Weekly Roundup

February 14th - February 18th

One Year of Moldova Matters!!

One year ago this week we sent out the first Weekly Roundup from Moldova Matters! The experience of writing this newsletter each week and interacting with so many subscribers over that period has been absolutely amazing. When I set out to create Moldova Matters I had no idea just what a crazy year we were in for in 2021 - 2022. We followed a constitutional crisis, elections, formation of a new government, a never ending COVID mess, the gas crisis (ongoing) and now a regional crisis driven by Russia. In between there have been countless stories week to week of the ups and downs of Moldovan politics and economics and many celebrations of the wonderful things happening in a small country that most of the world barely notices. I want to thank you from the bottom of my heart for subscribing to Moldova Matters and for all the interactions and discussions we have had over the past year. 

On this anniversary, I would also like to ask you for your help. Many of you have taken the time to become a paid subscriber this year and that is amazing! If you haven’t, I would ask that you consider subscribing in order to support the time and effort that goes into making this happen every week. When I started writing it seemed that this wouldn’t be a major time commitment. But with crisis after crisis it has taken more and more time to follow and contextualize the news in a way that makes it approachable and understandable. Please consider subscribing if you can. 

In addition to subscribing, please share Moldova Matters with friends or colleagues who also follow what’s going on in this small but very important country. I haven’t had much time to work on any proper marketing over the past year and have relied entirely on word of mouth for growth. So please help out and spread the word! 

Once again, thank you so much for being with us on this journey. Let’s look forward to another fascinating year where we will spend a little time every week focused on why Moldova Matters. 

David Smith

Regional Tensions - Ukraine Crisis

In case you didn’t see it this week, please check out our update on the crisis in Ukraine sent out in the new “Quick Hits” format. In order to keep the weekly roundup from getting totally out of control we will use these mid-week updates to track specific developments in ongoing stories as needed. This week we followed the sudden flurry of statements from the Moldovan leadership on the crisis as well as updates on the overall situation. 

This week tensions have continued to rise and rise over the potential invasion of Ukraine by Russia. President Biden and European leaders have continued to focus attention on the crisis and warn that Russian forces are now in position to attack at any time. On Wednesday the Russian government announced that they were ending some exercises and returning units to their bases. But US intelligence as well as open source intelligence professionals have noted that this is not the case. Videos purporting to show tanks being loaded onto trains and withdrawn actually only showed these tanks moving to different positions close to Ukraine. Meanwhile, tanks and artillery continue to position themselves within kilometers of the border and are running on metal tracks meaning that they are seriously damaging the roads of the Russian towns they are moving through. None of this looks like an exercise and tension remains high. 

Over the last 24 hours Russian backed separatists in Ukraine’s east have launched 47 artillery strikes or barrages against Ukrainian military and civilian positions. In one case, they shelled a kindergarten blowing out the wall of a classroom that was in use. Thankfully, all the children were safe (if terrified) but 2 teachers got concussions from the blast. Ukrainian troops are under strict “don’t shoot back” orders attempting to deny Russia a casus belli. Meanwhile, Russia’s statement in response to these attacks was that it was the Ukraniians conducting serious provocations near the contact line not them. Since one side is bombing kindergardens and the other side is not firing back it’s hard to understand the logic there. 

Moldovan Reactions to the Crisis

This weekend, President Sandu will attend the Munich Security Conference and meet with regional and world leaders. In a statement, her office said that they are focused on “Coordination of efforts: the fight against kleptocracy and corruption" and "Migration and international security".

Meanwhile this week Prime Minister Gavrilita stated that in the case of war there is a risk of Moldova being cut off from Russian gas. She sought to assure the country saying that in this case the Iasi-Ungheni pipeline and other connections to Romania will allow the country to draw on alternative sources of fuel. Meanwhile, the Russian Deputy Foriegn Minister made a visit to chisinau and met with the Prime Minister, Foriegn Minister and Deputy Prime Minister for Reintegration (with Transnistria). The Prime Minister expressed a desire for “pragmatic dialog” with the Russian Federation. Regional and Energy Security topics were on the agenda but there was no official statement following the meeting. 

Also this week Kent Logsdon, the new US Ambassador to Moldova arrived and was officially received and credentialed by President Sandu. Moldova has been without an ambassador from the United States for around 6 months due to Senator Ted Cruz’s one man embargo of all ambassadorial appointments. Ambassador Logsdon met with President Sandu and discussed the situation in the region. 

Moldovan Preparations for Conflict?

Observers noted this week the movement of Moldovan military units in the northern city of Balti which were filmed and shared on social media. The Ministry of Defense clarified saying that these were routine movements of the city garrison involving repairs of old equipment. Indeed some equipment was moved on flatbeds consistent with this statement. But in other cases columns of APCs were filmed driving through the city which is an unusual sight. Whether this represents moves towards increased readiness, or simply jumpy residents reading too much into the situation, it is clear that all eyes are on Ukraine now in a way that they were not only a few weeks ago. 

Source point.md

In one concrete example of preparing the country for possible conflict in the east, Parliament has proposed a new “anti-propaganda law” that would allow fines for media that disseminate false information, manipulate public opinion or fail to ensure a plurality of opinions. Parliamentary Speaker Grosu said that it will help fight propaganda and misinformation and emphasized the need for this in the context of a national security response to the situation in Ukraine. 

The International Press Doesn’t Quite Get Moldova….

Also this week, the international press started taking some note of Moldova’s proximity to Ukraine. CBS and FoxNews both reported that Putin could attack and take control of Moldova if Odessa falls. The statement from a Fox journalist was unsourced and worded in a highly speculative way. CBS was actually worse though. In an interview the CBS anchor started by saying that the US State Department had urged the departure of all US citizens in Moldova. That is not true, though the State Department did suggest all Americans leave Transnistria this week. Things got worse when the anchor asked her guest what the “consequences of Russia occupying Moldova would be.” The guest stated with great confidence, quote: "look at a map it would put Russian troops right on the front lines with Poland." Clearly they have not looked at a map themselves. 

Political Updates

Here’s a quick roundup of the government and parliamentary news of the week:

• The government has approved a new equal pay law requiring men and women to receive equal compensation for the same work. There is currently no proposed enforcement mechanism and the law is in early stages with the next steps being consultations with industry. Currently in Moldova men earn an average of 14% higher than women with the largest pay gaps in the IT sector (38%) and financial sector (44%). 

• The Communist and Socialist parliamentary delegations have announced the creation of a political block in parliament “for the salvation of the country.” Previously the two parties had formed an electoral block during last year’s elections but went their own ways in parliament. What this means in practice is unclear as the parties largely vote along the same lines already. 

• The Moldovan government is preparing to sign a memorandum on the transfer of the Republican Stadium to the US government for the construction of a new $250 million dollar Embassy in the capital. The process of selling the stadium to the US government has been ongoing since 2018 but has faced public backlash and a sluggish administrative response (not to mention at least 5 Prime Ministers). Once the memorandum is signed relevant state agencies will have 60 days to evaluate and set an appropriate price for the sale. 

Who is Spying on Who?

This week the Mayor of Balti and the Director of the National Anti-Corruption Center each independently announced that they had discovered listening devices in their offices. The Mayor of Balti said that 2 devices were found during routine cleaning and promised to discover who planted them and make their names public.  Meanwhile, the National Anticorruption Center ordered inspections of it’s own offices after the devices were discovered. No statements or speculation has been made public about who might have planted these devices. 

Energy Crisis… Again

Here we go again. We have had a few quiet weeks on the gas crisis front only to find that we are likely to be entering a new crisis in electricity prices! Moldova is due to conclude a new contract on the provision of electricity from it’s main supplier (Transnistria) in the coming weeks to cover service from April 1, 2022 - March 31, 2023. Minister of Infrastructure Andrei Spinu has said that in an optimistic scenario we will see the price of electricity jump from 1.51 lei / kWh to over 3 lei. He says that prices regionally are 4-5x higher than those in Moldova. A doubling or even tripling of the electricity prices in the country will create another major burden on the population that is already reeling from inflationary pressures. Negotiations are ongoing and announcements are expected in the coming weeks. 

COVID-19 Update

This week Moldova recorded a 7 day running average of 1904 cases / day and 25 deaths / day. As we can see from the charts the omicron wave of new infections continues to subside and there is the beginning of a downward trend in daily deaths. 

Due to the decrease in infections in Chisinau the city has taken several hospitals out of front line status. Meanwhile, in accordance with the color coding system of the outbreak some restrictions are beginning to lift. Restrictions requiring bars and restaurants to close at 10 pm are lifted as well as the 50% capacity rules. COVID certificates are still required for bars and restaurants but have been canceled for shopping and malls. 

Economic Update

This week the National Bank raised the base rate 2 points to 10.5%. Annualized inflation in January was 16.6% (2.6% higher than December). Inflation is primarily being driven by food prices which have seen a 7.6% increase over the last month. Forecasts show inflation continuing until Q3 and then beginning to recede. 

Crime and Corruption

This week the Prosecutor General’s office announced that 8 persons are being charged in the case of Metalferos. Charges state that from 2018 - 2019 senior management of the state owned enterprise colluded with companies to contract at favorable prices and split the earnings. The fraud is alleged to have soared to 736 million lei (around $40 million USD). Recall that the case of Metalferos has previously implicated Igor Dodon and Plahotniuc. Mr. Dodon has been questioned in the past about his involvement and has denied any part in the scheme. 

Corruption in Healthcare

One of the saddest elements of corruption in Moldova is the requirement that families pay large bribes in order for their loved ones to get medical attention. Such a case was uncovered this week when a department head in the Oncological Institute demanded a 2000 euro bribe from a cancer patient in order to admit them to the hospital and begin treatment. The good news is that the patient and their family informed the CNA (anti-corruption police) who set up a sting and caught the director in the act. He faces 10 years in prison. Cases like these pring hope because in the past calling the CNA had its own risks and they were not at all guaranteed to defend the victim of extortion. Both the willingness of the victim to call, and the actions of the CNA show that there is a change in the air. 

New Land Scandals in Chisinau

It seems a week doesn’t pass by without a major scandal in the field of construction in Chisinau. This week Socialist and DA deputies in the municipal council voted to sell 1.3 hectares of land in front of the Unic shopping mall for 2.6 million lei ($144,000). This is prime real estate in the absolute center of the city and outside estimates put it’s value close to 1.5 million euros. PAS deputies in the municipal council voted against the move and have promised to appeal the decision. 

Ending on a High Note!

This week’s high note is just one of hope. No war started this week. Moldova is awake to the threat in a way it was not a few weeks ago and people are paying attention. The sun is shining and spring seems to be in the air. Geopolitically times seem really dark, but it’s important to remember that day to day life goes on. Let us all hope that we can end the newsletter with “no war this week” next week and the one after that. 

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