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MOLDOVA


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 1,621 1,500 1,300 144
         
GNI per capita
 US $ 460 400 400 162
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km) 
33,843 

Population 
4,439,502

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: 278 - (01/03/04)

Communist grip is tenacious
The Moldovans have the dubious distinction of now having the poorest country in Europe, Albania having overtaken them in the 2000s. They also have the only overtly Communist government left in Europe, no great coincidence. The democratic opposition is dispersed and disunited, unlike Belarus where a new bloc has formed against the dictatorship. The Moldovans would do well to take Belarus as a model here.
Elections to parliament are due in February 2005. They decide everything in Moldova because its president is elected by parliament, not the people. 
Last time the Communists got 50.7% of the vote, but secured 71% of the parliamentary seats, plus the presidency, due to the bias inherent in a proportional system. It will not be easy for the fractious opposition to dislodge them next time round. They will need copious external assistance, conditional on their unity.

Russia extends a helping hand
Moldovan President Vladimir Voronin has welcomed a plan proposed by Russia in November to resolve the dispute between Moldova and its secessionist region of Transdniester. It calls for Moldova to become a demilitarised federation in which Transdniester would have special status. The federation would recognize Russian and Romanian as official languages. The plan calls for the country to vote on a new constitution in October 2004. 
Russia presented the plan on Novmber 17th to Moldova and Transdniester and to fellow mediators Ukraine and the Organization for Security and Cooperation in Europe (OSCE). 
Russian-speaking Transdniester declared independence from then-Soviet Moldova in 1990. Moldovan forces and separatists fought a short war in 1992 that ended when Russian troops imposed a truce. The two sides have yet to reach an agreement on the status of the region, where some 2,500 Russian soldiers are still based. 

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ENERGY

ANRE OKs Ciment's private dealing in energy contracts

The Rezina cement factory Ciment recently became the countries first independent electricity consumer. By decision of the National Energy Regulatory Agency (ANRE), the big enterprise has acquired the right to conclude direct contracts with any power supplier in Moldova or abroad, Infotag reported. 
This became possible after ANRE approved a decision on electricity market liberalisation commencement last spring. In the initial phase, the liberalisation stipulates, the cancellation of the monopoly on the usage of 35-110 kilovolt capacity lines. This enables major consumers to get linked to such high-voltage lines directly, and to sign contracts with different power suppliers. The market liberalisation is to be completed March 2005.

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FINANCIAL NEWS

World Bank to discuss Moldova aid strategy on June 17 

The World Bank board of directors plans to discuss the Bank's aid strategy in Moldova for 2004-2007 on June 17, said World Bank Country Director for Ukraine, Belarus and Moldova, Luca Barbone, Interfax News Agency reported. 
Speaking at a meeting between a delegation of the bank and the Moldovan government in Chisinau, Barbone said consultations on the strategy will start once there is a finalised version of the national strategy for economic growth and poverty reduction. The government is due to approve the strategy in March 2004. 
Only three of the World Bank's projects in Moldova are long term, Edward Brown, the coordinator of the permanent World Bank mission in Chisinau said. These involve social investment, a cadastre project and rural investment and services. 

IMF report on Moldova economy on the cards

A report on the economic situation in Moldova is to be drafted by the International Monetary Fund (IMF) board, following the recent visit of its delegates to the country. Minister of Finance, Zinaida Grechanaya, told local journalists that the debate on the report and the opinions to be heard from the IMG board members would be very important for Moldova, Infotag reported.
After this, the IMF will define a date for the beginning of talks with the Moldovan government on a new cooperation programme since the previous expired at the end of 2003.
The above-mentioned IMF mission, led by David Owen, worked in Chisinau to analyse the government's economic and financial policy and its correspondence to market economy principles. At his conclusive news conference in Chisinau then, Owen had positively appraised economic growth in Moldova, but voiced concern over a growth of inflation which was much higher than projected for the year. Grechanaya said that after the board meeting, a new IMF mission will go to Moldova. Meanwhile, however, other smaller-size groups of IMF experts, specialising in concrete problems, may arrive in the region.

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FOREIGN INVESTMENT

Russia to invest up to US$35m into building port in Moldova 

Russia plans to put up to US$35m into a project to complete the construction of the Geurgeulesti port on the Danube River in Moldova, Interfax News Agency reported. 
The Russian Transport Ministry and the managers of shipping and operator companies working in the Danube basin approved the project, under which a joint venture will be set up to complete the construction of an oil terminal and start building dry cargo docks in the port, Deputy Minister and chief of the State River Fleet Service, Nikolai Smirnov, said. 
The construction of the port began in 1996. The port is currently operating, but needs to be upgraded. 
Russia's shipping and operator companies have shown great interest in the port as a way to export various cargoes, including oil and petroleum products, grain, timber and mineral fertilizers to Europe. The port's annual handling capacity is about 15 million tonnes. 

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FOREIGN LOANS

Japanese grant supports forestry development

The government of Japan, via the World Bank (WB), recently provided Moldova with a grant of US$919,900 for forestry development, reported New Europe recently. 
The grant is a constitutive part of the Land Conservation project. The aim of the grant is to ensure the lastingness of forestation activities in Moldova via a higher level of information of the public and via strengthening forestry administration; the improvement of life conditions in rural space via the providing of support in the direction of investment in forests and pastures and the obtaining of global benefits via the sequester of carbon and the reduction of greenhouse gases concentration. The grant also foresees financial means for such activities as the strengthening of forestry administration.

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