Cabinet Reshuffle: PM Announces Ministerial Resignations, New Appointments Awaited

Weekly Roundup - July 15, 2023

Jul 15, 2023

Welcome back to Moldova Matters! Just a head’s up, this week’s roundup is a long one as there has been lots of important news on many fronts. If you value the work do at Moldova Matters and haven’t yet subscribed please consider doing so! It’s just $5 / month and goes a long way towards supporting the work that goes into this newsletter.

Prime Minister Recean Announces Cabinet Reshuffle

On Friday July 14th Prime Minister Recean announced the resignations of 3 ministers. They are the Minister of Internal Affairs Ana Revenco, Minister of Education Anatolie Topală and Minister of Infrastructure Lilia Dabija. The Prime Minister gave no reason for the resignations and thanked all 3 ministers for their service highlighting their accomplishments. Specifically, he noted Minister Revenco’s critical work in the refugee crisis, Minister Topală’s work on higher education reform and Minister Dabija’s work in rehabilitating the country’s road system.

Following the announcement Ministers Revenco and Dabija posted statements thanking their staffs and calling their service in government a great honor for them. Minister Topală has not made any statements at time of writing. None of the “resigned” ministers gave any reason for their departures.

Ministers Ana Revenco, Anatolie Topală and Lilia Dabija (photo sources linked)

The Prime Minister announced that he would present 3 new candidates on Monday July 17th to fill the now vacant rolls. This immediately set in motion leaks and speculation about who might fill the rolls. Here is what has been reported so far:

Minister of Education - PAS MP Dan Perciun, currently the leader of the Parliamentary Committee on Social Protection, is a rumored candidate. Asked about it he did not confirm but said that there are a number of names under consideration.
Minister of Internal Affairs - Head of General Inspectorate of Police Viorel Cernauteanu is rumored for the position and has not commented. PAS MP Andrian Cheptonar has also been discussed but he ruled himself out in an interview with TV8.
Minister of Infrastructure - Former Minister of Infrastructure and current Presidential Advisor Andrei Spinu is rumored for this position. He has neither confirmed nor denied his consideration.

Without knowing who the PM will announce for these positions on Monday it is hard to draw many conclusions from this shakeup. At the same time there are a few things we can say about the process and about what to look for on Monday:

This was (mostly) unexpected - Commentators and political experts were not completely surprised by the resignation of Minister Revenco. Voices in both civil society and the opposition have been calling for her resignation as a consequence of the tragic shootings at the Chisinau Airport this month. At the same time there were no previous indicators that the Ministers of Education or Infrastructure were likely to be replaced.
Spinu’s return would have political consequences - Experts interviewed by Newsmaker noted that if Andrei Spinu were to return to the Ministry of Infrastructure that would likely have serious political costs for PAS. Opposition voices have conducted a coordinated campaign questioning Spinu’s negotiation of gas contracts with Russia in 2021 and alleged various improprieties. Nothing has been proven on this front. Additionally, by being the face of the ministry during the winter energy crisis Mr. Spinu became very unpopular with some sections of the public. Whether fair or not, his reappointment would have political consequences for PAS.
The PM has differentiated himself from his predecessor - Prime Minister Recean has shown a willingness to make much quicker changes in personnel when compared to his predecessor Prime Minister Gavrilita. The former PM kept many Ministers in place even when facing loud internal and external calls for their dismissal. In this case, there were no public calls for the dismissal of 2 of the ministers and still the PM acted. His reasons are not know but it appears he is taking a more decisive position in managing his cabinet.

We will come back with an update next week when we know who will be appointed to these 3 critical ministries.

Key Political News of the Week:

In addition to the cabinet shakeup, here are some other key stories driving the political news of the last week:

Moldova withdraws from the CIS Inter-parliamentary Assembly. Parliament voted this week to withdraw Moldova from yet another CIS structure. Inter-parliamentary ties will be maintained with *some* CIS member countries on a bi-lateral basis.
Outgoing Bashkan of Gagauzia Irina Vlah will start a new party. The outgoing leader of the autonomous region has long been thought to have higher political aspirations. She gave no details except that she would announce more information in September.
Former PM Gavrilita applies for position on the Supervisory Board of the National Bank. The former PM noted that she plans to continue working for Moldova’s economic development in a technical (rather than political) capacity. Journalists noted that a role on the Supervisory Board pays roughly 4x higher than the 1000 euros / month salary of the Prime Minister. This is not to assume a financial motivation for the former PM, she had a highly successful career outside Moldova before returning to politics, it is just to note how poorly paid the senior political leadership of the country are in a system that historically relied on “supplemental” (corrupt) income.
Parliament votes to create a new agency called the “Center for Strategic Communications and Fighting Disinformation.” The new agency will be designed to combat misinformation and build up resilience to malign information campaigns. It will have a coordinating role among other agencies and a consultative role whereby they will be able to bring complaints to law enforcement agencies and make suggestions about changes to regulation. The center’s original name “Patriot” was dropped from the final version after a backlash from civil society saying that it sounded like a propaganda agency. The new agency’s director will be appointed by the President after an open hiring competition. Additionally there will be an 11 member committee evaluating misinformation drawn from both state agencies and civil society.
Parliament introduced a bill to bar members of a party that was ruled unconstitutional from running for office for 3 years. The proposed bill would include elected officials and senior leadership from such a party (the Shor Party specifically). PAS MP Olesea Stamate explained the bill by noting that right now officials from a party that was ruled unconstitutional can simply create a new party or run as independents which somewhat defeats the purpose of outlawing the party in the first place.
President Sandu’s Chief of Staff, Ecaterina Casinge, will depart to become the Press Secretary of the President of European Council Charles Michel. Before joining the Presidential Administration she worked as the chief media advisor to the European People’s Party EPP and in other communications roles in EU bodies. Ecaterina Casinge’s new role will put a Moldovan in a very prominent and public position within the EU’s leadership organizations.
Transnistria has banned the new Disney cartoon movie “Strange World” and ordered it removed from theaters. The local “authorities” claim the movie promotes non-standard gender identities. Theater owners who showed the movie before the ban will be fined.
The Socialists and Communist Parties will run in “parallel” in local elections. Party leaders announced that they would not run as a block (as they did in the last parliamentary elections) but would coordinate on key races so as to support one another.
The Central Election Commission CEC issued a warning against PAS. The MAN, PNM and PLDM parties had previously complained to the CEC that PAS was using tents and fliers with PAS Chisinau Mayoral Candidate Lilian Carp’s picture and slogan on them. This is not permitted as the official campaign season has not started. The CEC agreed with the complaint, issued a warning and ordered that such materials be withdrawn from circulation.

Security and Defense Updates

It has now been over 500 days since Russia began their full scale invasion of Ukraine on February 24, 2022. Marking the solemn anniversary President Sandu made a statement on the war saying:

“500 days have passed since peaceful people, sleeping in their homes, living on their own land, woke up from bomb explosions and the roar of tanks. Innocent people were executed, bodies were left on the streets or thrown into a mass grave. In Bucha, Irpin, Gostomel, Borodianka. Raped women, children killed or maimed by bombs.
...
"Thanks to the courage of the Ukrainian military, thanks to the resistance of the civilian population, we have peace in Moldova. We stand in solidarity with Ukraine and will do everything in our power to support it. Ukrainians are waiting and will be waiting in our country. Our roads and railways will continue to transport Ukrainian products to their markets. As part of the international community, we will join forces with Ukraine to hold Russia accountable for war crimes. Ukraine will win. It cannot be otherwise,”

During the NATO Summit in Vilnius this week, NATO called for a withdraw of Russian troops from Moldova and the restoration of Moldova’s internationally recognized territory. Foreign Minister Nicu Popescu attended the summit and spoke to journalists stressing that Moldova’s priority is the modernization of the country’s national security and defense sectors via bilateral relationships with partner countries and the NATO alliance. Towards this goal, but without any publicly announced details, this week the government allocated 26.2 hectares of previously agricultural land to the Military. This land is near the village of Bacoi which is located near the Chisinau airport.

SIS Announces Prosecution of Russian Spy Ring

Much of the security news of the last week has been focused on the identification, sanctioning and prosecution (in absentia) of Russian spies in Moldova. This week SIS announced pending prosecutions against members of an FSB coordinated spy ring that the Kremlin began recruiting in 2020. They named 2 Russian FSB agents identified only as “Iurie G” and “Vadim I” and also noted an unnamed Moldovan who is being charged with treason and “fraud on an especially large scale.”

The 2 FSB agents recruited Moldovans with a goal of influencing the Moldovan social and political landscape by gathering information on Moldovan political and legislative processes, seeking “Kompromat” (blackmail materials), running disinformation campaigns and “active measures.” Following the invasion of Ukraine this network was used to recruit people for violent anti-government actions. The Moldovan who is currently wanted was charged with creating "dark channels of funding" so that money supporting Russian agents could be sent from Russia into the country. In only one of these channels the agent managed to bring over $500,000 dollars into Moldova.

Following the announcement from SIS, news outlet ZdG reported that “Iurie G” and “Vadim I” are Russian citizens Iurii Gudilin and Vadim Iurcenco. Vadim Iurcenco is the vice-president of the Moldovan-Russian Business Union serving “under” the president of that organization Igor Dodon. Iurii Gudilin is a Russian political scientist who is already under US sanctions. Iurii Gudilin worked for Igor Dodon’s 2020 presidential campaign in an advisory role where he allegedly organized an illicit funding mechanism to move money from Russia to support Dodon via the cryptocurrency Tether. Iurii Gudilin has previously been reported on for his role in Dodon’s campaign, association with the Russian “troll farm,” for offering services to Ion Ceban’s MAN Party (it is unclear if they ever worked together) and for schemes aimed at stirring up hatred against Ukrainian refugees. Specifically, Iurii Gudilin had proposed a plan for mass break-ins of cars in Chisinau which the troll farm would blame on Ukrainian refugees in Moldova.

This follows on the heals of reporting from Radio Free Europe that has identified 5 of 7 Russian individuals who were sanctioned by the US Government for attempting to destabilize Moldova back on June 5th. The names of the sanctioned individuals were known but previously there was no public reporting about who they were. Now we know that these Russian agents entered Moldova under various guises. Some were instagram influencers selling bespoke candles, one was a small business consultant, another was a tourist… and one was just a guy who openly ran a Neo Nazi organization and didn’t manage to get into the country. Most of the agents in the list were detained and deported from Moldova by SIS this year.

What all this reporting makes clear is the fact that Russia, and its local proxies, are continuing to invest lots of resources in destabilizing Moldova and overthrowing the democratically elected government here. Naturally, that is not their official position. Responding to the news from SIS the Russian government responded with their usual litany of insults and lies and this particular gem:

"...Russia, unlike the West, respects the sovereignty of other states and does not intervene in their internal affairs"

Economic & Infrastructure News

Here are some key economic stories from the past week:

The Government approved the Ministry of Economy’s SRL reform and sent it to parliament. Parliament considered the bill and passed it in the first reading. It will have further consultations before the vote on the second reading at which point it would be law. In case you missed it, we wrote a Deep Dive into this bill and the implications it has for the business environment earlier this week.
PAS MPs registered a bill to force taxi-companies operating in Moldova to relocate their business here. The bill is targeted at the Yandex taxi app which operates the largest app based taxi service in Moldova but processes customer credit / debit card payments in Amsterdam. MP’s say that currently only around 20% of taxes from taxi rides are paid and this initiative will bring the total up to 60-70%. Taxi companies will need to legally register and process payments in Moldova as well as get their cars certified as transport vehicles. Explaining the bill PAS MP Marina Morozova said:

“The taxi service sector in Moldova has been facing a serious problem for several years – unfair competition. One of the factors that influenced this process was the emergence of online applications for calling a taxi in the country. The operators of these platforms make a profit by avoiding tax deductions to the country's budget, and financial transactions are often carried out through international financial organizations,”

Author’s Analysis: Taxis are not the only online digital service that offshores payment processing in Moldova. When you rent a bolt scooter your card is charged in Estonia. When you order a pizza delivered through Glovo your card is charged in Spain. When the quasi-government “Moldova for Peace“ refugee relief committee was formed in February 2022 they solicited donations through an online platform and bank accounts in the United States. Why? This isn’t a problem about tax-evasion it is a problem of digital infrastructure. Until very recently Moldova had zero legal mechanism to process online credit and debit card payments. Paypal in Moldova is still unavailable for business use. Almost all “digital” payments in Moldova are bank to bank wire transfers… which is pretty useless when hiring a taxi. Moldova still has very little digital infrastructure around both accepting payments and creating digital receipts in an automated way (especially for business which require special super complicated receipts for everything). Yandex is a Russian owned company and is hardly sympathetic right now but there is a bigger economic and structural issue at play here. We don’t have the full text of this bill so we don’t know if it envisions broad solutions for improving the digital commerce ecosystem. That said, all indications are that in a “carrot vs stick” calculation this bill is a stick that may be trying to force company behavior currently not even provided for in regulation.

Parliament, the Presidency and 65 other government buildings will be reconnected to central heating. Buildings in Chisinau and Balti will rejoin the municipal heating grid as a cost saving measure. The Ministry of Energy estimates major savings in gas consumption as well as electricity production benefits that occur as a byproduct of increased use of the 2 cities Thermal-Electric plants.

In a final economic note there is a story developing in Ukraine that has the possibility of impacting Moldova in the medium or long term. Last month President Zelenskyy announced that the government of Ukraine would legalize medical cannabis as part of a broader ambition to create a “world class” infrastructure for dealing with rehabilitation, pain management and PTSD. This week the Ukrainian Parliament passed the bill in the first reading with a vote of 268 for, 17 against and 11 abstentions. The bill aims to regulate cannabis cultivation, create a mechanism of distribution based on doctor’s prescriptions, and create an tracking system for cannabis.

American experience has shown that legalizing and regulating medical marijuana is often a precursor to broader decriminalization or legalization laws. In the context of the war Ukraine is unlikely to see much pushback from EU countries which are generally behind the US in terms of legalization. Given Ukraine’s status as an agricultural behemoth the introduction of cannabis as a potential new cash crop is likely to have regional implications. Should the EU follow the US on a slow path to legalization Ukraine will be well positioned to reap the rewards in years to come. Given Moldova’s similar, if smaller, agricultural capabilities as well as current position outside of EU regulations, decision makers in Chisinau are likely to watch this development very closely.

Crime and Corruption

New details have emerged about the tragic shooting at the Chisinau airport on June 30th. After shooting and killing 2 officers, the shooter called his mother in Tajikistan and the call was recorded by an unknown 3rd party in the room with her (speculated to be the Tajik police looking for him). In the call the shooter, Rustam Ashurov, says goodbye to his mother and admits to killing 2 people at the Chisinau airport. He also admitted his role in the kidnapping of a Tajik banker who he claimed they tortured to death before throwing his body in a river. Ashurov and his criminal gang apparently believed that the banker had around $200 million dollars in bitcoin. Tajik authorities have stated that there were 10 people in this criminal gang who all fled after the murder. 5 were arrested in Tajikistan, 2 entered Russia, one fled to Turkey and Ashurov came to Moldova via Turkey. Tajik authorities are working to track down the 4 who have not been arrested or killed.

Note, we previously wrote 3 articles on the airport shooting that can be found here (one, two, three).

Prime Minister Recean has received reports from all institutions responsible for airport security and has ordered various changes in response to the violent events. Within 20 days an analysis will be conducted on feasibility of stationing a rapid response FULGER unit directly on the grounds of the airport. Further changes in emergency planning and security protocols will be implemented.

Final Note - a Fight over History

In last week’s Moldova Matters Weekly Roundup we wrote about Moldova marking the 74th anniversary of the second wave of Stalinist deportations. At Moldova Matters we try not to print the words of Russian propagandists but the response to the commemoration from the Russian Embassy in Moldova is worth sharing. It highlights the type of rhetoric that is spewed from this and other Russian government organizations all the time. They Embassy said that the honoring of the victims was designed to “inciting hatred towards Russia and everything Russian.” They went on to say:

“We paid attention to the “month of Russophobia” that started in Moldova, disguised as a “fight against totalitarianism”. It is significant that the organizers of all kinds of "installations", exhibitions, stage and screen productions cordially honor the Romanian accomplices of Nazi Germany. They keep silent about their atrocities during the Great Patriotic War. They deliberately denigrate the soldiers of the Red Army who fought with them. In this regard, I would like to recall the tragic consequences of the repressions of the Antonescu regime against civilians in Soviet Moldova,”

As the world has become accustomed, the formula from Russia is simple. What started as whataboutism aka “sure Stalin had crimes but what about Hitler?!” has morphed into the even less subtle “if you say Russia ever did anything wrong you are a Nazi.”

Responding to the Embassy’s statement the Moldovan Ministry of Foreign Affairs stated:

"The actions of that time caused long suffering to our people. We invite the representatives of the Russian embassy to visit, between 8.30 and 21.00, the wagons installed in PMAN to talk with the historians on duty - university professors, scientific researchers, specialists in the field to find out the historical truth about the Soviet-induced famine and massive deportations to the Gulag"

Moldova Matters