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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: 318 - (28/06/07)

Between a rock and a hard place
Moldova is not in an enviable state. It is now the poorest country in Europe, Albania no longer being so. It is being harassed by Russia, which imposed a ban on its staple wine exports last year, and neglected by the West. It is hardly surprising that it is in secret negotiations to give its majority slav-populated enclave, Transnistria, its freedom, or at least de-facto independence within a federal framework.

Russia imposed a ban on the import of Moldovan wine last spring, citing quality reasons after buying some 80 percent of the product. The move cut Moldova's wine exports by one half, putting the whole economy in jeopardy. Moscow and Chisinau have been in talks over the ban all this time. Russian President Vladimir Putin said in December 2006 that Russia and Moldova had agreed to resume the wine exports, but the country's product has still been far from Russian stores of late.

Russia Hopes to Skim Off from Moldovan Wine
An indication that accommodation with Moscow is in the wind came with the news that Moldova's President Vladimir Voronin has signed a decree to resume wine exports to Russia, a Moldovan official said on June 14th. Russian authorities have not confirmed that a ban on wine imports from Moldova was lifted. Unofficial sources report that the state-owned vodka group Soyuzplodimport is in talks with Moldova, hoping to bargain the ownership of rights for the most popular wine trade marks to receive royalty from wine production. 

"Moldovan President Vladimir Voronin has given an order to resume wine exports to Russia immediately," Valeriu Mironescu, director of the Moldova-Vin agency said on the same day, the ITAR-TASS news agency reported. The nod has been given from the highest quarter. The official, however, did not give a schedule for resumed exports. The Russian Agriculture Ministry and other agencies declined to confirm the information.

Vladimir Voronin preferred meeting with Vladimir Putin to GUAM summit
Yet another straw in the wind came a few days later. The Organization for Democracy and Economic Development GUAM (uniting Georgia, Ukraine, Azerbaijan, and Moldova) opened the summit of its member states in Baku on June 18th. Gathered under the U.S. aegis, the presidents of these post-Soviet republics discussed plans for further counteracting Russia's influence. 

However, Moscow managed to strike a pre-emptive blow against its opponents. Voronin did not come to the summit. Instead, he arrived in Moscow on June 22nd to meet with his Russian counterpart Vladimir Putin, the very day, as it so happens, on which the Nazis invaded the USSR sixty-six years ago. It might seem pedantic to mention it. But the Nazi-Soviet Pact, which it broke, remains in force anent Moldova and Transnistria. 

Beforehand, Voronin was not only the GUAM summits' most punctual visitor, but he also enjoyed receiving the quartet's leaders in his residence in Chisinau. The quartet's leaders, in 2005 in Chisinau and in Kiev last year, strongly criticized Russia's policy, condemning the uselessness of the CIS it protects, and Russia's military presence in Moldova and Georgia. Thus, at the GUAM summit in Kiev in May 2006, Voronin personally reprobated Moscow for imperialistic ambitions: "We cannot get rid of the Soviet Empire syndrome. We, Moldavians, are a peace-loving nation; but even we cannot put up with 'elder brother-younger brother' relations." This time, however, when not only Moldova's future is at stake, but also his own political prospects, Voronin decided to stay away from the company of Russia's enemies.

One on one
Voronin has strived for one-on-one talks with Putin for a long time, ever since Moscow-Chisinau relations deteriorated drastically in 2003, when Moldova refused to sign the memorandum on Transnistria settlement, developed by then Deputy Head of Russian President's Staff Dmitry Kozak. After it, Russia declared a boycott on all Moldavian agricultural products, and also on the especially important product for Moldova, wine. Moreover, Moscow began openly providing political and financial support to Transnistria, so as to spite Chisinau. Tiraspol leaders were overtly received in Russia's Ministry of Foreign Affairs, while the doors to the Kremlin were closed for Voronin, and he had to be content with just passing meetings with Putin at the CIS summits. 

Everything changed in August 2006, after the Moldavian president met with Putin and offered a plan to normalize relations, which included Moldova's completely giving up any moves towards joining NATO. The Kremlin accepted the plan, concluding that Chisinau has not yet completely left Russia's orbit of influence. To nail down the success, Moscow made it clear that it was ready to lift the ban on Moldavian wine, and, as we have seen, Voronin signed the decree on immediately resuming wine supplies to Russia in mid-June.

At the same time, the Russian authorities resumed mediatory activities for settling the conflict in Transnistria. The issue is supervised by Deputy Secretary of Russia's Security Council Yuri Zubakov, who has been visiting Chisinau several times per month in the last six months. Thanks to Zubakov's to-and-fro diplomacy, Moldova and Russia became much closer. Zubakov brought Russia's suggestions for solving the Transnistria conflict to the Moldavian authorities. Moscow intends to settle it by organizing a meeting between Voronin and Transnistria leader Igor Smirnov in Putin's presence. Thus, Chisinau became very optimistic about the chances to reunite the split country soon. There even were stipulations that the document on reconciliation might be signed at the CIS summit in St. Petersburg. However, it did not happen, but the Transnistria issue dominated the Putin-Voronin talks in Moscow.

Other issues resolved on June 22nd
Russian President Vladimir Putin said on June 22nd he is satisfied with the development of Russian-Moldovan relations. He believes that some problems have been tackled, while some others remain unresolved, including the Dniester conflict settlement. "According to statistics, in general our relations develop well, even very well," Putin said at a meeting with his Moldovan counterpart Vladimir Voronin. "We've made first mutual steps towards unblocking cooperation in some areas. In agriculture this concerns plant production and meat products," he said. 

"The Russian government has submitted a decree on Moldovan wine supplies to the Russian market. I hope you know about this," he said. "I believe we have many other problems to speak about, including political ones. First of all, I mean the Dniester region conflict settlement," Putin said. 

"I am glad to discuss the current state and prospects for our relations. We also assess them as being at a very high level," Voronin said for his part. 

"In addition to those results you've mentioned I want to say that we managed to create a stable scheme of gas exports to Moldova. In the previous years the situation was tense, but now we have a stable scheme for five years," he said. "This year we practically overcame all obstacles that existed in our relations over the past one-two years," he said. 

As of July 1, 2006, Moldova bought Gazprom's gas at a price of US$160 per 1,000 cubic meters. Late last year the two countries signed a contract on gas exports at a price of US$170 dollars per 1,000 cubic meters. In 2007, Russia will deliver 3.6 billion cubic meters of gas to Moldova. 

Gennady Abashkin, the president of the Moldovagaz administrative board, said in 2008 Moldova will pay 75 per cent of the average European price for gas exports - US$195, in 2009 - 80 per cent and in 2011 Moldova will buy gas under the average European tariff. 

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