Weekly Roundup

April 3 - April 9

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!

Political Crisis - All Quiet During the State of Emergency

In the ongoing conflict between President Sandu and Mr. Dodon’s Socialist and Shor led majority in Parliament, it has been a quiet week. The State of Emergency, as discussed in the last Weekly Roundup has effectively paused any conversation about elections or a new Government for the next 2 months. President Sandu has chosen to challenge the State of Emergency in the Constitutional Court saying there is “no justification for a 60 day emergency with neither plan nor coherence” and that “it is now clear that the only activity this emergency is meant to block is the dissolution of Parliament.” While we wait for this challenge to be filed, MP Octavian Țîcu has announced that he will also challenge the State of Emergency in the Constitutional Court on the basis that an Interim Government does not have the constitutional right to declare a State of Emergency. It is unclear how these potential cases will fare on the merits, but we should remind everyone that Mr. Dodon has also said that it is unconstitutional for an Interim Government to declare such an emergency… right before he had them do it. 

As if to clear up any questions of political calculus that the Constitutional Court might have, Mr. Dodon clearly stated that he will lift the State of Emergency when his candidate for Prime Minister is put into office. The boldness of this assertion clearly indicates that this crisis is going to continue in a political game of hardball for a while and will likely continue at a slow simmer as questions work their way through the courts. 

President Sandu’s First 100 Days

Ever since FDR’s famous 100 days following the 1932 election Presidencies around the world have sought to highlight a record of success in this symbolic time Period. President Sandu’s 100 day anniversary came and went this week and the battle to define what it has meant has gotten heated. President Sandu’s team has created a website touting such accomplishments as Vaccines, Donations for the Health System, aid for the economy and farmers and Removing Moldova from international isolation. Mr. Dodon has similarly focused on this anniversary by creating a video blaming President Sandu for just about everything that has gone wrong recently, highlighting pandemic related deaths and other issues. It seems that this is part of a broader political strategy to weaken President Sandu politically by leveraging the vast gulf between the President’s elected mandate and actual constitutional powers that we discussed in our previous Explainer about the Moldovan Government. It remains to be seen if this will work, but we can expect an increasingly dirty and negative political campaign even though we are not technically in election season. 

A Very Public Kidnapping

A major scandal is unfolding this week whereby a disgraced, internationally wanted, Ukrainian Judge was kidnapped in broad daylight. The kidnapping was recorded on film as 3 men pulled the judge into a van in a park and sped off. Photos of the kidnapped judge later appeared on several anonymous telegram channels, believed to be linked to the Socialist Party. He has apparently been beaten and has a bandage on his right hand. President Sandu has instructed the Ministry of Internal Affairs and Security and Information Service (SIS) to find him and find out what happened. 

Ok, hold up a minute. Why kidnap a Ukrainian Judge in Moldova??

Judge Nicolai Ceaus has a complicated backstory and some powerful friends. In 2016 the Judge was caught taking a $150,000 bribe in order to sway the outcome of a drug trafficking case in Kyiv. Money that he buried in jars in his flower patch. Because Judges in Ukraine have immunity from Prosecution he had time to escape while the Parliament acted to lift his immunity. The Judge was connected to Ukrainian President Petro Poroshenko who had previously helped him keep his job in spite of being responsible for prosecuting protesters during the Maidan revolution. Judge Ceaus boarded a private aircraft owned by Mr. Plahotniuc, a close friend of President Poroshenco, and he escaped to Moldova. In 2017 his appeal for political asylum was definitively rejected, but he was not deported for some reason and he has been hiding out in Chisinau ever since. So we don’t know what the motivation was behind the kidnapping, but it seems this man has been up to his neck in something for a while. It may be that a March 29th article by investigative outlet RISE Moldova that identified the judge as continuing to live in Chisinau notified his enemies of his whereabouts. 

An international crisis is brewing over who is to blame for this. The Ministry of Interior now says that the kidnappers were foriegn citizens who already fled into Ukraine in a Ukrainian Diplomatic Vehicle. In response to accusations that Moldova and Ukraine somehow collaborated on this the Security and Information Service SIS has said “it wasn’t us.” Ukraine has also said it has no knowledge of who was behind this act and has offered to set up a joint working group with Moldova to investigate the matter. 

Meanwhile, Mr. Dodon has accused President Sandu of orchestrating the kidnapping as a mechanism of helping Ukrainian President Zelenski bring a corrupt judge to justice (remember how we said the political attacks were getting dirty?). Sensing some weakness in his position, Mr. Dodon also felt the need to justify the fact that 14 Turkish school teachers were kidnapped from Moldova on his watch. This scandal occurred in 2018 when the Moldovan authorities aided the Turkish Security Services in kidnapping 14 school teachers living in rural Moldovan communities. Most of the teachers had been Moldovan residents for over 20 years when black bags were thrown over their heads, they were taken away in vans, and then they were falsely imprisoned in Turkey as terrorists. Many were tortured and all were denied a fair trial. Apparently knowing that this comparison would come up to his accusations (completely unsubstantiated) that President Sandu was involved in the Judge’s kidnapping, Mr. Dodon claimed that the kidnapping of the Turkish teachers was completely civilized and legal. He said “we poured them tea and flew them home.” This was immediately contradicted by video of people being shoved into vans as they kicked and screamed. 

Goodness, what happens next?

It seems Moldova and Ukraine are going to cooperate to figure out what happened… but it seems equally likely that someone is not telling the truth about their involvement. Late Thursday a RISE Moldova investigative report vetted a number of Ukrainians who traveled to Moldova during the timeframe of the kidnapping and are being looked at by the Moldovan security services. RISE was able to uncover the fact that at least 3 suspects are linked to the Ukrainian intelligence services and at least one traveled with a fake name (RISE found the man on facebook with a different name). So someone seems to be lying here. You can’t take people across the border without some institutional help - either a Ukrainian diplomatic car that can’t be searched, or a Moldovan border guard who lets you through. So we’ll see what more we learn in the coming weeks. 

COVID-19 Update

Moldova has registered a decrease in the 7 day rolling average of new cases for the first time since January with an average of 1060 cases per day last week. Unfortunately, the death rate remains high with a 7 day average of 44 deaths per day. Meanwhile, the State of Emergency continues to cause confusion as the Mayor of Chisinau rejected the requirement to close parks and people generally protested the fact that going to the gym is fine but walking alone in the forest is prohibited. This led to some legal ambiguity as the local and national government were at odds, which was resolved when the Interim Prime Minister backed down, opened parks and basically said “my bad.” In spite of this one softening, police have fined over 900 people this week for violating the emergency measures. One area that caught people off guard was the stopping of cars and taxis after the 11 pm curfew and fining the occupants. Even with this enforcement, many noted that Moldova has a far worse health situation than its neighbors and far lighter restrictions. In many ways it feels like Moldova is finding the perfect path towards economically and socially damaging restrictions, without impacting the spread of the virus in any way. Pretty much, the worst of all worlds. 

Vaccines for Sale?

This week the Interim Prime Minister announced that they are working on provisions to allow private clinics to sell COVID vaccines to the public. He hopes that the legal provisions for this process will be finalized by the end of April, but cautions that this does not mean vaccines will immediately arrive. It will be up to private companies to secure a source of vaccines which may be easier said than done. We shall see. 

Fake Tests and Travel Agencies

This week ZdG announced an investigation into a scheme by which private labs, working with travel agents in some cases, sell fake COVID-19 tests to people who want to travel. In the investigation, the reporter went undercover to buy fake negative tests and found them to be totally genuine - even registered with the national health authorities. It seems that while the buyer is not tested, someone is, making this a complicated scheme with many players - not simply someone printing off fake certificates. One interesting note was that the person signing these fake certificates is not actually an employee of the state health service. And she was previously the subject of a criminal investigation for selling fake children’s vaccines. Sounds like a lovely person. 

One fascinating part of this story is that the illegal fake tests cost less than the real ones. I write more about this topic in a post on the Moldova Matters facebook page discussing what market pricing of risk can tell us about criminal enterprises. Consider following Moldova Matters on facebook for shorter updates and discussions of topics of interest that don’t always make it into the Weekly Roundup. 

Economic Updates - what is MMT?

The main economic story of the week is Mr. Dodon’s proposal to borrow one billion dollars from the National Bank’s currency reserves to “help people” during the pandemic. The illegality and lack of detail of this plan did not stop it from being a major political and economic discussion in the press and on social media. The political story basically centered on those opposed to Mr. Dodon noted that he ran the country for literally all of 2020 and conducted no programs of COVID relief whatsoever. Predictably, this led to accusations that President Sandu isn’t doing enough and a partisan food fight ensued. 

But the economic story had more legs than that with serious economists disagreeing with the merits or problems of this plan. Local think tank Expert Grup noted that political control over such fiscal policy is dangerous (and currently illegal) and that it would cause inflation and generally have a multitude of bad consequences. But they note, that the core idea isn’t that bad and it could be accomplished indirectly by decreasing the National Bank’s liquidity requirements in order to pump financial reserves into the economy in the form of more lending to banks. Some online conversation turned to Modern Monetary Theory (MMT)¹ with many joking that Mr. Dodon’s sudden embrace of this idea (if not explicitly) is quite a reversal from the budget and deficit hawk we saw last year. Based on current law and lack of a real government we can expect this issue to go nowhere fast. But the amount of discussion it drew as to what the right fiscal response to the crisis might be was interesting and shows that there is less budget orthodoxy in Moldova than last year’s inaction on the pandemic implied. 

Corruption Update

In the last Weekly Roundup we talked about how there was a potential raider attack unfolding between Oligarch Vladimir Platon and Businessman Vladimir Rusu whereby Platon had used a court order to seize 2 buildings from Rusu. It seems that the judge in that case was subsequently arrested for other corrupt actions and the Prosecutor General decided to reverse the seizure of buildings and restore their ownership to companies controlled by Mr. Rusu. The courts will likely continue to contend with this case for a time, but the unexpected intervention of the Prosecutor General caused many observers a lot of surprise and some amount of optimism. If Mr. Platon has a case; he'll have to prove it in a courtroom where his adversary is represented as well. 

Ending on a High Note

As with last week, we will continue our new Moldova Matters tradition of ending the week’s news on a high note with some positive or heart warming story from around Moldova. This week we highlight the fact that Moldova’s vaccination program has moved to different front line workers with 300 conductors and drivers of Chisinaus’s bus fleet preparing to get the jab this week. As the vaccines continue to move slowly, we should celebrate when they get to the people who need them most, and who we all need to be putting themselves at risk to keep the city running. Let’s all hope that these modest but important steps are bringing us in the right direction. 

1. For more about MMT check out this fun Planet Money Podcast