Democracy and governing in Moldova
e-journal, year VI, issue 127, 1–15 November 2008
Activity of Public Institutions
Studies, Analyses, Comments
Activity of Public Institutions
1.1. Appointments. Dismissals
Marian Pocaznoi (appointed on behalf of the National Confederation of Trade Unions) and Ignat Vasilache (nominated on behalf of the Peasants’ Cartel St. George) were appointed as members of the Audiovisual Coordinating Council (CCA).
Vitalie Panis was assigned director of the National Centre for the protection of personal data for a five-year term. Previously, Mr. Panis served in the Information and Security Service (ISS); he holds the ranking of ISS lieutenant colonel.
Svetlana Caitaz was appointed deputy chairwoman of the economic college of the Supreme Court of Justice for a four-year term.
1.2. Legislative acts
Law concerning the civil control on respect for human rights in detention institutions. The draft was submitted by president of the republic and has the declared purpose "to build an efficient and independent mechanism for monitoring detention facilities." Civil society representatives will monitor detention facilities and they will be organised into territorial permanent commissions.
Law on modification of some legislative acts (on judges elected to the Judicial Inspection). Under the law, a judge selected as member of the judicial inspection advising the Supreme Council of Magistracy shall be detached from the office for the 5-year mandate. A judge may serve as judicial inspector until 65 years old.
Law on modification and completion of the law on restructuring debts of energy enterprises. By following the declared goal "to improve the economic-financial situation," the law annuls debts of energy enterprises towards:
- S.A. Moldova-Gaz, an amount of 547.3 million lei;
- I.S. Moldtranselectro, 294.8 million lei.
Note by ADEPT: Independent surveys on this draft law have signalled shortcomings and imperfect regulations, the lack of adequate public information and discordance with basic principles of the legislation concerned.
Law on transparency of the decision-making process. The document was insistently promoted by civil society organisations and it aims to enhance the transparency and cooperation of public authorities and non-governmental sector in drafting and promoting normative and public policy documents. However, independent experts fear that the mechanism is imperfect and the new regulation will be ineffective, so that a supplementary legislative and normative intervention is required.
1.3. Parliamentary control. Statements
Legislator Valentina Cusnir has asked the Prosecutor-General’s Office to report actions taken against violations discovered following the post-privatisation activity of state enterprises after 2001 and breaches in managing the public patrimony of the State Enterprise Moldelectrica.
Legislator Vitalia Pavlicenco has asked the Ministry of Education and Youth to provide information about viability of institutions of higher learning should education fees be cancelled.
OMA Deputy Gheorghe Susarenco has asked the Government to provide information about legality of documents signed with the Chisinau Municipal Council concerning the credit to cover debts of the municipality towards S.A. Termocom and S.A. Moldova-Gaz.
The parliamentary faction representing the Moldova Noastra Alliance (AMN) has released statements concerning:
- The degrading condition of the education sector;
- The violation by governance of constitutional norms on separation of powers and responsibility of the Government in front of the Parliament;
Legislator Vladimir Braga has read a statement by the Ecological Party of Moldova "Alianta Verde (Green Alliance)", which disagrees with selling land to foreigners.
Legislator Ion Neagu has presented a statement on joint participation of the European Action Movement (MAE) and National Liberal Party (PNL) in the 2009 parliamentary elections.
In connection with the summit of CIS heads of government held in Chisinau, many opposition parliamentary parties have asked the Parliament to adopt an appeal in order to demand the withdrawal of the Russian armed forces from Moldova. PCRM and PPCD lawmakers have turned down this initiative.
1 See also Report # 344 on corruption proofing expertise of the draft law # 2767 from 24.09.2008 at www.capc.md
Decision approving the quantum of the medium monthly salary on economy planned for 2009. According to a governmental forecast, the medium salary next year is expected to be 3,140 lei.
Decision approving the national action plan on preventing and combating child violence for 2009–2011. It stipulates the harmonisation of national legislation, increasing assistance and protection for children, development of the institutional framework, etc.
Decision approving the regulation on operating public acquisitions from a single source.
Note by ADEPT: The document is approved to execute the law on public acquisitions which entered into force in late October 2007. Under the law, the Government shall approve normative acts within six months, but this happens a year after the enforcement of the law.
2.2. Sittings. Decisions. Statements
Conflict between municipality and energy providers
First Deputy Prime Minister Igor Dodon stated on November 5 that getting involved into the conflict between Termocom and Chisinau City Hall is inopportune for the Government because such a step could produce a chain reaction for similar situations in other localities.
On November 11, Prime Minister Zinaida Greceanii convoked a special sitting to examine the situation in the capital after heating enterprises in Chisinau have been cut off gas supply. The same day, the Government released a declaration, saying that "it cannot keep playing the role of passive observer in an imminent humanitarian catastrophe" and "it assumes the initiative to redress the situation and find a principle-based compromise among all responsible structures of the energy complex of the capital."
Few days after Government’s intervention, contracting of a loan and assuming of some guarantees by the Chisinau Municipal Council, energy enterprises have restarted supplying gas and heating in the capital.
Rise of scholarships
Despite previous statements regarding the lack of resources and necessity to limit public spending, the Government decided on November 12 to increase the scholarships for universities, colleges and professional schools, and post-graduation education. Scholarships will be increased gradually as follows: by 15 percent starting October 1, 2008, by 20 percent starting January 15, 2009 and by 30 percent starting September 1, 2009. In order to implement this decision, 4 million lei will be needed in 2008 and 40 million lei in 2009.
The "Gloria Muncii" (Labour Glory) Order was awarded to Anatolie Gorodenco, minister of agriculture and food industry.
The 1st-class "Credinta Patriei" Order (Faith to Homeland) was awarded to Artur Resetnicov, director of the Information and Security Service.
Under a presidential decree, diverse state distinctions were awarded to participants in the restoration and reconstruction of the Curchi Complex.
3.2. Sittings. Decisions. Statements
Meeting student leaders
In the framework of actions dedicated to the Year of the Youth, the president of Moldova has met leaders of ruling student associations from institutions of higher learning. The sides evaluated key progresses related to the condition of youths; in particular, the rise of the number of state scholarships granted to youths; the elaboration of a normative framework on building a fund to sustain the academic mobility of students; the elaboration of a programme on modernisation of infrastructure of student hostels; the drawing up new criteria to evaluate and accredit institutions of higher learning; the formation of student detachments on summer and their participation in diverse production processes; the organisation of job fairs, etc. Leaders of ruling student associations said that many earlier approached problems have been resolved. The chief of state stressed the need to accommodate 90 percent of the students from other localities and promised that canteens from institutions of higher education will be renovated and modernised by September 1, 2009.
Preventing and combating smuggling
A Presidency-hosted meeting has focussed on preventing and combating smuggling and illegal actions on the market of precious and semiprecious metals, with participants discussing matters related to the legal and organisational regime of import, manufacturing, processing, use and circulation of precious and semiprecious metals in Moldova. Participants signalled frequent violations committed by economic agents working in this sector; in particular, forging of precious metal objects; appearance of new methods to develop illicit operations; faking of origin documents. The chief of state explained the existing problems through the fact that the effective law on precious metals and stones (adopted in 2004) is out-of-date and does not meet current realities. Vladimir Voronin called for improving the mechanism of certification and taxation of operations involving precious metals and functioning of pawn offices. He instructed competent authorities to combat the illegal trading of gold jewels and other precious metals and stones. On the other hand, the law on regime of precious metals and stones shall not be modified repressively but rather encourage the development of legal activities in this area.
Meeting trade unionists
While receiving representatives of the National Confederation of Trade Unions in Moldova (CNSM), the chief of state has emphasised the role of trade unions in promoting and protecting the interests of employees, stressing the importance of the unification of the unionist movement and building of a national unionist organisation. Vladimir Voronin appreciated the CNSM readiness to maintain a permanent and constructive dialogue with authorities, outlined the importance of consolidating the society and mobilising efforts of state institutions, civil society, trade unions, employers, political class in reaching the goals of modernising and developing the country. CNSM representatives praised the state authorities for having established a productive dialogue with trade unions, stressing the effectiveness of implemented social policies, but signalling lots of problems requiring the intervention of public authorities; in particular, the improvement of the existing salary and pension system; the maintenance of the existing mechanism of management of spa institutions; the optimisation of the work of the tripartite commission Government – Trade Unions – Employers, and others.
1. Prices and inflation
Inflation forced to fall…
According to NBS accounts, the inflation rate for October was 0.8 percent. It was influenced by higher prices for food products, which have increased by 1.5 percent, manufactured goods by 0.4 percent, and tariffs for public services by 0.5 percent.
The growth of prices of food products in October was linked to higher average prices in September; in particular, prices of agricultural products such as tomatoes have increased by 30 percent, aubergines by 7 percent, peppers and red peppers by more than 6 percent, dietetic eggs by 12.5 percent, and sausages by more than 3 percent. Tariffs for public services rose in October as follows: drinkable water supply and sewerage services by more than 7 percent, hotel and spa services by about 6 percent, and public alimentation services by about 2 percent. However, prices for this category could go up in November, as the heating tariff for population has been increased.
The cumulated inflation rate for 2008 (October 2008 compared with December 2007) is 7.5 percent (for information, the inflation rate was 10.7 percent in October 2007, compared with December 2006). Medium prices in the last 12 months (October 2008 compared with October 2007) have grown by 9.8 percent (14 percent in October 2007, compared with October 2006).
2. Banking sector
The banking system not affected by financial crisis, for the time being…
Deposits in Moldovan lei by individuals in domestic commercial banks have grown by 150 million lei in the first week of November 2008. According to data of the Ministry of Economy and Trade, deposits in foreign currency by individuals have decreased by 144.8 million lei in the same period due to the appreciation of the euro-leu exchange rate.
Despite consequences of the world financial crisis, the rise of deposits in lei reveals the confidence of people towards the domestic currency and banking system, which seems to be among most stable in the region, according to many references (IMF, WB). Data of the National Bank of Moldova show that deposits by individuals in commercial banks accounted for 24 billion lei, including 14.4 billion lei in Moldovan lei and 9.6 billion lei in foreign currencies. The supply of deposits in the banking system has grown by about 3.4 billion lei this year.
3. Foreign trade
Spirits exports up by 76 percent…
The spirits exports from Moldova have grown by 76 percent in nine months of this year, compared with the same period of 2007. According to accounts of the agro-industrial agency Moldova-Vin, exports have grown up to more than 146 million dollars, compared with 83 million dollars in 2007. The agency said that more than 86 percent of exports went to the CIS, and they were worth more than 126 million dollars (by 82 percent more than in 2007). Exports to the EU were worth more than 17 million dollars (by 42 percent more than in 2007), and Moldova exported spirits worth about 3 million dollars to other countries (by 38 percent more than in the same period of last year).
As a rule, the largest spirits supplies went to the Russian Federation – 47.6 million dollars, exports to Ukraine were worth over 35 million dollars, Belarus – more than 34 million dollars. According to Moldova-Vin, Moldovan wine exports to Kazakhstan were worth 5 million dollars, Romania – more than 4 million dollars, the Czech Republic 2 million dollars, Azerbaijan – over 2 million dollars, Georgia 1.4 million dollars, and the U.S. 1.2 million dollars.
Diagram 1. Value of Moldovan wine exports in the 1st-3d quarters of 2008, million dollars
Source: Agro-Industrial Agency Moldova-Vin, www.aamv.gov.md
4. Social sector
Moldova has most retirees…
The Parliament has recently passed in the first reading the draft state social insurance budget (SSIB). The budget was not modified in terms of structure. However, its revenues have been increased, but this is something normal when the number of state-assisted people increases every year, particularly due to rise in the number of retirees. Single birth indemnities and monthly allocations for growing up babies have being increased. Finally, the measure that employees will feel is the rise of their contribution to the state social insurance budget by 1 percent point up to 6 percent. This rise seems to have an explanation. Firstly, the number of employees decreases every year, and therefore, social insurance revenues are on the decline. Secondly, the number of retirees is on the rise every year and more resources will be needed to maintain them. For example, the elderly counts for 15 percent of the population and this is a very high share.
In addition, pensions will be indexed 20 percent, both accordingly to the inflation rate and rise of the monthly medium nominal wage. Therefore, the pension fund will be increased by about 909 million lei and will account for about 5.4 billion lei. This rise will be particularly due to the increase of the social contribution by employees. Indeed, the policy on this sector over the last years was focussed on social salaries rather than on social policy elements such as reformation of the pension system which is discussed much for a long time. Moldova, for example, has more than 620,000 retirees.
Reform of pension system…
Building non-state or private pension funds is being discussed for quite a long time. These funds are generally part of a developed financial market, but our financial market or capital market is growing up. For example, contributions by employees to private pension funds would be an investment for a calmer and more stable retirement accordingly to annual contributions, as well as a lasting solution to a long-term crediting of economic agents. These institutions along with banks form the financial market in the world and the Moldovan legislation does not ban such funds.
A solution to remedy an eventual crisis in the retirement system would be for the Government to find all possible ways in order to oblige Moldovans working legally abroad to contribute to the retirement system in the countries they work and to further transfer the rights. But this would be possible in the event Moldova has (or will have) such agreements with the countries concerned. Otherwise, Moldovan immigrants could contribute directly to the domestic retirement system from other countries, as the security of this system could run a risk when some immigrants will come back home.
Transnistrian leader Igor Smirnov visited Moscow in early November to seek economic and financial assistance from Russian authorities over the international financial crisis. On that occasion, ad-interim foreign minister Vladimir Yastrebceac has revealed a truth, saying that "Transnistria is experienced in receiving help from Russia". Indeed, the truth is that the Transnistrian regime has survived over years thanks to Russia’s support.
Exports by key Transnistrian economic agents, the Metallurgical Plant, the Ribnita-based Cement Factory, textile manufacturers, etc., are on the decline because of the international financial crisis. The inflation rate for January-September 2008 exceeded 25 percent. Prices are on the rise; in particular, prices of meat have increased by 74 percent, milk by 30 percent, rice by 300 percent, industrial goods by 14 percent, services by 22 percent, etc. The opposition media in Transnistria, particularly Novaya Gazeta quizzes over beggary by Transnistrian officials in Moscow after much precedent assistance has disappeared.
This year, the number of jobseekers in Transnistria has decreased by approximately 4,000 people compared with 2007. This evolution is linked to the strong exodus of people from the region, rather than to the rise of the number of jobs. The unemployment indemnity in Transnistria accounts for about 35 dollars, while the medium salary in budgetary sector counts for approximately 117 dollars. Therefore, Transnistrian residents choose to get register as jobseekers and leave the secessionist enclave to earn at least twofold higher salaries.
New pretexts to keep "frozen" relations between Chisinau and Tiraspol
On November 3, 2008, Transnistrian border guards obstructed President Vladimir Voronin to visit his natal village in order to attend the sanctification of a new church built under his patronage there. They invoked an order by Transnistrian administration and a direct indication by Igor Smirnov in this respect. On the other hand, Minister of Reintegration Vasile Sova has stated that "the participation of Moldova’s president in that ceremony was thoroughly coordinated with the Transnistrian administration as required to do. These actions by Transnistrian administration are certainly a provocation, which has unfortunately become a tradition. But they are also an example of a rough lack of respect for sentiments of the faithful, Christian traditions and even for the Russian Orthodox Church." In this context, the official news agency Moldpres has said: "Transnistrian leader Igor Smirnov has avoided any contacts with Vladimir Voronin in the last months; he cancelled all planned meetings invoking the necessity to be provided security even when the Moldovan side proposes meetings in Tiraspol. According to observers, the provocation arranged by Igor Smirnov proves that the Transnistrian leader is afraid both of Moldovan President Vladimir Voronin, the Metropolitan Church of Moldova, and all Orthodox Church."
Transnistrian administration not willing to discuss new initiatives with Moldovan authorities
Transnistrian leader Igor Smirnov met Russian Ambassador to Moldova Valery Kuzimin on November 10, 2008. He assured the Russian ambassador that the November 6-schedulled meeting with President Voronin was cancelled because Moldovan authorities misunderstood the Transnistrian administration. The Transnistrian leader stressed that he will not discuss new initiatives with Moldovan authorities as long as they do not respond to the April 11, 2008 initiatives to sign a friendship and cooperation agreement. The same decision was reconfirmed the next day during a meeting between Transnistrian officials and OSCE Special Envoy Heikki Talvitie. Mr. Talvitie stated that he would like to have a clear impression about points of view of Chisinau and Tiraspol before the OSCE annual ministerial summit, which will take place in Helsinki on December 4–5, 2008 and will discuss the Transnistrian problem.
OSCE efforts to approach positions of Chisinau and Tiraspol
The OSCE organised a seminar on analysis of conflicts and ways to settle them, in Odessa on December 10–11, 2008. Participants concluded that the peaceful settlement of the Transnistrian conflict does not have an alternative. It is worth to note that starting 1994 all seminars of this kind held under auspices of many organisations have drawn the same conclusion.
Tiraspol Supreme Soviet accuses Moldova of destabilising Transnistria’s economy
The Supreme Soviet in Tiraspol released a statement on November 13, accusing Moldova of destabilising the economic situation in Transnsitria by imposing the double taxation of Transnistrian economic agents after introducing the customs control on the Transnistrian section of the Moldova-Ukraine border on March 3, 2006. In this context, Transnistrian legislators demand the Smirnov administration to consider the situation before December 1, 2008 in order to take adequate measures and minimise the effects of the double taxation; to consider the possibility of appealing to EUBAM observers to prevent the entry of objects which have a limited circuit in Moldova, including drugs, in the Transnistria-controlled region; to take actions in order to prevent the degradation of confidence between the parties involved in the Transnistrian conflict.
Transnistrian Supreme Soviet combating own myths
On November 14, the commission for external relations of the Transnistrian Supreme Soviet released a propagandistic booklet aimed to combat 10 myths about Transnistria. The booklet was released after Transnistrian leader Igor Smirnov stated during a November 3 meeting with a representative of the security commission, Oleg Gudimo, that the quality of propaganda is very bad. The majority of the ten myths seem to be invented in order to produce pretexts to combat them easily. But true myths about Transnistria are not combated at all. For example, the myth about three official languages. Why Transnistrian legislators do not try to answer questions such as which is the proportion of newspapers, books published in Moldovan and Ukrainian languages and those published in Russian language; do high-ranking functionaries in Transnistria speak fluently all three official languages or taxpayers must speak one language only which suits these functionaries; are sittings of the Supreme Soviet translated in other official languages like in Moldova; are all normative acts translated into the three languages; how many websites do Transnistria have in Moldovan and Ukrainian languages etc. Or, another example is to combat the myth about the right of the Transnistrian people to self-determination. The Transnistrian regime has chosen the name of Transnistrian Moldovan Republic, but does this mean that the Moldovan people from the left bank of the Dniester has self-determined there? Why the Moldovan people should self-determine separately on the two different banks of the Dniester? This is absurd and the fact that the Bender municipality located on the right bank of the Dniester is regarded as located on the left bank is a proof in this regard, etc.
6th Meeting of the EU-Moldova Cooperation Subcommittee on Trade and Investments
On November 13, 2008, Brussels hosted the 6th Meeting of the EU-Moldova Subcommittee on Trade and Investments, which discussed topics related to the situation of the investment climate in Moldova and foreign, bilateral trade, as well as within regional arrangements.
European experts have appreciated the progress made by Moldova in the area of public procurements after adopting the new legal framework, in implementing European standards relating to customs, protection of intellectual property and use of the Autonomous Trade Preferences. It was highlighted the increasing weight of the EU as No.1 commercial partner of Moldova. At the same time, European experts recommended Moldova to increase efforts in order to reform areas linked to sanitary and phyto-sanitary standards and competition.
With regard to the future of Moldovan-EU relations, the European side reconfirmed the readiness of the European Commission to negotiate a deeper Free Exchange Agreement with Moldova in the near future. A feasibility research will be worked out and its findings will be released in the second quarter of 2009 (According to a press release by MFAEI).
Meeting of officials in charge with European integration within central public administration authorities
Officials in charge with the European integration within central public administration (CPA) authorities convened in a sitting on November 6, 2008. The meeting aimed to establish parameters of communication between CPA authorities with the view to optimise and strengthen the exchange of information and successfully implement the European Integration Agenda. The creation of the Secretariat of the National Commission for European Integration was announced at the sitting. The Secretariat will advise the directorate for coordinating foreign policies and assistance within the Government Apparatus.
Republic of Moldova – Russia
The Moldovan-Russian relations continue to ascend, while the official visit by Russian Prime Minister Vladimir Putin to Chisinau on November 14–15 gave a new impetus to these relations. During the visit, which took place in parallel with the participation of the Russian premier in the Summit of CIS Prime Ministers, Vladimir Putin has met Moldovan President Vladimir Voronin and his counterpart Zinaida Grecianii.
Moldovan and Russian prime ministers have signed bilateral cooperation agreements including a bilateral economic cooperation programme for 2009–2020, cooperation agreements on information technologies and culture and tourism. At the same time, Inter RAO ES and Moldelectrica Companies have signed, in presence of prime ministers of the two countries, an agreement on functioning of energy blocks at the Cuciurgan Power Plant in a joint regime with the Romanian energy system. This agreement is expected to enhance electricity exports to Romania.
During talks with Mrs. Grecianii, the Russian prime minister approached issues related to investments in the energy infrastructure of Moldova, gasification of Moldova, facilitation of Moldova’s commodity trade in Russia and ways to extend it, etc. Although Mr. Putin highlighted positive trends in Moldovan-Russian relations, he noted that the economic ties between the two countries need a more diversified and modern structure.
The first step to set up this structure was the opening of the Russian commercial representation in Moldova on November 14, 2008, with the participation of co-chairpersons of the Moldovan-Russian intergovernmental commission for economic cooperation, Moldovan First Deputy Prime Minister Igor Dodon, Minister of Economy and Trade, and Russian Minister of Education Andrei Fursenko.
The opening of the Russian commercial representation in Chisinau was preceded by the 10th sitting of the Moldovan-Russian commission for economic cooperation in Moscow on November 7, 2008. The sides have signed a protocol which approaches the following matters:
- Moldova’s initiative to open the second customs station for the exportation of Moldovan agricultural products (additionally to the existing one-stop-shop);
- Moldova’s proposal to Russia to accept Moldovan pork exports;
- The possibility to raise the number of motor cargo carriage permits for 2009 by Russia;
- The situation related to debts of Moldovagaz towards Gazprom and ways to restructure the debts for natural gas by transferring the debt of Transnistria from the balance of Moldovagaz to the balance of the Transnistrian administration;
- Moldova’s initiative to raise the tariff for the supply of Russian gas to Balkan states via Moldova.
Note by ADEPT. There are more and more allegations that the acting communist governance animates the current Moldova-Russia friendship, hoping this way to get Russia’s support at the forthcoming elections.
Republic of Moldova – Council of Europe
The European Court of Human Rights has pronounced decisions in the following cases in the period concerned: Tudor-Comert vs. Moldova, Panzari vs. Moldova, Boboc vs. Moldova, Malai vs. Moldova and Russu vs. Moldova. The Court sentenced Moldova in all these cases for having violated the right to a fair trial, effective recourse, for not banning the torture and not motivating the detention. Overall, Moldova will have to pay up to 12,000 Euros in pecuniary damages and 3,775 Euros in costs and expenses.
Republic of Moldova-CIS
On November 14, 2008 Chisinau hosted the summit of the Council of CIS Heads of Government. Georgia did not attend the meeting, as it has quitted the CIS after the August 2008 conflict, and Uzbekistan was represented by a deputy premier. The working agenda of the summit contained 35 draft documents, of which 34 were approved. The economic development strategy of the CIS until 2020 was the key document signed at the meeting. It presents key directions to develop cooperation with CIS member states in economic, transportation, financial-monetary, energy sectors, etc. The strategy proposes to finish a free exchange zone within CIS by 2020 and to set up premises needed to build a single economic area, etc.
Also, participants in the summit have signed documents on key cooperation directorates for developing the transport, ensuring food security, coordinating migration policies, concerning currency regulation and agriculture, etc.
The summit opened the Moldovan Chairmanship in the Council of CIS Heads of Government; Moldova will chair all CIS structures starting January 1, 2009.
Studies, Analyses, Comments
CIS summit – a pretext for a propagandistic campaign?
Igor Botan, 15 November 2008
During November 13–14, 2008, Chisinau hosted the summit of CIS heads of government. Much was written about this regional organisation, though it deserved only some ascertainments. The CIS may claim the title of the most secret regional international organisation