Quick Hit #15: War in Ukraine
April 21, 2022
Welcome back to Moldova Matters. This week we’re continuing our new format called “Quick Hits” where we will write important updates on evolving stories during the week. For now, we’ll use this format to keep more regular updates moving on the Russia - Ukraine crisis and specifically how this impacts Moldova.
Progress of the War
Over the course of the last week we have seen the start of a major shift in Russia’s war of aggression in Ukraine to the east. Russian forces are preparing for a major offensive in the Donbas while Ukraine rushes troops east to meet them. Critically, the United Sates, United Kingdom and many other partners have begun to send substantial amounts of heavy weapons into Ukraine in order to support Ukrainian troops preparing to fight a conventional, large scale battle in the flatlands of eastern Ukraine. All of this has represented a sort of race to organize, equip and deploy troops as both sides try and get prepared for the coming fight. In a sense, it is as if we are in the eye of the hurricane. The battle for Kyiv is behind us and Russia has failed at its blitzkrieg. But the next phase of the storm may be worse than the first.
At the same time as the world braces for the next battle, Ukraine is starting to regain some normality behind what are increasingly clear frontlines. Russian long range missile strikes continue all across the country reminding Ukrainians that nowhere is really safe. But in Odessa, troops removed the hedgehogs that previously dotted the downtown streets in an apparent confirmation that the city is no longer under imminent threat of attack.
Ukraine Levels Criticism Against Moldova
In the last week, there have been multiple criticisms leveled against Moldova by senior Ukrainian officials. Deputy Prime Minister Iryna Vereshchuk accused Moldova of being hesitant to call the war a “war” and accused Moldova of attempting to profit off of the war by also applying to join the EU. She said:
“Moldova is behind the Ukrainian back, behind the women who have been victims of violence, behind the backs of children who have become disabled. Now Moldova has applied for EU membership, trying to get some more economic benefits. This surprises me, because I have always supported Madam President, who always performed so beautifully. I thought that her support is important, that this is the new face of the new democratic Moldova,”
In response, the Presidential administration released the following statement:
“Moldova condemned the Russian aggression from the first day. The authorities of the republic called the events in Bucha and other Ukrainian cities war crimes. Moldova was a co-author of UN resolutions condemning Russian aggression. In addition, the country complies with international financial sanctions,”
It is fair to say that the accusations suggesting Moldova has been hesitant to call out Russian aggression are misplaced and absolutely false. The Moldovan government has had strong statements from day one as they noted. Regarding the idea the Moldova might “profit” off of the war by applying to join the EU this also seems misguided. It is absolutely true that Moldova (and Georgia) hastily followed Ukraine’s application in the hopes that the EU might expedite what is normally an extremely long process. It is also a fact of geography that Ukraine is fighting for Moldova’s security too. However, statements about the EU application should be viewed more in the lens of Moldova seeking a mechanism to bolster its own security in the context of a rapidly deteriorating situation. If you haven’t already, check out the recent Moldova Matters article “Moldova is in a Pickle” for an overview of the country’s vulnerabilities and challenges.
An additional controversy arose when reporting from Ukraine has suggested that Moldova refused to sell its 6 MiG-29s to Ukraine in the early days of the war. Prime Minister Gavrilita responded to this saying that Moldova is in no position to provide military and security aid to Ukraine, unlike many larger countries. Objectively, that is a fact. Moldova’s military and security services are entirely inadequate for the country’s own defense and if they did have 6 operational MiGs Moldova would need them. The reality though is that Moldova doesn’t even have them. The planes were retired in 2000 and none of them fly. Worse, the official previously responsible for the airport where they are stored has said that the planes are nothing more than empty shells. Anything of value was taken out and sold by corrupt officials years ago.
These diplomatic spats between the countries are unfortunate and represent a real misunderstanding by some in Ukraine as to what Moldova is capable of. The country is reeling from the challenge of caring for 100,000 refugees and is in that sense doing all it can.
At the same time, Moldovan volunteers are fighting in Ukraine as are citizens of countries from around the world.
Transnistria and Moldovan Security
Ukrainian officials continue to make statements suggesting that Russia is preparing military activity from Transnistria. This week, they announced that FSB agents conducted readiness checks with the 1st, 2nd and 3rd motorized rifle brigades in Transnistria. The presence of Russian agents in the region is disquieting but not alarming and the Moldovan and Transnistrian authorities continue to say that they see nothing abnormal about the force posture in the region.
Meanwhile, it appears that Transnistrians are not comfortable with the direction of events. Applications for Moldovan passports by residents of the region spiked since the beginning of the war overwhelming the passport office. Of around 465,000 Transnistrian residents 338,000 are already MD citizens and it appears that the remainder are rushing to get passports that will allow them to travel internationally if needed.
To highlight the continued threat to Moldova, here is a short clip of Russian state TV showing the increasingly belligerent and violent propaganda being directed at Russian citizens (captions in English).
Economic News
The economic situation in Moldova is looking increasingly bleak as the blocking of supply chains and crash of the eastern export markets take their toll. Moody’s changed its rating of Moldova from “Stable” to “Negative” citing the danger of the war and specifically the idea that Transnistria could become involved essentially drawing Moldova in. Across the board all investment indicators are quite negative. We’ll have a longer article on this topic soon.
Meanwhile, the US Treasury has named 4 Moldovan companies on sanctions lists. They accuse these companies, owned by dual Moldovan and Russian citizen Alexander Okulov, of attempting to circumvent sanctions on Russia. Apparently most of the companies operate in Africa and Mr. Okulov is closely linked to a major Russian oligarch with ties to the Kremlin.
Energy Security
Moldova is now warily eyeing May 1st as Gazprom’s deadline on the payment of historical debts approaches. The Russian company claims massive debts are owed to it and it will cut off supplies if they are not paid by this deadline. The Moldovan government has refused to pay unless these debts are confirmed by an independent audit. Due to the outbreak of war no such audit has been possible in the last months and now May 1 is approaching.
In the case of a gas cutoff, Moldova will be able to buy gas on the European market through its pipeline with Romania. This would not be possible in the winter months but because of the warming weather and decreasing demand it would be possible to source 100% of Moldova’s needs from Europe. Unfortunately, the same is not true of electricity which is provided by Transnistria and made with Russian gas. Moldova’s state company Energcom has announced tenders for the supply of electricity in case of disruption. It is possible for Moldova to buy from Romania or Ukraine but in either case prices will rise substantially. Minister of Infrastructure Spinu has announced that Moldova is prepared now for a full cutoff of Russian gas in the case of “unfriendly actions.” He is also encouraging citizens to shut off the lights when you aren’t in the room and basically to conserve energy wherever possible.
Meanwhile, a new energy crisis is looming. Chisinau’s Termoelectric plant produces around 15% of the country’s electricity as well as central heating for much of the city. It’s in a terrible state of disrepair and 2 of its 3 power units are at the end of their service life and at risk of failing next winter if not upgraded. The government previously held a tender to select a company for the work (valued at 10s of millions of dollars) and selected the consortium of Horus and Power Machines. General Electric also bid but was disqualified in a process it claims was unfair. The government was not happy from the start in the choice of Horus and Power Machines but selected the Russian company because it was one of the only ones experienced in servicing the 70s era systems at the plant.
Three days after awarding the tender the government abruptly withdrew it. They cited the fact that Power Machines is now under US sanctions as it is owned by a Kremlin linked oligarch. This reasoning was rejected by the consortium which is threatening legal action. Meanwhile, Minister Spinu announced that in this process Power Machines attempted to bribe him in order to get the contract back. While the mess around this power plant seems only to get worse there is now no plan on upgrading it before next winter.
Just one more way the war and its economic consequences are being felt in Moldova.
The Information War
This week, the main story in Moldova was about Parliament’s new law banning symbols of Russian aggression. The “Z” “V” and St. George’s Ribbon are now all banned in Moldova and displaying any of them will result in a substantial fine.
After signing the bill into law President Sandu explained the necessity of this move with the following statements:
“We remember the sacrifice of the heroes, we know how great was the price that peace was achieved. At least 100 thousand people in Moldova died so that we could live in peace. Speculation on the Victory of 1945 to promote military aggression against Ukraine is an insult to the memory of our parents, grandparents, who gave their lives for us to live in peace. It was our duty to keep this peace,”
"This is not about the war of 77 years ago, but about today's war in Ukraine."
“We must say a firm “No!” to war and its symbolism. It must be excluded from its use in our communities. The place of such symbols is in the dustbin of history, next to other barbaric symbols of destruction and death. This decision is a debt to all the victims of this war, to all who survived its horrors!”
This ban has infuriated Moscow and its proxies in Moldova. A presidential spokesperson in Russia responded by saying:
"We call on Chisinau to abandon such rhetoric or we will respond and these answers will be painful,"
The Russian Embassy in Chisinau called this a ban on "the foundation of historical truth and justice," proving once again their unfamiliarity with either topic.
The Ministry of Foreign Affairs has summoned the Russian ambassador over these and many many more official comments by Russian Senators and TV presenters which in many cases rose to the level of threats against Moldova’s President. The Ministry had the following statement:
“Given the unacceptable statements of the official representative of Russian diplomacy to the head of state, the MFAEI ordered to summon the Ambassador of the Russian Federation to Moldova Oleg Vasnetsov,”
“We appeal to the Russian side and call for non-interference in the democratic, legal and internal process of our country,”
Meanwhile, the Communist and Socialist parties in Moldova have vowed to march with the St. George’s ribbon on May 9th. This sets up “Victory Day,” the holiday celebrating the Soviet victory in World War 2 as a showdown between the opposition parties and law enforcement. Rallies were held in Balti in support of keeping this symbol:
The pro-Russian opposition claims that this is a question of culture and heritage and the ribbon has nothing to do with the war in Ukraine. Besides this being easy to refute by simply reading the news, some vandals chose to make the point very clearly by painting the St. George’s ribbon over the Ukrainian flag on the Hotel National. The symbol of Russian aggression being used to erase the Ukrainian flag is pretty on the nose.
For context, it’s important to note that many countries made attempts at removing the St. George’s ribbons back in 2014. Belarus and Kazakhstan both chose to encourage new ribbons made of their own national colors to remember the victims of WW2. That is doubtlessly a dead movement in Belarus at this time but simply shows that Moldova has done nothing “radical” by banning a symbol that is now totally associated with Russian aggression.
Meanwhile, Moldovan companies are choosing to rebrand to disassociate themselves with these symbols. Zity Mall took down its giant “Z” logo this week.
How is the Information War Going?
A poll came out this week that allows us to somewhat gauge the Moldovan public’s views on the Russian invasion. Asked to describe what is going on in Ukraine 52% say there is a war, 33% say there is a “liberation and de-nazification” operation and 15% didn’t answer. More troublingly, from the same group 43.6% say that blame for the war lies with Zelensky, NATO or the West while only 41.6% say that Putin is to blame.
In Other News…
Moldovan news remains completely consumed by the war in the east and its fallout in Moldova. However there are other stories and we’re going to do a bit better including the most important ones in the newsletter so that they don’t get lost in the very understandable focus on the war.
The Government has approved the plan to sell the Republican Stadium to the US Embassy. The Embassy will develop the site for a new Embassy facility to replace the 100+ year old building they are in now. Development will be done in such a way that the historic gates to the stadium will be preserved and much of the land will be open as a public park.
The Acting Prosecutor General went to Parliament this week to ask the body to lift the parliamentary immunity of MP Radu Mudryak. He accused the MP of money laundering on an exceptionally large scale noting that dozens of fictitious loans were used to justify Mr. Mudryak’s wealth being wildly out of proportion with his income. The MP spoke in his own defense becoming increasingly animated until he needed to be removed from the hall with his Socialist colleagues saying he had a medical emergency. He was taken away in an ambulance and is said to have a serious heart condition.
COVID is over. After more than 2 years the government has declared the “State of Health Emergency” caused by COVID-19 to be at an end. Hopefully we have some time to manage the war, energy crisis and everything else going on in 2022 before the next variant arrives.
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