Weekly Roundup

August 11, 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!

War in Ukraine

Anyone closely following the war raging in Ukraine will have noticed the main story of this week - that Ukrainian forces *somehow* struck multiple targets deep within Russian occupied territory behind the front lines. Specifically, a Russian airbase in Crimea was seriously damaged if not completely destroyed. The shock of the huge explosion was clear through videos of Russian beachgoers rapidly packing up and 12 hour long traffic jams of people leaving Crimea back to Russia.

Matthew Luxmoore @mjluxmoore

Footage of the massive strike on Saki airfield in Crimea, more than 200km from the front line. Beach-goers panicking as war returns to the peninsula annexed from Ukraine in 2014.

At the same time, there is a bigger story to watch in Ukraine - at least in terms of Moldovan security. One that has gotten lots of play internationally but hasn’t much broken through public conversations in Moldova. That is the Zaporizhzhia Nuclear Power Plant in the Ukrainian city of Enerhodar. The plant, the largest in Europe, has been occupied by Russia for months while Ukrainian operators remain in at their posts running the plant. Reports from western news outlets have indicated the the Russian army is using the plant as an artillery base and a location to store ammunition on the idea that they can fire freely at Ukrainian positions knowing that if Ukraine fires back they risk a nuclear catastrophe. On August 5th there were explosions at the plant with reports of shelling and on August 7th more explosions occurred resulting in one of the power units being shut down. Ukraine calls the situation "Nuclear Terrorism" while Rafael Grossi, head of the International Atomic Energy Agency IAEA says there is a real risk of disaster. Not mincing words, UN Secretary General António Guterres called attacks on the plant “suicidal” appealing to Russian forces to pull back. Leaders of the G7 nations have also called on Russia to pull back from the plant.

This threat is the backdrop for the new emergency procedures announced by the Moldovan government last week. At the same time, the Chisinau City Hall accused the government of not doing enough to alert citizens to the threat and educate them about what to do in the case of disaster. They put out the following release:

“Close windows, doors and vents. Turn off the ventilation system, if any. If you are in a car, close the windows, turn off the ventilation and leave the affected area. Take off your clothes and put them in a plastic bag. Wash your hair and body. This precaution will remove any particles of radioactive dust. Potassium iodide tablets are recommended to prevent the absorption of radioactive iodine by the thyroid gland. But these pills are only needed in the event of a major nuclear accident. The thyroid gland will quickly absorb the stable (non-radioactive) iodine from these pills and stop the accumulation of radioactive iodine, doctors say. The latter will be more quickly excreted from the body, ”

At the same time, the Ministry of Health announced that they had received a donation of 1 million doses of potassium iodide from Romania and were in the process of distributing them to regional and municipal health centers. In the event of a threat, the government will instruct these institutions to begin mass distribution. The Ministry said:

“The Ministry of Health has ensured the availability of potassium iodide in the country. After negotiations between the head of the Ministry of Health of Moldova, Alla Nemerenco, and her Romanian counterpart, Alexandru Rafila, the neighboring country handed over more than a million tablets of potassium iodide,”

At the same time, the Ministry sought to assure the public that there is no current threat and that “We urge the population to remain calm.”

It is important to note that Romania has begun national distribution of the drug. Romania has been in this process for months.

At the same time, the Environmental Protection Agency has noted that they are monitoring radiation levels across the country and everything is normal (whew!)

Speaking of Moldova’s preparations, Ukrainian Presidential Advisor Podolyak noted:

“Honestly, I am very glad that the Moldovan government is well aware of all the risks and threats and is really taking important steps. This is important not only for understanding the situation, but also for saving citizens. We also warn people and prepare for any excesses. In principle, over these six months we have fully realized all the risks that the Russian Federation generates,”

Is it Time to Panic?

No. Zaporizhzhia is around 430 km (270 miles) from Chisinau so the country should have at least some warning if there is a disaster. Depending on prevailing winds radiation might even be carried right into Russia rather than Moldova - a fact one would hope the Russians recognize.

Furthermore, international monitoring and attention to the problem will mean that, unlike during the Chernobyl disaster, scientists in Europe won’t just wake up someday to strange radiation readings that they didn’t expect. So while preparations seem wise there is not yet a disaster, and if one happens Moldova will have at least a bit of time to organize.

With all that said, it is deeply unnerving that people have another reason to consider their “emergency plans” in yet another disturbing twist of 2022.

Moldovan Security

Bomb threats in Moldova continue but have gotten a little less intrusive now that new airport security measures assure that the airport isn’t evacuated and flights canceled daily. Speaking of the bomb threats, Prime Minister Gavrilita announced that the online threats are nominally originating from Russia and Belarus, but was quick to note that due to the perpetrators covering their digital tracks there is no way to know if these countries are the actual locations of the criminals behind the threats. She said that the purpose of the threats was for Moldova to "lower our guard and test the reaction" adding that “We must remain calm.” Such statements surely imply state planning or at least organization rather than pranksters.

Meanwhile, protests in Gagauzia are getting louder with rhetoric intensifying. At rallies people chant "Russia! Russia! Russia!” while organizers accuse the national government of a "genocide of its own people" - apparently referring primarily to gas prices and inflation. Socialst Party MP Bogdan Tirdea spoke at a rally saying that “satan” is sitting in the Moldovan Presidency.

Meanwhile, the government included the Bashkhan (governor) of Gagauzia and the speaker of the People’s Assembly of Gagauzia in the newly formed National Commission for EU Integration which will manage the process of Moldova’s ascension to the block. Irina Vlah, the Baskhan has been extremely muted in her criticisms of the national authorities and has mostly steered a centrist and pragmatic course. Some experts, noting that she is finishing her 2nd term as Bashkhan in 2023 and is term limited, think that this may be a because she wants to step into national politics in the future.

The Gavrilita Government - 1 Year On

This week marked the first year of the Gavrilita government and the Prime Minister sought to push a message about her government’s accomplishments as well as the challenges that have plagued the country in the past year. We are going to reserve a close look at the government’s track record for a future (hopefully soon) Deep Dive article on the topic, but suffice to say even the landmark of one year was swept away by the news of crisis - energy, nuclear fears, etc. In a way this is a fitting summary of the whole year itself.

Health Updates

Health? Wasn’t this section called COVID-19 Updates? Well, yes it was. And sadly we still have those as COVID cases rose to 10,147 cases last week up more than 600 cases from the week before. We can’t do our old charts because the government tracker website still hasn’t been updated since April. But this is the “Health Updates” section now because Moldova has officially registered its first case of Monkeypox. This week, a man checked himself into the national hospital for infectious diseases on suspicion that he had monkeypox - a suspicion that was proved correct. The man in question had just returned from a trip to the US where he is suspected to have contracted the disease.

Hopefully, this case is contained and Moldova doesn’t see any community spread of the disease. But it is worth noting what a potentially ugly political issue monkeypox is in Moldova. Because most cases worldwide are contracted and spread by men-who-have-sex-with-men, monkeypox is absolutely primed as a culture wars issue for Moldova - a country with a poor LQBTQ rights record and opposition parties that are explicitly anti-gay. Luckily the WHO is working hard at disease prevention in Moldova and… uh oh….

WHO Pays to Print 100,000 Icons for the Orthodox Church

This week the Metropolit of Chisinau announced that the WHO funded the printing of 100,000 icons of St. Panteleimon which will sport biblical quotes on the importance of living healthy lifestyles. It seems the WHO was not quite ready for this announcement which was made ahead of their own acknowledgement of the program. They responded saying that "the value of this cooperation is much higher than the cost of printing" - refusing to name the amount of money spent on the printing. Further justifying the mass printing of religious icons the WHO noted that “We all want people to be healthy, and church leaders have a certain amount of public trust here.”

Undoubtedly the second statement is true, many people in Moldova follow the words of the Orthodox Church which is under the Russian Patriarch. Those words have aggressively opposed COVID vaccinations, masks, shutdowns and almost every possible public health initiative from multiple governments in the past 3 years. All of that is on top of a long long history of torpedoing a national sex-education curriculum for Moldova. It is hard to imagine the church being a stronger partner on monkeypox than COVID.

The church was also conspicuously totally absent in the efforts to assist Ukrainian refugees fleeing the war. At the same time, Jewish, Catholic and Evangelical congregations played a massive role in supporting refugees over the course of 2022.

So what is the WHO doing?

Well, that’s not clear at all. Seemingly by WHO design. Not being transparent about the money spent on the program is a red flag, especially when the Orthodox Church has a (well deserved) reputation for corruption in Moldova. We will have to follow this story and see if the WHO choses to explain these actions in some more detail.

Economic News

This week the National Bank revised their inflation projections upwards saying that they now expect inflation to peak in Q3 at 34.7%. Mr. Armasu, the governor of the National Bank noted that these projections, which foresee inflation falling in Q4 and into 2023, are “only relevant if there are no unforeseen shocks" to come. Mr. Armasu believes that the market has largely “priced in” energy and food price increases due to the war and believes it is likely there are no new shocks to come. At the same time, this contrast strongly with international experts and individual people who look towards the cold season and possibility of a cutoff of Russian gas as a very “foreseen” shock that is right on the horizon and may upend this calculation.

In order to try and reel-in inflation the National Bank raised the base rate another 3 points from 18.5% to 21.5%. This puts Moldova as 7th in the world for highest base rate. The countries with higher rates are: Zimbabwe (200%). Venezuela (56.18%), Argentina (52%), Yemen (27%), Ukraine (25%) and Sudan (23.80%).

In some rare good news, the price at the pump keeps falling as gasoline prices retreated to April levels of 26.79 lei / liter (the all time maximum being 33.9 lei / liter in June)

Unfortunately, the good news ends there. This week Russian regulators announced that they were banning the import of agriculture products from 31 regions of Moldova due to “insects and other contaminations.” The 31 regions include all the raions and municipalities in Moldova outside of Transnistria and Dubasari (which is 50% occupied by Transnistria and 50% by Moldova). Gagauzia was included in the list and has already formed a commission that will independently invite Russian regulators to visit their agricultural lands and grant them an exemption.

Responding to the news, Prime Minister Gavrilita tasked the national food safety agency with investigating but wondered:

“I want to understand how it is possible that fruits and vegetables from Criuleni have these insects, but not from Dubossari?”

For context, Dubasari and Criuleni do not only share a border but are semi-intermixed raions with a zig-zagging line between them. The idea that the only Moldovan raion deemed “safe” happens to be partially under Transnistria control poses obvious questions about Russia’s actual intentions.

This is not the first time that Russia has embargoed Moldovan goods in order to force political concessions from the Chisinau government.

Quick Analysis: Russia has used this tool in Moldova many times and has repeatedly leveraged similar tactics this year. The mechanism is simple - Russian creates a pretext to sanction or economically harm Moldova. The Chisinau government is given a choice - call them out, and risk the gas being shut off, or try and deal with it on Russian terms - aka “we will call the national health inspectors and see what is going on with the crops!” The problem is that by taking the later route average Moldovans are led to believe this is the fault of the government and not Russia. Because the government is afraid to name Russia as a country waging economic war against Moldova we get the worst of all worlds - sanctions but no rallying effort to resist them. And the kicker? They are gonna cut off the gas anyhow this winter. Speaking of which….

Energy Crisis

This week, Minister of Infrastructure Andrei Spinu explained a bit more about the process of providing gas heating compensation to citizens this winter. He noted that the mechanism will be similar to last winter and will cover around 80% of households in Moldova. At the same time, unlike last year where everyone automatically got subsidized gas, this year people will need to apply and find out which category of support they qualify for based on their income and the percent of their income that they spend on energy. Explaining the situation, as well as expected challenges, the Minister of Labor and Social Protection said the following:

“In autumn, all households will have to register in a single system. There will be a form where you will need to indicate personal data and income so that we can calculate how much a household spends on paying bills and determine the amount of compensation, ”

“Our problem is that we do not know our own population. We know that they are vulnerable, but we do not know what categories there are. Therefore, it will be a difficult process, but we must cover as many citizens as possible, ”

This frank assessment cuts directly to the challenge the government is facing. Last winter, subsidies were quite simple - everyone was subsidized for the first ~60 cubic meters of gas, corresponding to the cost of heating an average small home. This year there will be an application process and the test of the government is to make this as simple and painless as possible. It’s worth noting that highly efficient national systems are something Moldova has very little experience with.

Backlash Against Online Learning

This week, the government faced a backlash against the idea that some schools may be transferred to online learning in an attempt to save energy. Addressing the question Minister Spinu said:

“In September-October, all children will attend schools. We hope that this will be the case in November as well. If there are crisis situations, we will make decisions depending on them. We proposed this plan to reassure citizens that the government is ready to act in the interests of citizens,”

He also noted that many schools (especially rural schools) are heated with firewood or biomass and these schools will not have to close in any circumstances. So the decisions will be made school by school.

Diversifying Energy Sources

Of course, Moldova doesn’t have a stable supply of biomass or wood either. So this week the government announced a number of initiatives to stock up on the key sources of heat for many village homes and schools:

1. MoldSilva (the state forestry agency) will only sell to households that burn wood and state institutions this winter, limiting sales to businesses and other consumers.

2. Moldova is already in talks with Romania to buy firewood.

3. The Commission on Emergency Situations approved a simplified import scheme for sawdust, wood chips, and wood residues used in the making of biofuels. The process will allow companies to simply bring the products to customs, pay the taxes and import them. This is good… but begs the question of why it was ever more complicated (licensing, pre-approvals, non-acceptance of foreign issued invoices, etc).

4. The Commission for Emergency Situations banned transporting firewood at night between 11 pm and 6 am across Moldova. The exact reason wasn’t stated but presumably this is to allow easier crackdowns on illegal logging.

In addition to wood and biofuel, the government is taking the following additional steps to diversify energy sources ahead of winter:

• The Termoelectric plant is urgently stockpiling 20,000 tons of fuel oil which is used as an emergency backup in the case that gas is cut off.

• The port of Gurgulesti will be required to prioritize coal shipments over other cargo.

• Moldova has concluded a contract to buy / exchange electricity from Romania. The first exchanges are scheduled for October.

• On June 24 National Commission for Emergency Situations lifted the ban on disconnecting customers who don't pay for gas, electric and heating. MoldovaGaz disconnected more than 700 customers last week. Once they pay their debts and pay a reconnection fee they will be reconnected. But for a year they will have to pay monthly in advance

• Moldova has entered talks with Romania to participate in Romania’s experiment with Small Modular Reactors - a new US designed nuclear power plant that Romania is scheduled to host in the coming years. Moldova will not install any reactors on its territory but is discussing investing in the project in order to benefit from some of the power.

Finally, commenting on the opposition’s continued claims that Moldova simply needs to ask Russia more nicely for gas, Speaker of Parliament Grosu said:

“If we recognized the $8 billion debt of Transnistria, if we recognized, perhaps, the new status of Transnistria, if we applauded all the atrocities that are taking place in Ukraine, perhaps. But I'm not sure, because cheap gas or free gas is like free cheese in a mousetrap. It does not exist!"

Also, responding to a question on whether the government will supply energy to Transnistria in the event the Russia cuts the country off, Grosu noted that they are Moldovan citizens and need to be taken care of but that Transnistria "needs to first learn how to pay for it [gas]."

Crime and Corruption

This week the Prosecutor General’s office announced that they had finished the investigation of the Energcom case in which Igor Dodon is indicted and that he will stand trial. The case goes back to 2008 when Dodon was the Minister of Economy. At that time, he signed contracts creating a “middle man” shell company in the purchase of electricity for the whole country. This caused customers bills to be padded and $11.9 million USD to be siphoned out of the country into offshore accounts. Dodon denies the charges.

Meanwhile, Dodon’s mother was brought into the Anti-Corruption Prosecutor’s office for questioning. Apparently during the searches at her house multiple bullets and shell casings were found. While she walked into the building a crowd of activists stood outside and booed her and jeered at the elderly woman.

This led Dodon to respond saying:

“These few hunting cartridges that were found in a house where husbands and sons hunted for decades - is it a reason to drag women to the prosecutor's office? Are you afraid that my mother might stage a coup d'état?"

He condemned President Sandu and called all of these cases political prosecution. The President’s office issued a statement condemning the heckling of Dodon’s mother saying “justice should deal with justice, not with a circus."

The whole episode resulted in widespread condemnation against prosecutors for allowing this to happen and managed to make the Dodon family somewhat sympathetic in a week there Igor Dodon is preparing to finally stand trial.

Ending on a High Note!

This week Moldova had an amazing showing at the International Chess Olympiad tying with India and the United States where the 3 countries came in 4th - 6th place and had the same number of points. As if tying with 2 vastly larger countries wasn’t enough, Moldova, virtually unranked, managed to climb to this spot by defeating Norway, the past international champions. Moldova’s 19-year-old Ivan Skitsko forced a draw against Magnus Carlsen, 5x reining world chess champion catapulting the team up the rankings. Go team Moldova!!

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!