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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: 268 - (25/04/03)

The Moldovan republic is not doing well, indeed is now the poorest country in Europe, having taken over that unenviable role from Albania. This is an anomaly. It actually possesses a potentially rich agriculture and horticulture, situated as it is on the rich black soil that stretches from the Carpathians to the southern Urals across Ukraine and Southern Russia, once the bread basket of Europe. It has in the river Dnestr a highway to the Black Sea and beyond while its geographical location and historic and linguistic links to Romania qualify it for EU membership one day.

The Communists take stock
For two years now Moldova has had a communist government, the only one in Europe. That it is also the poorest country of the continent is no accident. The Brussels bureaucrats and the West generally have been understanding and sympathetic about this development. They are well aware that there is a sound logic to it, the communists being the most idealistic and least corrupt of the political forces at work in the benighted and impoverished land.
The communists have dropped their revolutionary zeal: indeed even their forerunners in Brezhnevite and post,-Brezhnevite times scarcely had much zealotry of the true flame. 'Better brain-dead than red' was then the effective line. The government of President Vladimir Voronin is similarly devoid of new ideas.

The China card
But Voronin has one old idea that he is sedulously developing. He is courting the like-minded communists of China, the mandarins of Beijing, who believe in pushing economic, not political, reforms.
He went to China and Vietnam earlier this year and has offered the Chinese and Vietnamese favourable terms to set up in Moldova business ventures, technical and cultural institutes and technology centres. They can use Moldova as a base to enter the vast European space around it, Ukraine and Russia to the east and Romania, Bulgaria and the EU beyond to the west, all at cheap wages for an educated work force, the one undoubtedly beneficial legacy of former Soviet rule. It was Albania under Enver Hoxha who last played the China card but then it was their ideology and military supported he looked for, not economic colonialism. 

TransDnestr demilitarisation
Another less helpful hangover from Soviet times is the largely Russian - and Ukrainian - populated enclave, TransDnestr, across from Moldova proper on the left bank of the river Dnestr. It has been a CIS, in effect a Russian, military base ever since independence, with a local unreconstructed Stalinist in its president, Igor Smirnov. It has de facto autonomy.
Moscow is determined to extricate itself from TransDnestr and is removing its troops in stages. There is no conceivable military rationale for their deployment there, now that the Cold War is over, the Soviet Union no more and the Germans and the French Russia's new close allies in the West.
Putin is on good terms with Voronin, a Russian by race and tongue, who has persuaded him that Smirnov's regime, venal through and through, is an embarrassing anachronism. What Moldova needs is not the Big Brother protection of Russia, but the openness to the wider world, which being China's Hong Kong in the FSU might bring. Putin who is open to new approaches, realises that.

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FINANCIAL NEWS

Moldova prepared to make it without IMF loan


The lack of external financial assistance will not hit the state budget till July, as the government will take measures to cover the spending for the first half of this year from available domestic resources, Prime Minister Vasile Tarlev told the press on 27th March, Basapress News Agency has reported.
The premier estimated that the government could get the next US$25m tranche from the International Monetary Fund no earlier than July. "All we have to do is to accept the condition under which a pre-shipment inspection [of exports] will be carried out by a single company, as the IMF requires," he said.
"Pre-shipment inspection is the most important condition of the IMF for further assistance, but this is a political problem, which has to be solved by the parliament," Tarlev added.
The premier said that given the new disruption of financial assistance, the cabinet will follow the pessimist scenario for the national economy, and some social protection actions will not be carried out due to the lack of finances. "It is premature to establish what happens next," the premier stated.
The IMF mission, which included experts in macroeconomics, monetary and banking systems, finance and budget, studied on 13th-25th March the government programme and fulfilment of obligations needed for the disbursement of an ordinary tranche of credit under the poverty reduction and growth facility mechanism. The mission established that preliminary actions included in the memorandum of economic and financial policies failed to be respected [by Moldova] and, as a result, the IMF cannot advise the managing board to approve disbursement of the next tranche of the credit for Moldova.

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FOREIGN LOANS

Moldova fails to get money from EC


Negotiations between the European Commission and the Moldavian government on allocating a €15m grant to the former Soviet republic, have been postponed for several months, the head of the EC delegation in Moldova, Ivan Borisavlevic, said at a meeting with Moldavian Economy Ministry, Stefan Odagiu, RBC quoted a representative of the Economy Ministry as saying. 
The EC official noted that the next EC mission would arrive in Chisinau in June. He said the delay in allocating the grant was due to the fact that the government had failed to agree with the International Monetary Fund's mission on allocating US$25m within the framework of the programme on fighting poverty. Moldova may receive these funds in June, if the government fulfils provisions stipulated in the agreement on allocating these resources.

World Bank sets new conditions for resuming loans

The World Bank has put forward a new condition for continued financial assistance to Moldova and implementation of an important project in the Moldavian energy sector.
World Bank Director for Moldova, Luca Barbone, has had meetings with President Vladimir Voronin, Prime Minister Vasile Tarlev and experts of economics ministries. At the end of the visit, he said that one more obstacle has appeared before resuming international financial assistance for Moldova. The Moldavian government will have to solve problems, which have appeared in relations with Union Fenosa. "The supreme Justice Court has sent to a lower court the case on the sale of the networks. Under these conditions, it is not clear how Union Fenosa will operate in Moldova in the future. This makes impossible the attraction of investments in the Moldavian energy sector," Barbone said. 
The World Bank official said that not only the Energy II project, worth up to US$35m, depends on the settlement of this issue, but also the continuation of credit to Moldova in order to cover the budgetary deficit. Among other conditions were the privatisation project, in particular, privatisation of the wine and tobacco companies and the resumption of financial assistance by the IMF, ProTV reported in Chisinau.

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TELECOMMUNICATIONS

Moldtelecom awarded GSM licence

Moldavian incumbent telcoms company, Moldtelecom, has been awarded a GSM licence by the country's telecoms regulator, the National Agency for the Regulation of Electronic Communications and Information. The 15-year licence will cost Moldtelecom €920,000. A first payment of €185,000 is due in April and further payments of the remaining €735,000 are to be remitted over the next four years.
Moreover, the government has said that it intends to sell its 51% majority holding in Moldtelecom.

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