Republican Reference - Area (sq.km) 33,851 - Population 4,314,377 - Capital Chisinau - Currency Leu - President Marian Lupu (Acting) - Principal ethnic groups Moldovans 64.5%, Ukrainians 13.8%, Russians 13.0%

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Key Economic Data 
 
  2012 2009 2008 Ranking(2012)
GDP
Millions of US $ 7,254 5,405 6,046 140
         
GNI per capita
 US $ 2,070 1,590 1,500 157
Ranking is given out of 213 nations - (data from the World Bank)

  

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 Dniester River supporting the Slavic majority population, mostly Ukrainians and Russians, who have proclaimed a "Transnistria" republic. The poorest nation in Europe, Moldova became the first former Soviet state to elect a Communist as its president in 2001.

Update No: 326 - (26/04/14)

Putin's Next target? Transnistria & Moldova
In 1991 as the USSR folded, one of the smallest of the fifteen all-union republics to have independence thrust upon them, was Moldova, a patch of south eastern non-slavic Europe historically bounced about by more powerful neighbours. Before Stalin swallowed it, the once-upon-a-time Principality of Moldova might well have doubled for mythic Ruritania - the stuff of European opera. The mainly Romanian-speaking country is divided by the river Dnister on whose eastern shores is a 15 mile strip of land, Transnistria. There in communist times most Russian and Ukrainian settlers congregated, although 25% of citizens maybe more, are ethnic Romanians.

Further to the east lies Ukraine, but Transnistria has remained occupied by Russian troops since Moldova's 'independence from Moscow,' that really didn't happen. It is an illegal breakaway 'state' of some infamy, largely because it has all this time been the source of immense wealth for Russia's top military 'brass,' as a base for selling off the Soviet Union's excess weaponry, gathered there in vast armouries against the Armageddon that thankfully never came.

Backed by Moscow, it is a pseudo-Soviet region dominated by former KGB and GRU (Soviet military intelligence) officers-turned businessmen who are protected by an all-encompassing, heavy-handed internal security system. Unrecognised by any other nation, Transnistria is a volatile "black hole". The Tiraspol Mafia who run the region sit on vast stockpiles of weapons and facilitate the illegal trafficking of vast amounts of goods (and people) to the West and beyond. Transnistria has the power to influence both the outcome of wars (the Nicolas Cage movie "Lord of War" illustrated this), and the economies of other nations across the globe. Many of the weapons used in the frightful wars in Africa during the 1990s were purchased and delivered from Transnistria. Yet it has been largely ignored, as an untouchable pariah in Europe's East. That may be about to change. Touted by the British media as the next frontier between Russia and the West - the next "Berlin Wall" - Transnistria's geopolitical and military importance is being thrown into the spotlight. Following Moscow's annexation of Crimea in March, experts are speculating that Transnistria might be next and such a move could again greatly affect the future of Ukraine.

Like other breakaway states:- Abkhazia, South Ossetia, Nagorno-Karabakh and now Crimea, Transnistria gained its post-Soviet independence with the help of the Kremlin. In 1990, when the Soviet Union was coming to an end, Russian-backed separatists declared independence from the Moldovan Soviet Socialist Republic, largely because the government there had declared Romanian the official language. Angered by Moldova's leanings towards Romania, Moscow provided Russian separatists in what is now Transnistria, with economic and military support in an effort to create a stronghold in the area.

In March 1992, a little reported war broke out between Transnistria's separatists and newly independent Moldova. After months of heavy fighting in and around the breakaway region's capital Tiraspol, separatist forces - with the help of Russia's 14th Army and Don Cossack volunteers (sound familiar?) - defeated Moldova's ill-equipped army and a ceasefire was declared. Shortly after that, Russia stationed 2,000 peacekeepers in the region to protect its 14th Army's enormous arms depot, which is situated in the north of Transnistria. Around 1,200-1,500 Russian troops are still stationed there and, since declaring independence in 1992, the region has become a global centre for illegal arms production and trafficking.

Because it isn't recognised as a state by any country, Transnistria has capitalised on its rogue status in the past and the organised criminals in charge have become very rich. But now it wants to join the Russian Federation. Sixty per cent of Transnistria's half-million citizens speak Russian and have benefited from the Kremlin's support. Ethnic Russians there enjoy free pensions and virtually free gas, courtesy of Moscow. Living conditions in Russia-leaning Transnistria are marginally better than they are in EU-leaning Moldova. In a 2006 referendum, roughly 90 per cent of Transnistria's citizens that voted were said to have opted to join the Russian Federation. At the end of March, the president of Transnistria's parliament was reported to have requested that Russia create a legal basis for the annexation of Transnistria.

Whether or not Putin will go for it, is up in the air. Even though most Transnistrians would like to join the Kremlin (although not the Romanian-speaking minority, who are harassed by security forces to leave), there is a chance that Moscow will invade the region. On March 23d, Nato's most senior military commander said that Russia had strengthened its military in eastern Ukraine and Moscow could be planning to take Transnistria.

General Philip Breedlove, Nato's supreme allied commander, said: "There is absolutely sufficient force postured on the eastern border of Ukraine to run to Transnistria if the decision was made to do that. That is very worrisome."

However, Tony Blinken, Barack Obama's deputy national security adviser, said it was more likely that Moscow's goal was to intimidate Ukraine. As Russian-backed separatists began to occupy Ukrainian government buildings in the east of the country throughout April, that indeed began to look more likely, although these objectives are not mutually exclusive.

European diplomats say that Putin's immediate goal is to destabilise Ukraine and to sabotage its pro-western government in Kiev. Beyond this, they believe Putin's ambitions may include creating a zone of Russian influence in the south and east of Ukraine as far as Odessa, which borders Transnistria, cutting off Kiev's access to the Black Sea.

But Russia doesn't need to annex or invade Transnistria to do this. The 1,200-1,500 Russian "peacekeeper" troops that have remained stationed there since the end of the civil war with Moldova in 1992 are sitting on a stockpile of 28,000 tonnes of arms and ammunition. Those resources could be called upon at any time, without the need for Transnistria to be officially part of Russia.

Artem Filipenko, head of Odessa branch of National Institute of Strategic Studies has said: "Russia is not hurrying to recognise [Transnistria], as unlike Crimea, Transnistria doesn't play a strategic role. They have no borders with Russia or any important transport routes. If Russians want to capture Odessa, they would do it from Crimea by sea, or by land through Kherson Oblast."

The current crisis in Ukraine is Putin's top priority in terms of foreign policy. As Roger McDermott, Senior fellow in Eurasian military studies at the Jamestown Foundation, says, Ukraine is of huge strategic importance to Moscow.

"This crisis seen from Moscow's perspective, is a 'Eurasian crisis', not a European crisis as such," McDermott said. "That means it is about Russia and its future role in Eurasia. Putin learned to play hard ball in this crisis by carefully observing how the US and Nato acted since 1999. He saw Nato out-of-area operations as a threat to Russian interests, an alliance that expanded beyond its means, and a US that acted as a global hegemon, including promoting 'colour revolutions' close to Russia. The latest crisis was one step too far. Putin relied on a Russian intelligence assessment that views the events of the Maidan [the popular protests in Kiev and other cities] in a very different way to the West's reading - and he made his move."

But even if Russia doesn't invade, heavily militarised Transnistria still poses a regional threat to EU member Romania, and by extension the West. 'Sheriff', Transnistria's most influential company, run by former Soviet security officers, is a force to be reckoned with. It owns a chain of petrol stations, a chain of supermarkets, a TV channel, a publishing house, a construction company, a Mercedes-Benz dealer, an advertising agency, a spirits factory, two bread factories, a mobile phone network, and FC Sheriff Tiraspol football club. It also owns 26 seats of Transnistria's largest political party. The companies it owns are used for money laundering purposes and the firm's wealth largely comes from the illegal trafficking of arms, humans, tobacco and other goods. The region is lawless (for 'Sheriff' read 'outlaw') highly corrupt and closely linked to organised criminals.

In the past, Ukraine's economy has been destabilised by the black market goods that flow out of Transnistria. Soon after the Orange revolution in 2005, the new administration in Ukraine turned its attention to the problem. In June 2005, former Foreign Minister, Boris Tarasyuk, said: "If the border is securely sealed, the illegitimate authority in Transnistria will soon lose the economic foundation of its existence. The previous government used Transnistria as a springboard for contraband because the money chiefly flowed to Kiev. The situation has changed now. Ukraine is not interested in the existence of a 'black hole' on its frontier, neither is Ukraine interested in capitalising on the conflict in the neighbouring state."

Tarasyuk was foreign minister for only a few months before the first Orange Government collapsed, amidst political infighting and a deteriorating economic situation, worsened by energy 'sanctions' imposed by Moscow. No effective moves to contain the threat from Transnistria's black market has been made since then, and Russia has continued to wield ever-greater influence on Ukraine and other countries in eastern Europe through its energy policy.

But while Russia's foothold in the Crimea-Ukraine-Black Sea region is firming up, Transnistria's fate is undecided. The Kremlin guarantees the safety of the 500,000 ethnic Russians who live there and accounts for 70 per cent of the budget. But while Transnistria is emotionally attached to Russia, most exports - legal and smuggled - head west. According to Tiraspol's official information, 35 per cent go to Moldova, 16 per cent to Poland and 9 per cent to Italy. Russia takes only 13 per cent of Transnistria's exports, including steel, electricity and agricultural goods. When Transnistrians fall ill, they rely on Moldovan ambulances.

Most people have Moldovan mobile phones and Transnistrians are also aware that Moldovan passports will soon offer them visa-free travel to the EU when the EU-Moldova Association Agreement is signed this summer.

"It's a contradiction," one technician in Moldova says. "The mood is to join Russia and if there were a referendum, 90 per cent would back that. But everyone has two passports: Russian and Moldovan."

Transnistria's businessmen may also have more opportunities as a result of the impending trade accord Moldova has negotiated with the EU. It seems as though the real battle over the region's future and its role in the current crisis in Ukraine may, in the long run, be determined by economics.

 

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