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Democracy and governing in Moldova

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No. 1, February 25, 2003

Activity of the public institutions

Studies, analysis, commentaries

I. Activity of the public institutions

1. Parliament

The Parliament of the Republic of Moldova resumed its activity on February 6. Two of its factions, Social Democratic Alliance and Christian-Democratic Peoples’ Party decided to boycott the plenary sessions. The Parliament examined a series of other legal acts, as follows:

Law on the modification and completion of the Electoral Code.

The amendments reintroduce the provisions of the Electoral Code dealing with mayor election and revocation, which were excluded by the law outlawed in early 2002. Another amendment refers to sanctioning the persons whose resignation leads to new elections.

By adopting the said law the Parliament rejected 4 other drafts on the modification of the Electoral Code submitted by the Social Democratic Alliance. In particular the drafts referred to: introducing a mixed electoral system; introducing a preferential system; changing the ballot design, by replacing the current ones with another one comprising a detachable control coupon.

Law on the modification and completion of the Law on Administrative-Territorial Division, passed in the first reading.

Under the law, changes are made in the structure of administrative-territorial units by amalgamating several localities in a single one. Also, several localities are to be transferred from one rayon to another. Also, administrative-territorial units shall enjoy the status of a legal entity and shall be entitled to patrimony.

Law on the ratification of the Convention on the rights and procedures of holding a public office, adopted in the second reading.

World Labor Organization passed the Convention in 1978. Its main provisions refer to the right of public officers to associate in trade unions.

Law on the modification of the civil status acts.

In the law the Parliament cancelled its own decision of 2001, namely the Law on the Civil Status Acts, providing that all the aforesaid acts should be drawn in the state language as well as in Russian.

Law on modification and completion of the Law on the Status of the Deputy in Parliament. The modifications regulate related businesses carried by the MPs.
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2. Government

On February 12, Minister of Justice Ion Morei was ousted. This is already the 10th resignation in the Government headed by Prime Minister Vasile Tarlev since April 2001. This time Minister of Justice was ousted after President Vladimir Voronin publicly criticized his activity and blamed him of incompetence. The grounds for such severe criticism were the amendments operated by the Parliament to the Law on Political Parties and Other Socio-Political Organizations, which triggered protest rallies of the political parties. The same day Vasile Dolghieru was appointed to the position via a presidential decree.

In the said period the Government endorsed several draft laws, namely: draft law on fighting extremism; draft law on modification and completion of the Law on Administrative-Territorial Division (providing the establishment of 33 rayons instead of the current 12 counties); draft law on local public administration; three draft laws on the modification and completion of the Law on Audiovisual; draft law on modifying the Constitution (granting Gagauz-Yeri the status of autonomous administrative-territorial unit); draft law on the modification of the Law on Public Service, draft law on national defense, etc.

On February 19 the Government decided to entrust Ministry of Economy and local government to coordinate overseeing and control activity, in order to better control how entities observe the legal framework, and to create a single control system operating within an integrated information system. Also Ministry of Economy and Information Technology Department shall jointly develop the principles of functioning of the integrated system and control procedures.

In addition the Government approved the Regulation on the responsibilities of the Ministry of the Reintegration. It shall have the following competencies: enforce Government policies in the field; develop the national concept of reintegration; and devise a work plan in this respect. The Minister is entitled to legal initiatives on establishing a single legal, social-economic and cultural space of the Republic of Moldova; to negotiate with Transdnistrian authorities; and to monitor the activities aimed towards the country reintegration. Also under the Regulation two new positions of Deputy Ministers are to be established. State Chancellery together with the Ministry of Finance are to devise the budget and propose appropriate amendments to the Law on State Budget for 2003. On February 14, the Government abrogated its Decision on the establishment of an Inter-department Commission to coordinate state policies in the localities to the left of Nistru River. Noteworthy, during a meeting with European Commission delegation, Minister of Economy, Stefan Odagiu, asked for the assistance in reintegrating the country within the framework of TACIS Assistance Program.

Amendments operated to the Government Resolution no. 120 of February 12, 2001, oblige Ministry of Foreign Affairs to develop the priorities of the country foreign policy and present them yearly to the President, as well as to brief quarterly the Government on the enforcement of the treaties and other international acts.

Foreign relations

On February 12, the Free Trade Agreement was initialed between the Government of the Republic of Moldova and Ministerial Council of the Union of Serbia and Montenegro. Bilateral negotiations between the countries focussed mainly on the legal framework regulating the trade of industrial and agricultural products and customs cooperation. The Agreement was developed as part of the Memorandum of Understanding on Trade Liberalization and Facilitation in the South-Easter Europe. Under the Memorandum, by the end of 2002 a free trade zone was to be established between the countries members of the Stability Pact for South-Eastern Europe comprising around 55 million consumers. So far Republic of Moldova signed Free Trade Agreements with Bosnia-Herzegovina and Romania. The Free Trade Agreements may allow for the liberalization of 90% of the trade, adjustments of tariffs, and considerable discounts for a transition period of up to six years. The Agreements are to be adjusted to the norms of the World Trade Organization.

On the other hand the Agreements provide some barriers, which would be preserved by certain countries members of the free trade zone. Another drawback of the Agreement is its protectionist and discriminating nature in relations to third countries. Consequently, it would be necessary to simultaneously impose the same rules for all the countries in the region and liberalize uniformly the goods. contents previous next

II. Studies, analysis, commentaries

1. Economy overview
by Anatoli Gudim

Republic of Moldova has registered a steady GDP growth in the last three years (7.2% in 2002, and a total of 16.4% throughout 2000-2002); an industrial growth of 10.6%, and a 3% growth in agriculture in the last year.

There are encouraging forecasts for 2003 as well. Nevertheless, services rather than production account for the great part of GDP, whereas 70% of the revenues to the state budget have been provided by the Customs Department. A top priority for the Government continued to be social issues: the average salary per economy has raised by 32.3% and amounts 666.4 MDL1, whereas the average pension amounts 168 MDL. Needless to say, in December 2002 the consumption basket has been officially estimated at 1,177 MDL.

Traditionally, National Bank of Moldova assumed the role as an oversight and stabilization body for the macro-economic tendencies and ensured a relative stability of the Moldovan Lei (13.5 MDL for 1 USD in 2002, as compared to 12.9 in 2001) and a 4.4% inflation rate. By the end of 2002 Moldova’s foreign reserves amounted to $ 264 million, this also accounts for the remittances flowed into the monetary system from the Moldovan citizens working abroad (around $ 200 million in 2002).

A concern remains the increasing domestic and foreign debt burden; imports exceeding by 1.6 the exports; the increase of the foreign direct investment by only 4% (investment growth rate smaller than the GDP growth); privatization revenues ten times less than those forecasted in the state budget; and last but not least adverse business environment as was the case in the previous years.

According to opinion polls the great majority of the population positively evaluates the socio-economic development of the country and Government initiatives. The latter, despite the quite impressive amount of approved strategies, programs and concepts (around 30), dealt mainly with ongoing problems, rather than addressing long-term and strategic issues. An illustration of this is the record number, i.e. 1,800, of Government resolutions passed in 2002 in the field of local government.

The general impression is that in the last two years the incumbent Government haven’t decided yet to what extent to apply "state regulation" in economy (as was announced in its 2001 Program) and to what extent to rely on "market forces", especially as far as the entrepreneurship is concerned. This is the more important as the private sector runs at about 85% of the GDP.

Uncertainty and inconsistency in the Government policies are the main causes of the tarnished relations with IMF and World and delay in releasing further credit disbursements. The second disbursement of the SAC-III credit shall be released no earlier than April although initially scheduled for November – December 2002.

In January and February this year the Government already approved 200 resolutions, the most important of which refer to the Program for binding medical insurance (to be enforced commencing July 1, 2003) and the Concept of corporate business administration. The latter was probably developed in response to President Voronin’s appeal to the legislators at the end of last year session, reading that "it is necessary to modernize state administration, liberalize economy and boost civil society". The President reached that conclusion after reviewing 9,365 documents registered with the State Chancellery. Consequently, the Government had to pass another Resolution, this time on the Enforcement of Presidential decrees and orders by the state public administration in 2002 (no. 126 din 10.02.2003), pointing to the "indifference and irresponsibility of the of the bodies entitled to enforce them", and to "the less demanding attitude of the central public administration towards the relevant bodies", etc.

Meanwhile, statistics repots positive results in the first two months of the year. Economy and social sphere followed a normal path of development. In January 2003, Statistics and Sociology Department registered a 13% industrial growth and a 1.9% inflation rate. The revenues forecast in the State Budget have been achieved at 125%. Noteworthy, Fitch Ratings Agency has recently raised the rating of the Republic of Moldova from "DD" to "B-" to the same level as in Uruguay, Libya and Gambia and the rating Moldova had in 1999 prior to the regional financial crisis.

Constitution provides that "The economy of the Republic of Moldova is a socially oriented market economy, based on private and public property engaged in a free competition". In line with those provisions, the Government together with IMF and World Bank is finalizing the Poverty Reduction Strategy (deadline – March 2003). Similar strategies have been developed in more than 40 poor countries. They serve as a guideline in implementing economic policies for the relevant Governments, and a framework for monitoring the country for international organizations.

The quality of the PRSP document would be indicative of the incumbent Government professionalism, its priorities, and transparency in relations with other state institutions, opposition and civil society.

Government forecasts for 2003 are rather optimistic: 6% GDP growth, 20% monthly salary raise, 6% inflation, an exchange rate of 14,6 MDL for 1 USD, and 0.8% GDP budget deficit. However, international monetary organizations are more pessimistic in their forecasts: 4% GDP growth, increased domestic and foreign debt burden; negative trade balance. They point that a stable economic growth may not be achieved unless economic reforms are completed and impediments for small business eliminated.

Needless to say, the new administrative-territorial division replacing the current 12 counties with 33 rayons would definitely generate new problems. The new administrative-territorial division would not only be resource consuming but also cumbersome for Government relations with local government and small business, budget enforcement, and statistics.

Having said that, the most important problem for the Republic of Moldova remains to be the quality of the governing. According to President Voronin "the current structure of the Executive does not meet the goals and objectives of the state" (Government session of 17.02.2003). Indeed, at a close look at the causes of disruptions in economic reforms and at the periodic attempts to resume the old administration practices, one may find out that to a certain degree, the unreformed state administration machine is to be blamed. Another striking factor is the exaggerated dispersion of the Ministerial structures, departments and national agencies (around 50), as well as the absence of a center to coordinate and elaborate economic policies. The Government functions like a conglomerate of exponents of different interests, rather than a single team. Apparently these are the factors undermining President’s intentions to liberalize the economy.

Experts believe there is no better time to dramatically change the structure and functions of the state apparatus then upon the formation of a new Government. If President’s initiative is to be accomplished by the end of 2003 then it is worth referring to the experience of the European countries, namely a clear-cut distinction should be made between Government political functions (Prime Minister, Ministers and their Deputies, Councilors) and state service (the rest of the functions). In particular, candidates to the state service should be selected based on an interview; good working conditions (proper salary, training and motivation) should be provided in order to reduce personnel turnout; an Ethical Code of Conduct for the state officials should be adopted. The implementation of the aforesaid measures wouldn’t require the adoption of new laws, but rather the modification of the existing ones, which falls within the competence of the Executive power. contents previous

2. Overview of electoral law
by Igor Botan

The Electoral Code has been the most disputed legal act lately. Since its adoption in 1997, 15 laws on its amendment have been passed. Out of the total 205 Articles, 90 have been amended, 250 modifications being operated. Certain articles have been amended 5 times, 10 of such modifications were outlawed by the Constitutional Court.

There are various grounds for such an increased attention to the modification of the electoral law. Firstly, flaws that should be eliminated surface after each elections. Central Electoral Commission (CEC) drafts appropriate amendments based on the recommendations of international organizations (OSCE, Council of Europe, IFES) and domestic NGOs and submits them for the examination of the Parliament.

Secondly, political parties represented in Parliament have their interests in amending the electoral law. As a rule such modifications are operated to serve the incumbent ruling party. This was the case in 1997 when during the final reading of the Electoral Code (Article 86) the phrase that the 4% threshold refers only to parties and not to independent candidates was excluded; in 1998 additional barriers were set (Article 13) for the MPs to run for Chisinau Mayoralty; in 2000 the threshold of representation was raised from 4 to 6%; in 2002 representatives of the incumbent ruling party introduced a progressive threshold of 6% for a single party, 9% for an electoral bloc formed out of two parties and 12% for three or more parties. In early 2002 the procedure of mayor election was changed, from direct elections to elections by the local councils. Another modification was aimed to prevent the mayors who served for two consecutive terms to run in elections for the third time. The latter amendment is believed to be targeted at the incumbent Chisinau Mayor, Serafim Urechean so as to prevent him from running for the third mandate.

Thirdly, opposition parties initiate the modifications of the electoral law in order to eliminate the flaws and consequences of the modifications operated by the ruling party. As a rule, majority faction rejects them even if they are to improve significantly the electoral process. In 2000, the initiative to establish a limited proportional system (one administrative unit – one multiple-mandate constituency). The initiative was aimed to make the deputies accountable to their voters and strengthen regional branches of the political parties.

Amending electoral law takes center stage again, as two factions boycott the Parliament plenary sessions. The letter of the Council of Europe Secretary General, Walter Schwimmer, on settling political conflicts within the framework of the Permanent Round Table (PRT) reads that the current electoral system should be changed in order to settle the conflict. The changes in the electoral system would provide equal chances to electoral contestants and eliminate the flaws of the incumbent system, which enabled the ruling party to get additional 40% of the mandates. Although committed to enforce Council of Europe recommendations, Communist authorities rejected several Social Democratic Alliance (ADA) initiatives to amend the Electoral Code in line with the said recommendations. The initiatives referred in particular to introducing a mixed electoral system, or changing the current proportional system so as to enable political parties running in elections to choose to whom their votes should go in case they fail to pass the electoral threshold (replacing the mechanical proportional redistribution of votes by a preferential one). In such a case voters would be able to cast their votes in favor of the party they choose, knowing at the same time where his/her vote would go upon the failure of the party to pass the threshold choice. Majority faction rejected both initiatives. The first one on the grounds that it prevents citizens residing in Transdnistria to vote, whereas the second on the grounds the system has not been used in the other countries. Both arguments are not exactly correct. Mixed system enables a single national constituency, as they as in the previous three electoral campaigns, so there are no grounds for concern regarding Transdnistrian voters. Secondly, Transdnistrian voters could cast their vote in the neighborhood uninominal constituencies, as was the case in a single national constituency. A very simple procedure was devised in this respect. As for the second argument that a system that wasn’t put in practice in other countries may not be used, it is not valid as well. An illustration of this is the recent amendments operated to the Law on Political Parties, obliging political parties to yearly confirm they have at least 5,000 members, practice not used anywhere else. Indeed, Moldovan legislators may come up with innovations, on condition they would have a positive impact and clear procedures would be outlined. If there is a preferential vote for candidates, then why shouldn’t preferential vote exist for the parties as well, especially as under Electoral Code all contestants, be it an independent candidate or a party are equal. The only thing that matters is to provide several options to the voter from which to choose.

If the ruling party had some excuses not to change the electoral system, than it had none as far as the security and transparency of the voting are concerned. It is difficult to explain why the ruling party rejected Social-Democratic Alliance initiative to change the ballot design, so that it would include a detachable control coupon. Firstly, such ballots are widely used in other countries. Secondly, the new design would allow a better control over possible frauds with the ballot papers. However, the arguments for rejecting the initiative brought by the Communist Party, were that the introduction of a new procedure would be time-consuming. The experience of the previous seven elections in Moldova indicated that on average it takes a voter 10 minutes to exercise his right to vote. It would take him around one minute to fill their name and ID in the coupon and detach it, so it wouldn’t be time consuming at all. Furthermore, the great part of the day polling stations are empty, whereas during the rush hours some additional measures for the normal and orderly functioning of the polling place might be taken.

Upon crisis like the one Republic of Moldova is undergoing, its is very important to gain the trust of political opponents. This is the more important as a referendum on endorsing the new Constitution is due soon, followed by general elections into the Federative Parliament. Unfortunately, though there are still many unresolved problems related to elections and referenda. Nevertheless, a positive sign is that the Parliament proceeded to the modification of the Electoral Code so as to reintroduce the old procedures of mayor elections and eliminate the barriers preventing mayors to run for more than two consecutive terms.


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