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MOLDOVA


 

 

In-depth Business Intelligence

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)

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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: 298 - (27/10/05)

A new type of Cold War with Russia
Moldova's most important international interlocutor is undoubtedly Russia. There is intense diplomatic activity going on now between Moscow, Chisinau (Kishinev) and Kiev.
On October 14th, a Russian delegation, headed by Yuri Zubakov, Deputy Secretary of Russia's Security Council, returned empty-handed from Moldavia. During the negotiations in Chisinau Moscow had asked directly: would Moldavia agree to resolve the Transdnestr problem on Russian conditions (basically continued Russian military presence in the region and its effective domination by Moscow). Otherwise it could expect a tough economic blockade from the Russian side, in other words no gas in winter, 
The Moldavian President Vladimir Voronin rejected the ultimatum. Then, the Russian delegation went to Tiraspol (capital of the breakaway region) and got agreement with its authorities about special economic relations with the unrecognized republic, which means smuggling, embezzlement and crime of every sort unimaginable in the West. This clearly indicates that Transdnestr is becoming second only to the Kaliningrad region as a Russian enclave, the other bolt-hole for every sort of crook imaginable in the East.

Unbowed Chisinau
The visit started on October 11th in an atmosphere of secrecy. The agenda and list of the negotiators were not publicized. 
But we are dealing with an ex- communist country as a matter of fact, despite, actually because of, the triumph of the Moldovan Communist Party in March. They delight in telling the facts these days. 
Only several days afterwards it became known that Yuri Zubakov brought with him Vice President of Trade Industrial Chamber (TIC) Boris Pastukhov, Special Foreign Envoy Igor Savolsky, other officials from the Foreign Ministry, who supervise the Pridnestrovie problem, the officials from Ministry of Economic Development, the representative from Gasprom, Central Bank, Federal Security Bureau, Transportation Ministry and Federal Migration Service. In other words, the representatives of the official organs, responsible for the relationship with Moldavia went to Chisinau. The same people are using recently economic and political leverages to pressure this former-Soviet republic. For instance, in September Russia imposed a ban for import of Moldavian vines and earlier it promised to raise the price for natural gas to the European price level.
As Kommersant learned from the Administration of the Moldavian President, they have never seen yet that many Russian officials in Chisinau before. The source said that Russians flew in by their own initiative and after their persistent request, Vladimir Voronin delayed his departure to Croatia, which was planned on Tuesday. According to the Kommersant source, the negotiations lasted about three hours but did not bear any fruits-- the Moldavian President categorically refused to make any concessions in Pridnestrovie (Moscow demands most of all to keep their troops, the so-called Russian 'peacekeepers'). The delegation spent three days in Chisinau and met with Moldavian Prime Minister Vasily Tarlev, local head of the Foreign Ministry Andrey Stratan and Reintegration Minister Vasily Shova. The Moldavian officials were insisting that they cannot make any decisions without the consultation with the head of state and he did not leave any instructions. All of this looked like complete seizure of the dialogue

From Friendship to Blockade
In the mean time, only two years ago the relationship between Russia and Moldavia was the most cloudless in the CIS, and Vladimir Voronin was known as the most pro-Russian politician in all post-Soviet space. It was because of Russian support of the leader of Moldavian communists became president in 2001. After that he was warmly received in the Kremlin during his visits. The relationship spoiled the fall before last. In October of 2003, President Voronin rejected the previously agreed upon plan of Pridnestrovie settlement, which was created at that time by the head of the Russian Presidential Administration Dmitry Kozak. This plan was rejected just several hours before Russian President Vladimir Putin was ready to fly to Chisinau. After breaking up with Moscow, Moldavian president decided to place his bets with Brussels, and announced the course of the country's integration into the European Union. Because of that, Voronin won presidential election for the second time in the spring of 2005.
Since then, the ways of Vladimir Putin and Vladimir Voronin crossed only in rare CIS summits. During the last one - in August of this year in Kazan -- two presidents agreed "to overcome the obstacles on the way of development of normal Russian-Moldavian relations." According to the official version, the two presidents talked already in Kazan about the Zubakov's delegation visit. Moscow, probably, thought, that after Moldavia lost its main market for the wine export, Chisinau will come back to its senses and will raise the white flag. It did not happen this way.
However, the failure of the negotiations could be predicted several days before their start. It became clear after the interview of Moldavian President to BBC Rumanian Service. "I officially state that Moldavia is ready to live without its wine export to Russia. It will be difficult, but we are ready to live in the cold, to freeze without Russian gas, but we won't give up. Moldavia will not sacrifice its integrity, sovereignty and freedom, despite the price we would have to pay," Voronin said. Possibly, if this interview was read in Moscow, the delegation, headed by Zubakov, would cancel its trip to Moldavia.

Welcoming Tiraspol
Yuri Zubakov was put on the Moldavian beat for a reason. Starting from the August of 2003 until the April of 2004, he worked in Moldavia as an Ambassador. It was Zubkov who helped Dmitry Kozak to persuade the authorities of Moldavia and Pridnestrovie to accept the Russian settlement plan, which later was called by the press "Kozak's memorandum." However, Zubakov did not last a year as the Ambassador -- Chisinau rejected the Kremlin's plan, getting mad at the condition of maintaining the presence of Russian troops in Pridnestrovie for 15 years. Zubakov was called back to Moscow, where the position of the Deputy Secretary of Security Council was waiting for him. In his new job, Zubakov started to specialize on settlements in post-Soviet space with retaining the Russian influence in CIS countries.
Under Zubakov, the Security Council developed the so-called "plan of measures to maintain the Russian influence in Republic of Moldavia." The main goal of the Russian policy was prevention of Moldavia's leaning to the Western direction and escape from the Moscow's influence. The goal was also to keep Russian military present in Pridnestrovie. To keep Chisinau in Moscow's orbit, the plan offered to increase political and trade-economical, and humanitarian pressure in the most sensitive points. However, the document cautioned that the possible sanctions against Moldavia should at all cost bypass Pridnestrovie.
On the next day after the cold reception in Chisinau, Yuri Zubakov took the Russian delegation to Pridnestrovie capital - Tiraspol. Here, the Russian officials were met warmly. On Wednesday and Thursday the delegation was having negotiations with Igor Smirnov, the president of the unrecognized republic. The goals and results of the visit was commented on by Boris Pastukhov, President of Trade-Industrial Chamber. According to him, the chosen line lays in the direction of forming new pragmatic policy by Moscow. "The time of 'giveaways,' conversations, kisses, including the economical ones, has passed," Pastukhov said. "When our Pridnestrovie colleagues say that it is hard to move their production to Russia and customs control is being brutal, we are intending to take on these problems very closely." It was decided not to prolong the solutions of the problems and the two sides immediately signed an agreement "About the perspectives of cooperation between Russian and Pridnestrovie business communities."
Tiraspol was full of joy. The head of the Pridnestrovie Foreign Ministry Valery Litskai told Kommersant that Russia should have switched a long time ago from diplomatic pirouettes to the pragmatic policy. "That should have started five years ago. Why is there Russian-Moldavian commission and no Russian-Pridnestrovie commission? Now, everything will be different," he said. According to the minister, there were discussions with Russian experts about the gas supply to Pridnestrovie, cooperation in the area of energy resources, transportation, industry and banking.
Because Pridnestrovie is territorially separated from Russia by Ukraine, Moscow does not have the opportunity to support directly the rebellious region. It is clear that Russia would have to use a special ways to help friendly republic. In this case it could use the experience of Kaliningrad region -- Moscow hopes to get agreement from Kiev about the transit through the Ukrainian territory of people and cargo.
However, the perspectives of the Russian-Pridnestrovie cooperation do not look too encouraging. The reaction of European Union and the United States would be strictly negative. Brussels and Washington are seeing the self-proclaimed republic as a criminal enclave on CIS territories, which has the function of a hub for illegal weapons dealing, drug trafficking and other criminal activity, which for reasons Moscow never explains, is maintained by them for those purposes. Also, only two years from now Romania will join the EU and Moldova will have a common border with European Union. It means that Brussels wants to speed up final solution of the Pridnestrovie conflict, which is impossible with the current position of Moscow. That's what Chisinau is really hoping for -- the help from the West.

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FOREIGN COOPERATION

Moldova and Bosnia/Herzegovina agree on cooperation

Moldovan President, Vladimir Voronin, and President of Bosnia and Herzegovina, Ivo Miro Jovic, have agreed on exchange of visits by parliamentary and governmental delegations of the two countries. This accord was achieved in the framework of bilateral meetings of the heads of Central European states who have gathered in Zagreb (Croatia) for their 12th Summit. 
The two Presidents have also agreed that Ivo Miro Jovic will pay a visit to the Republic of Moldova. 
Vladimir Voronin said that for Moldova, collaboration with Bosnia and Herzegovina is particularly important because it has signed the Stability Pact for South Eastern Europe. The availability of Agreements on free trade exchange with all the Pact member states opens to Moldova wide possibilities for economic cooperation. 
The two Presidents share an opinion that Moldova and Bosnia and Herzegovina have much in common in their development and come across similar problems, therefore it is essential for them to maintain a continuous dialog.

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FOREIGN AID

European Commission grants Moldova 1.2m Euros in aid 

The European Commission has transferred 1.2 million euros to Moldova's state budget under the Food Security Program for Moldova, the republic's prime minister said, RIA Novosti website reported
Vasile Tarlev said this was the first tranche of the April 2005 agreement between the Moldovan government and the European Commission. "The grant Moldova is expected to receive in three phases will total 9.2 million euros," Tarlev said.
EC representative in Moldova Chezare de Montis said the aid would help the republic curb poverty, support the socially vulnerable sections of society, and foster the development of agriculture, the main sector of the economy.
The issue dates of the remaining tranches will be announced in the next few weeks. The Moldovan cabinet of ministers' reform record will be taken into consideration, a European official said.
"The support the republic is receiving from the European Commission will help it achieve the objectives outlined in the Economic Growth and Poverty Reduction Strategy and in the EC-Moldova Action Plan," Tarlev said.

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