Weekly Roundup
November 6 - 13
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!
100 Days of the Gavrilita Government
This week Prime Minister Gavrilita reported on her government’s first 100 days in power in a discussion with reporters. She noted up front that she desires an opportunity to work in a period of calm in which reforms and government work can proceed quickly but that the last 3 months were anything but “calm.” She spoke about the government’s priorities: fighting the pandemic, fighting corruption, mitigating rising prices and inflation, and finding sources of finance for the government. To this end she noted that in fighting the pandemic the government has cut testing prices in half, purchased and maintained an adequate vaccine supply and brought in digital tools such as the digital vaccine certificates. Against rising prices she spoke about how this is a regional and global trend during the pandemic crisis and not limited to Moldova. To counter the effects of this she touted the government’s success in raising minimum pensions which affected 183,000 people directly. Further she spoke of the upcoming program of subsidizing gas prices for some consumers. Regarding corruption the Prime Minister spoke primarily of new laws such as the one recently passed that will reveal the beneficial owners of offshore companies working in Moldova. Beyond these laws she spoke about ongoing investigations and referrals to the General Prosecutor but did not go into details. Finally, the Prime Minister noted that the EU and IMF have both agreed to large loan and support packages for the government which has given them stable financial grounds from which to conduct reforms.
Taking questions, the Prime Minister denied that there was any planned cabinet reshuffle. This rumor has been swirling this past week primarily focused on the Minister of Health who the Socialists and Communists accuse of failing to control the pandemic. These parties have put forth a vote of no confidence in parliament and the Minister will present herself and defend her work to that body this week. The Prime Minister denied these rumors but did address the resignation this week of Deputy Prime Minister Vladislav Kulminsky for Reintegration (with Transnistria). His resignation was announced as for personal reasons and the Prime Minister stressed it was not a result of inter party conflict or any larger looming reshuffle.
The Old Guard Keeps on Keepin On
This week, Vladimir Voronin and Mihai Ghimpu were re-elected leaders of their Communist and Liberal political parties respectively. Both men have led their parties for over a decade and are in the words of one political scientist “pensionare millionaires” leading parties that are effectively walking corpses. One way or another both men have amassed large personal fortunes in their decades of “public service” and were “begged” by their parties to continue the mandel of leadership. Political commentators in Moldova took the occasion to note how this is the way of political parties in the young democracy. Parties are not really parties as such but personality driven movements and, in many cases, patronage networks. Once the leader is gone, the party dies. No transitions of leadership really happen in Moldova within political parties; you simply get new parties with new leaders. Filat, Plahotnuic and many others have shown the way but Mr. Voronin and Mr. Ghimpu seem to be holding on for a few more years leading parties with hardly any showing in the polls.
Abuse of a Gay Soldier in the National Army
This week, an 18 year old soldier from the national army went public with stories of harassment, mocking and abuse leveled at him by superior officers because of his sexual orientation. The soldier said that he borrowed his officer's phone to call his boyfriend but apparently the officer monitored the call. He was then outed and abused and says that he considered suicide.
After going on leave and contacting civil society LGBTQ rights groups for support the soldier made his case public and is refusing to go back into the army. His lawyers say he is not hiding and is ready to face charges of dissertation which could cost him 5 years in prison. The Ministry of defense announced that it is conducting an investigation into the incident.
This story highlights the incredibly hard road faced by LGBTQ persons in Moldova especially if they come out publicly. Moldova is not a friendly country to gay rights and has a conservative society that has largely shown itself unable to accept gay citizens broadly. It will be an interesting test both of the army as an institution and of the PAS government as to how this case will be treated and what will come next for this soldier.
Updates on the Energy Crisis
While the “crisis” in the natural gas sector has passed, the rise in prices will continue to be a political and economic challenge for Moldova this winter. Prices have doubled for the population from November 1st and the government is working to prevent an economic shock that will hurt average people. The Prime Minister announced a plan whereby the state will subsidize two thirds of the first gigacalorie of gas for families each month. This is expected to provide up to 450 lei / month of subsidies per household and affect around 220,000 families in Moldova. Around 70% of consumers use less than the subsidized amount per month so this will keep their overall bills down.
Businesses however will not have subsidies under this plan. The Prime Minister noted that the price of gas in Moldova is two times lower than the regional market rate due to the deal with GazProm and companies will have to accustom themselves to higher prices given the market conditions. The era of cheap energy in Moldova is coming to an end and the market is going to have to adapt.
MoldovaGaz announced this week that it will restructure its 12 subsidiary distribution companies into a single nationwide distributor. This is being done as a cost saving mechanism and the company will lay off 500 employees from the administrative divisions as redundancies are eliminated.
While the subsidies are going to be welcome for consumers and MoldovaGaz seems to be working to get its house in order the underlying problems remain. We’ll have to watch what other actions the government takes in the coming year to prevent a future energy crisis from bringing Moldova so close to the brink next time.
A Scandal with the Hungarian Ambassador
Everyone who has ever lived in New York knows that the city is plagued by diplomats from all over the world working at the UN abusing their diplomatic status and parking pretty much wherever they like. It seems that this problem happens in Chisinau as well since the Hungarian Ambassador to Moldova created quite a scandal this week with his parking choices. The Ambassador chose to park his car right in the middle of a road and blocked in a mobile vaccination center that was working there. The employees of the vaccination trolleybus asked the police to have the driver move his car. When the police approached the car the driver identified himself as the Hungarian Ambassador and loudly argued with them, getting angry. He said that he would complain to the Ministry of Internal affairs over violations of his diplomatic immunity… which he seemingly thinks means that he can just park wherever he wants. The police disagreed and asked him again to move and talk to them but the ambassador abruptly tried to speed off and hit a police officer. The officer was uninjured but understandably frustrated. The whole event was filmed on the officer’s body camera and is just about as unflattering a portrayal of diplomatic behavior as you can imagine.
COVID-19 Update
This week the number of new COVID cases continued to fall with a 7 day average of 1054 new cases. The average number of daily deaths however rose to 55 per day. The Ministry explained that this is partly a result of correcting numbers based on mistakes of the past year. Some deaths were not reported last year and needed to be added to the total artificially inflating the rate this week. Even accounting for this we can see that the daily death rate continues to climb though the hope is that it will follow the case rate downwards in the coming weeks.
Vaccinations… Progressing Slowly
The Ministry of Health unveiled a new digital system this week to attempt to count and track citizens who were vaccinated outside Moldova. Currently the ministry estimates that 5-10% of Moldovans got vaccinated elsewhere, primarily in Romania, but has no hard numbers. In the new system those vaccinated outside Moldova can register themselves to be counted on a website so that the government has a clearer picture of just how many people were vaccinated and how many holdouts there still are.
In order to encourage vaccinations the Ministry unveiled a new video advertisement this week called “Don’t worry about COVID.” In the ad a man says “don’t worry about COVID! Moldova has the largest cemetery in Europe!” (it does actually - Doina Cemetery). It cuts to a picture of a man making coffins who says “Don’t worry about COVID - business is great!” and more quotes along a similar line. The ad concludes with the line that the “Pandemic is not over - the responsibility for ending it lies with all of us.”
Another group working on clever vaccination incentives is the city of Chisinau which has announced that this weekend anyone getting vaccinated at 2 city locations will get a 500 lei voucher to be used at any of 10 participating local restaurants.
Whether or not any of these approaches will work is unknown but government officials are clearly trying to break through to the vaccine hesitant as much as they can.
Meanwhile, the investigations into fake vaccine certificates are progressing. Police detained 3 persons who acted as intermediaries in a scheme to sell fake vaccine certificates. These intermediaries would find people who wanted certificates and match them with doctors willing to spray the vaccine in the sink and issue the certificate. Fake certificates cost around 4000 lei and the criminals apparently kept pretty good records of both clients and participating doctors. This has led to a large investigation and searches at 3 medical facilities. Arrested individuals face fines and imprisonment up to 7 years.
Economic News
This week the National Bank released its inflation forecast and reporting. Average annual inflation over the last year was 6.9% over the previous year. The National Bank projects that average annual inflation will be 14% in 2022 peaking in Q3 and Q4. They cite energy insecurity, rising food costs, and continued pandemic related economic disruption as the key drivers of inflation.
Meanwhile, the National Restaurant Association reacted this week both to the inflation numbers and the announcement that businesses would not get subsidies to buy gas saying that there is likely to be a 30% increase in prices at restaurants. The association called on the government to provide concrete economic support to the sector which is still reeling from pandemic related business falloff.
Cracking Down on Illegal Apartment Renting
This week the authorities announced that 616 landlords were fined for failing to register their rental contracts with the authorities. Property rent is taxed at a 7% rate and many (most) apartments in Chisinau are not registered and rented for cash. But the good news is that registration of rent contracts is up 24.8% this year and perhaps the crackdown is yielding concrete results.
Crime and Corruption
This week we’ve seen a number of searches and arrests by prosecutors and anti-corruption police targeting corrupt officials. In addition to the raids conducted on issuers of fake vaccine certificates a prosecutor in Chisinau was arrested in a case of “illegal enrichment.” The prosecutor, Igo Popa, lives in a luxury apartment in the center of the city which he never declared. The apartment and his car are registered in the name of his ex-wife who he still lives with.
In addition, Acting Prosecutor General Robu appealed to the Superior Council of Magistrates for permission to conduct searches targeting a sitting judge. This was granted and searches against Judge Tatiana Avasiloaie were conducted which resulted in a discrepancy of 1.2 million lei ($68,000) between her income and expenses in addition to 1.3 million lei ($73,000) in undeclared property purchased and held through intermediaries.
In both these cases the press led the investigation process publishing stories about the suspect finances of these officials. These stories, published in the last year, are now getting traction with prosecutors. The 4th estate has done excellent reporting on official corruption for years - it’s exciting to see that reporting being used to finally begin cleaning up the system.
More Investigations into Plahotnuic’s Schemes
This week the leader of the National Trade Union CNSM resigned. His resignation was not accepted by the union committee which is currently investigating him for financial fraud and presumably wants the opportunity to fire him and refer things to prosecutors. Allegedly the director of the union allowed property of the union to be used as collateral for fraudulent bank loans obtained by Illan Shor and Vladimir Plahotnuic.
Meanwhile, the General Prosecutor has brought charges against Plahotniuc for illegal activity related to the national company Metalferos. The charges are in 3 counts: creation and management of a criminal organization, large scale fraud and money laundering. This criminal scheme involved manipulating the economic activity of the state owned enterprise for personal gain. In one example, the company purchased scrap metal for $260 / ton. Of this only $150 went to scrap collectors and the rest was siphoned off by middlemen in the criminal gang. Fresh arrest warrants for Mr. Plahotniuc are being requested by prosecutors.
Assessing the Former General Prosecutor
The commission to assess General Prosecutor Stoyanoglo was announced this week and they will have 30 days to assess his activities. The commission will be responsible for looking at his operational leadership of the office as well as his internal and external communications to decide if he was actually well, prosecuting people. He will be graded on a rubric of 0 - 10 points with anything above 5 being a passing grade.
MP Olesea Stamate who leads the legal committee in parliament said that this investigation is required to evaluate his work and officially remove him from his position if there are problems found. She acknowledged that he is currently already suspended and under arrest but noted that criminal cases can take a long time to process and it's important to fully remove him and appoint a new prosecutor.
Ending on a High Note!
This week Moldova was quite literally invaded by hordes of kilt-wearing Scottsman who came to town to see the Scottish National Football (soccer) team play Moldova. Thick accents and colorful attire caused lots of conversation in Chisinau and the city’s bars were quite literally overwhelmed by all the football fans enjoying their trip to Moldova.
In a strange note, one group of fans has been detained for actually managing to drive right into Moldova without ever passing passport control. This busload, including 5 British citizens, 1 American and 1 Romanian somehow drove right through the checkpoint in a truck lane without being stopped. Whether this was intentional or just over-eagerness to get to the game is not clear.
Scotland beat Moldova 2-0 but Scottish and Moldovan fans mostly seemed to enjoy each other’s company and a good time was had by all!
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