Weekly Roundup
June 6th
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!
Updates on Igor Dodon’s Arrest
Politically, the most charged story in Moldova remains the arrest of Socialist party de-facto leader and former president Igor Dodon. This week the court of appeals upheld the decision to keep Mr. Dodon in house arrest. Prosecutors had appealed hoping remand the former president to jail just like his brother in law claiming that being free he is able to tamper with witnesses and influence the investigation.
Additionally, anti-corruption prosecutors conducted searches and confiscated documents from the Socialist Party headquarters. They stated that they were looking for evidence of illegal party financing.
In response to Dodon’s arrest and these latest actions the Socialist party held anti-government protests. These protests called for the ouster of President Sandu and the PAS party. To get a flavor from the protest here are some quotes that journalists at Newsmaker reported:
Woman at the protest:
“In our youth, we were liberal, we destroyed the Soviet Union, and now we don’t need democracy.”
Pensioner talking about gas prices:
“Maia Sandu had to go to Vladimir Putin in October on foot, wash his feet, drink this water and ask, as Dodon asked.”
Socialist MP:
“Putin loves Moldova very much, especially Moldova!”
Within these and many other quotes, slogans and speeches given from the stage and within the crowd we can see the Socialist party message becoming clear. Economic crisis can be overcome but only with Russia’s support. The PAS government is failing to get gas prices down because they are not groveling before Putin (as Dodon did). In general, the event presented a rejection of a path of European democracy and a return to a satellite relationship with Russia. Increasingly the Socialist Party is one that promotes a single geopolitical solution to Moldova’s economic problems while attempting to stoke a culture war around gay rights and “traditional family values.”
Culture War in Pride Month
June is LGBTQ pride month and traditionally local gay-rights group Generdoc-M holds a pride march in Chisinau to mark the event. This year the Metropolitan of Moldova Vladimir, Moldova’s leader of the Orthodox Church under the Russian Patriarch, called on Chisinau Mayor Ceban to stop the event "by any means." Ceban responded on his facebook with the following:
"I inform you that the planned gay parade did not receive the permission of the municipality. Do what you want at home, not in public,”
Speakers for Genderdoc-M responded:
"We will hold a parade because neither the city hall nor the mayor can restrict our rights and do not have the power to ban protests. The mayor can seek a ban through the courts, but he needs a reason. Therefore, he can not ban the parade. Moreover, the situation is no longer the same as during the pandemic, when it was possible to ban gatherings, ”
Meta (formerly facebook) also responded by deleting Cebans post as a promotion of hate-speech that is against the company’s policies.
The Pride parade is expected to go forward for the first time in 2 years (since the beginning of the pandemic). As a foreshadowing of how the event might go, the Iasi Romania pride parade was held this week and resulted in counter-protestors throwing eggs and smoke bombs into the parade requiring police intervention. Traditionally Moldova’s pride marches are organized carefully and secretly so that counter-protestors are not aware of the route and thus will have to scramble to intercept the parade once it starts. The counter protestors, led by priests and representatives of the Orthodox church as well as young people organized by right-wing political groups generally spread out in small groups around the city center in order to maximize their chances of a fast interception. Traditionally, police presence is massive and dwarfs both groups attendance. This year pride events are scheduled from June 13 - 19.
New SIS Director Appointed
This past week the director of Moldova’s Security and Information Service SIS resigned citing personal reasons and “transfer to another job.” SIS is Moldova’s primary domestic and foreign intelligence agency that is effectively a hybrid of the FBI and CIA. The former director was appointed in 2019 to a 5 year term that was due to expire in 2024 and his resignation came as a surprise in Moldova as it meant a major official from the Plahotniuc / Dodon time left office “willingly.” There has been much speculation about whether or not he was actually forced out but little support for the former director and almost universal silence from the Socialist and Communist parties.
President Sandu moved quickly to nominate Alexandru Musteata as the new SIS director. Musteata was confirmed by parliament by a vote of 54 to 3 with 4 deputies abstaining (and presumably quite a few more not showing up for work).
Recently, Alexandru Musteata has served as Prime Minister Gavrilita’s advisor on anti-corruption. Previous to that, he served in the Central Election Commission CEC and worked as a project manager and project director at the Soros Foundation from 2013 - 2022. He is seen as an outsider being brought in to reform the security services. Various experts have noted that this is very normal in European politics with civilian oversight of such agencies. Since independence, SIS has been a bit of a black box with very little public understanding of the service or clear mechanisms of parliamentary oversight. Notably, Moldova never opened up the SIS / KGB archives in the country as did the Baltic States, Ukraine and multiple other regional countries. We’ll have to see what kinds of reform and transparency Mr. Musteata brings to SIS long term. Short term he has noted that his priorities are in increased cyber-security and key reforms to allow the agency to better adapt to the regional security situation.
Polling Shows Souring Public Opinion for PAS
Note: This poll was released May 26th
Think tank IDIS Viitorul released a new set of political polls. They found that if an election were held tomorrow the results would be as follows:
24.6% would vote for the Communist / Socialist block
24.1% for PAS
7.3% for Shor
21.6% undecided or no response
12.9% would not vote
Asked who the most trusted politician in Moldova is respondents said:
18.2% Maia Sandu
10.9% Igor Dodon
3.5% Ilan Shor
49% no one is trustworthy
Looking at the cross-tabs we see some interesting results:
Maia Sandu has a gender gap with 21.6% from men and 15.4% from women.
Dodon’s male / female support is tied.
Maia Sandu’s support increases with education and income level and is stronger in urban centers.
Igor Dodon’s support falls with education level, falls with income level, and is nearly double among people who are “economically inactive” (Sandu’s is the inverse)
Maia Sandu’s support when broken down by native language is 22.1% Romanian speakers and 4.6% Russian speakers.
Igor Dodon’s support when broken down by native language is 27% Russian, 6.3% Romanian speakers
Since there is no election in sight it’s unclear how meaningful these responses actually are. Clearly there is a dissatisfaction with the job that the PAS government is doing and every indication that many of their voters moved into the “undecided” category while Socialist strength remains very close to their result from last election (27.7% - PAS got 52.8%). With nearly a year of non-stop crisis since the last election voters are likely feeling strained and not yet seeing the “good times” that PAS promised. Results like these should put the government on notice that even with the crises political considerations can’t be ignored and voters are feeling disappointed.
International Affairs
This week Spanish Prime Minister Pedro Sanchez visited Chisinau. This marks the first visit of a Spanish head of government since Moldova gained independence. In a joint press conference with President Sandu, PM Sanchez promised more support to Ukrainian refugees in Moldova and outlined a plan for increased diplomatic ties between the countries including opening a Spanish Embassy in Chisinau for the first time.
In a more concerning foreign policy twist, Moldovan police have detained Ukrainian MP Yevgeny Yakovenko as he tried to cross into Moldova. Mr. Yakovenko was detained because of an outstanding arrest warrant from Interpol which was posted by the Belarusian government. Neither the Moldovan nor Ukrainian governments have commented on this situation or what Mr. Yakovenko was doing in Moldova. Local authorities say they are working with Interpol to clarify the situation.
It is worth noting that Russia and Belarus both have long histories of weaponizing Interpol “red notices” in order to target their political enemies. There is a fantastic book about the subject from Bill Browder called “Red Notice”
Moldovan Military Readiness
Discussions in Moldova about modernizing the national army are now a daily occurrence. This week, Moldova’s Defense Minister commented on the ongoing discussions with international partners and outlined the situation. He noted that the bulk of Moldova’s military equipment was manufactured between the 1960s and 1980s and universally belongs in a museum. No spare parts have been imported since the fall of the USSR. He first noted the need for non-lethal support such as helmets, body armor, communications systems and the like. Commenting on lethal weapons the Defense Minister noted that Moldova can’t afford to either buy or maintain tanks but that a focus on anti-tank guided missiles and kamikaze drones is a viable defensive option following Ukraine’s example.
No programs or purchases have been announced but the flurry of meetings with international partners and comments by elected officials indicates that Moldova is finally taking security issues quite seriously.
Economic Updates
The economic news in Moldova continues to be bleak and plentiful. We’ll take a quick look here and will soon have a Deep Dive into some major areas of concern going forward.
Ministry of Agriculture predicts 30% decrease in wheat harvest. This is due to drought conditions in fall and spring leading to decreased planting. The ministry notes that there will be more than enough for local consumption and projects the ability to export 200-300k tons. At the same time, exports are currently prohibited meaning local stocks in Moldova are sufficient for at least 200 days. Domestic yearly consumption is around 350k tons while the 2021 harvest (a national record) was 1.5 million tons. President Sandu announced that the government is exploring opening up limited exports. This will be required at least to clear warehouses for the new harvest.
Customs is a mess. Trucks moving goods from Moldova to Romania are now waiting 4-5 days in line to cross the border. Customs is opening new truck-only lanes in order to help speed the crossing but the situation has been made worse this week by technical failures on the Romanian side leading to backups of more than 200 trucks. One truck driver died this week after waiting in line 20 hours. He experienced heart failure and was unable to be rushed to a hospital in time to save his life.
Natural Gas prices going up again. The national energy regulator ANRE announced a 20% increase on the consumer tariff for gas purchases in June. At the same time MoldovaGaz requested a 60% increase to cover the ballooning cost of gas from Gazprom which they expect to hit $880 / 1000 cubic meters in June. ANRE disagrees and projects the June price at $692 up from $620 last month. MoldovaGaz states that they are concerned that an insufficient increase in the tariff will result in a deficit they can’t fill. They want to maintain increased prices in the summer in order to lower prices in the winter season. The ANRE has rejected this pricing scheme. In 2021 the average cost of gas was $200 / 1000 cubic meters.
Electricity Prices for June have been announced at $65.03 / MWh. This price includes Moldova purchasing 70% of its electricity from local sources and from Transnistria at around $59.9 / MWh and 30% of its electricity from Ukraine at an unspecified price (calculated at ~$83 / MWh). Prime Minister Gavrilita refused to comment on the price from Ukraine citing contractual obligations but noted that it is the best possible price and lower than in past months. Overall, we are seeing Moldova making some successes at diversifying energy consumption away from Russia. At the same time, this move results in higher prices for consumers pitting national security concerns against pocketbook economics.
National Bank Raising Interest Rates. This week National Bank Governor Armasu announced a hike in the base rate from 15.5% to 18.5%. Additionally, bank’s capital reserve ratios will be raised in 2 steps from 30% to 34% while foreign currency reserve ratios will also be raised in 2 steps from 33% to 39%. Armasu explained that this is necessary to fight inflation and support the lei which is slipping in valuation against international currencies. He noted that inflation stands at 27% and Moldova is expecting to see 31% by Q3. The governor noted the limitations of monetary policy and suggested that parliament use fiscal policy to blunt the effects of inflation by increasing support to the poor and vulnerable.
Information War
This week parliament passed a new bill targeting disinformation. The bill defines disinformation as “the intentional dissemination of false information created to harm an individual, social group, organization, or state security.” Particularly, the bill blocks all news, information content, and military themed movies from countries that have not ratified the “European Convention on Transfrontier Television,” which Russia has not ratified. At least 50% of all foreign content must come from counties that have ratified the convention implying the EU, US and Canada. The final version of the bill dropped individual fines for spreading misinformation on social networks and a provision that would allow SIS to block websites sharing disinformation. Both provisions had created widespread controversy and stoked worries across the spectrum about how enforcement would be accomplished.
Penalties against TV networks that do not comply will include a ban on all advertising for up to 3 months for offending networks.
Ending on a High Note
Level 3: Reconsider Travel! The US Department of State has downgraded the travel warning for Moldova from Level 4: Do not Travel to Level 3: Reconsider Travel! Previously, the level 4 warning had been in place since March 2020 and referred to the risk of COVID-19 in the country. At the outbreak of the war an additional warning best summarized as “do not under any circumstances go to Transnistria” was added, but the warning still primarily focused on COVID. This week, the CDC noted that Moldova has a “moderate level” of COVID-19 risk and the State Department’s level 3 warning is entirely about Ukraine. In any case, whether due to a deadly pandemic or a horrible war, the result is the same - Uncle Sam thinks Moldova is just a bit safer than it was last week.
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