Developments in Moldova

Updated: 10 November 2017

Despite relative stability after recent year’s political turmoil and economic crisis, Moldova remains Europe’s poorest country. GDP amounted to 6.75 billion dollars in 2016 but was to a large extent supported by remittances from the emigrated population. 

The small land-locked country has since the beginning of the 2000s been characterized by a polarization between pro-Russian and pro-EU attitudes and actions. The presidential election held in 2016 increased this split with the election of pro-Russian President Igor Dodon.

EU integration

In recent years Moldova has made important EU approximation steps by signing an Association Agreement AA, and the Deep and Comprehensive Free Trade Agreement (DCFTA), an arrangement between the EU and the Republic of Moldova that foresees a preferential trade relationship, based on mutually advantageous treatment.

The EU is Moldova's biggest donor and the support aims at, among other things, to strengthen the judicial sector, which is weak and characterized by extensive corruption. Another objective is to raise the technical competence and modernize the public sector. Relations with the neighbouring EU member Romania was long complicated but has improved and Romania is now the second largest bilateral donor to Moldova.

A massive bank fraud

In 2015 it was revealed that three of the country's biggest banks shortly before the election made payouts of approximately one billion dollars, equivalent to 15 per cent of the country's GDP. The money is believed to have ended up on the foreign accounts belonging to politicians and businessmen. The central bank granted the banks a loan of 700 million dollars and took control of their operations to save them from bankruptcy and to prevent the banking system from collapse.

The deal led to widespread protests. The billion dollars have not been recovered and a large part was transferred into national debt through a government decision and subsequently adopted as law in 2016, therefore making the citizens responsible for debt recovery through dramatically increased taxes and prices. The banking crisis has revealed the involvement of key political figures in corruption schemes that qualify Moldova as a "captured state."

Equality and pluralism

Moldova is still a highly patriarchal society. Women are underrepresented in politics and in senior positions in government and industry. Gender based violence is widespread and attitudes towards it often enabling and forgiving.

In 2016 three major amendments were made to promote gender equality in Moldova called Law 71. These include a quota system for political representation, two weeks of paid paternity leave and prohibition against sexist advertising.

Moldova's constitution stipulates a free press and freedom of expression but in reality the Moldovan media market is monopolized and politicized. There is a high prevalence of propaganda and fake news.

The anti-discrimination law adopted in 2012 was an important step to promote tolerance, but Roma people, LGBT people, persons with disabilities, and religious and other minorities are still frequently exposed to harassment and discrimination. There is a recent trend in the legislative development to restrain the freedom of expression and freedom of assembly as well as to enhance the controlling tools in the online and off-line space.

Environment, energy and agriculture

Moldova's natural resources are insignificant. Minerals and other industrial raw materials have to be imported, as well as gas and oil, and the industry is poorly developed. However, Moldova, have fertile soils and a favourable climate for agriculture production.

Moldova's energy supply is to 90 per cent dependent on Russia. The supply of natural gas has repeatedly been used by Russia as a political weapon against Moldova's government.

Moldova is facing several environmental challenges including de-forestation pollution, poor water and air quality. The concentration of particles in the air exceeds the recommended norm of the World Health Organization by 100 per cent. Only 12.4 per cent of the land is covered with forest, compared the EU average 35 per cent.

These challenges are likely to worsen with climate change and impact the quality of life of the population. Climate change impact on agriculture is of particular concern as agriculture is a major source of income for a big part of the population, especially the poor in rural areas.

The Association Agreement with the EU imposes an ambitious environmental agenda that is currently not sustained by the setup of the national institutions.

A Frozen Conflict

Moldova has one autonomous region: Gagauzia, and a break-away region: Transnistria. At the dissolution of the Soviet Union, Transnistria opposed Moldovan independence and wanted instead to create a separate Soviet republic. A short civil war took place before a ceasefire was agreed on.

Today, Russian peace keeping forces monitor the borders of this frozen conflict. Moldova lacks the de facto control over the region, and no country has recognized Transnistria as an independent state.

In the 2014 referendum in Gagauzia, an overwhelming majority of voters opted for closer ties with Russia over EU integration and preferred independence if Moldova were to join the EU.

Page owner: Department for Europe and Latin America

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