Catherine Lovatt

Sandwiched between Romania and Ukraine, politically unstable Moldova finds itself economically dependent on outside support and in a vulnerable position. Ethnic infighting complicates the matter and throws doubt on the future of her existence as an independent nation.

Romania has strong historical and ethnic links with Moldova. Moldavia, now a region of Romania, initially stood as a feudal state until it was united with Wallachia and an independent Romanian state was declared in 1878. In 1881, Romania was declared a kingdom. The region of Moldavia was composed of what is much of Moldova today. Present-day Moldova has experienced a history in which areas of the country have been bandied about to Romania, Russia and Ukraine. Consequently, a diverse ethnic population now exists.

Since 1991, Moldova has been recognised as an independent state; however, ethnic, economic and political instability have raised doubt over the future of its existence. The volatile Dnestr region of Moldova has exasperated these fears. The Dnestr is a predominantly Slav enclave to the East of the Nistru River. The area is occupied by Russian speaking conservatives who had wished to remain part of the Soviet Union. In 1990, they declared independence. Independent status has remained unrecognised fuelling ethnic resentments. As a result, in 1992, they attempted to break away from Moldova over concerns that Moldovan nationalists would reunite with their ethnic kin in Romania. The political status of the Dnestr is still not agreed upon. Moldova has offered autonomy but the leaders in Tiraspol (Capital of Dnestr) are pushing for a confederation. Disagreement remains, providing a potential hotbed for future conflict and emphasising the insecurities of the region. If further conflict ensues, the weak Moldovan economic and political systems could crumble under the pressure. Slavic fears may then be realised.

Ethnic conflicts have infringed upon economic stability. Moldova has a small, agrarian economy and imports many of its industrially produced goods. Services and commodities are therefore reliant on outside economies. Moldova imports 98% of its electricity, largely from Ukraine and Romania. However, some electrical plants can be found in Dnestr. In July, Tiraspol cut off electricity supplies to its exclusive customer, Chisinau (the Moldovan capital). Commercial life was brought to a standstill and the city was left with paralysed transport and water systems, halted production lines and darkness. Many businesses are still closed. The Moldovan President, Ion Sturza, stated that Dnestr was demanding that Chisinau pay USD 31 million in debts for power supplies. He criticised the Dnestr as an "unpredictable partner" carrying out actions that would be "unacceptable even in wartime" (Reuters, 23 July 1999).

Unpredictability and lack of cooperation between the Slavs and the Moldovans jeopardises the resolution of ethnic tensions and complicates political and economic development. In Moldova economic development is limited. Crises in Russia, Romania and Ukraine have raised the cost of imports and sent Moldova cascading into bankruptcy. Fuel shortages in Ukraine have reduced supplies to Moldova. In Romania and Russia petrol prices are rising rapidly. Consequently, Moldova is unable to maintain previous supply levels causing her own fuel prices to rise. This has a knock-on effect in all areas of the Moldovan economy. For example, Ion Bulgac, head of the agricultural ministry's crop cultivation department, has said that fuel shortages are threatening this year's harvests. He fears that much of the produce will be left on the fields resulting in food shortages. This would be disastrous for a largely agricultural nation.

Deep economic crisis has pressurised Moldova into selling many of its state-owned companies. Tobacco, wine, telecommunications and the Moldovan electricity industries are earmarked for privatisation. However, the success of these sales is questionable. In 1998, a similar privatisation plan was declared but the companies remain unsold. With a small population of four million and a shrinking economy, Moldova will attract few investors. Despite this, the Moldovan government has gained the help of the French bank, Credit Commerciale, to assist in the privatisation programme, and analysts are predicting an upturn for emerging market investment risk.

Economic instability is compounded by political instability. The present system enables the majority group to establish a government. But the existence of numerous parties has meant that no one party has gained a majority. The present centre right coalition government is weak. Blighted by internal disputes, the formation of a strong cabinet has proved difficult. Disagreements and political infighting have prevented economic problems from being resolved. In response to a referendum last May, a new bill has been drafted. It aims to stabilise the political structure by increasing the powers of the President. Under the new system the President would be the only one who could appoint the Prime Minister and his Cabinet Ministers. If accepted, the President would yield much more power. This may bring greater stability, but it may also bring dictatorship.

The decay of the Moldovan economy, coupled with political and ethnic insecurities, has created an atmosphere of chaos; the continued existence of an independent Moldovan state is jeopardised. Reliance on imported goods from countries with weakening economies has sent the Moldovan economy spiralling out of control. Ethnic rivalries between the Moldovan snd the Slavs continue to threaten the Moldovan nation. Moves are being taken to strengthen the government and the economy, but it remains to be seen whether these attempts will be successful. Without cooperation and a stable economic and political infrastructure Moldova has a grim outlook.

Catherine Lovatt, 1 September 1999