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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 1,964 1,621 1,500 141
GNI per capita
 US $ 590 460 400 157
Ranking is given out of 208 nations - (data from the World Bank)

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ethnic groups 
Moldovans 64.5%
Ukrainians 13.8%
Russians 13.0%


Leu (plural: Lei)

Vladimir Voronin

Update No: 295 - (26/07/05)

No easy answer in Transnistria
Ukraine wishes to play a larger diplomatic leadership role after the Rose Revolution last year, bringing a new team to power under President Victor Yushchenko, now a world-renowned figure. 
A plan introduced by Ukraine to resolve the 15-year struggle over the disputed region of Transnistria, the territory east of the Dniester River in Moldova, has met with some success, and augurs well for Ukraine's new prestigious foreign leadership of the region. The region is largely Russian-speaking, but it has a key Ukrainian ethnic component as well.
The document, devised by Ukraine's National Security and Defence Council Secretary Petro Poroshenko, envisages an autonomous Transnistria within a sovereign Moldova, and democratic elections to the Transnistrian parliamentary body by the end of the year. Moldovan President Vladimir Voronin called the document the "most checked out and promising" in the history of the conflict when the Moldovan parliament voted to support the plan on June 10th.
Yet, true to the form of the labyrinthine negotiations, "indispensable conditions" subsequently demanded by Moldovan legislators have proven to be irrevocably repugnant to key guarantors, Transnistria and Russia. All in all, despite Ukraine's efforts, significant improvements to the situation continue to be elusive. 
This is dangerous, not only for Ukraine but all of Europe. Continued resistance on the part of the key actors will only perpetuate the malfeasance and lawlessness that has come to characterize the regime ruling the enclave of 670,000 people. Known colloquially as the "black hole of Europe," Transnistria allegedly rakes in huge profits through tax-free trafficking schemes involving arms, drugs, cigarettes and other products. Viorel Cibotaru, programme director at the Institute for Public Policy in Chisinau (IPP), estimates that Transnistrian authorities have generated between US$1 and US$2 billion in illegal revenue, some of which is used to pay pro-Transnistrian lobbies in Kyiv and Chisinau. The area is also notorious for its panoply of human rights violations. 
Ukraine has a vested interest in reining in this Wild West of south-eastern Europe, given the Western course envisioned for the country by President Viktor Yushchenko's administration. Borys Tarasyuk, the head of Ukraine's Foreign Ministry, called ending the conflict "one of the most important tasks for Ukrainian national security" in February. 

Imperial shenanigans
Transnistria has been affiliated with Russia since 1792, when it was incorporated into the Russian Empire. The rest of Moldova, which was also briefly a part of Tsarist Russia, but historically a principality of Romania, was only added to the Soviet Union during the Second World War, when it was combined with Transnistria to make the Moldovan Soviet Socialist Republic. 
Unlike in Ukraine, where the Soviets cracked down on ethnic loyalty in favour of a stateless Soviet identity, they encouraged Moldovan nationalism. Considered artificial by many Moldovans today, the project was a way to quell ethnic identification with Romania.
When the Soviet Union fell apart, the majority population of ethnic Ukrainians and Russians in Transnistria balked at the idea of being joined to Romania, a possibility being considered by the rest of Moldova. The conservative Soviet politicians in power in Transnistria exploited the natives' anxiety, and took the opportunity to declare the independence of the Dniester Moldovan Republic (DMR), as the Transnistrian state was branded, in 1990. A short civil war soon broke out over the split, with the conflict ending when the Russians intervened militarily in the spring of 1992 under the renowned General Alexander Lebed, who has since died in a Siberian aircrash. Around 1,700 Russian peacekeepers still police the region, with Russia seen as attempting to safeguard a foothold in its old sphere of influence by supporting Transnistria's de facto independence from Moldova. 

A mini-USSR
Transnistrian President Igor Smirnov and friends have more or less made Transnistria a living museum of the Soviet Union, retaining the region's infrastructure from the communist era, when the area was Moldova's industrial heart, and mimicking Soviet efforts to control the minds of the masses.
Transnistria touts its own brand of nationalism while billing itself as the last bastion of Moldovanism (again, a construct promoted by Stalin), which it pits righteously against a Romanianized Moldova. Tiraspol, Transnistria's capital, has walls daubed with freshly painted slogans that proclaim, "The DMR is our pride!" and profiles of Lenin are displayed prominently on government buildings. 
Does the average Transnistrian buy into this anachronistic ideology? Difficult question. First of all, many grassroots NGOs and Western organizations committed to democratizing the region have been harassed or barred from working by Transnistrian authorities - making objective information about the native mindset hard to come by. But Natalya Belitser, an expert at the Pylyp Orlyk Institute for Democracy in Kyiv who has worked extensively with the region, proffers that Transnistrians still have a "Soviet mentality that makes them unaware of the attractiveness of democracy." Media mostly limited to Transnistrian and Russian sources, "informational brainwashing," as Belitser puts it, and poverty conspire to keep political consciousness low. A poll conducted by the IPP in February 2005 shows that only 27 percent of non-Transnistrian Moldovans are concerned or very concerned about politics.
And in Moldova proper political consciousness and democratic freedoms, while hardly perfect, are widely seen as being better realized than on the other side of the Dniester.
At the same time, the isolation and grinding poverty of Transnistria - which has an official GDP even lower than Moldova, the poorest country in Europe - must be hard to ignore, as is that along with a Soviet-like state come bizarre manifestations of its corruption.
One notable example is the brand-new, state-of-the-art soccer stadium in Tiraspol's vacant and derelict outskirts, as out of place as a spring in the middle of a desert. There's even a Mercedes-Benz outlet in the stadium's bottom floor, which no one save the region's elite could ever dream of patronizing.
An equally lavish Orthodox church has also reportedly been erected in Tiraspol. While these structures in some way benefit the local population because they are officially public facilities, more frequent, covert forms of corruption don't. As a result, "people are becoming more and more tired," says Belitser. "They want normal lives."
But intimidating governance, coupled with the low political consciousness, easily stifles dissent. "Human rights don't exist in Transnistria," says Maxim Belinschii, a lawyer at the Helsinki Committee for Human Rights in Moldova. Stefan Uritu, the Committee's president, says that the right to free and fair elections; freedom of speech and mass movement; and an independent judiciary are all systematically violated. He also alleges, as the Helsinki Committee has formally attested, that the Transnistrian regime is responsible for more insidious offences, including the deaths and/or disappearances of local critics of the regime. 

Transition in Transnistria?
According to conflict resolution theory, the Transnistrian dispute is one of the easiest to solve because, unlike conflicts in other Eurasian hotspots like Chechnya, Abkhazia and Nagorno-Karabakh, the dispute isn't predicated on religious or ethnic hatreds. "The conflict is an artificially constructed political issue," Belitser explains. 
On the other hand, those benefiting from Transnistria's lawlessness are not inclined to see the regime dismantled any time soon.
"The main task of the Transnistrian regime is to keep it going as long as possible," says Viorel Cibotaru, the program director at IPP. If the current regime maintains power and drive, as the stalled negotiations unfortunately suggest, "one hundred years from now, this game will still be the same."

Moldova asks EU to help solve frozen Dniestr row
The separatist Transnistria region has been a thorn in the side of the Moldovan government since the Romanian-speaking country achieved independence from the Soviet Union in 1991. Russian speakers in Dnestr set up their own mini-state even before the collapse of Soviet rule and, after a brief war in 1992, still control what they call the Pridnestrovian Moldavian Republic. Moldova sees the region as a haven for smugglers and arms dealers. 
Moscow keeps 1,000 troops there, despite agreeing to remove them, saying they keep the two sides apart and oversee large quantities of weaponry and ammunition. It is patently uninterested in really solving the problem, indeed benefits financially from the shenanigans going on.
Moldovan President Vladimir Voronin says the troops are impeding a settlement. Anger over Russia's stance has driven Voronin, a communist, to seek closer ties with the EU. He was first elected on a pro-Moscow ticket in 2001, but was re-elected by parliament earlier this year on a pledge to move towards EU membership. he is now an ardent pro-Westerner.
Voronin asked the European Union on June 7th to monitor the country's border in the Dnestr region, potentially helping end the long-standing frozen conflict. Voronin handed EU foreign policy chief Javier Solana a letter, jointly signed by Ukraine's President Viktor Yushchenko, which effectively asks the EU to take over efforts to resolve the problem from Moscow. "We kindly ask you to examine the possibilities for offering assistance in establishing an international customs control on the Transnistrian segment of the Ukrainian-Moldovan state border, as well as for creating an effective international monitoring mechanism on this segment of the border," the letter reads. 
The letter he gave Solana followed a plan to resolve the Dniestr question first put forward by Yushchenko. Moldova is wedged between Romania and Ukraine, and seeks the support of both in ending the problem. 
"I hope very much that discussions between Mr Yushchenko and Mr Solana on Mr Yushchenko's proposal will be very fruitful and would make progress for the reunification of the Republic of Moldova," Voronin told a news briefing after talks with Solana. Solana, who said he would visit Moldova soon, was cautious, saying he needed to analyse the letter before deciding how to react. 
"The European Union is always willing ... to see if we can be of any help to control that border," he said. "It would be too early for me to say what is the mechanism, or even what is going to be the task ... but we are going to analyse the possibilities and if the possibilities exist we will help as much as we can." 
Solana recently appointed former Dutch diplomat Adriaan Jacobovits de Szeged as his special representative to Moldova, ordering him to help end the Dniestr question. The EU wants it cleared up before Romania joins the bloc, possibly in 2007.

Moldova farmers in the spotlight
An instance of the fall-out from the Dniestr region is evident in the adjacent security zone along the Rabnitsa-Dubasari-Tiraspol route. Because of the illegal actions taken by the Transnistria authorities, the farmers in the security zone could not harvest the yield and suffered considerable losses. It was not specified by Reuters exactly what these activities were; but that they were nefarious is highly likely, such is the nature of the regime there.
Moldova's government is working on a draft law for the cancellation of penalties for non-payment of taxes by these farmers possessing land nearby the route. Prime Minister, Vasile Tarlev, ordered the document to be presented to the government for adoption and then to parliament for examination. 
At a working meeting measures were to be taken to ameliorate the social-economic situation of the residents of these villages. They were put to disadvantage last year and their social-economic situation was worse than in other districts of Moldova. 

Moldova FDI rises in 2004
In line with its new pro Western stance, it is appropriate that the volume of the foreign direct investment (FDI) attracted to Moldova in 2004 doubled if compared with 2003. It surged 101% to US$184.5m in 2004, the Moldovan Export Promotion Organisation said. 
According to the data, the influx of FDI to the Moldova's economy in 2003 had constituted US$91.75m. The considerable investment growth, registered in 2004, was conditioned by the volume of the reinvested profits, which increased 387% to US$61m.

Moldova reports growth in FDI 
The amount of foreign investments in Moldova totalled US$250 million in 2004, exceeding the figure the year before by 72 per cent, new service RBC reported recently, citing a representative of the organisation for supporting Moldova's exports. The representative added that the sum of direct foreign investments in Moldova reached US$184.5 million in 2004, exceeding that in 2003 two-fold. The number of companies with foreign capital, incorporated in Moldova, rose 11.2 per cent to 3,621 in 2004, compared to that in 2003. A total of 437 companies with foreign capital were incorporated in that country in 2004, compared to 393 companies in 2003.



Moldova boosts agro subsidies 

The amount of direct and indirect subsidies into the agrarian sector of Moldova in 2005 will total 864m Moldovan lei (US$68m), which is well ahead of last year's 500m lei (US$39.7m) the press service of the government said recently, New Europe reported.
According to Vasiliy Tarleyev, Prime Minister of Moldova, the subsidies will compensate forcosts of energy consumed for irrigation, planting of new gardens and vine plantations and construction of hail protection systems. 



Moldova prioritises EU entry 

The Moldovan government has pronounced integration into Europe and cooperation with NATO among its foreign policy priorities, Deputy Prime Minister and Foreign Minister Andrei Stratan told the conference European Choice of the Republic of Moldova in Vienna recently, New Europe report.
Apart from cooperation within the framework of the Partnership for Peace Programme, Chisinau also comes out in favour of the Individual Partnership Actions Plan with NATO. "This will help strengthen a political dialogue in the process of the solution of regional security and stability problems," the ministry press service quoted Stratan as saying.



Belarus to buy more Moldovan fruit

Moldova could export to the Republic of Belarus about 80,000 tonnes of fruits and vegetables in 2005, up by 20,000 tonnes against the planned volume, Moldovan Agriculture and Food Minister Anatolie Gorodenco said at a meeting with Belarussian Ambassador to Chisinau Vasili Sakovich, New Europe reported recently. Gorodenco said Moldova has scheduled to provide Belarus with about 30,000 tonnes of fruits, against 26,000 tonnes in 2004, and about 10,000 tonnes of vegetables in 2005, against 3,500 tonnes exported in 2004. Moldova expects a rich harvest of vegetables, and in this case the export to Belarus could reach the amount of 15,000 tonnes, Gorodenco said.





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