Leu (plural: Lei)
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: 274 - (27/10/03)
Moldovans wish to emigrate
The sad fact is that the majority of the young people, that is those aged under 30, in Moldova want to emigrate. In a recent poll 62% of respondents told the State Migration Department that they would go abroad to take a well-paid job and 18% were ready to emigrate.
Moldova is now the poorest country in Europe, having taken over the bottom slot from Albania. The Moldovan republic has one of the most seriously afflicted of the post - Soviet economies, down to a third of its 1991 level. It suffered a civil war in 1992 that effectively saw its most developed industrial region, the TransDnestr province on the left bank of the River Dnestr, secede, with its largely Russian and Ukrainian population. This was a heavy blow to the economy, plagued by the other usual post - Soviet maladies, already manifested, cronyism among a corrupt elite, gross red tape and a residue of attitudes hostile to a market economy.
Popularity amid poverty
The one thing that Moldova achieved was the creation of a sort of democracy. This was demonstrated in March of 2001 when the communists got back in on 50.1% of the vote, who then elected their leader Vladimir Voronin as president. Curiously, the US and the EU welcomed this development. Not without reason. At least there is a chance that a new regime might not be corrupt!
Voronin has, indeed, done well. His popularity has actually risen and stands at over 70%. How so in the poorest country in Europe?
The paradox is readily explained by the incredibly low expectations of the population. The main reasons for why young people want to go abroad are lack of money, unemployment, expensive private medicine and high food prices. The State Immigration Department said that 1.6 million, or 30% of young Moldovans are working abroad, 80% of them illegally.
Fourteen per cent of those asked in the same poll as above why they wanted to emigrate responded in the affirmative to the statement: "Moldova's tomorrow is worse than its present day;" 22% said that there was no reason to expect any change for the better and 10% saw living abroad as a chance to build for their future.
If you have been experiencing decline for a decade or more - and precipitous decline at that - a government that can deliver some improvement in public morality in a stagnating or even mildly growing economy comes to be looked on as benign. Then Voronin is the one figure who could achieve movement on the stalled process of re-integration of the country.
Voronin aims to re-unite the country
As a son of Trans-Dnestr himself, with a Russian origin, he sees himself as the one man who might re-unite the torn republic. At first his idea was to stand in elections against the entrenched and thoroughly corrupt leadership of Trans-Dnestr under its president, Igor Smirnov. He wisely refrained from that, for while Moldova may be democratic, Trans-Dnestr is only in name. Smirnov won 85% of the vote in being re-elected on December 9th 2001.
What Voronin has done instead is to make conciliatory gestures towards the Russians, re-introducing Russian language into the school curriculum as a compulsory subject (so is the native Romanian, the language of 20% of Moldovan citizens). There have been protests in Chisinau against this move by supporters of right - centrist parties attached to the Romanian heritage of Moldova. But at least they were allowed to take place. That Moldovans should know some Russian is not an outlandish idea, given history and the presence of so many Russians in their midst.
Voronin's other line of approach to heal the feud with Trans-Dnestr has been to use the good offices of Russia. His intermediary here is Russian First Deputy Foreign Minister, Vyacheslav Trubnikov. But the intransigence of Smirnov is making it difficult to conduct negotiations.
The one really effective way to lure the Trans-Dnestrians back would be to get the economy moving in the right direction - poverty and unemployment are the key problems.
Certainly Voronin's high standing in the West is a trump card. Moldova is sending 42 military professionals to participate in the Iraq peace-keeping process. He is widely esteemed in Western capitals.
It is not just a question of aid and credit, although the World Bank and IMF are now closely involved, but of attracting foreign investment to what is in natural terms a rich country, the orchard of its part of Europe. Paradoxically, it may be the modern communists who purge Moldova of the ills of old-style communism and anchor their country to the West.
World Bank downbeat on Moldova's economic development
The period to come will be a difficult one for Moldova without adequate foreign support in the next six to nine months, Edward Brown, the resident representative of the World Bank mission in Chisinau, has said, Basapress News Agency reported.
He said economic growth will not be probably as good [as expected], while inflation and the trade balance deficit will soar. Revenues expected by the government "are insufficient to serve the large debt it is facing."
"If the reform continues, conditions will improve," Edward Brown told a news conference on 7th October.
He said that it is unlikely that Moldova will receive any loans from international financial institutions in the first quarter of 2004.
Everything will depend "on dialogue with the IMF and the World Bank's assistance strategy for Moldova, the elaboration of which has already started." The strategy could be submitted to the World Bank board of directors in mid-2004. "If the strategy includes budgetary support, I repeat if it includes this, then loans will certainly be released," Edward Brown said.
Moldova reports fastest industrial growth in CIS
Moldova has registered the highest increase in industrial output (19.7 per cent) among CIS member countries in January-August 2003, Infotag News Agency has reported.
According to the CIS statistics committee, Armenia is second (with 19.2 per cent), followed by Ukraine (14.6 per cent). CIS member states registered an average 8 per cent increase in industrial output in January-August 2003 compared with the same period last year.
IMF director begins working visit to Moldova
International Monetary Fund Executive Director, Jeroen Kremers, arrived in Chisinau on 20th October on a six-day documentation visit. This is the second visit of the IMF dignitary to Moldova, which preceded the arrival of a fund mission in Chisinau on 28th October. However, there was no connection between the two visits, Basapess News Agency has reported.
Basapress News Agency reported that government sources said they do not yet know the agenda of Kremers' visit. Many experts presume that the fund's top official went to Chisinau to study the economic and financial situation of the country and its development strategy after the International Monetary Fund [IMF] suspended its financing programme last summer.
In December 2003, the IMF board of directors is to discuss how Moldova is fulfilling the financing programme as part of the Poverty Reduction and Growth Facility mechanism, which was approved on 15th December 2000 for a period of three years and which expires in December 2003. Because Chisinau failed to meet some actions which were agreed with the fund, the programme has been repeatedly suspended. Thus, Moldova received only three tranches worth about US$37m out of the total sum of US$137m in December 2000, March 2001 and July 2002.
Jeroen Kremers is an executive director of the IMF, including for Moldova. A mission of the IMF arrived in Chisinau on 28th October on a two-week visit to discuss the economic and financial situation of the country and initiate talks with the government on the development strategy prior to beginning talks on a new credit programme next year.
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