Area: 33,843 sq km Population: 4.29m CapitalCity: Chisinau (population: 656,000) People: Moldovan/Romanian (65%), Ukrainian (13.8%), Russian (13%), Gagauz (Christian Turks) (3.5%), Jewish (1.5%), Bulgarian (2%), other (1.2%) Main Languages: Moldovan and Russian Religion(s): Eastern orthodox (98%), Jewish, Baptist Currency: Moldovan lei Political system: A form of parliamentary democracy, with a strong presidency Major political parties and alliances: Communist Party, Popular Christian Democratic Party, Moldova Noastra (Our Moldova), Democratic Party Government: Parliamentary Republic Head of State: President Vladimir Voronin Prime Minister: Vasile Tarlev Foreign Minister: Andrei Stratan Membership of international groupings/organisations: United Nations, World Trade Organisation (WTO), Council of Europe, Commonwealth of Independent States (CIS), European Bank for Reconstruction and Development (EBRD), International Monetary Fund (IMF), Interpol, Organisation for Security and Cooperation in Europe (OSCE), NATO's Partnership for Peace, Stability Pact for South East Europe, GUAM
GEOGRAPHY
Moldova is a landlocked country in Eastern Europe and borders Romania and Ukraine. The terrain consists of rolling steppe with a gradual slope towards the Black Sea. has cold to moderate winters and generally warm summers. It has natural resources of lignite, phosphorites and gypsum. Rich black soils make it very suitable for agriculture.
HISTORY
Recent History
Most of the territory of Moldova was before World War II the Romanian province of Bessarabia, which was annexed by the Soviet Union in 1940. This was combined in 1947 with existing Soviet territory - an area on the left bank of the Nistru (Dniester) river, to which Stalin gave the status of autonomous region (now known as Transnistria) - to form the Moldavian Soviet Socialist Republic (MSSR), one of fifteen Soviet republics.
Like all other Soviet republics, the MSSR was governed by the Communist Party leadership in Moscow, through local subordinate party and government structures. The economy was centrally planned, also from Moscow. Moscow decreed that the local language, originally Romanian (a Latin language), was written in Cyrillic script and renamed Moldavian. Russian was obligatory in schools, in administration and of course in dealings with Moscow. Political dissent, nationalist sentiment and any other manifestation of opposition to the one-party, Russian-dominatedState were suppressed by the KGB.
As the political climate began to ease in the late 1980s under Gorbachev, nationalist stirrings began in as well as in other republics of the Soviet Union. It became a strong trend by 1989, leading to a declaration of independence by the now renamed in August 1991. In 1990 politicians toyed with the notion of unification with (following the fall of Ceausescu). A law making Moldovan the sole state language was adopted. These moves alarmed the republic's non-Moldovan population, mainly ethnic Russians, Ukrainians and Gagauz (Christianised Turks), resulting in their unilateral proclamation of separate republics in Transnistria (12% of Moldovan territory, 14% of the population) and the Gagauz region (the latter remained, however, within the Moldovan state). The problem, though often characterised as an ethnic one, owes more to ideological, historical, social and economic factors.
Transnistria
The population of the Transnistrian region is 40% Moldovan, 28% Ukrainian and 23% Russian. Much of the Russian population moved there from in Soviet times as a workforce for the SovietRepublic's industries, many of which are located in this region. The region's leadership maintains close links with : its 'President' Smirnov hails from Siberia, moved to Transnistria in 1987 and holds Russian citizenship. In the wake of moves to rejoin Romania (see above) and following independence, a separatist movement in the Transnistrian region on the left bank of the Nistru River declared a 'Dniester Republic'. Tension rose and in 1992 armed clashes occurred between government forces and Transnistrian separatists, resulting in several hundred deaths and the flight of tens of thousands of refugees to . Following peace efforts by the Foreign Ministers of Moldova, , and in April 1992, Presidents Yeltsin and Snegur signed an agreement in December 1992 confirming Moldovan territorial integrity and providing for the deployment of a tripartite Russian, Moldovan and Transnistrian peace-keeping force in Transnistria. They also agreed that a special status should be negotiated for Transnistria. However, no agreement on the status of Russian forces was ever formally concluded.
Moldovan leaders, with the mediation efforts of the OSCE, and , have sought to reach a political settlement with Transnistria and Gagauzia. In July 1994 the Moldovan parliament approved a constitution according to which Transnistria and Gagauzia would be granted a special status. In December 1994, after several months of negotiations, legislation was adopted and duly implemented on Gagauzia.
Negotiations with the Transnistrians have proved far more difficult. Eventually in 1997, and Transnistria signed a Memorandum on the bases for Normalisation of Relations with international backing. This memorandum established the framework for negotiations to reach a political settlement, involving the Moldovan and Transnistrian authorities with , and the OSCE as mediators. This agreement foresaw a broad degree of autonomy for Transnistria within a unitary Moldovan state; foreign and security policy would remain the preserve of central (i.e. Moldovan) government. But no agreement was reached and the negotiations remained sluggish.
In July 2002, the mediators approved a document setting out a by the OSCE and the mediation states (Ukraine and Russia) draft federalisation plan, and in February 2003 the Moldovans and Transnistrians agreed to establish a Joint Constitutional Committee (JCC) to draft a new Moldovan constitution for a re-integrated state. The JCC has met regularly but progress has been slow. Deep differences remain on the fundamental questions of the structure of the federation and the relative powers of the entities. Chisinau wants a unitary state, with Transnistria a subordinate federal subject with extensive internal autonomy. Tiraspol wants equal status for Transnistria and so favours a confederal arrangement in which it would have equal powers.
On 24 February 2003, the EU's General Affairs and External Relations Council announced an EU visa ban against those members of the Transnistrian leadership considered to be primarily responsible for the lack of co-operation to find a political settlement to the conflict. The EU renewed the ban on 23 February 2004 and again in February 2005.
In late November 2003, produced a document setting out the parameters for a settlement. This was at the initiative of Presidents Voronin and Putin and drafted by Dmitri Kozak, then Deputy Head of the Russian Presidential Administration, following months of opaque negotiations with President Voronin's administration and the Transnistrian authorities. The Kozak document was drawn up in parallel to the OSCE-led negotiation and drafting of a text by the three mediators. The OSCE refused to endorse the document and the opposition parties within held widespread anti-government protests. Voronin initially welcomed the Russian paper but the planned signature on 25 November was cancelled along with a visit by President Putin.
Progress since then has been limited, although the Ukrainian settlement proposal put forward in March 2005 has given some impetus to the process. The first substantive talks between the parties and mediators since formal negotiations broke down again in July 2004 took place in on 15 and 16 May 2005. In addition, at a meeting in Odessa on 26/27 September 2005, the parties and mediators agreed to invite the EU and US to participate as observers in the settlement talks. The first round of talks in this format took place on 27/28 October. The Ukrainians and Moldovans requested EU assistance in improving the transparency across the Ukraine/Moldova border. The EU has responded positively to this request, and on 30 November 2005 launched a border mission to and to help in efforts to address the security concerns associated with illegal trade across the border.
These developments came after almost a year of deadlock during which tensions rose significantly, primarily a result of Transnistrian moves to force the closure of Latin script schools in the region (the schools teach Moldovan in the Latin script and use the curriculum of the Moldovan Ministry of Education. Other schools in Transnistria teach Moldovan using the Cyrillic script under the curriculum of the Transnistrian "Ministry of Education"). Schools re-opened on 1 September 2005 and the situation for teachers, parents and students improved considerably. Accordingly, on 12 December the EU decided to partially lift travel restrictions imposed in August 2004 against individuals within the Transnistrian administration directly responsible for the measures. The EU chose to leave the ban in place against two officials from Ribnitsa, where the school continues to operate from temporary premises.
Although unlikely to break out into violence again, the conflict is a concern for Europe, especially given 's position as a future neighbouring country of the enlarged EU. Not only is Moldovan territorial integrity undermined, but there are serious security concerns too (e.g. alleged arms smuggling to other regional conflicts and cigarette, people and drugs trafficking to the West).
Ammunition Withdrawal
The presence of Russian troops from the former Soviet 14th Army and approximately 43,000 tonnes of arms and ammunition remains of concern. The Russians and Moldovans signed an agreement on a 3-year timescale for the withdrawal of the Russian 14th Army forces in October 1994, but this was not ratified by the Duma so never entered force. The Istanbul OSCE Summit (November 1999) agreed a decision calling for full withdrawal of arms and ammunition from Transnistria or their destruction in situ by end 2002 and withdrawal of Russian forces. A few trains loaded with ammunition did leave the territory in 2002 but the Transnistrian authorities put obstacles in the way of complete withdrawal or destruction. As a result, at the OSCE Ministerial in Porto in December 2002, successfully negotiated a new deadline for full withdrawal of Russian arms, ammunition and forces from Transnistria – 31 December 2003. From mid-March to mid-June 2003 approximately 16,000 tonnes was removed. However, in mid-June 2003, the Transnistrian authorities halted further loading or removal of ammunition. They claimed that they were blocking operations until paid USD100m in assistance promised to reduce Transnistria’s debt to the Russian gas monopoly Gazprom. A further trainload left in March 2004, but a substantial amount of the ammunition remains in Transnistria. At successive OSCE Ministerials the EU has expressed regret at ’s failure to comply with their Istanbul Commitments and has stressed the need for the fulfilment of these Commitments without further delay.
Longer Historical Perspective
POLITICS
Recent Political Developments
In July 2000, the Moldovan parliament voted by a large majority to change the constitution, ending direct presidential elections and creating a Parliamentary Republic. However, in December 2000 the first attempt by parliament to elect the president ended in disarray, resulting in the dissolution of parliament. In the subsequent February 2001 parliamentary elections, the Communist Party of Moldova won more than two-thirds of the seats in the parliament (50.2% of the vote) and elected party chairman Vladimir Voronin as the new President. The OSCE Election Observation Mission concluded that the parliamentary elections met international standards for democratic elections, consolidating a trend already evidenced during the two previous elections since ’s independence.
Since the 2001 elections the Communist party’s grip on power has remained firm, despite a fundamental change in policy from a strongly pro-Russian to pro-EU position. The main opposition parties have remained active, organising several demonstrations during 2002 and 2003 as well as a parliamentary boycott during 2003, but this has not threatened the position of the Communist government. The 2003 local elections confirmed the Communist Party's strong support; they won just under 50% of votes countrywide. However, the local elections also marked a backward step in the otherwise positive development of democracy in since independence. Although the OSCE concluded that the elections were generally in line with international standards, observers were critical of interference by the authorities and state-media bias during the campaign period. The opposition also accused the government of revising the division of local authorities to favour its much stronger local party network.
Elections to the People's Assembly were held in the autonomous Gagauz region in late November/early December 2003. The Communist party and those loyal to it won the majority of seats. Independent candidates secured a small number of seats, while the principal opposition parties failed to win a single seat. The OSCE Election Observation Mission concluded that the elections were conducted in line with international standards for transparency, but again noted some concerns, including deficiencies in protecting the secrecy of the vote, divergences in the implementation of the election law with regard to the use of mobile boxes, and the presence of police within polling stations.
held parliamentary elections on 6 March 2005, with the ruling Communist Party winning 46.1% of the vote, equivalent to 56 of the 101 seats in parliament. This was down from their previous majority of 71 and meant that they could not elect the President on their own (which requires 61 seats). The leaders of the two opposition parties which also won seats, the Democratic Moldova bloc (BMD) and Christian Democrats, both promised not to co-operate with the Communists. However, the BMD coalition fragmented after the election, with eight BMD deputies leaving to form the Democratic Party and a further three creating an informal parliamentary group. All 11 voted on 4 April for the incumbent President, Vladimir Voronin. The Christian Democrats also voted for Voronin, who ultimately won a total of 75 votes, securing his re-election as President.
The OSCE Office for Democratic Institutions and Human Rights (ODIHR), which deployed a full election observation mission, concluded that the elections generally complied with international standards, but fell short in some key areas. The main shortcomings noted concerned unequal campaign conditions and constrained media coverage. On 8 March the EU issued a declaration welcoming the positive aspects but calling on the Moldovan authorities to address the shortcomings without delay.
ECONOMY
Basic Economic Facts
GDP: US$ 1.59bn (IMF estimate for 2002); US$ 2bn (GoM estimates for 2003) GDP per head: US$ 544 (Official figure for 2003) Annual Growth: 7.8% (Official figure for 2002); 6.3% estimated for 2003, 7% in 2004 Inflation (CPI end of period): 4.4% (Official figure for 2002), and 15.7% for 2003 Major Industries: Manufacturing (food processing, agricultural machinery, foundry equipment, refrigerators & freezers, washing machines, hosiery, sugar, vegetable oil, shoes, textiles). Major trading partners: , , , , . , the and are significant investors in , followed by , and . Exchange rate: (December 2005): 1 GBP = 22.221 Lei; US$ 1 = 12.795 Lei; 1 EUR = 15.191 Lei
The proximity to the Black Sea provides with a mild and sunny climate though winters can be cold. Agriculture accounts for 23% of GDP. The fertile soil of the river valleys supports wheat, corn, barley, tobacco and sugar beet, as well as beef and dairy cattle. is also well known for its vineyards and fruits. The country does not have significant mineral deposits, so has to import all of its supplies of oil, coal, and natural gas from and .
As a legacy of the former internal trade system, remains particularly dependent on as a market for its agricultural products and for imports of energy and raw materials. The geographical distribution of Moldovan exports in 2002 was as follows: 51.9% CIS, 24.3% EU, 13.5% CEE, 10.2% other countries. The main imports came from the CIS (39.4%), EU – 26.3%, CEE – 23.2%, other countries – 11%. As a trend, the importance of the EU as a trading partner increased in the last decade, and is expected to grow further. The trade deficit continues to grow, though the present growth rate of exports is slightly higher than the one of imports (by 0.6%).
Following a decade of contraction, which was particularly severe in the aftermath of the 1998 Russian financial crash, posted its first positive economic growth in 2000. Growth has continued since then, albeit from a very low base. Structural reform has not lead to efficient results, especially in the sphere of privatisation. Thus in spite of the voucher privatisation of small and medium sized enterprises in the early years of independence, privatisation of large-scale enterprises has been halting and each case has been controversial.
In spite of macroeconomic improvement, remains the poorest country in Europe, with a significant external debt; The GDP per capita is significantly below the average for CIS and central European states. During the 1990s, drew heavily on multilateral lending, but the IMF and World Bank have periodically suspended lending over 's failure to meet the necessary conditions. has continued negotiations with the IMF and WB under the Communist administration. However in July 2003 the IMF announced that it was not continuing its financial package to , due to the Moldovan Government's failure to meet a number of requirements. Surprisingly, managed to do relatively well without external support, mainly due to significant remittances from Moldovans working abroad. Around 600,000 Moldovans are thought to be working abroad (legally or illegally). This represents more than 30% of the economically active population and about 15% of the total population. Remittances from this group are significant, and have grown from 113 million USD in 1997 to 268 million USD in 2002, and are estimated at around 450 million in 2003. These have significantly contributed to the economic growth registered in the last four years.
INTERNATIONAL RELATIONS
is a member of the Commonwealth of Independent States (CIS), but has not joined its Collective Security Treaty, the Eurasian Economic Community, or the Single Economic Space established in September 2003. Relations with strengthened during President Vladimir Voronin’s first years in power, but have deteriorated since the Moldovan rejection of the Kozak memorandum in November 2003. The recent parliamentary elections further strained the relationship, with many people in , including the government, accusing of interfering in the elections.
Relations with are generally cordial, but occasional differences occur.
has been a leading member of GUAM (, , and - formerly GUUAM, until ’s withdrawal in May 2005) since the core group of states first met in 1996. GUUAM is a sub-group of the CIS without , and member states seek to co-operate on political and economic issues. The grouping was formalised at the June 2001 GUUAM Summit in Yalta. It has not been very active since then, but developments in and have given the grouping some impetus. A GUAM Summit in Chisinau in April 2005 was used to launch the new guise of the grouping, which is set to become a standing regional organisation, with a permanent Secretariat in Kiev.
The , together with EU partners, recognised on 31 December 1991. joined the Council of Europe in July 1995, the first CIS member state to do so. The EU/Moldova Partnership and Cooperation Agreement entered into force on 1 July 1998. The first Cooperation Council met in July 1998.
During 2001 acceded to the WTO and the Stability Pact for South East Europe.
assumed the Chair of the Committee of Ministers of the Council of Europe from May-November 2003. The Council has periodically expressed concern at developments within relating to political dialogue with the Opposition; the treatment of the BessarabianChurch; and the independence of the media.
President Voronin has publicly avowed a policy of working towards closer relations with, and eventual membership of, the EU. This theme is gaining ever greater prominence in statements by the leadership at all levels. In Summer 2003, created a new Department for European Integration within the MFA, headed by then First Deputy Foreign Minister Stratan, who subsequently became Foreign Minister. In October 2003 President Voronin presented to the European Commission a concept paper for Moldovan integration into the EU.
is a priority country for the European Neighbourhood Policy, launched by the Foreign Secretary, Jack Straw, in spring 2002. The Policy offers a much closer relationship with the EU provided it carries out the necessary economic and political reforms. A jointly agreed Action Plan setting out key reform priorities was launched on 22 February 2005.
The EU has also appointed a Special Representative (EUSR) for , Adriaan Jacobovits de Szeged, whose principal role is to contribute to a peaceful settlement of the Transnistria conflict. In addition, the EUSR will contribute to the strengthening of democracy, rule of law and respect for fundamental freedoms for all citizens of Moldova, promote good and close relations between the EU and Moldova on the basis of common values as set out in the ENP Action Plan, and assist in the fight against trafficking of weapons and other goods and of people from and through Moldova.
