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Democracy and governing in Moldova

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e-journal, III year, no. 53, June 6-19, 2005

Activity of Public Institutions

Economic Policies

Transdnistrian Conflict

Foreign Affairs

Studies, Analyses, Comments

Activity of Public Institutions


1.1. Legislative documents

The public opinion focused on foreign political events in the period concerned, in particular, on outcome of the recent meeting between presidents of Moldova and Ukraine, as well as of the tour of Moldovan president to Brussels and Strasbourg. Therefore, the June 10 sitting of the Parliament focused on the Transnistrian settlement issue.

In the context of these political developments, lawmakers paid less attention to draft legislative documents on settlement, but examined and adopted, however, several important documents.

The Parliament adopted the following documents through its decision on the Ukrainian plan regarding the settlement of the Transnistrian conflict:

  1. Declaration on Ukraine's initiative regarding the settlement of the Transnistrian conflict

    The Parliament described the peaceful and democratic settlement of the Transnistrian conflict, restoration of Moldova's territorial integrity, and accomplishment of people's unity as cogent priorities of the internal development of the country. Thus, the Parliament saluted the initiative of Ukrainian President Viktor Yushchenko to back Moldova's reintegration endeavors, and highly appreciated the offer of Ukraine. Parliamentarians established that the proposal of Ukraine contains a new and efficient approach of the problem - settlement through democratization.

    However, lawmakers indicated the lack of some clear principles in the Ukrainian plan, in particular, regarding the pullout of Russian troops; demilitarization and democratization of the region; introduction of a transparent and legal monitoring on the Transnistrian segment of the Moldovan-Ukrainian state border.

    The Parliament found out that some aspects of this plan are able to harm Moldova's sovereignty, including the idea seeking the participation of the Transnistrian region in promotion of Moldova's foreign policy and creation of a so-called conciliation committee.

  2. Appeal on criteria of democratization of the Transnistrian region

    This appeal is based on principles of the March 24 Declaration of the Moldovan Parliament regarding the political partnership for accomplishment of the European integration objectives.

    The document describes the existence of a separatist and authoritarian regime in Moldova's eastern breakaway enclave of Transnistria as insufferable in a modern Europe, the "frozen conflict" is a hotbed of regional instability, while the lack of a control of central state bodies of Moldova on one part of territory and a segment of the state border unfits the European option of the country. Also, the conduct of free and democratic elections in the Transnistrian region is impossible without respecting the Constitution of Moldova and international democratic standards, in absence of political pluralism and freedom of expression, repression of any manifestation of attitude different of the one imposed by force.

    The Parliament noted that a wide and complex process of democratization of the region is needed to uproot these abuses, under a control of the international community, which would comprise the following measures:

    • closure of the State Security Ministry, political police which suppress any manifestation of freedom and eliminate the political opponents of the acting separatist regime;
    • reformation of the so-called judiciary power in the Transnistrian region;
    • release of political prisoners who are illegally detained in prisons in the Transnistrian region;
    • elimination of obstacles on way of free activity of political parties of Moldova in the Transnistrian region;
    • elimination of obstacles on way of free activity of national and local mass media institutions in the Transnistrian region;
    • elimination of obstacles on way of free activity of nongovernmental organizations and development of civil society in the region;
    • conduct of elections in the Transnistrian region of Moldova under the exclusive aegis of an International Election Commission assigned by the Organization for Security and Cooperation in Europe (OSCE), with wide representation of member-states, without attracting consequences of recognition of this entity;
    • exercise of the right to participation in the electoral process in the region only on basis of confirmation of Moldovan citizenship.

    The guaranteeing of the right of Moldovan citizens in this region to free expression of will is impossible without a preliminary insurance of these conditions, while the creation of representative bodies in the Transnistrian region is also impossible.

  3. Appeal on principles and conditions for demilitarization of the Transnistrian region

    The appeal describes the military factor of the Transnistrian problem as a defiance of national and regional security which requires an immediate solution, with the Parliament soliciting the assistance of the OSCE, the European Union, the Council of Europe, the United States, the Russian Federation, Ukraine, and Romania, in order to eliminate the threats of the military factor of the Transnistrian conflict through demilitarisation of the region.

    Respecting the provisions of Article 11 of Moldova's Constitution, which says that the territory of the Republic of Moldova, as neutral state, cannot be used for deployment of armed forces of other states, the Parliament of Moldova established a number of cogent conditions for demilitarization of the Transnistrian region, including the following:

    • the Russian Federation will complete the withdrawal and destruction of the Russian military arsenal, as well as the pullout of the Russian military forces from Moldova's territory by late 2005.
    • the Russian Federation and the Republic of Moldova will recognise that the military units deployed to the security zone of Moldova on basis of the July 21, 1992 Moldovan-Russian Agreement had reached their purposes, and they will be gradually reduced and entirely pulled out from country's territory by December 31, 2006.
    • the Republic of Moldova assumes the obligation to propose and accomplish the dissolution of troops in the region, destruction of weapons and military hardware, and social rehabilitation and requalification of persons who are part of the personnel of the so-called Transnistrian military teams, within the NATO's Partnership for Peace Program.
    • Once the Russian Federation fulfills the obligations assumed at the 1999 OSCE Istanbul summit regarding the complete and transparent withdrawal of army and weapons from Moldova's territory, the Moldovan Parliament expresses readiness to ratify the Adapted Conventional Armed Forces in Europe Treaty, which is a fundamental element of the European security.

    The law on ecological agriculture regulates the social relations related to obtaining of vegetal and animal products through ecological agriculture, without using synthesis chemical products. The basic principles of the ecological agriculture comprise the following:

    • accomplishment of lasting, diversified and balanced agricultural systems to protect natural resources, health and life of consumers;
    • integrated approach of policy and actions at national and local levels;
    • opposition to any polluting technologies and restrictive regulation on use of polluting chemical means;
    • use of modern technologies for growing of plants, breeding of animals;
    • continued maintenance and improvement of natural fertility of soil;
    • voluntary start and stoppage of entrepreneurial activity in this sector.

    The law regulates the competences of authorities in the ecological agriculture sector, ecological production rules, product label rules, competences of businesses working in this sector, assessment of production conformity, importation and exportation of production, insurance of ecological production. Law developers consider that the promotion of principles of this law and growing of ecological products will lead to larger exports and consolidation of reputation of domestic products on national and international markets.

    (For more information on the legislative activity please see "Legal Commentaries" on ADEPT website).

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    2.1. Resolutions

    • The Government approved the structure and staffs of several ministries and other central public institutions in the period concerned, including: the Finance Ministry, Economics and Trade Ministry; Ministry of Industry and Infrastructure; Ministry of Agriculture and Food Industry; Ministry of Transportation and Road Management; Interior Ministry; Reintegration Ministry; Ministry of Environment and Natural Resources; Ministry of Health and Social Protection; Ministry of Education, Youth and Sport; Ministry of Culture and Tourism; Customs Service; Bureau for Interethnic Relations; Agri-Industrial Agency MoldovaVin; Agency for Material Reserves, Public Acquisitions and Humanitarian Aid; Agency for Land Relations and Cadastre; National Bureau for Statistics; National Bureau for Migration; Agency for Forestry Moldsilva; and Agency for Regional Development.

      The Government approved functioning regulations for the Ministry of Industry and Infrastructure, Ministry of Agriculture and Food Industry, Ministry of Transportation and Road Management, Ministry of Environment and Natural Resources, and the Customs Service.

      The newly-created Agency for Regional Development arouses a special interest. Under a governmental decision, the structure of the central administration of this agency includes:

      1. Administration of Agency;
      2. General directorate for regional development;
      3. General directorate for constructions and town planning;
        • Town planning directorate;
        • Construction directorate;
        • Public development directorate;
      4. Directorate for international relations and investment programs;
      5. Administrative directorate.

      The agency will coordinate the State Inspection for Constructions and the National Housing Service, while the personnel of its central administration will count for maximum 43 employees.

    • In the context of measures for reformation of the executive power, the cabinet of ministers ordered the creation of the Agency for Regulations - a single central public authority for regulation of natural monopolies. Under a governmental motion, several central public authorities were told to present draft laws on Agency for Regulations and its draft functioning regulation by June 24.

    • The wide public opinion did not observe amendments to the April 22, 2004 governmental decision # 412 "on approval of normative documents on establishing and payment of pensions to public functionaries." Under amendments, a new annex was attached to this decision, but its text seems to be at least strange under the current conditions. It calls for inclusion of periods of activity in a number of offices held by ruling bodies of the former Communist Party of the Moldovan Soviet Socialist Republic (MSSR) in the due payment length in public service.

      Thus, the periods of activity as: "first secretary, second secretary, secretary, chief and deputy chief of section, deputy chief of section - chief of the cabinet of political illumination, deputy chief of section - chief of sector, chief of party record sector, chief of sector, chairman of party commission, instructor, adviser and lecturer," within: the Central Committee, city and district committees of the Communist Party of MSSR, were included in this fee payment length.

      In addition, the periods of activity as: "chief of house - deputy chief of propaganda and advertising section, deputy chief of house and adviser" within the "political illumination house" of the Central Committee of the Communist Party of MSSR, were included in the due payment length in public service. Anyway, the favoring of persons who held ruling offices in the Communist Party of MSSR compared with other retirees is hardly understood in the context of the current pathetic option for the European integration, European standards, common European values, etc. , betrays stereotypes of perception and thinking, indicates the perpetuation of practice of making some products of internal mediation consumption, and other products for external consumption, as well as a very typical mode to understand the very mediated "evolution"/ "revolution", with or without color , of democracy in Moldova.

    • The decision on organization of hearing is very important for common citizens of Moldova. It establishes that the hearing is conducted as follows:

      1. Government:

        Prime Minister Vasile Tarlev:

        • hearing of citizens - the first and forth Mondays of every month;
        • hearing of representatives of local public administration authorities - the second Monday of every month;
        • hearing of managers of enterprises, institutions and organizations - the third Monday of every month;

        Deputy Prime Minister Andrei Stratan:

        • hearing of citizens - the second Monday of every month;

        Deputy Prime Minister Valerian Cristea:

        • hearing of citizens - the first Monday of every month;

      2. ministries, other central administrative authorities:

        • heads of ministries and other central administrative authorities - the first and third Mondays of every month;
        • deputy ministers and heads of central administrative authorities - the first and second Mondays of every month;

      3. chiefs of districts - the first and third Mondays of every month;
        deputy chiefs of districts - any Monday of every month;

      4. public administration authorities of first level - any Monday of every month.

    • The cabinet of ministers decided on June 15 to pay a monthly sum worth the minimum salary on country (about eight dollars) to employers for hiring a state-financed graduate from an institution of higher learning, who was not employed for one year after graduation. This indemnity will be paid for a 12-month period, and a 18-month period for employment of 3rd-degree invalid graduates. Only employers who sign contracts for an indefinite period with graduates registered with employment agencies will benefit from this money. If graduates or employers cancel the labor contract earlier than after three years, they will have to pay back the entire sum received the first year to employment agencies.

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    3. Presidency

    3.1. Diplomatic tour

    President Vladimir Voronin was on official visits to the NATO General Headquarters and the European Parliament on June 7-8. The visits focused on the Transnistrian settlement issue. Passing over aspects of this issue which we will discuss below, other topics discussed within this ample diplomatic tour are also worthy of attention.

    The NATO General Headquarters

    The Moldovan president enjoyed the occasion to deliver an ample speech to the North-Atlantic Council while on a visit to the NATO central headquarters. President Voronin expressed gratitude to the North-Atlantic Treaty Organization for the support it had granted under different shapes to Moldova, opening of the Moldovan side for development of its relationships with the NATO, and highlighted Moldova's wish to sign an Individual Partnership Action Plan (IPAP) with the strongest military alliance in the world, a document able to start a new stage in the contract-based ties with the NATO. Taking into account the permanent neutrality statute of Moldova, especially the former perceptions of President Voronin, leader of the Party of Moldovan Communists, and of most of his party colleagues towards NATO, this relatively new approach of Moldova's relations with the NATO is surprising, though it envisages the signing of an eventual IPAP for the time being. More than that, Defence Minister Valeriu Plesca hinted recently that Moldova could give up the permanent neutrality statute. We will see whether the statement of Minister Plesca is venturesome. However, the idea to reconsider Moldova's relationships with the NATO is clearly outlined in Moldovan society for sure.

    According to Voronin, the eventual IPAP between Moldova and NATO, whose start was already solicited through an official letter to the NATO secretary-general, should take intro account the specifics and needs of Moldova, while its implementation should take place in parallel with the implementation of the European Union's Action Plan for Moldova.

    The European Parliament

    In Strasbourg, the Moldovan leader had a number of meetings with European Parliament President Joseph Borrell Fontelles, members of the Commission for Foreign Affairs of the European Parliament, and European Commission head Jose Manuel Baroso.

    According to official press reports, Voronin aimed to persuade again the sides over legality and naturalness of Moldova's European aspirations, existence of a wide national consensus regarding the key objective of foreign policy, and to ask the support of European institutions for settlement of many problems faced by Moldova at present. In the context, Voronin sought the urgent endorsement of the E.U. Action Plan for Moldova by the European Parliament and recognition of Moldova's European perspective, stressing that the European Neighborhood Policy (ENP) is unable to fully satisfy the European integration aspirations, while the "neighborhood" notion in the name of an eventual new agreement would reflect neither the endeavors of Moldova, nor the nature of its relations with the E.U. Also, he assured that Moldova will demonstrate through implementation of the E.U. Action Plan for Moldova that it is capable of another type of contract-based relationship with the E.U. However, Voronin gave few enough examples when he should give concrete examples of actions undertaken within the E.U. Action Plan for Moldova.

    3.2. Meeting between Vladimir Voronin and George Soros

    President Vladimir Voronin had a meeting with George Soros, chairman of the Soros LLC Management Fund and head of the Open Society Institute. According to the presidential press service, Soros informed the Moldovan president about his intention to formulate a new strategy of the Soros Foundation for Moldova. According to philanthropist Soros, the strategy will call for development of capacities of governmental institutions, implementation of education and healthcare programs, support for European integration activities, attraction of foreign financing for different strategies and programs aimed to adjust Moldova to the European standards.

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    Economic Policies

    1. Prices

    According to preliminary statistics, the inflation rate in May was 0.1 percent. The cumulative rate for the first five months of this year was 5.6 percent.

    The food consumption index dropped by 0.3 percent, the index of manufactured goods rose by 0.6 percent, and services by 0.1 percent.

    Prices of fresh fruits and vegetables registered the highest rises among food products in May, respectively by 15-20 percent on average, while the price of sugar grew by 7-10 percent.

    The National Bank of Moldova and the government forecast an inflation rate between eight and ten percent for this year. On the other hand, economists say that the maintenance of the inflation

    rate at this level will be "a provocation" for the government, since the inflation was higher than half of the official index for the entire year in the first five months of 2005 1.

    2. Banks and insurance

    Collections of insurance companies rose by 18 percent in the 1st quarter of 2005, compared with the same period of 2004. They raised insurance premiums worth over 101 million lei (8.4 million dollars).

    Also, insurance societies paid 26.6 million lei (2.2 million dollars) in damages the same period.

    These data are based on reports and statistics of 44 insurance companies working in Moldova.

    According to data, 34 percent of the overall collections came from mandatory civil responsibility insurance and sales of Green Card policies. Most of money - about 33 million lei (2.64 million dollars) - was raised from optional estate insurance, including about 30 million lei from insurance of estate of enterprises.

    3. Foreign trade

    Moldova's trade deficit rose 1.7-fold in January-April 2005, up to 293 million dollars.

    The trade deficit grew up to 186 million dollars in the 1st quarter of 2005, and it rose by 55 percent in April alone, up to over 103 million dollars. The exports rose by only seven percent in the 1st quarter of 2005, while imports grew by about 30 percent. The importation/exportation coverage level in January-April was 54 percent, compared with 63.4 percent in the similar period of 2004.

    The growth of deficit with Ukraine, which is the second key commercial partner of Moldova, is regarded as one of the main causes of the high trade deficit. Moldova registered 42.1 percent of its trade deficit in January-April with Ukraine.

    Moldova's deficit with the European Union accounted for 114.8 million dollars in January-April 2005, 92.2 million dollars with the CIS, 18.4 million dollars with Central and Eastern Europe, and 67.2 million dollars with other countries.

    Statistics show that Moldova's exports accounted for 174.8 million dollars in January-April 2005, by 12.4 percent more than in the first four months of 2004. On the other hand, the imports rose by 31.7 percent up to 637.4 million dollars. According to the National Bureau for Statistics (BNS), the trade deficit rose 3.5-fold compared with January-April 2001.

    Moldova's trade deficit has alarmingly increased and, if this tendency remains unchanged the entire year, we can be sure that it will become the No.1 problem in the macroeconomic policy agenda in 2005-2006 2.

    4. Moldova and the world

    The European Commission is ready to release a 15-million-euro grant to Moldova, if Chisinau establishes its relations with the International Monetary Fund, Antonio de Lecea, chairman of the general directorate for economic and financial affairs in the European Commission, has told Moldovan Economics and Trade Minister Valeriu Lazar.

    On the other hand, the commercial credits released by the World Bank and the International Monetary Fund (IMF) to Moldova in the mid-1990s must be restructured, while the difference between commercial and preferential interests must be pardoned immediately, so that Moldova hold preferential relations with international financial organizations, independent experts said in the study Economic Policies for Growth, Employment and Poverty Reduction, which was released in Chisinau on Tuesday, June 14.

    "The government had paid a high price by allocating funds for reduction of debts, which could be used to encourage the economic growth and poverty reduction," they noted. Moldova became eligible for preferential crediting only in 1997, after the grave economic crisis. The foreign debts accounted for more than 700 million dollars then.

    Also, the experts consider that the government's tendency to reduce the fiscal burden down to 15 percent is not argued because the lower tax will not "legalize the underground economy." They pleaded for the maintenance of a 25-percent tax for corporate profits and reintroduction of the rates of 2003 3.

    According to the study, the Moldovan economy registered a seven-percent annual average economic growth the past three years, but it was not a sustainable one because the rise was mainly due to remittances of Moldovan citizens who work abroad.

    1 For more details, see the economic commentary "Macroeconomic evolutions. Tendencies for future" by Iurie Gotisan from this issue

    2 See the economic commentary from this issue

    3 Ibdem
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    Transdnistrian Conflict

    On 10 June the Moldovan Parliament adopted a Declaration on Ukraine's proposals regarding the Transnistrian settlement, and two appeals to the international community, one regarding the criteria of democratisation of Transnistria, and one on the principles and conditions of demilitarisation of the Transnistrian region.

    The three documents have been adopted unanimously within a special parliamentary session dedicated to Ukraine's proposals and reflect the position of parliamentary factions towards them. Thus, although in general all parliamentary factions approved of the proposals and welcomed them, especially due to the approach to solve the crisis through the democratisation of the region, Moldovan deputies mentioned a lot of gaps and shortages in the proposals, most of which have been earlier invoked by Moldovan analysts and pundits (for a full independent analysis of the plan see the Statement of the Association for Foreign Policy on Thus, the purpose of the adopted documents was not only to express the position of the Moldovan Parliament on Ukraine's plan, but also to cover the major gaps in the plan and to propose a series of measures to complete and improve it, such as, for example, the appeal to Ukraine's authorities to take the necessary measures to securitise the Moldovan-Transnistrian border.

    Moldovan officials and media affiliated with the Government and with the parties represented in the Parliament hailed the 10 June vote as a "historic" one, which reflects an unprecedented internal political consensus on the Transnistrian issue. On the other hand, independent observers have taken a less optimistic view on the voted documents and questioned the realism and feasibility of some of the measures included in them, such as the demand that Russia withdraws its troops and weapons from Transnistria by the end of 2005 or the proposal to organize democratic elections in the Supreme Soviet from Tiraspol in the autumn of 2005.

    A statement by the official representative of the Russian Foreign Ministry, Alexandr Iakovlenko, published on 11 June (, refers to the documents voted in Chisinau as an attempt to "impose forcefully the inhabitants of Transnistria to adhere to Moldova's constitutional framework, which causes great disappointment". Practice has shown that real problems may not be solved with the help of "emotionally charged" statements, and the "inclination of Moldovan deputies towards measures of constraint without taking into account the view of Transnistrians and outside of the civilised dialogue, causes serious concerns," the MID statement mentions. Later, within a press conference, the Speaker of the Moldovan Parliament, Marian Lupu, rejected the affirmations that Chisinau promotes an anti-Russian course, and said that the fact that Moldova and Russia disagree on the Transnistrian issue may not be interpreted as anti-Russian course.

    Lastly, on 15 June 205, the official Transnistrian news-agency Olvia-press ( published the official position of the Transnistrian authorities towards Ukraine's proposals and the prospects of Transnistrian settlement. The Transnistrian authorities appreciate President Yushcenko's initiative as an attempt by Ukraine to make its serious contribution to obtaining a "viable, just and politically balanced" settlement. At the same time, Tiraspol expresses hope that as a result of the implementation of the proposed plan, a package of documents will be adopted that would settle the "Moldovan-Transnistrian relations", would draw on the commitments and decisions taken to date and as such would reiterate Transnistria's right to establish independently external relations in the economic, cultural, social etc. spheres, and to participate in the foreign policy of the Republic of Moldova. The Transnistrian authorities welcome the proposals regarding the international monitoring of elections to the Supreme Soviet this autumn, which would ensure greater transparency of the electoral process, but also contribute towards the "international legitimation of Transnistria's status and its state bodies". Settlement is possible only on the basis of the principle of equality of parties, and the policy of "dictates and ultimatums" is not acceptable. In conclusion, the document of the foreign affairs department from Tiraspol mentions that should any of the parties involved in the settlement process revert to pressure, Transnistria reserves the right to organise "a popular referendum on the prospective relations with Moldova".

    The official position of the Transnistrian authoriteis, as well as Russia's irritated reaction to the Moldovan Parliament vote show the long and difficult road that lies in-between the adoption of the 10 June documents and the actual resolution of the Transnistrian issue. The resumption of Moldovan-Transnistrian consultations, in one format or another, and the securisation of the Mo0ldovan-Ukrainina border including the installation of joint Moldovan-Ukrainian customs check points along the Transnistrian segment are two key measures that need to be taken as priority. Both tasks are going to be serious challenges to the Moldovan authorities, who will have to demonstrate a lot of political skill and will to actually put into practice the three "historic" documents adopted by the Moldovan Parliament on 10 June.

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    Foreign Affairs

    1. Moldovan-Serbian relations

    1.1. GUUAM ended in GUAM

    President of Serbia-Montenegro Svetozar Marovic was on an official visit to Moldova on June 9-10. The Serbian leader had a meeting with Moldovan President Vladimir Voronin on the first day of his visit. Their talks focused on deepening of the political dialogue between the sides, enhanced bilateral economic cooperation, and mutual support within regional and international organizations. The meeting of presidents was followed by a joint session of official delegations of Moldova and Serbia-Montenegro. The next day President Marovic met with Moldovan Speaker Marian Lupu and Prime Minister Vasile Tarlev.

    Four bilateral documents were signed on occasion of this visit: the joint declaration of presidents, convention between Moldovan Government and Council of Ministers of Serbia-Montenegro on avoidance of double taxation of income and estate taxes, intergovernmental agreement on abolition of visa regime for holders of diplomatic and service passports, and the intergovernmental agreement on cooperation in the education and culture areas.

    The text of the declaration repeats 90 percent of the text of a similar document signed between Moldovan President Vladimir Voronin and his Croatian counterpart Stjepan Mesic in late May, on occasion of an official visit of the latter to Moldova.

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    Studies, Analyses, Comments

    Macroeconomic evolutions. Tendencies for future
    Iurie Gotisan, 23 June 2005

    Statistics on macroeconomic evolutions in the first quarter of 2005 followed the general expectations for the year»»»


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