Weekly Roundup

October 6, 2022

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!

Mobilization Continues, Ukraine Advances

Russia’s war in Ukraine continues to show signs of serious problems for Russian troops. Ukrainian forces have made considerable advances on the southern front in the Kherson region, though Russian forces have managed organized retreats. Reports of the situation remain mixed showing that Russian troops have managed to avoid a total rout, but are giving up critical ground as Ukrainian forces get closer and closer to being within artillery range of the bridges across the Dnieper river at the Russian army’s back. Meanwhile, in the northeast Ukrainian forces repeat liberating 16 more towns in the Lukhansk region continuing to build on their momentum after the lightening advance liberating Kharkiv and the capture of the strategic city of Lyman. In response, Russia appears to have increased its number of long range strikes at civilian infrastructure and housing deeper into Ukraine.

War Mapper @War_Mapper

A timelapse of the development of Ukraine's counter-offensive in Kherson Oblast over the past 5 days.

Meanwhile, “mobilization” in Russia continues to show serious problems with more and more reports of troops being called up, given scant weaponry and rushed to the frontlines with little or no training. The outflow of Russian men across the borders continues and Russia has so far chosen not to fully block their borders but has issued confused statements indicating that such a plan could be in the works. At the same time, the United States and numerous other countries have called on their citizens to “leave Russia immediately” while there is still time. Of particular worry are dual citizens who could be drafted into the Russian military.

Most critically, in the last week Putin announced the official annexation of 4 regions of Ukraine following sham referendums conducted at gunpoint. Russia does not control these territories fully and Presidential spokesman Dmitry Peskov threw additional confusion into the discussion this week admitting to journalists that they are not really clear what the borders of the annexed territory will be actually. But no matter how shambolic, this represents a major escalation in the war where Putin has firmly tied the Russian Federation to “defending” (or conquering) this territory and he has repeatedly implied there are cases in which Russia could use nuclear weapons.

Meanwhile, Belorussian Dictator Lukashenko commented on rumors that Belarus is preparing to mobilize troops to attack Ukraine from the north. The Dictator admitted that Belarus is playing a role in the war by supporting Russia’s invasion but said that they “aren’t killing anyone.” Lukashenko said that the rumors are being caused by people noticing Belarus preparing conscription offices, updating conscription lists and otherwise behaving as if they are going to take conscription actions. He said that this is all a normal response to the “way” in which mobilization is being conducted in Russia and that Belarus is only learning from the mistakes being made there.

In a separate press conference, Lukashenko railed against inflation (13% in Belarus predicted to rise to 19% this year) declaring that from October 6th onwards all price increases are prohibited. He went on to threaten international companies that might consider leaving Belarus and to instruct the National bank to bring inflation down to 7-8% by 2023. It’s a wonder the rest of the world didn’t think of this brilliant solution.

Moldovan Government Responds

In response to the announced “annexations” the Moldovan Government responded by forcefully declaring that they will not recognize these moves by Russia. They summoned the Russian ambassador to lodge a formal protest and reiterated Moldova’s support for Ukraine’s territorial integrity. Additionally, the Government has requested that Parliament grant another 2 month extension of the State of Emergency citing the ongoing war as well as energy crisis.

Preparing for Nuclear Threats

Most news this week revolved around the increasing risk of some kind of nuclear confrontation in Ukraine. Putin’s threats have caused innumerable articles to be written in the Western press trying to parse out if, how, when Putin might escalate to nuclear weapons usage. At the same time, Putin signed a decree “annexing” the Zaporizhzhya Nuclear Power Plant in Ukraine and putting it under control of a new joint stock company (most likely to be owned by one of his friends). This plant continues to be the nexus of many nuclear fears as shelling near the plant keeps the whole region on edge.

In Moldova, emergency services conducted drills on what to do in the case of a nuclear or radiological threat. They also released a video on youtube walking citizens through ways of protecting themselves and sheltering in place. Russian troops in Transnistria also conducted drills on what to do in the case of a nuclear, biological or chemical attacks.

The local press is starting to write more about these threats, with outlet Newsmaker publishing a guide on “How to Prepare to Survive a Nuclear Strike” which largely follows the advice published by the government last week on their official website. In an echo that should be familiar to the cold war generation, the article notes that if you are out in public transport or can’t easily get in a building you should “stop and duck.”

Meanwhile, journalists (also at Newsmaker) questioned the government about their plans to distribute Potassium iodide pills which have been donated by Romania. Officials responded by saying that the pills have been sent to regional health centers and will only be distributed further in the case of a nuclear or radiation threat. In such a scenario, pills will be sent to local polyclinics and distributed by Family Doctors (GPs). State officials say that pills are not being distributed now (as they are in Romania) because they are dangerous to many people and should only be taken in an emergency. This is logical… to a point. There is a very tight timeline for potassium iodide to be effective at protecting the thyroid gland from radiation. Ideally pills would be taken 24 hours before exposure or within 2 hours of radiation exposure. They can be taken up to 8 hours after exposure with diminishing gains but are largely useless after that. In the case of a disaster at the Zaporozhye Nuclear Power Plant radiation could be over Moldova in 6 hours (depending on the wind). Authorities say this is enough time… but their plan has a lot of moving parts and a tight timeline - not a situation Moldova is known to excel at.

Speaking on the topic, Prime Minister Gavrilita reiterated that the risk is low and should not be exaggerated but that it is important citizens know what to do. She said:

“Much has already been said about the measures to be taken in the event of a nuclear accident. This worries everyone after the news from Ukraine. Of course, there are exaggerations, but, in any case, it is important. I know that the General Inspectorate for Emergency Situations released a video and conducted exercises, but we must make sure that all the information reaches every citizen,”

President Sandu Pranked(?) by Russian Comedians(?)

This week, multiple Russian propaganda channels on Telegram sought to spark fears in Moldova of an imminent mobilization for war. One Kremlin affiliated channel put out a video, purported to be a prank call where a Russian prankster called President Maia Sandu pretending to be the Prime Minister of Ukraine. In the video, President Sandu speaks into the camera in English but is loudly dubbed over in Russian. In the video, the “Prime Minister of Ukraine” asks her if it might not be time to mobilize Moldovan reserves (and declare martial law presumably). President Sandu responds that the government is working with Romania and other partners to increase training and readiness. She notes that Odessa is not currently threatened but that if it was and Russian troops got close enough Moldova would do what it could to defend itself. The President also mentioned that United States is helping with information sharing.

The video is neatly spliced with videos of the Shor protests and various videos of police purporting to be related to impending mobilization. The voiceover talks about Moldova preparing to mobilize troops and speculates about a second front against Russia with Romanian help.

The Presidency issued a forceful statement saying that this video was a digitally manipulated “deepfake.” The Ministry of Defense responded more broadly to Russian propaganda on various telegram channels saying that Moldova cannot mobilize without martial law and that since there is no direct threat to the country, there is no prospect of this right now.

At the same time, the video itself seems credible and it’s possible the President was in fact “pranked” by Russian agents. The “comedians” who go by the names Vovan and Lexus, and who don’t really attempt any comedy to speak of, have a history of pranks like this. In 2019 the duo were behind the video of a prank call to French President Emanuel Macron where he thought he was talking to President Zelensky after his election. The duo also pranked Canadian Prime Minister Justin Trudeau pretending to be Greta Thunberg in 2020 where the comics urged him to “just leave NATO.”

If the video represents a real call, then it seems Maia Sandu fell for the same prank techniques used on past world leaders and spoke candidly thinking she really was talking to the Ukrainian Prime Minister. Nothing she said was really newsworthy - basically that Moldova would defend itself and that the key threat point is the city of Odessa in Ukraine. But the way the video was cut, including the many shots of the anti-government protests led by the Shor party and the insinuation that Moldova is heading towards mobilization imminently point to destabilizing motivations by Russian actors.

As if on cue, the Socialist Party loudly decried the government saying the authorities were “militaristic” and that Moldova needs “cheap gas” not “drones.”

Note on Telegram: We’ve talked a lot about Telegram channels recently but people outside of Eastern Europe might not know what those are. Telegram is a messaging app similar to Whatsapp that is very popular in Russia and Eastern Europe. It has a feature called “channels” where people can subscribe to a channel and receive updates from it (without replying). These channels are basically a twitter competitor here with many politicians and personalities publishing on personal channels.

Shor Party Protests - 3rd Week

Last Sunday the Shor Party held their 3rd straight week of protests in front of the Presidential Administration and Parliament. Chisinau police say around 6500 people showed up while Shor Party leaders claim 50,000 protestors. Meanwhile, Anti-Corruption Prosecutors have announced that they are checking media reports of illegal financing of protests by the Shor party - specifically the paying of protestors to protest. Shor Party officials in Chisinau continue to deny the accusations… but Shor doesn’t! Speaking from Israel, Ilan Shor again said that yes, he is paying people to protest and said “I spit on the prosecutor’s office.”

At the same time, the Council of Television and Radio has asked law enforcement bodies including the National Anti-Corruption Center, Security and Information Service (SIS), Competition Council and others to investigate Shor’s alleged consolidation of media channels. They claim there are credible reports that Shor now owns TV6, Orhei TV, Primul în Moldova and Accent TV. Moldovan law allows for one person to control up to 2 TV stations but not more.

Author’s Note: Ilan Shor probably has a point when he says “I spit on the prosecutor’s office.” Moldovan prosecutors like to announce investigations without much follow through. Worse, when they do follow through it takes years (decades) to take cases to court. Shor’s own case in the Theft of the Billion has been delayed in court every month for years when the Judge simply gavels in a new excuse from the defense to reconvene for new excuses in a month’s time. If history is a guide, Shor could be fined 5000 lei ($250) or some similarly inconsequential amount years and years from now for his actions in attempting to overthrow the government. The point is not to be jaded, but to understand that these “investigations” are not something likely to affect the situation.

Meanwhile, from house arrest, Igor Dodon gave an interview stating that if he was a free man he would also set up a tent in the Shor protest camp. He called on people to protest - “not for Shor but for yourselves.” Dodon stated that either the government is brought down and elections scheduled for next spring of summer… or the government will serve out their mandate until 2025 and the country will be lost. This is a really interesting formulation that somewhat tips Dodon’s hand. He is noting that the maximum point of pressure against the government will come in the coming months during the artificially imposed Russian energy crisis. Dodon is saying that if the government survives until spring, there is no stopping them.

Gagauzia Gets Quiet

Last week, Gagauz authorities scheduled and then abruptly canceled a “Congress of Deputies of all Political Levels” for October 2nd. This congress, which was supposed to include regional and local elected leaders was canceled almost as fast as it was called with little reason given. Meanwhile, the People’s Assembly of Gagauzia presented a statement they said was in response to international press calling Gagauzia a threat to Moldova saying:

“The Presidium of the People's Assembly of Gagauzia declares: ATU Gagauzia - in the historical, present and future contexts, is an integral and indivisible part of Moldova. Gagauz autonomy is a form of self-determination of the Gagauz people, but only within the framework of a single Moldovan state, which has become the only homeland for the small Gagauz people,”

They noted that the only people the Gagauz could threaten were people “seeking union with other countries” reiterating their red-line against Moldova joining Romania but otherwise indicating support for the Chisinau government (in a sense).

This represents an interesting decrease in what were continuously building tensions between Gagauzia and Chisinau over the past months.

Crime and Corruption

Here’s a quick roundup of stories making the news in crime and corruption in Moldova this week:

• Investigative outlet RISE Moldova reports that it has tracked money flows from the Theft of the Billion representing 21 million dollars funneled through a Cypriot shell company and used to buy 2 identical Embraer Legacy 650 private jets. The planes tail numbers differ by only one digit. One was for Ilan Shor and the other for Vladimir Plahotniuc.

• Moldova Amends Criminal Code around Sexual Assault. The criminal code has been amended to create harsher punishments for the crime of rape (was 5, now 7 years; was 7 raised to 12 years for aggravated rape). Importantly the definition of rape and sexual assault was changed from "violent acts of sexual nature" to "actions of sexual nature without consent." Requirements that victims seek remediation with their rapists have been removed. Additionally, any reference to “homosexual acts” have been removed from the code de-facto decriminalizing homosexuality. These legal amendments codify “consent” and update the Moldovan criminal code to help victims while removing archaic criminal penalties for homosexual acts.

• Lead Prosecutor on the Theft of the Billion Case Resigns. Acting Prosecutor General Robu says this unexpected (and unexplained) resignation will not slow the investigation. Though it is hard to know how it *could* get any slower.

• Acting Prosecutor General Robu’s term expires today (October 6th). According to the law, an interim / acting prosecutor general can only serve for one year. The outgoing Acting Prosecutor General noted that his deputy will take over and he will go on a long vacation. It’s important to realize that well over one year into power the government has still failed to appoint a Prosecutor General.

• Moldova Prison #17 featured in Netflix series "Inside the Worlds Toughest Prisons." A dubious honor, Moldova’s Prison #17 in Rezina which houses people sentenced to life sentences is considered in the show one of the worst prisons in the world. It is hard to know how true that is (speaking globally) but very easy to say that no one wants to wind up in a Moldovan prison.

Economic News

Here’s a quick roundup of the economic news driving Moldova this week:

• The Government announced the Moldovan Entrepreneurship and Economic Growth Fund (FACEM). This fund plans to loan money to small businesses (targeted at priority development areas such as alternative energy) at better rates than can be found at commercial banks to spur economic growth. The fund is designed to be financed through international agencies and plans to start lending in November. The government envisions 2.8 billion lei lent next year with the creation of 20,000 new jobs.

• The IMF Approved a tranche of $27 million USD for Moldova as part of an $800 million dollar package to be dispersed over 40 months. They noted Moldova’s progress on implementing reforms while saying that there is still much more to be done.

• The US Dollar passed the Euro in value against the lei. Experts say that the weaker Euro could hurt the Moldovan economy by making Moldovan goods less competitive and incentivizing imports from the EU.

• Minimum Wage Raised in Public Sector to 3,500 lei / mo ($180) (bruta - the “in pocket” salary is less after taxes). This raise brings public sector minimum wage into line with the private sector minimum but still falls far short of the cost of living in most parts of Moldova.

• The new Bessarabka to Berezino railway link (Moldova to Ukraine) is still not working over a month and a half after completion. Moldova and Ukraine (mostly Ukraine) worked furiously this summer to rebuild a section of railway connection southern Moldova to Ukraine to facilitate exports (both ways) in the new geopolitical climate. This railroad is complete… but unused because the countries have not yet figured out how to manage customs posts on the rail line.

• Chisinau Real Estate Market is in bad shape. The local real estate market is suffering from both a supply and demand crash. Builders aren’t making new housing because they have no way of forecasting prices given rapidly rising material cost and labor costs. Meanwhile, banks are getting few applications for mortgages and denying a larger portion of those they get due to tightened lending conditions. Worse still, increasing interest rates make mortgages less attractive. Currently prices have not fallen except in the cases of forced sales (people leaving) where prices are down around 10%. Currently the only transactions being done are in cash with speculators buying apartments ahead of predicted rising prices in the spring (some experts predict up to 50% increases).

Energy Crisis

This week, GazProm announced at 30% reduction in the supply of gas to Moldova in October. They cite “problems” in the transmission pipelines in Ukraine as the reason. Ukrainian authorities say this is a lie and they are happy to transit as much gas as is needed. GazProm also sets a new “cutoff date” as October 20th saying that if Moldova doesn’t pay its bills in advance and clarify the historical debts until that date they can cut off the gas.

Minister of Infrastructure Spinu notes that there are no problems transiting gas to Ukraine and that Moldova pays for its gas on time (with small delays based on rising / fluctuating prices). He said that GazProm is looking for an excuse to cut off the gas. Since this is easily the 20th such deadline in a year it seems that GazProm is keeping the option of cutting Moldova off open… but that no decision has been made. The Minister thanked citizens for conserving gas in September - usage was down 30% compared to last year in spite of a cold September (most likely due to price concerns).

Meanwhile, mitigation efforts are in full swing… kinda. The Ministry of Labor and Social Protection has announced that families will be able to apply for gas subsidies at compensatii.gov.md soon. The site is not yet active. Meanwhile, central heating prices in Chisinau and Balti each rose by 50% this week while electricity prices rose by 25%. The Czech NGO People in Need announced that they would run a project in the south of Moldova giving needy families 700 lei / month to buy energy. This is a regional project with EU funding.

In a sign of the… strange? Prime Minister Gavrilita announced that the government would begin a process of monitoring national forests in real time by satellite to prevent deforestation. How this will work or whose satellites we are talking about was not mentioned.

In a sign of just how critical things are getting, Chisinau brick maker JSC Macon announced it was shutting down production due to the increasing price of gas. The company will lay off 85% of its staff (350 people) and only retain sales staff until they finish selling off stocks. The company noted that they are paying 29 lei / cubic meter of gas while their main competitor, Tiraspol brick factory (in Transnistria) is only paying 1 lei / cubic meter. The company is seeking a government bailout. As the energy crisis gets more acute, companies like this that are high consumers of energy will be the first to fold or curtail operations.

Ending on a High Note!

Next year, Moldova will introduce a new optional class for 9th and 10th graders entitled "Education in the field of elections." The class will be the first attempt at a “civics” class in Moldova and will focus on historical democratic and voting systems, what campaigns are, how to vote and more. The curriculum will be supported by the UNDP with financial support from USAID and the British Embassy. This is a high note because it shows a first (tiny, optional) step towards educating citizens in how to live in a democracy. Currently Moldovans get no civics class, no “how a bill becomes a law,” no education on the Constitution, no government class, no class on your rights as a citizen. None. This is a *tiny* step but one in the right direction for a young, powerfully struggling democracy. Let’s hope we have enough time for the 9th and 10th graders of next year (who opt-in) to grow up and start fixing things.

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