Quick Hit #14: War in Ukraine
April 13, 2022
Welcome back to Moldova Matters! I must admit I’m sorry for the absence as of late. Last week we wrapped up work at our donation center run from Smokehouse restaurant (link to some final stats which we are still compiling). We are still supporting a donation center in Balti as well as deliveries to shelters and other coordination efforts. The need for Ukrainian refugees in Moldova remains huge so please consider donating to Friends of Moldova if you want to help. In the meantime, my schedule is somewhat easier day to day and I hope to get back onto a regular Moldova Matters update schedule.
Progress of the War
So much has happened in the past week and a half it would be foolish to try and summarize it here. The war is shifting from the battle for Kyiv to the coming battle for the Donbas and the east of Ukraine. As Russian forces withdraw after being defeated outside the capital the true cost of Russian occupation has become clear to the world. Retreating forces have left a trail of horrific war crimes including summary executions, mass rapes, forced deportations and more. In the last weeks the whole world’s eyes have been opened to what it really means when the Kremlin sends soldiers to “erase” a country and people. These atrocities do not appear limited to Bucha or the Kyiv suburbs and when the full story is told of the battle for Mariupol we can expect much of the same. It is only through the ferocious resistance of the Ukrainian military and population that lives are being saved every day.
This link shared as a testament to the morale and spirit present in Kyiv even as this horrible news comes to the world.
The images and reporting from Bucha have shocked Chisinau just as much as western capitals. Reporters from Moldovan outlet Newsmaker traveled to Bucha to report directly on the warcrimes there and shared this horrific video with readers and watchers in Moldova (warning - video is age restricted for good reason).
Responding to the news of atrocities, President Sandu declared April 4th a day of mourning for all the war victims in Ukraine with flags flown at half-staff all through the country. She issued the following statement:
“Like the whole world, we are shocked by the massacre in the city of Bucha near Kiev. Moldova strongly condemns this crime against humanity, just as it condemned the illegal, unprovoked war launched by Russia against Ukraine,”
We can say that the Battle of Kyiv is over. Boris Johnson and other Western leaders are visiting the city and Embassies are reopening, including the Moldovan Embassy which will reopen in Kyiv on April 15th.
But the battle for the east is only beginning and the war next-door in Ukraine is far from over.
Moldova and the War
While the war has shifted east and there is less immediate threat on Moldova’s borders the crisis caused by the war continues to deepen in Chisinau. Whether speaking about security, refugees, economics, political risks, or political opportunities the war has completely changed the scope of affairs in Chisinau.
This week, Prime Minister Gavrilita announced that the State of Emergency, which was originally declared for 2 months, will continue as long as the war represents a threat to Moldova. This will include the closing of Moldovan airspace except for the narrow corridor towards Romania.
President Sandu did an in-depth interview touching on many aspects of this crisis and attempting to explain the nuances of Moldova’s complicated position. Here are some highlights:
Asked in Russia will attack Moldova (referencing the maps shared by Lukashenko and others) - President Sandu stressed that the Russian Federation has said they won’t and that they deny this public information as mistakes. (See “Explainer: Moldova is in a Pickle” to understand the government’s guarded language better)
Asked if Moldova has enough bomb shelters - No. Most are in horrible disrepair and those are the ones still under government control. Many were privatized in the last 30 years and no one knows their condition. She stressed that efforts can be made to renovate some but that “an adequate supply cannot be made in a month.”
Discussing how Moldova can support Ukraine - The President said that Moldova has offered Ukraine assistance in the form of bomb squads (police and / or military presumably) to work in non-combat areas clearing mines and other IEDs.
Asked about sanctions - President Sandu stressed that Moldova did not and will not join the sanctions against Russia but will also not become a platform for circumventing sanctions. This means that Moldovan banks will observe banking sanctions against the Russian Federation and that Moldova will prevent “re-export” of goods from the EU to Russia through Moldova. Also noted that while Moldova has not sanctioned Russia, trade between the countries has fallen to zero (other than gas) due to the war.
In major news this week, the war has expedited the EU’s consideration of Ukraine, Moldova and Georgia as members. Following the applications of all 3 countries at the beginning of the war, Moldova has officially received its EU questionnaire. This packet of questions must be answered in-depth by every level of Moldovan government and bureaucracy to assess the country’s level of EU compliance. Speaking about the packet Minister of Foreign Affairs Nicu Popescu said the following:
“The answers to the questions of this questionnaire will describe the current situation, show how prepared we are for joining the EU, and in what areas we need to make additional efforts. A lot of work awaits us right from today, the day we receive the questionnaire. All institutions are ready to provide the necessary information as soon as possible. This process will involve not only the authorities, but also civil society, since joining the European Union is a national project that concerns each of us,”
Moldova hopes to provide answers in weeks. This process often takes years and the whole thing is a testament to how much the world has changed in the last 6 weeks.
Moldovan Security / Transnistria
As part of his virtual world tour, Ukrainian President Zelensky has done a masterful job of speaking to parliaments around the world in both the practical and emotional terms that they feel most. Recently he addressed the Romanian Parliament saying the following:
“Ukraine is not the last target of Russian aggression. Russian invaders want to take Nikolaev and occupy Odessa. And from Odessa one step to Moldova. Russian propagandists say that Moldova is a target for Russian expansion. Therefore, it is fundamentally important to protect the independence and statehood of Moldova,”
Apart from being a highly accurate assessment of the security situation in Moldova, this is an appeal to the emotional connection between Romania and Moldova in order to get Romania to further commit to the support of Ukraine. President Zelensky knows that the MP’s he is addressing know that supporting Ukraine (with weapons) now is an easier choice than making hard decisions about supporting Moldova later (with troops).
One major thread of the news of the past few weeks has been the increasing drumbeat of warnings from the Ukrainian high command about threats from Transnistria. Here are a few examples:
Ukraine says Transnistria and Russian troops there are redeploying for possible provocations (limited / diverting attacks) against Ukrainian troops. (warning repeated week to week)
Ukraine announces that Tiraspol airport is being prepared for reception of large Russian transport aircraft. They say that troops landed here could be used in a push against Odessa.
Ukrainian armed forces warn that any Russian military planes flying too Tiraspol will be shot down.
Responding to this barrage of warnings and accusations the Transnistrian authorities deny everything. They say that they have actually reduced military activities during the war in order not to spook their neighbors.
President Sandu also responded, reiterating Moldova’s position that the Moldovan security services have not detected any changes in Transnistrian deployments. She noted that nothing is unusual but they are always monitoring the situation. Regarding the airport specifically she noted that this is a rarely used airport that gets overgrown and the Transnistrian authorities always clear the brush in the spring. At the same time the President appealed to the Transnistrian authorities:
“I hope that they are aware of the risks and will not allow actions that contribute to the risk of a military attack on the territory of Moldova,” [referring to both banks of the river]
President Sandu also acknowledged that the current format for resolving the Transnistrian dispute is no longer very relevant. The 5+2 format (Moldova, Transnistria, the OSCE, Russia and Ukraine + the EU and United States as observers) cannot work as it anticipates both Ukraine and Russia working constructively together. President Sandu stressed though that even if the format changes, the only option is a peaceful settlement.
At the same time, things remain tense. Ukrainian border guards have heightened their alert status with Transnistria and patrol the border on an identical status to that of Belarus.
International Diplomacy
Prime Minister Gavrilita visited Ukraine this last week to accompany 7 trucks of humanitarian aid from Moldova to the border crossing at Mogilev-Podolsky. 7 more trucks were sent to Odessa. The Prime Minister stressed Moldova’s support for Ukraine while noting that critical medical supplies destined for Ukrainian hospitals were the core of the shipments.
A minor scandal occurred this week at the Romanian city of Constanta pulled out of a sister-city agreement with Chisinau at the last possible moment (after the ceremony was planned). The Mayor of Constanta cited his desire not to “send a political message” highlighting his desire not to appear with the Socialist / pro-Putin Chisinau mayor Ion Ceban. Mr. Ceban has been trying to starch his hat white in recent days with a decided shift westward in his international relations. Apparently this is not fooling anyone.
In other pro-Russian news, former President Igor Dodon decided that during the week that the world became aware of the Bucha massacre he would ignore the news entirely and instead post on his twitter about the 30th anniversary of Moldovan-Russian relations (note in the twitter post the Russian flag comes before the Moldovan one… at best a breach of diplomatic protocol from the former President).
Finally, Administrator of USAID Samantha Power visited Moldova last week. During her visit she announced the “allocation” of $50 million dollars in aid to Moldova to support local agriculture, the IT sector, the textile industry, rule of law development, good government and more. There are 2 things that are important to understand about this:
These are all programs that USAID currently supports. They are not opening new programing due to the war OR providing humanitarian relief OR providing the Moldovan government budget support. This is a budget increase in current aid work.
“Allocated” is a tricky word. 100s of millions of dollars have been “allocated” too Moldova in the last month while almost none arrives. This is a future promise, not a declaration of current actions.
This is not to undercut Administrator Power. USAID does amazing work in Moldova and has constantly taken the long view supporting the wine industry, textile industry, IT development and more. At the same time, it is fair to note how unambitious this is. Doubling current programing budget while not re-focusing it on a crisis is one thing. “Allocating” money to that with no delivery date is another.
It is all a bit like a firefighter who sees an electrical fire, doubles the budget for chemical fire prevention, and promises to call you in 6 months.
Refugee Crisis Update
Just a quick update on the numbers. As of this week 404,000 refugees have entered Moldova from Ukraine and around 95,000 remain in Moldova. 50% are children. Moldova is still waiting for a substantial or coordinated response from the UN or international relief agencies. People here are getting used to understanding “assessing the situation” and “allocating” in many languages.
Economic Updates
The National Bank reports that as of March 31st, foreign currency reserves are down 15% since one year ago (around $600 million). This is due to the bank’s work stabilizing the lei against a 9% reduction in lei bank holdings (8.8% in foreign currency holdings) caused by people withdrawing cash. They say that there is no macro-economic risk to the banking system itself.
At the same time, the consumer pricing index is up 22.16% since one year ago as cost of staples soars (salt up 42.5%) due to supply chain disruptions across the market.
Moldova Matters will soon do a Deep Dive into the economic crisis driven by this war and explore small companies going out of business as well as the nationwide crisis in investor confidence driven by the security situation.
Macro-Economic Support
Prime Minister Gavrilita and much of her cabinet went to Berlin for a newly created “donor conference” of nations and entities who pledged to support Moldova. From this, Moldova got pledges of 700 million euros of support in a mix of grants and loans. On one hand this is fantastic news and Moldova needs the support desperately. The country is in a very bad economic situation and massive support will be needed to help Moldova support refugees as well as bolster the budget in order to create fiscal space for needed reforms. At the same time, this news is mixed. There has been little good reporting about the percentage-mix of grants vs loans but most indications are that these are mostly loans. Moldova is now heavily debt burdened and the shedding of foreign currency reserves to try and offset the effects of the war is a bad indicator. The country cannot afford to contract large debts in foreign currency at at time where imports and exports to the east are being crushed and consumer confidence is driving a major contraction in spending. The World Bank now projects Moldova’s economy to grow at 0.4% in 2022 (down from 13.9% in 2021) and inflation to be at 18.1% for the year. These numbers are optimistic and assume the war will end soon.
We’ll explore this in more depth soon.
Energy Security
The Moldovan government is moving quickly, with the strong support of European partners, to shore up the country’s precarious energy security situation. To that end Moldova has joined the Commodity Exchange of Romania's natural gas trading platform. This will allow a transparent, electronic process for Moldova to buy natural gas on the open market from EU countries. Prices through this mechanism will be massive (compared to Russia) and the pipeline from Romania can only handle 60% of Moldova’s winter gas needs. At the same time, this is a major improvement that will allow easy purchasing and avoid the mad scramble for bi-lateral agreements that Moldova went through last fall. Meanwhile, the EU has made preparations for reverse flow of gas to both Moldova and Ukraine in the event that Russia cuts off supplies totally.
In other news, Parliament has passed an energy security bill in the first reading. This bill will require MoldovaGaz to buy and store a 2 month gas supply for the winter months. This supply must be purchased and stored by August. It will be housed in a neighboring country with adequate storage capabilities (Romania or Ukraine). Up until now Moldova has not had any strategic energy reserve.
Information War
The information war is raging in Moldova as Russian propaganda seeks to both feed misinformation to Moldovans and keep Russian language Moldovan press out of Russia itself.
Parliament has proposed a new, and sweeping, law on misinformation and fake news. The bill defines misinformation as the following:
"Disinformation will be called the intentional, committed with malicious intent, dissemination of information that harms the security of the public information space. And information that harms the security of the public information space is false information aimed at creating panic, tension, social conflicts, military conflicts, man-made destruction or humanitarian disasters.
Such information, as follows from the bill, may be information that incites hatred or violence, justifies or promotes military aggression, hybrid type aggression or its elements, justifies or promotes terrorism, justifies, promotes or glorifies dictatorial regimes, information that comes from state authorities , which is in a state of military conflict and is recognized as an aggressor state."
This law provides for the following:
Legal amendments empowering the Security and Information Service (SIS) to block websites and remove content. This extends the government’s emergency powers in this sphere into permanent law.
Blocking of Russian state or state-affiliated owned TV stations
Levies fines for the spreading of fake news
Banning of the “symbols of the aggressor” including “Z,” “V,” and the St. George’s ribbon
This law applies both to legal entities (TV stations, etc) as well as individuals (social media posts). The law has not been fully passed by Parliament and is working through a complicated consultation process.
Replying to this law the pro-Russian Socialist Party says that it is the equivalent of creating a “Ministry of Truth.” Former President Voronin of the Communist Party said that Stefan Cel Mare used the St. George’s banner in his victories. This confused even his own party members who could not help but note that Stefan Cel Mare died in 1504 while the St. George’s ribbon was introduced by Cathrine the great in 1769. This, naturally, begs the question - what exactly is fake news?
Replying to the Socialists the PAS party noted that they are happy to discuss Orwell anytime with the Socialists and suggested the conversation could be used to promote critical thinking.
Both the Communist and Socialist leaders have vowed to keep using the St. George’s ribbon and to display it prominently in their May 9th (Victory Day) celebrations. All of this sets up a culture war showdown of fairly pathetic proportions given what is going on in the east.
Thank you for reading this update from Moldova Matters. If you haven’t already, consider becoming a paid subscriber. During the war all updates will continue to be open to all whether paying or not. But each subscription helps us expand Moldova Matters and bring more and more quality information right to your inbox. It’s just $5 / month and helps let the world know that Moldova Matters.
Thank you David. Your analysis and reporting are an important component in creating awareness and knowledge about this most unfortunate war and its impact on life in Moldova.