exists because Russia and Ukraine allow it to do so.
The Moldovan Minister of Reintegration (of the enclave), Vasile Sova, endorses the plan. "This proposal needs to be thoroughly examined. It can complement the existing draft bilateral agreement on settling the conflict and provide important assistance in drawing up a new Moldavian constitution," Sova said. The European Union's Institute for Security Studies has come up with its own plan for settling the TransDnestr conflict, which envisions setting up a regional working group comprising representatives from the OSCE, Russia, Ukraine, Romania, Moldova and TransDnestr, and experts from international financial institutions. In the view of the EU experts, the group should be co-chaired by the EU and Russia. Under the plan, Russia should reduce its military presence in the region, and the remaining Russian military would take part in establishing an international mission of military observers together with the OSCE and EU.

Economy recovering
The Moldovan economy is growing faster than any other among the CIS. Its industrial production rose by 14.5% on an annual basis in the January - April 2003 period. But this is just bouncing back from an incredibly low trough.
For the Moldovan economy also contracted by more than any other CIS economy since independence to one third of its 1991 size. The economy even after several years of growth is only at 57% of its 1991 level, itself depressed in the late Gorbachev years.
The economy is not without its assets, excellent black soil for its orchards and farms and a central position in Europe not quite landlocked with estuary access to the Black Sea. But there is the rub. It is surrounded by extremely poor countries, Ukraine and Romania. Its fate will depend on their, as much as upon its own efforts.

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ENERGY

Odessa-Brody may have offshoot to Moldova

Ukraine is considering laying an offshoot to the Odessa-Brody pipeline to link it to a refinery for Caspian oil that may be built in Moldova, a company chief executive said. Interfax News Agency quoted Alexander Todiychuk, chief executive of Ukrtransnafta, as telling reporters that his company reached an agreement with Moldova recently to speed up work to that end. A joint working group has been formed, and Moldavian president, Vladimir Voronin, has appointed his representative to the GUUAM coordinating council for oil transport development. 
GUUAM is an association bringing together Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova. It has not yet been decided where to locate the refinery, which will handle up to three million tonnes of oil a year. "There are three or four location options and the refinery itself can be built in two to three years," Todiychuk said. He said the project would help fill the Odessa-Brody pipeline, which is 974 kilometres long and has a pipe diameter of 1,020 millimetres. The construction of the pipeline and the Yuzhny terminal in Odessa was completed in 2001.

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FINANCIAL NEWS

Moldovan chief banker upbeat on resumption of Western lending

National Bank governor, Leonid Talmaci, has said Moldova stands a good chance of securing a resumption of foreign assistance. Talmaci also said that the financial situation of the country was good and forecast that inflation would decline in the next few months. Inflation increased from 1.9 per cent in January 2003 to 6.2 per cent in April, ProTV has reported.
Talmaci told a news conference on 2nd June that following talks with foreign donors, he understood that foreign assistance would be resumed.
Talmaci said: "Chances of restoring relations with the IMF, the World Bank and the European Union are very good, very good. The very fact that an IMF mission arrives speaks for itself." The IMF mission will start its visit to Chisinau on 5th June. 
The National Bank governor said he expected inflation to drop. He said: "We now expect that inflation will drop this month and during the summer, or there could even be deflation."
He added that the euro's leap in value had not had a negative impact on the Moldovan economy.

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FOREIGN LOANS & AID

Moldova mending fences

In 2003, the European Commission is to issue Moldova with a US$10.4m grant under a food security programme. The funding will be released after Moldova mends its financial ties with the Intentional Monetary Fund.
The bulk of the funding will go to low-income Moldovans.

World Bank approves two loans to Moldova

The World Bank's Board has approved two loans to Moldova, worth a total of US$12.7m, ITAR-TASS News Agency has reported. 
The first one, US$7.2m, will be directed at reforming Moldova's customs service within the framework of a programme that encompasses eight countries in the South-East Europe.
The other loan, US$5.5m, will be used by Moldovan hospitals to prevent HIV/AIDS.

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