Weekly Roundup
September 18 - September 24
Welcome back to Moldova Matters! In this weekly roundup we will check in with the top stories of the week in Politics and Economics. Subscribe to Moldova Matters to get our Weekly Roundup and other content sent right to your email! And consider becoming a paid subscriber to support our work at Moldova matters. For just $5 / month, the price of a nice coffee, you can support this work and help us expand into even better content!
Moldova at the UN General Assembly
This week, diplomats and leaders from around the world gathered in New York City for the UN General Assembly. For Moldova, this event was punctuated by two newsworthy speeches. Firstly, President Sandu addressed the body, and secondly, Moldova got quite a shout out in President Biden’s UN address.
President Sandu on Moldova’s Role in the World
Addressing the UN General Assembly in English, President Sandu struck an international tone and discussed major problems facing the world today as well as Moldova’s place in their solution. Beginning, she stated that in this past year Moldova has chosen democracy and freedom over corruption and congratulated the country on 30 years of independence. But she moved on to say that even though Moldova mostly focuses on it’s own, large internal problems, it cannot avoid global challenges. Specifically, COVID-19, climate change and international security concerns.
The President spoke with gratitude for the international support and solidarity around COVID-19 vaccines for Moldova. She noted that thanks to the support of many international partners Moldova began vaccinating in May and now has an adequate supply for all citizens. President Sandu went on to discuss the challenge of climate change, noting that Moldova is at risk of severe temperature changes, droughts and floods. She noted that Moldova’s ecological footprint has and remains very small implying that the country was a very minor cause of global warming. But she went on to say that while smaller, Moldova wants to keep it that way and has plans to replant cut forests and promote greener energy.
Finally, President Sandu spoke on the topic of security in some depth. She started by expressing concern about the deteriorating security situation in the Black Sea region referring at least in part to the war in Ukraine. Specifically, she discussed the breakaway region of Transnistria stressing Moldova’s commitment to a peaceful resolution “within Moldova’s internationally recognized borders.” These borders of course include Transnistria as it is internationally recognized as part of Moldova. In speaking of a peaceful resolution the President stressed the importance of Moldova’s constitutional neutrality, but in a twist she suggested that this very neutrality was infringed by the presence of Russian soldiers in Transnistria. She called for their withdrawal and the destruction or removal of the huge weapons caches there. The President called for international support on security issues such as these.
Further speaking on security, but on a different tack, President Sandu spoke of the threats to democracy posed by corruption, disinformation and social media. She noted that Moldova was able to throw off a corrupt and captured state but called for more international cooperation against kleptocracy, specifically in investigating and returning the theft of funds from countries like Moldova. It was noted that these are international challenges that need international efforts. President Sandu ended her speech saying that she and PAS have a mandate for change and will start turning hope into a reality in the country.
Follow this link for the full text of her speech in English
President Biden Name Drops Moldova
In his speech at the UN General Assembly, American President Biden spent much of his time addressing democratic backsliding around the world and the threats posed by the growing assertiveness of authoritarian governments and movements. In his speech, he highlighted not only challenges but hopes and the champions of democracy saying
“The authoritarianism of the world may seek to proclaim the end of the age of democracy, but they’re wrong. The truth is: The democratic world is everywhere. It lives in the anti-corruption activists, the human rights defenders, the journalists, the peace protestors on the frontlines of this struggle in Belarus, Burma, Syria, Cuba, Venezuela, and everywhere in between. It lives in the brave women of Sudan who withstood violence and oppression to push a genocidal dictator from power and who keep working every day to defend their democratic progress. It lives in the proud Moldovans who helped deliver a landslide victory for the forces of democracy, with a mandate to fight graft, to build a more inclusive economy,”
This name drop was a surprise in Moldova and caused a swell of pride (including in this author) that the US President singled out Moldova in such a context as a hope in a darkening world.
Parliament has Been Busy
Parliament has continued its rapid pace of work and this week succeeded in amending the constitution regarding the appointment of judges in Moldova. PAS and Socialists voted together with 86 of 91 present deputies for the change which would strengthen the independence of the judiciary by making all judicial appointments the responsibility of the Superior Council of Magistrates. It also changed the composition of the Superior Council of Magistrates to include 12 members, 6 chosen by the country’s judges and 6 chosen by Parliament from outside the judiciary. Currently, some judges are direct Parliamentary appointments and the Superior Council of Magistrates includes the Prosecutor General as well as other politically appointed members. These amendments were drafted in 2017 as a requirement of the EU association agreement but got bogged down in political questions and court proceedings until now.
Parliament Bans Gambling Advertising
Parliament is considering a bill banning all advertising of gambling including sports betting and the national lottery. The bill will also ban gambling companies from sponsorships and charity work. The national lottery is “national” in the sense that it is a state sanctioned monopoly but not in the sense that it is publicly run or owned. This system was created during the Plahotniuc time and granted a monopoly on lottery gambling to an assortment of opaque offshore companies based in Dubai with at least some ownership tracking back to Bulgarian oligarchs. While many support the move to tamp down gambling in the economy, TV stations and even journalists are concerned as it will remove large amounts of advertising revenue their channels need to stay in business.
Local Politics Update
This week, the election for mayor of Balti got underway as the Socialists and PAS vye to replace outgoing mayor Usati in the country’s second largest city. Both parties have nominated candidates and are beginning to organize their campaigns for the November special election. There is no word so far as to what role, if any, Usati plans to play in the election or if his party will put up a candidate to replace him. Prior to Mr. Usati the city was continuously controlled by the Communist party since independence. A win by either the Socialists or PAS would mark only the 3rd party to control the city’s mayor’s office and send a strong signal as to how the predominantly Russian speaking city will position itself in future political contests.
Meanwhile in Chisinau, Mayor Ceban continues to level opaque accusations of conspiracies designed to discredit him. As we discussed last week, the mayor accused SIS of planning to put “tablets” into the city water supply in order to make the city smell bad and therefore discredit his work as mayor. This week, the mayor continued making cryptic allusions to plots about smelly pills but went further outlining a plot to arrest him. He says that he is “being followed by serious people and special structures'' and that he may be arrested and imprisoned. All of this supposedly is a plot to defame his image. In this plot he claims a Romanian company of some kind has been contracted to “smear him.” The mayor claims that there will soon be searches at his home and office and that he is not afraid. He went so far as to say in the video conference where he keeps his keys so the raids can be conducted more easily. When asked by journalists to comment SIS had none and the PAS faction in parliament suggested asking the Government to comment. They have not at this time.
It’s impossible to say what Mr. Ceban is talking about exactly. He provides no details of these plots or alleged perpetrators. Perhaps he is laying out information to later accuse law enforcement of political action if a case is brought against him. Perhaps he is just trying to attract attention in some very strange ways. Maybe there is a secret cabal of people working to make stinky water. We’ll just have to wait and see.
COVID-19 Updates
Cases and deaths continue to increase with a 7 day rolling average of 1066 cases / day and 10 deaths / day. As we can see from our increasingly grim charts the 3rd wave is moving once again upwards each week. Reacting to the increase in hospitalizations Chisinau has brought Archangel Michael Hospital back onto front line status with an additional 300 beds and 16 ICU units. Right now there is little reporting of critical hospital shortages and the authorities are giving indications that they are following their plans and phasing in resources to meet the growing demand.
New Restrictions for Moldova
The newly re-composed National Emergency Commission for Public Health issued new restrictions for Moldova this week. Past restrictions and lockdowns each existed as new requirements that “stacked” on top of old requirements and policies to create a tangled web of rules that evolved over time to become larger and larger. These restrictions seek to create a national policy that will evolve over time based on conditions as measured by 7 day cumulative cases per 100,000 population measured locally.
In describing the restrictions, the Minister of Health said that certificats will be required for “most types of activities” going forward. We’ll briefly discuss here what that means and how it will affect people and businesses.
What is a “certificate?” The new orders define a certificate of being COVID-free as a vaccine certificate (2 doses and 14 days after last shot), a negative PCR test taken in the last 72 hrs, a negative antibody test taken in the last 48 hrs, a doctor issued certificate showing that you have had COVID in the last 6 months, or a certificate of having detectable antibodies by test in the last 3 months. The orders also state that on Oct 18th the commission will consider simplifying this to a simple requirement that all people wishing to go to businesses and events have a vaccine certificate.
The new restrictions are divided into levels Green, Yellow, Orange and Red based on the number of detected cases in a community in the last 7 days.
During Code Green, communities will have few restrictions on activity. Restaurants will be allowed full capacity outdoors and indoors provided tables are limited to 4 persons per table with exceptions for close family. Schools and colleges remain open.
During Code Yellow, capacity restrictions will be made for events, restaurants operate the same as green. Large events such as sporting events will have the option of operating at 75% capacity if they certify the whole attendance as COVID free or 50% if they chose not to. Schools and colleges remain open.
During Code Orange, capacity restrictions on events will be tightened and COVID-free certification by the organizer will be required for all guests. Work from home will be encouraged. Restaurants will continue to have no restrictions on outdoor dining, but will make a choice for indoor dining - 75% seating capacity with all guests certified as COVID-free or 35% capacity without certifications. Schools remain open but colleges and universities go online only.
During Code Red, capacity restrictions are further tightened at events and more of them are required to be COVID-free certified. Restaurants will continue to have no restrictions on outdoor dining, but will only operate indoors at 50% capacity and only with COVID-free certification of all guests. Schools remain open but colleges and universities go online only.
These new rules have a phased implementation with some general restrictions coming into effect this weekend and the new color code system coming into effect October 1. As of the time of writing all major population centers in Chisinau are firmly in Code Red with cases rising.
Economic News
This week Parliament has moved forward with a bill designed to support restaurants in the COVID-19 pandemic. It would reduce VAT taxes for restaurants from 12% to 6% on food sales starting October 1st and lasting until the end of the national health emergency. This is welcome news as the Shor faction passed this law in the spring but failed to state that it should be implemented immediately. Instead, they mistakenly set implementation for November 2021 rather than their intention - immediately. This bill corrects this oversight albeit far too late to address the 2nd wave of COVID it was meant to address.
Moldova Moves to Tackle Offshore Secrecy
Parliament is considering a bill meant to break through the barriers of secrecy that allow people to own local Moldovan companies anonymously through offshore shell companies. Under this bill, “beneficial owners” of offshore companies with more than 25% ownership or 25% voting rights must be publicly declared. Currently, the ownership of Moldovan companies is public and you can look it up in many places online (like this link). But the trail of ownership dies at the border and you don’t see who owns foriegn companies. Importantly, the Moldovan authorities *do* know who owns the foriegn companies but the law currently allows that to be shielded from public view. It remains to be seen how this law will be implemented and if it will tackle the far stickier questions of “bearer shares” and countries that exist in jurisdictions that by design do now allow discovery of the company’s owners.
Moldova Bond Market Starts Rolling
The Moldovan Government continues to roll out the country’s new government securities market. This week they approved a program whereby citizens can purchase government bonds directly without a broker or bank intermediary. The digital platform will be called e-VMS and is being created in collaboration with USAID.
In other bond news, the small town of Ceadir-Lunga sold out of its first municipal bonds offering in only 5 days. The town was very pleased with the success of the project and the demand for the bonds which carried a 6% interest rate - much preferably compared to the 9% maximum rate some thought would be required to attract buyers. The town plans to repeat bond issuance for future projects.
Crime and Corruption
Former Democratic Party deputy Vladimir Andronaki’s house was searched this week by the national anti corruption center and SIS in connection with the theft of the billion. Laptops and electronic devices were seized as part of the ongoing investigation. Additional searches were carried out on various officers of two companies associated with the former deputy. Recall that Vladimir Andronaki fled Moldova immediately following the election results this summer. Writing from abroad, the former deputy said that the searches were political, etc etc. He said he is only abroad for “treatments” but did not elaborate.
Ending on a High Note!
The Minister of Culture has announced that they will rebuild the recently burned down Philharmonic but in a modern way. He noted that the structural integrity of the old building is in question and that after studying the matter for over a year the Ministry has determined that the building can’t be rebuilt as it was. So the goal has shifted to a modern facility on the same site. Right now they have collected around $200,000 from donations and an unspecified additional sum from the sale of scrap metal that came out of the burned down building. The minister is working to identify more sources of funding but in a press conference made it clear it is a priority to begin putting this historical building back into function. So perhaps we will have concerts again once the COVID restrictions end after all!
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Another great entry David. The reporting about Sandu's appearance at the U.N. was great to hear. Kudos to Biden for mentioning Moldova. The situation in Transnistria could be worrisome.