Weekly Roundup

March 13 - 19

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!

It was a big week in Moldovan news so our roundup will run a bit longer than usual. I promise, it’s worth it - things have not been boring in Chisinau. 

COVID - to Lockdown or Not?

This week started with President Sandu convening an emergency meeting of the State Security Council on Saturday to discuss the developing state of the pandemic. The outcome of this meeting Saturday evening set  the table for a raucous week in politics and policy with President Sandu strongly advocating for a 2 week state of emergency and economic shutdown. Former President Dodon and the Socialist party vehemently oppose this with more pro-economy and business statements than we saw during their entire last year in power. Mr. Dodon strongly denounced President Sandu over the lockdown proposal indicating that the political struggle and crisis has now fully spilled into the health arena, with online commentators noting that President Sandu must simply oppose a lockdown for Dodon to begin embracing it. 

So, how bad is the Pandemic situation right now?

Bad. Very bad. As we discussed in the past Weekly Roundup Moldova is entering a new wave and this week’s numbers were even more dire than the last. With a 7-day average of over 1500 new cases a day and 36 deaths a day Moldova is entering a time of record cases and death. Scaled for population, this death rate would be equivalent to over 4400 deaths a day for the United States, a rate not seen yet during the pandemic. In Chisinau, these rising rates are felt daily with ubiquitous ambulance sirens and daily warnings that the hospitals are at capacity. Further, many public figures are now sick including the Mayor of Chisinau, and 4 members of parliament, one of whom is in intensive care. One private labrewtory has confirmed that 9 out of 10 of their COVID tests indicate the British variant of the virus. Strongly implying that the increased infectiousness and mortality of that strain is driving this new wave in Moldova. 

Ok, so lockdown or no? It seems like we need one…

For the moment, the question of lockdown remains very much up in the air but it seems that the Government is leaning towards tightening current restrictions like preventing parties and events but not closing businesses totally. Since the Government, not the President, is responsible for this decision we can at least assume that there is extreme hesitancy on the issue. Meanwhile, a heated debate inside of academia and think tanks is raging around the costs and benefits of radical action. Calculations show that even 2 weeks could save 1000s of lives but would deeply damage the economy and mortally wound some industries. 

What about the vaccine already? Is there good news?

Yes, slowly but surely vaccines are on their way. Moldova expects another 110,000 doses from the COVAX program to be delivered incrementally over the next month with over 25,000 doses of the Pfizer vaccine due to arrive today March 19th. This will substantially increase the capacity of the government to vaccinate at risk populations but still falls well short of what is needed. Critically, vaccinations will continue to move as fast as possible with no pauses or disruptions due to the chaos over Astrazeneca in the EU. Moldova is following the WHO guidance that the vaccine is safe and proceeding to continue vaccinations as fast as possible. 

Meanwhile, Mr. Dodon has met again with the Russian Ambassador and returned with promises of an imminent Sputnik V delivery. Since this same news story has played on loop for months I think we will have to just wait and see. Meanwhile, Russia has set a timeline for delivering Sputnik V to Transnistria, which must somewhat throw salt in Mr. Dodon’s wounds as he has been talking about this for so long.  

The Political Crisis is Heating Up

After last week’s ultimatums passed it seemed that the Socialist’s were hesitating to take radical action against President Sandu but might be pushed as we move closer to the March 23rd deadline, after which early elections will occur should no Government be in place. This week, an unexpected twist came when Mr. Dodon’s candidate Mariana Durlesteanu withdrew her candidacy for Prime Minister abruptly catching even her own supporters very much off guard. It seems that this may have been prompted by the investigative journalists at RISE Moldova publishing records of Durlesteanu’s extensive property holdings overseas and questioning the legality of her business ventures. Mrs. Durlesteanu withdrew hours after RISE called for comment on the story. RISE conducts excellent in-depth investigations on corruption - consider supporting investigative journalism in Moldova via their Patreon. 

President Sandu rapidly capitalized on this development by rapidly nominating Igor Grosu from the PAS Party for Prime Minister. The process of him forming a government and presenting himself to Parliament is likely to be sufficient to run out the clock to March 23rd dealing a substantial blow to Mr. Dodon’s desperate efforts to prevent elections. 

Mr. Dodon has appealed to the Constitutional Court over the matter which has said it will not suspend the President’s nomination but will hear arguments March 22nd. Mr. Dodon has indicated that his Parliamentary Majority will nominate the current Moldovan Ambassador to Russia, Vladimir Golovatyuk,  as another “technocratic” candidate. Some were quick to criticise this pick as Mr. Golovatyuk may not actually speak Romanian though we have yet to see definitive reporting on this. Meanwhile, Andrei Nasase of the DA Party has responded with fury to these developments and indicated he is still eager to lead the country. Interestingly, his previous mortal enemies, the Socialists and the Democrats are willing to support him. This clearly highlights that the fault lines of the political crisis exist between parties who stand to lose or gain in the coming election rather than any ideological vision for the country. President Sandu and the PAS party continue to oppose any kind of “temporary government” saying that it is nothing more than an attempt to seize control and prevent elections for the next 2 years. 

As the March 23rd deadline approaches the crisis is sure to develop rapidly in the coming week. 

The Economic Crisis Continues

New statistics now show that 2020 was Moldova's Largest economic decline in the last 25 years. A -7% decline in GDP driven by COVID and drought. In little reported news, it seems that this crisis does not affect all business equally, as there is a small list of companies that don’t have to pay their taxes on time. As a business owner myself, I can say it would be wonderful to have whatever connections are required to be on this “special treatment list.” In all seriousness though, if not for all the other news this week this story would be explosive in highlighting the government’s special treatment of friends rather than support for the overall economy in this crisis.  

Any good economic news?

Actually, yes! Moldova has launched a bond market for issuing and trading government securities. This project has been in the works for years and is likely to significantly improve Moldova’s macro economic situation by allowing the government to finance itself with public debt in its own currency. We’ll have to check back in on this and see how it is going down the road. 

Corruption

The last week has broken numerous high profile corruption cases in Moldova with serious implications for both the government and society. 

The Theft of the Billion - will someone be Prosecuted?

The long running investigation into the Theft of the Billion has so far yielded little in the way of convictions. But today, the General Prosecutor’s office has indicated a desire to arrest two Members of Parliament from the Shor faction related to this request. He transferred information about the alleged crimes and asked Parliament to lift their immunity from prosecution (something afforded members of Parliament). This story is developing so we shall likely see more in the coming week. 

The Railroad - bad business or criminal enterprise?

As we have discussed in past Weekly Roundups the national railroad is in terrible shape. They are over 4 months behind on salaries and experiencing blackouts as their utilities are shut off for lack of payment. PAS MP Radu Marin conducted an investigation into the railroad which was confirmed by news outlets showing that a major part of the institution’s financial issues are related to theft and cronyism. In particular, he was able to analyze the ratio of fuel usage and fuel additives to show that almost 50% of all diesel fuel is being stolen with 200-300 liters being stolen per engine per day - a process caught on video. This fuel was then sold to local residents and the proceeds given to the railroad directors. Meanwhile, a fuel inventory computer system costing more than $250,000 sat unused and disconnected WHILE the state paid $7000 a month to one of Plahotnuic’s companies to maintain said system. Whistle blowers have previously reported this theft, but were ignored and sometimes fired by the responsible manager - the brother in law of Igor Dodon. In addition to the fuel theft, he was able to prove that ⅔ of all ticket sales remained unregistered. Meaning the passenger bought the tickets but the railroad employees did not register the transaction and passed the cash earnings to whoever was running this scheme. As the railroad asks for a bailout from the Government this scandal is likely to give real pause about how this money would be spent. 

Raider attack at the port of Giurgiulesti

Danube Logistics, the company that runs Moldova’s only international port at Giurgiulesti, was ordered by a judge to be dissolved and it’s shares turned over to a Mr. Aliyev, an Azerbaijani Oligarch. Danube Logistics is a dutch company partly owned by the European Bank of Reconstruction and Development EBRD. The judge’s order was based on the fact that Mr. Aliyev claims that Danube Logistics’ former director Thomas Moser owes him money. Danube Logistics quickly points out that Mr. Moser is not affiliated with them and that it does not make sense for the court to take someone else’s company to pay Mr. Moser’s debt (if there is one). This case will likely bounce through Moldovan Courts on its way to the European Court of Human Rights before it is resolved. But it keenly highlights the use of corrupt judges (allegedly) to outright steal companies from their rightful owners and grant them to an oligarch. 

The Soviet Cocaine Union?? What?!?

A truly explosive investigation is coming soon from RISE involving Moldova’s former “leader” Vlad Plahotnuic. RISE has obtained documents from a long running but officially suppressed investigation by the Moldovan authorities proving that Plahotnuic was laundering Latin American drug cartel money and himself distributing cocaine into Russia and the EU using his control over Moldovan customs and justice to facilitate the transfers. RISE has previewed the investigation in a short video at the following link in english. They hope to crowdfund 6000 euros to assist in the investigation. Consider donating if you want to support anti-corruption efforts in Moldova, if 6000 euros can expose billions of dollars in money laundering and the cocaine trade we have to realize that even modest investments in independent journalism can massively change things for the better. 

Like Podcasts? Me too!

I’m quite a podcast nut and will start posting here when Moldovan news and current events are discussed in a good podcast. Today, Presidential Justice advisor Olesea Stamate speaks with the Kickback global corruption podcast about the difficulties in justice reform in Moldova.