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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)

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Update No: 313 - (25/01/07)

Echoes of 1940 
The Nazi-Soviet Pact of August 1939 changed history all right, making the second World War inevitable. It still has repercussions in Moldova. The bulk of the country - then called Bessarabia- was at the time part of Romania. It was ceded by Hitler to Stalin, along with the Baltic states, as a part of their deal to carve up Poland.
Moldova was part of Romania until 1940 when it was annexed to the Soviet Union; it declared independence in 1991 shortly before the Soviet collapse. Some three-fourths of the population of 3.9 million are ethnic Romanian. 

Romanian president visits Moldova, torn between EU and Russia
Rural, economically-backward Moldova has long toyed with the idea of merging with its bigger and richer neighbour, Romania - whose entry this year into the European Union would appear to add allure to the prospect. 
Yet as Romanian President Traian Basescu visited Chisinau on January 16th in his first visit to a foreign capital since joining the bloc, unification was not on the agenda. The reason? In part, it is one more reflection of Russia's growing influence as an energy superpower. 
Like many other countries in the former Soviet orbit, Moldova relies on Russia for natural gas and trade - complicating any attempt to move closer to the EU. But for Moldovans the choice may be more resonant, mixing economic concerns with highly emotive questions of national identity. 
In public speeches, Moldovan President Vladimir Voronin declares that his country's aspirations lie with the EU - and there is still support in the country for strong ties to Romania and even, to a degree, for reunification. "It is normal to reunite with Romania because we are the same people. It is natural for a people to be within the borders of one country," said Ion Rotaru, 21, a history student in Chisinau. 
But economic realities have caused Voronin to cosy up to Russia - which has already begun punishing Moldova for its tentative steps toward the West. 
The double game is one seen throughout the former Soviet bloc - with nations weighing the relative advantages of the EU's free market against comfortable ties with a resurgent Russia that controls their energy supplies. 
Moldova has doubtless been heeding the example of Ukraine - which was hit by a drastic jump in Russian natural gas prices last year after it started drifting toward the West. This year, Moldova managed to stave off steeper natural gas prices from Russia's state natural gas monopoly, OAO Gazprom, after threatening to withhold its vote for Moscow's bid to join the World Trade Organization. 
But the reprieve is temporary. In the next five years Moldova will be paying average West European prices - a massive blow to a country where the average monthly salary remains a paltry US$100. 
Moldovan leaders have been closely watching a bitter oil dispute with Belarus that led to a brief interruption of supplies to Western Europe. Last year's dispute with Ukraine also led to temporary shortages of Russian gas to European customers - and hurt Russia's reputation as a reliable energy supplier. 
Moldova's economy was badly hit in spring last year when Russia banned wine imports from Moldova and Georgia, another former Soviet Republic, saying it needed to protect consumers from poor quality wine. Before the ban, Moldova sold 80 per cent of its wine to Russia. Analysts have called the measure retaliation against the countries' steps to establish closer ties to the West. 
Moldova now sells its wine in Romania. But Romania already produces its own wine, and with a population of 22 million is a much smaller market than Russia. 
For his part, Basescu has made no secret of his desire to have closer ties with Moldova, with which Romania shares a common language and history. Romania cannot offer energy supplies, but arriving in Chisinau, Basescu promised to ease application procedures for Moldovans seeking Romanian citizenship and announced the opening of two new consulates in the northern city of Balti and the southern city of Cahul to cope with demand. Moldovans whose parents or grandparents had Romanian citizenship are eligible. 
Basescu said Romanian authorities were currently processing Romanian citizenship applications from 530,000 Moldovans - more than one in eight of the total population. 
Although reunification was not on the official agenda on this visit, a few hundred Moldovans gathered outside the president's office and the Romanian embassy chanting "Unification!" and "Long live Moldova, Transylvania and other Romanian lands!" and "Unification with the motherland! This is our sacred goal!" 

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ENERGY

Gazprom could increase stake in Moldovagaz to 63.4%

The Moldovan government has cleared the way for Gazprom to acquire 13.4 per cent of Moldovagaz, Gennady Abashkin, general manager of Moldovagaz, said, InterfaxNews Agency reported on January 9th.
Thus, Gazprom, which currently owns 50 per cent of Moldovagaz, could increase its stake to 63.4 per cent. The price for the stake has not been determined yet, therefore it is too early to talk about the value of the 13.4 per cent stake, Abashkin said. The company's shareholders have already reached agreement to issue additional shares, he said. The new issue will be capitalized by investment in gas distribution networks that Moldova implements through budget allocations. Experts estimate their value at more than US$70 million. A five-year contract for gas supplies signed between Moldovagaz and Gazprom envisions that gas shipments to Moldova will be 3.6 billion cubic metres in 2007, Abashkin said. Moldovagaz has asked the National Energy Regulation Agency to change gas tariffs after the purchase price was increased to US$170 per 1,000 cubic metres in 2007 from US$160 per 1,000 cubic metres in 2006. Moldovagaz plans to increase prices for consumers by 10 per cent-12 per cent, Abashkin said. The five-year contract for gas supplies envisions a gradual increase in gas prices. Prices will increase to US$170 per 1,000 cubic metres in 2007, to US$195 in 2008 (75 per cent of the average European gas price), to US$208 in 2009 (80 per cent) and to US$260 in 2011 (100 per cent).

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FOOD & DRINK

Moldova govt launches quality control of its wines

Moldova has launched an expensive quality control and certification system for wines and liquors it sells both domestically and abroad, the presidential press office said January 3rd, New Europe reported. 
All alcoholic beverages slated for export will be required to apply for a state trademark with the regulatory agency overseeing their sale. Beverages intended for distribution inside the country will need a quality excise from the tax inspectorate agency, Ria Novosti reported. The measure is aimed at restoring importer confidence in Moldovan wines, the tiny former Soviet republic's key export. Russia, the largest market for Moldovan wines and brandy, banned them last March for an alleged failure to meet its food quality regulations. In November, Russian President Vladimir Putin promised to reverse the ban if Chisinau introduces a proper quality control system.

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FOREIGN AID

UD$44.3 million of Russian aid given to Transnistria 

Russia has given US$44.3 million of financial aid to Transnistria since March 3rd 2006, a source in the unrecognised republic's economy ministry said recently, Interfax News Agency reported.
"The Transnistrian Supreme Council decided to use this money for compensating budgetary expenditures of 357.09 million Transnistrian roubles, including 56.78 million transferred to regional budgets and 6.3 million in additional subsidies," he said. Russia started helping Transnistria after March 3rd 2006, when Ukraine refused to admit Transnistrian cargo without Moldovan customs clearance. Tiraspol said it was an economic blockade and asked Russia for help.

 

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