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MOLDOVA


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
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)

Books on Moldova

REPUBLICAN REFERENCE

Area (sq.km) 
33,843 

Population 
4,446,455

Principal 
ethnic groups 
Moldovans 64.5%
Ukrainians 13.8%
Russians 13.0%

Capital 
Kishinev 
(Chisinau)

Currency
Leu (plural: Lei)

President 
Vladimir Voronin


Update No: 311 - (29/11/06)

Georgia, Moldova okay to settle "frozen" conflicts jointly
Georgia and Moldova have a lot in common, parts of their territories which are secessionist with the backing of Russian security forces, not necessarily obeying the Kremlin. They have decided to cooperate in settling these "frozen" conflicts.
This issue was in the focus during the meeting between Moldovan President, Vladimir Voronin, and Georgian Foreign Minister, Gela Bezhuashvili, when the Georgian minister arrived in Moldova recently for a two-day official visit. 
The sides expressed assuredness that "the problem of the 'frozen' conflicts may be resolved only if the territorial integrity of the two countries is maintained," the press service of the Moldovan president said.
Voronin, in his turn, voiced confidence that Tbilisi and Chisinau "will settle other problems together. One of those problems is the advancing of our countries to Europe," he said. "Moldova already has certain experience and is ready to share the benefit of this experience with Georgia," the Moldovan president said.
Bezhuashvili recalled that Georgia was expected to sign an action plan with the European Union, which is similar to that concluded between Moldova and the EU earlier. In his words, Georgia is interested in Moldova's experience with hosting the EU border mission, which began monitoring the state border with Ukraine, including its Dniester stretch, starting from December 1, 2005.

Troubles with Russia 
Russia's relations with Moldova have deteriorated since Moldova's ruling communist party took a pro-Western stance in early 2005.
The Moldovans have a lot of trouble with the Russians, who have huge leverage over them. Russia has long been the main supplier of energy and raw materials, while it used to take the bulk of Moldovan wine and tobacco exports. 
Moreover, there are over one million Moldovans living in Russia, who send remittances home worth US$1-1.5bn per annum. They are the breadlines for many Moldovan families. Russia's hold is almost as great as in the Soviet days, only more ruthlessly exploited.
Moscow banned Moldovan wine imports earlier this year, supposedly for reasons of defective quality, but really to put pressure on Chisinau to end its own embargo on trade with Transnistria, which is a den of smuggling and corruption, run by a notorious reprobate, Igor Smirnov, thick as thieves with Russian mobsters. He is standing for a fourth presidential election that he will certainly win hands down, (his people 'count' the votes). There is nothing Chishinau can do about it.

Russia hopes to complete WTO talks with Moldova, Georgia soon
Relief is coming from Russia's desire to be acceptable on the international stage. 
Russia hopes to complete talks on its accession to the World Trade Organization (WTO) with Georgia and Moldova in the near future, Andrei Kondakov, director of the economic cooperation department of Russia's Foreign Ministry, said, ITAR-TASS reported. "We hope that (Georgia and Moldova) will be constructive and we'll be able to complete negotiations with them in the near future," he said.
Meanwhile, in early November Russia's Economic Development and Trade Ministry said that Russia and the U.S. had reached an agreement on Russia's WTO accession and planned to officially sign it. Alexei Gromov, Russian President Vladimir Putin's press secretary, said that Putin and U.S. President George Bush had pledged at a meeting earlier on that day to sign an agreement on Russia's WTO accession on November 13th in Hanoi, the capital of Vietnam.

Message to Moscow
The Moldovans are fed up with the Russians meddling in their affairs. The Moldovan parliament on October 12th adopted a resolution calling on Russian lawmakers to stop supporting separatists controlling the Transnistria province in eastern Moldova. 
Pridnestrovie, also known as Transnistria or Trans-Dniester, is embroiled in a 16 year- old territorial claim with neighbouring Moldova. A hot war, which ended with a ceasefire agreement in 1992, has now been replaced by a cold war and an information war, in which both sides accuse the other of numerous unproven misdeeds. 
By a law passed in 2004 Russia's State Duma, the country's lower chamber of parliament, decreed that it could absorb certain break-away territories of former Soviet republics, so long as it was done 'peacefully.' They had in mind primarily Abkhazia and South Ossetia in Georgia and Transnistria in Moldova. The current crisis between Georgia and Russia is making the Moldovans fearful on their own account. 
Moldovan lawmakers criticized the Duma more recently for questioning Moldova's territorial integrity by supporting a controversial Transnistria referendum, held in September, where 97 per cent of the region's voters endorsed a proposal to unite with Russia. In early October, the Duma adopted a statement, approved by a 419-0 vote, saying the referendum had been conducted legally and that its results "should be taken into account by the international community" in order to protect human rights, peace and security and resolve the dispute over the region. Russia should also take into account "the free expression of the will of the people of Transnistria" when building its policy, it said, suggesting that the government should be more aggressive about supporting their hopes of joining Russia. 
Moldova's parliament said that the statement was unacceptable under international law and that Russian lawmakers openly acted as an advocate for the separatists. Moldova and the Organization for Security and Cooperation in Europe (OSCE) did not recognize the referendum. 
The Moldovan President Vladimir Voronin has said the Transnistria region is run by an undemocratic regime that fosters organized crime, and has called on Russia to withdraw its 1,500 troops stationed in Transnistria. It is notorious for its smuggling activities conducted by those with close links to the Russian underworld, including, it was widely thought until recently, arms-dealing. 
However, Moscow will have none of this; and curiously, now nor does some reputable opinion in the West, such as that of the OSCE, but this organisation of course for many FSU state in membership. 

Russian Defence Ministry survey states no unauthorized sales of stored arms from Transnistria, which sets out one parameter of the dispute and will not be the last word on the subject
A month-long survey carried out by Russia's Ministry of Defence states that all stored weapons in Transnistria are fully accounted for. This refutes speculation by Moldova that the weapons might have been sold on the black market - at least in the eyes of Moscow. Most have already been removed or destroyed under the supervision of the OSCE, the survey concluded, giving endorsement they say that has been approved by the US State Department too, but no evidence of that is in the public domain.
The audit and physical on-site review was initiated by an order from President Putin, following a meeting earlier this year with his Moldovan counterpart, President Voronin of the Communist Party. Voronin, a former Soviet-era Major General, has much in common with Putin, not just a shared Christian name 'Vladimir,' but a past career in the Soviet security network, in which Putin was a KGB operative, and a long-time communist background. They respect each other, which is decidedly not the case with Putin and US-educated and Western -inclined Georgian President Mikhail Saakashvili, who has been consistently denied a private audience with the Russian ruler.
In that common origin lies hope for a more measured outcome in Moldovan-Russian affairs than is prevailing in Georgian-Russian relations right now. In the meeting, Voronin repeated claims by Chisinau that stored weapons guarded by Russia in Transnistria were finding their way to the black market. 

All weapons fully controlled and accounted for
"With the president-to-president agreement on the audit, and the successful finding that none of these claims are true, these fears are now laid to rest," claims a Russian Defence Ministry spokesman, Major General Boris Sergey.
He emphatically denied claims and rumours that Pridnestrovie (another name for the breakaway enclave) was leaking Russian weapons, and that Russian weapons stored in the area were being siphoned off for unauthorized sale on the black market. On 12th October, Sergey produced the findings of a special commission from Russia's Defence Ministry which for 20 working days - four weeks in total - was involved in a full audit of all stored weapons deposits located in Pridnestrovie, between Ukraine and Moldova.
According to the Major General, the group of generals and commissioned officers of the main rocket artillery administration of the Ministry of Defense satisfied itself that "nothing was missing or unaccounted for. Not a single pistol, nor machinegun, not a single grenade, nor any other type of weapon." 
That is categorical enough. Is it true?

Who to believe?
Approximately 800 Russian troops are involved in guarding and dismantling an old Soviet-era ammunitions dump in Kolbasna, in northern Transnistria. The majority of the ammunition has by now been removed from Kolbasna under the supervision of the OSCE. Military equipment which it is impractical to remove has been undergoing on-site destruction. The U.S. State Department has publicly stated that the process of removal of ex-Soviet munitions and equipment has been carried out with efficiency since 2003. 
Chief among the Moldovan claims against Pridnestrovie, another name for the enclave, is that the unrecognised country is a "black hole" and a hub for weapons smuggling. Tiraspol, its capital, counters by pointing out that as a landlocked country with no airport, all exports - legal or illegal - must go through either Moldova or Ukraine, making weapons smuggling next to impossible, and that Moldova's accusations have absolutely no basis in reality.
Actually this is highly disingenuous of Tiraspol. After all the enclave owes its existence to the fact that it is separated from Moldova proper by a great river, the Dniester, giving it its name, that flows right into the Black Sea! Also Ukraine under Kuchma was believed to be wholly complicit in delivering these weapons internationally.
Western diplomats agree with Tiraspol, however, having stated to US-funded RFE/RL that Moldova's claims are wildly exaggerated. OSCE and European Union officials state that there is not a single piece of evidence to indicate that the country has ever trafficked arms at any time in the past. 
Well, well. It is a question of who you believe. The affair calls to mind the dictum of the radical UK journalist, Claud Cockburn, in the 1930s that he never believed in a rumour until it had been officially denied!

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ENERGY

Moldova opens US$38m oil terminal on Danube 

Moldova on October 26 opened a US$38 million oil terminal on the Danube River, for the first time linking the land-locked country with international ship traffic, New Europe reported.
The Free Port Dzhurdzhulesht is located at the southern tip of the former Soviet republic. "This will enable our country to receive oil shipments from abroad," said Moldova President, Vladimir Voronin, at an opening ceremony of the port. Moldova's government completed the installation in cooperation with the Azerbaijan energy company Azpetrol for an estimated total cost of US$38 million, with US$27 million raised by the Azerbaijan firm.

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FOREIGN LOANS

World Bank to provide US$10 million to help boost growth 

The World Bank is to provide the Moldovan government with US$10 million to finance work aimed at accelerating economic growth and increasing the effectiveness of social programmes, Interfax News Agency reported.
Slavian Gutu, spokesman for the World Bank office in Moldova, said the Eurobond board of directors approved the credit at a meeting in Washington. "The credit is being provided for 40 years with a 10-year grace period at 0.75 per cent per year. It will be used to implement a strategy of economic growth and to reduce the level of poverty. Investment is planned in repairing roads, the social sector and rural development," he said. "Although in recent years the poverty level in Moldova has fallen significantly, it is necessary to increase state investment in infrastructure and in social services," Gutu said. 

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INVESTMENT STRATEGY

Moldova approves investment strategy 

The Moldovan government has approved the strategy for attracting investment and promoting exports for the period until 2015, RBC news service reported. 
Economy Minister, Igor Dodon, said the document contained a new outlook on the process of attracting investment and promoting Moldova's exports. The strategy puts a special emphasis on developing the infrastructure, such as modernizing the road network, developing free economic zones and industrial parks. During the period of the implementation of the strategy in 2006-2015, Moldova plans to achieve direct foreign investment growth of 10 per cent per year, fixed investment growth of 8.0-15 per cent per year, and export growth of 10-15 per cent per year, Dodon stated. Moldova also intends to expand the range of its exports, and broaden and diversify its export markets, he added. To achieve this, the republic will provide tax preferences and hold a tax amnesty, among other stimuli to raise investment.

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TRADE DEFICIT

Foreign trade deficit grows 36% in 9 months 

Moldova's foreign trade deficit grew 35.8 per cent year-on-year to US$1.1 billion in January-September 2006, a source at the national statistics bureau said, Interfax News Agency reported.
Exports dropped 8.2 per cent to US$718.6 million in the first nine months, but imports grew 14.5 per cent to US$1.8 billion. Imports from the Commonwealth of Independent States dropped 23.5 per cent to US$303.7 million, which helped cause the reduction in exports. Exports to Russia, which is considered Moldova's biggest trading partner, fell 45.6 per cent to US$142.3 million.
Russia accounted for 19.8 per cent of total exports, compared with 33.4 per cent in the first nine months of 2005. Exports to the European Union grew 6.5 per cent to US$239.5 million. Exports of food products, beverages and tobacco products fell 30.7 per cent to US$197.3 million in January-September 2006. Exports of textile materials and products grew 11.5 per cent to US$163 million, while plant-based exports dropped 3.2 per cent to US$84 million.
Imports from the CIS rose 10.1 per cent to US$704.5 million. Imports from Russia grew 50 per cent to US$273.1 million and 6 per cent to US$559.3 million from the EU. Imports of mineral resources grew 31.2 per cent to US$458.7 million. Imports of machines, appliances and equipment rose 8.2 per cent to US$248.9 million and imports of chemical industrial products rose 3.3 per cent to US$158 million. Exports stood at US$83.4 million and imports at US$230.5 million in September 2006. Moldova's foreign trade deficit grew 23.5 per cent to US$1.22 billion in 2005. Exports grew 10.7 per cent to US$1.09 billion and imports rose 30.7 per cent to US$2.31 billion.

 

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