Weekly Roundup

September 6 - September 10

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!

Hey everyone, sorry this is so late on Friday… Substack has had some technical issues today that didn’t allow me to send it at a normal time. Just to assure, we are back on schedule for Friday Weekly Roundups from Moldova Matters!

Political Updates

Pension Reform is Finally Here!

For most elections of the last decade one or all parties have promised to reform the pension system in Moldova. Particularly, they focus on the fact that many elderly retired citizens receive as little as 800 lei (around $40) a month to live on. This week, PAS began passage of a major reform to the pension system designed to raise the floor of the minimum pension in the country. The proposed law, which has been promoted by the government and must be voted on by parliament, would see the minimum pension raised to 2000 lei. This will affect workers who worked enough years to qualify for a full pension. For those who have not met those requirements, their pensions will increase by around 400 lei a month based on their previous formula. Additionally, pensions will be indexed by 3.86% annually. This law represents the fulfillment of a major campaign promise and the biggest increase in pensions in many years. The opposition, led by Mr. Dodon, has loudly objected to this move saying that it is unfair to anyone making 2001 lei per month from their pension who will not see an increase. He called for an additional increase across the board. This in spite of the fact that the Socialists never managed any reform this significant while they were in power. 

Ultimately, this is a major win for PAS and shows their confidence and fiscal stability at this moment. But this confidence is largely drawn from the success of the new government in bringing external donors to the table to support the country’s budget. To make this sustainable real economic reform will need to happen swiftly. This is highlighted in a report this week on the stability of the pension system overall. In 1991 there were 3 workers paying into the system for every 1 retiree. Now this ratio is nearly 1:1. Last year 15 billion lei was paid in to the pension fund while 26 billion was paid out in the form of benefits. The gap was made up from the government’s general budget. Long term, Moldova must create economic reform and solve serious demographic challenges in order to stabilize this system. 

A New Way to Immigrate to Moldova?

PAS deputy Dumitru Alaiba has proposed a bill allowing for a new type of long stay visa in Moldova for retirees. This visa would allow people from high income countries such as the United States and EU member states to apply for a visa to live in Moldova provided they can show pensions or resources to support themselves. The idea is to provide for immigration where people with resources will be able to come to Moldova and spend their retirement in a low cost environment where they can productively spend money into the Moldovan economy. As this author, and many called Expats (though I prefer immigrants) know, it is very hard right now to gain a right to stay in Moldova even given the huge demographic crisis the country faces. This bill only scratches the surface of the problem, but is a common sense “quick win” to modernize the immigration system and allow people who want to live in Moldova and spend their money here a way to do so. 

Head’s Rolling… a Roundup of Personnel Changes in State Authorities

This has been a very big week in parliament and government as the new authorities consolidate their control over various institutions and make staffing changes. In order to even begin to summarize all these moves we’ll try a point by point summary of the changes occurring right now. 

• The Constitutional Court refused to suspend the law on evaluating (and eventually firing) the Prosecutor General. In its ruling, the court acknowledged that the Prosecutor General argued that the law may provide for abuses but noted that after vaguely alluding to this fact the Prosecutor General made no concrete arguments in his own defense. As such, the court will allow the law to progress and consider future cases around the implementation on their own merits. This clears the way for the replacement of the Prosecutor General but the process will likely continue to take time. 

• The Ministry of Culture has reformed the mechanism of appointing members to the National Council on Historic Monuments allowing for an open and transparent process. This is important because this council makes hugely consequential decisions regarding privatizing and developing old buildings with historic designations. In the past the council has allowed many projects to bulldoze culturally and historically significant buildings to make way for new block apartments. A process that has widely been seen as highly corrupt. 

• The director of the national food safety agency ANSA resigned without giving a reason. The government accepted the resignation. ANSA is also known as a hotbed of corruption and has a reputation for being highly abusive to large and small companies in the form of inspections and permitting processes. 

• Minister of Defence Anatolie Nosatii has issued a draft decree dismissing Brigadier General Igor Gorgan as Chief of General Staff of the National Army. President Sandu must approve the dismissal. As a side note, this year marked the Moldovan Army’s first international deployment which was 18 years ago to Iraq as part of the peacekeeping and stabilization mission following the US led invasion. The Peacekeeping Battalion "Blue Helmets" were deployed to Samarra and at that time commanded by Major Anatolie Nosatii - now minister of defense. The journey of a Major to Minister of Defense highlights just how long it has been since the interventions in Afghanistan and Iraq. 

• The Administrative Council of the National Commission for Financial Market's reports to Parliament were deemed unsatisfactory. Parliament dismissed the head of the commission and 5 members of the council noting particularly the failure of the commission to regulate non-bank financial markets. This likely refers to the explosion of non-bank lending agencies in recent years, many of which have preyed on unsophisticated consumers offering loans with up to 200% APR rates. 

• Deputy head of General Inspectorate of Police and the Deputy head of the National Inspectorate of Investigations have resigned. This follows comments from Parliamentary Speaker Grosu calling on them to resign and suggesting they would have help finding the door if they could not on their own.

• PAS passes a bill allowing Parliament to evaluate, and fire heads of major agencies, specifically the National Energy Regulatory Agency, the National Financial Market Commission, the Television and Radio Council, the Competition Council and the National Dispute Resolution Agency. Members of Parliament noted the risk of bad president exercising this much political control, but stated that the situation in these agencies right now is so dire no risks to precedent are worse than the status quo.

• Parliament announced it will take direct control over the National Anticorruption Center. 

• Parliament announced that the Director of Customs and heads of State Tax Services will become parliamentary appointees and accountable directly to parliament. 

So that’s quite a list! I imagine we will have to keep this section in future newsletters as cleaning up of state institutions is an ongoing process and there are many many areas of corruption, mismanagement and abuse to focus on. 

A Dark Week for Independent Journalism

This week Natalia Morari, Moldova’s most watched news anchor and founder of the independent and reform oriented channel TV8 dropped a bombshell on the political world. On facebook, Morari alleged that she is being blackmailed by agents of Moldova’s Security and Information Services SIS - the national intelligence agency. In order to break the blackmail and maintain her journalistic “integrity” she chose to reveal a personal secret she claimed was being used to influence her. Namely, that her one year old son’s real father is Vyacheslav Platon. As we have discussed many many many times in Moldova Matters, Platon is a notorious criminal with links to broad bank frauds, corruption schemes and Mr. Plahotniuc. He is a wanted criminal on the run currently hiding in the United Kingdom to escape prison in Moldova. It is no overstatement to say that Plahotniuc, Shor and Platon are the three best known names in corruption in Moldova today. 

Responding to the allegations SIS denied any blackmail attempts but invited Morari to share details of the scheme with them and the Prosecutor’s office so that they may investigate any rogue elements that are responsible. 

Morari said of SIS “They want to pacify me as a journalist, but this will never happen. The irony of fate is that these same people who selflessly served during Plahotniuc's time remain the most diligent workers today.” This attempt to cast the intelligence services as servants of Plahotniuc, even though they currently report to President Sandu, did not seem to buy her much support in the general public. 

Following this bombshell, Morari resigned from the Board of TV8, the channel she founded, and noted that she would temporarily suspend her primetime TV show “Politica.” She said that she would return to TV in good time and remain as a “founder” of TV8. 

TV8 did not agree and permanently canceled Politica noting that Morari is no longer a decision maker at their network and saying that their decisions to cancel her show are based on their policy, ethics, mission and values at TV8. Other media outlets responded. A statement signed jointly by the Center for Independent Journalism, the Electronic Press Association and the Media Guard Association says that this relationship with Platon can undermine the confidence of media consumers in the independence of the press and that it implicates serious conflict of interest and ethical breaches. Marina Rata, another major anchor at TV8 responded on her show saying that she is extremely disappointed and shocked. She noted that ethics is core to TV8 and that the channel is not one program or one person. She asked viewers to allow them to regain their trust by judging the whole channel by its coverage and not the actions of one person. Meanwhile, 2 other journalists resigned from the channel. 

It is incredible to consider that the most prominent and well known Moldovan journalist who made her name calling out corruption and fighting the Plahotniuc regime was secretly conducting an affair, and had a child with one of the men at the center of her investigations. This is a very sad week for Moldova’s fledgling independent press.  

Meanwhile, from wherever he is hiding from arrest, Platon noted on telegram that “they are adults and free people.” No doubt this sentiment will make everyone feel much better. 

COVID-19 Update

Cases have begun to sharply increase this week as the delta surge begins to be felt across Moldova. The country recorded an average of 602 new cases / day and 9 deaths with spikes as high as 850 cases a day in the last week. 

These new numbers, as well as dire WHO projections for Moldova, have led to the Minister of Health declaring a new State of Emergency in Healthcare for the whole country to come into effect today, Friday September 10th. The new restrictions state that any entry to theaters, cinemas, nightclubs, concert halls or other large events is restricted to COVID-free persons. This will be proven at the door with the following options:

1. A vaccine certificate showing the 2nd shot was at least 14 days ago

2. A negative PCR test in the last 72 hrs

3. A negative rapid test in the last 48 hrs

4. A certificate proving the person had COVID in the last 6 months

5. An antibody certificate valid for 3 months after test

It is expected that these initial restrictions for large events will soon be applied more broadly to restaurants, cafes and shops but no announcement has yet been made. The Government did announce this week that it is working on a raft of economic support measures for the most impacted industries including lowering VAT taxes for restaurants from 12% to 6% for the next 2 years to assist in recovery. More announcements will come soon. 

Meanwhile, following WHO recommendations Moldova will begin vaccinating children 12 and over. This is limited to RNA vaccines which in Moldova’s case means Pfizer. Vaccinations are expected to being in the coming week. 

Overally, vaccination rates remain low in Moldova with the highest estimates putting the vaccinated at only around 30% of the population. The total number is unknown because there are no records of how many dual Moldovan-Romanian citizens got vaccinated in Romania. 

Crime and Corruption Report

This week, the Parliament moved forward with an effort to strip Ilan Shor of his salary as a member of parliament due to him never having attended any sessions. While this seems a good effort considering any attempt by him to come and claim the paycheck would result in arrest, most likely the architect of the theft of a billion dollars isn’t going to be too hard up following the change. 

Meanwhile, a man was caught at the Chisinau airport trying to smuggle 100,000 euros out of the country in his luggage. No reporting at this time as to who he is or what he was up to. But it seems a good bet that a number of people are rather desperate to get their ill gotten gains out of the country right now. 

In the UK, members of the Moldovan diaspora signed an open letter to UK authorities asking for an investigation to be opened into fugitives Platon and Cavcaluc who are thought to be in London. The open letter requests that the UK authorities investigate and assist Moldova in their extradition. Cavcaluc has sent a letter to the authors of this letter threatening to sue them in UK court for defamation. Given the libel statues in UK law this is no idle threat so we may follow this case as it progresses over time. But given the number of diaspora who have filmed, followed and harassed Platon and Cavcaluc as they have traveled in Europe after fleeing Moldova, it might be said that there isn’t going to be a comfortable place for these alleged criminals anywhere the Moldovan diaspora calls home. Which is everywhere. 

Ending on a High Note!

Reflecting on this week’s high note, it occurred to me that things are pretty complicated in the news right now. The stunning fall of Natalia Morari, a champion of the fight against corruption and for good governance has rocked the country. But at the same time, we are seeing real reform at almost all levels of government happening at lightning speed. So on this high note, I thought it would be best to reflect on how progress works. It’s messy and there are setbacks. At times heroes may fall but then others will rise. There’s hope in the air in Moldova this autumn and while this scandal stings it doesn’t change the feeling that things are going in the right direction for a change. Let’s hope they continue, but also all do our parts that reform can succeed and the battle against corruption be carried forwards. 

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!