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MOLDOVA


 

 

In-depth Business Intelligence

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)

Books on Moldova

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: 283 - (26/07/04)

Relations with NATO
Moldova is a small country, with only 4.5 million people. It is also the poorest country in Europe. The Moldovans do not have much of a defence establishment, just about 7,000 to 8,000 troops. But Moldova now with the accession of the new NATO members is effectively a borderline state. For it is on the border between Romania and Ukraine. 
The Moldovans have been earning brownie points of late, even if the neutrality enshrined in their constitution means that they do not want to join themselves. They have participated in Iraq, where they had a de-mining unit and some other forces there until March of this year, and they are planning positively to send another contingent to Iraq, so NATO has to thank them for that.
They participate in the NATO Partnership for Peace programme. They have been quite active in peacekeeping exercises. In fact the most developed battalion in the military is a peacekeeping battalion. Many of the officers in this battalion have had some training in the U.S. at various staff colleges, et cetera.

The Trans-Dnestr problem
Moldova is then a buffer state in between NATO and the rest of the states of the former Soviet Union. A major problem here is the smouldering stand-off over Trans-Dnestr. On the eastern side of the Dnestr River, there is a strip basically the length of Moldova between Moldova and Ukraine that is populated by Slavs, Ukrainians and Russians predominantly. The rest of Moldova to the west of the Dnestr and bordering Romania is predominantly 65 per cent ethnic Romanian. They are Moldovans but with an ethnic Romanian stock.
Since about '90, the Dnestr region declared themselves a separate republic, even around the time that the Soviet Union was starting to crumble. It has been a separatist region ever since. There was some fighting there in '90, '91. A ceasefire was brokered in '92 east of the river. There is a multi, a five-sided group that is working to try and negotiate settlements in this conflict. It includes the OSCE, Russia, Ukraine, Moldova and Trans-Dnestria. 
This five-sided negotiating group has made a number of proposals. The primary sticking point seems to be all sides agree that some sort of federated or federative status would be proper. The Trans-Dnestrians want a co-equal federation. The Moldovans want what they call an asymmetric federation, which means they have a few more rights than the separatist region. That has held up the negotiations.
In November of last year the Russians worked a separate negotiated settlement directly with the Moldovans and at the 11th hour it fell through. President Voronin from Moldova decided not to sign it. It slightly changed the complexion of the negotiations. Now seeing how that fell through there seems to be an impasse.
There are about 1400-some-odd Russian forces in Trans-Dnestr. As part of the final summit declaration of the OSCE in Istanbul in 1999, Russia agreed to withdraw forces from Moldova and Georgia. They agreed to take out forces and armaments. They successfully withdrew all items limited by the CFE Treaty -- heavy equipment, tanks and personnel carriers -- by the deadline, which was December2001. The troops, according to the declaration from 1999, were to have been withdrawn by December 2002. The Russians missed that deadline.
A subsequent OSCE summit at Porto in 2002 extended the deadline until December 2003. The Russians have also missed this deadline. They have gone on record as saying that, because of the unrest they believe would follow if they withdraw their troops, the situation would deteriorate to civil war. There is also a very large ammunition dump in Trans-Dnestr, and the Russians say they need their forces there to guard this ammunition dump. They had been taking some of it back to Russia, but that process is halted.
There are parliamentary elections in Moldova in February 2005 and the conventional wisdom now among analysts is that there will be no movement on this negotiated settlement until at least several months after the elections.

Political scene
The way the Moldovan government works is that it has a parliamentary presidency. The parliament is elected directly and then the parliament elects the president. So right now it has a unicameral legislature. 
There are 101 seats in parliament. Seventy of them are members of the communist party of Moldova, who elected President Voronin, who is also of the communist party of Moldova. So depending on the elections in February of 2005, one will see what direction the government takes and what direction the settlement might take.

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ENERGY

Moldovan power plants to be privatised

Moldovan heating-electric power plants - CET-1 and CET-2 in Chisinau and CET Nord in Balti town - will be privatised according to individual plans, reported Infotag News Agency recently. 
Subject to the privatisation will be the State-owned parcels in the plants - 50% plus 1 share, reads the bill on amending the existing CET privatisation concept. The Government approved the new concept of privatisation recently. The CETs were to be put up for privatisation simultaneously at the second stage, after the privatisation of electricity distribution enterprises (REDs), and the parcel was supposed to be 75% plus 1 share. The Ministry of Energy maintains it is inexpedient to put up the CETs for sale all together, because these facilities have difference ages, different degrees of wear and tear, and are in different operating conditions.

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FOREIGN LOANS & AID

WB loan US$20m for vulnerable communities

On behalf of the Moldovan Government, Deputy Prime Minister, Valerian Cristea, has signed with the World Bank a credit agreement intended to further underpin the development of the social sphere in the Republic of Moldova, reported Infotag recently. 
The World Bank has approved the US$20m equivalent credit for the Moldova Social Investment Fund 2 Project (SIF 2). This project is a continuation of the first Social Investment Fund project, which has been successfully implemented in rural areas over the last 5 years. The objective of the project is to provide access to a better quality of basic social and economic services in education, environment, water, roads and other services in poor rural communities and small towns. The project will also contribute to the development of capacity of community organisations, and to strengthening social capital. The project is closely linked to and supports the objectives outlined in Moldova's Economic Growth and Poverty Reduction Strategy paper, and will help in establishing a regular feedback mechanism to reflect community experiences in changing national policies. 
The total amount of the SIF 2 Project is US$29.17m, out of which the IDA credit is US$20.0m, US$1.53m represents the Government's contribution, and US$3.73m will be covered by local communities. The remainder is expected to be covered by donor co-financing grants. The projects will be implemented over the period of five years: October 2004 to September 2009. The World Bank credit will be disbursed on standard IDA terms, with no interest rate, and will be repayable in 40 years, including a 10-year grace period. Moldova joined the World Bank in 1992. Since then, commitments to the country total approximately US$572m for 24 operations.

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