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Positive economic signals between Chisinau and Bucharest
Iurie Gotisan, 3 February 2005
The recently visit at Chisinau of Romanian President Traian Basescu put an end to overshadowed relations because Moldavian government had accused Romania of "expansionism" and interference in Moldova's domestic affairs. Among others, during his visit to Chisinau Romanian President stated Bucharest will support and develop economical relations with Republic of Moldova. Moreover, he said that Romania had engaged to be the most loyal advocate of Moldova in Europe and will never allow it to be blackmailed by threatening its energetical security.
The coldness in Moldovan-Romanian relations affected not only politics but also economics. To cite just the propositions made by Bucharest 2-3 years ago to finish together with the Moldavian part the construction of atomic electrical station from Cernavoda, thereby providing electric power generated by one of the reactors to the Republic of Moldova. Noteworthy those propositions were quite advantageous, still they were never realised. Of course, it required a financial effort from the Moldovan side, but we think it would have been worthwhile on a mid and long term.
It is known for a fact that Republic of Moldova imports over 90% from the electricity it consumes. Natural gas accounts for 50% of the energy cost, fuel 30%, the main supplier being Russian Federation. In fact, Moldova morphed into an object of Russian energetical policy being deprived of an active position in negotiations. We remain dependent on the Russian energy, more specifically on "Gazprom", the only monopolist supplying the Moldavian stations with natural gas and fuel, still Chisinau government made quite few attempts to diversify its suppliers.
Life-buoy came from Bucharest. Romanian President announced at the end of last year that he agreed to supplying electricity to Moldova. This came in response to Chisinau requests for assistance following the cut-off of electricity by Cuciurgan electric power station from Transdniestria. Basescu's clear and convincing message once again confirmed the fact that Romanian part was committed to pull Moldova from its energy dependence on Russia. The more so as Moldova is connected to electricity lines of Romania, which allow both the import and export of electrical power.
At the same time, the Bucharest government agreed to supply energy to Chisinau on condition the former recognised a $32 millions debt for previously supplied electricity. It is hard to say how and from what sources would Republic of Moldova reimburse the debt. Still we think that Bucharest will be generous and make some big concessions to Chisinau as regards the grace period and interest rates.
Basescu's paid a visit the same day when Chisinau government signed the contract of $250 millions with the Azerbaijan company "Azpetrol" for completing the construction of fuel terminal in Giurgiulesti. Let's hope that this project will be finished. If so, besides gaining energetical security and cutting transportation costs, Moldova's geographical position at the crossroads of the three geo-economical zones (between CIS, South-Eastern Europe and Black Sea region) will enable it to become a transit corridor, thereby bringing additional benefits (for instance, petroleum transit via Baku-Tbilisi-Ceyhan pipe line). In the future it may well happen that Moldova would no longer be an importer, but an exporter of fuel.
But let's go back to our subject. Economic relations between Bucharest and Chisinau were even more tensed in the spring of 2003, when Romania blamed Republic of Moldova that it exported sugar cane on the Romanian market, specifically that sugar was imported to Moldova and then re-exported, thereby violating free trade bilateral agreement. Additionally, officials from Bucharest often reported that products (such as sugar, meat, eggs etc.) imported from Moldova didn't always met the quality standards imposed by Brussels to Romania for joining EU.
Currently Romania agreed to cancel current commercial sanctions imposed to Moldova for eggs, poultry, pork, sugar exports. And probably the move would reduce the trade balance deficit between Romania and Moldova. Romania accounts for 11% in the trade with Moldova being Moldova's biggest partner in Central Europe. Romanian exports go mainly (over 60%) to European Union.
The positive developments registered by Romania in finalising the negotiations on accession to EU, the 5% economic growth, reduction of unemployment to 7%, 10% drop of inflation, favourable business and investment climate enable Romania to project a favourable image abroad. For instance, in Romania the annual average of foreign direct investments (FDI) reached $1.5 billions, while total FDI in Moldova over the 10 years of transition has hardly reached $800 millions.
Finally, Chisinau should preserve and consolidate privileged relations with Romania, at least because it is an "entrance door" to EU. And in general, we think that in the years to come economic and commercial ties between Moldova and Romania would also test the formers' relations with EU. It is also true that Moldova's "place under the sun" is not predestined. It is up to us, especially so political and intellectual elite, to find the best way for Moldova to EU. We have to step on the path of modernization, and the parliamentary elections of March 6, 2005 would be an exceptional event in the history of Moldova!