The political situation in Moldova resembles going round in circles. Representatives of the Democratic Party returned to the new coalition government. The fight against corruption in the highest echelons of power is virtually nullified. Predicting a slowdown in economic growth in 2020, the incumbent government focused on obtaining another loan of trust from the European partners and IMF financial support.
Facing the presidential elections
Since the beginning of the year, the main attention has been focused on the upcoming presidential elections, possible candidates, and scenarios. The pro-Russian president’s policy launched a discussion on whether Moldova could still remain pro-European while becoming closer to Russia. The European officials were in no hurry to establish cooperation with the new government, headed by I. Kiku. In response in his interview to Euronews, I. Dodon said: “We must recognize that some European partners, European ambassadors do not want to cooperate with the new government.” However, the point is most likely not in reluctance but in distrust and disappointment with the policies pursued by Moldova.
The opposition also repeatedly expressed its dissatisfaction and stated that the current government is working against the Moldovan citizens and is aimed solely at establishing one of the most corrupt regimes, the I. Dodon regime. Ex-Prime Minister M. Sandu repeatedly mentioned possible early parliamentary elections.
However, the majority of the Moldovan population did not support the idea of snap elections: 70% are against such idea, and only 17% are in its favour, according to the Association of Sociologists and Demographers of Moldova survey. Polling carried on January 2-15 reveals that in the presidential elections 35% of respondents would vote for the current president Igor Dodon, 20% for Maya Sandu, leader of the Action and Solidarity Party, and 8% would support ex-Prime Minister Pavel Filip.
The lack of a stable majority in the Parliament was resolved. On the verge of declaring a state of emergency due to the spread of coronavirus in Moldova, a new coalition government of socialists and democrats was created. On March 16, an agreement was signed. So, the Democratic Party’s protégés under the conditions of the growing epidemiological situation returned to power and received portfolios of ministers of foreign affairs, defence, economy, as well as education, culture and research. Besides, the Democrats secured the position of Deputy Prime Minister for the reintegration of Moldova.
Thus, the crisis was used for regular backstage political games ahead of the presidential elections. The fight against the oligarchic regime and corruption in the highest echelons of power is a thing of the past. Today, the representatives of the oligarchy are once again in ministerial seats. Parliament Speaker Z. Grechanaya called the creation of this coalition “a truly historical moment”, but this moment is the return to a circle of the once existing state of affairs.
Looking for financial support
In the economic sphere, the main attention was paid to the results of 2019 and plans for the future. State budget revenues in 2019 exceeded 2018 revenues by 3.7 billion lei ($202 million). According to forecasts for 2020, the economic growth rates will decline. If in the previous year the economy grew by 4.5-5%, in 2020 the growth will be at 3.5-4%, according to preliminary data. Most sectors will demonstrate slow growth.
The Executive Board of the International Monetary Fund (IMF) completed the assessment of the economic results achieved by the Republic of Moldova in the framework of the program supported by the Extended Credit Facility (ECF) and the Extended Financing Facility (EFF). According to the conclusions drawn from the IMF mission’s visit to the Republic of Moldova in January 2020, the IMF Council appreciated the actions taken to restore the banking sector and improve macroeconomic and financial stability. They noted significant success in reforming the banking system by ensuring transparency of the joint-stock banks’ shareholder’s structure, verifying compliance with the criteria of integrity and professionalism of the banks’ owners, improving supervisory and regulatory frameworks, and strengthening mechanisms to ensure financial stability. The completion of the IMF mission assessment allows it to pay a $20 million tranche, with $12 million addressed to support the budget, and the rest of the amount to be transferred to the National Bank of Moldova.
The EU has also put forth the conditions for subsequent payments. The most important of these are the fight against corruption and the reform of justice. Macrofinancial assistance involves the implementation of some specific technical conditions related to the justice reform, the regulatory framework, as well as the energy sector. Also, a new program for cooperation with the International Monetary Fund is on the table but they are to assess the political preconditions beforehand.
The fight against the oligarchic regime and corruption in the highest echelons of power is a thing of the past
Both with the EU and Russia
Trying to develop relations with the EU and Russia, while receiving help, support and benefits from both sides, the president increasingly emphasizes that Moldova cannot be exclusively pro-Russian or pro-European. That is why currently the main task is to smooth out the prevailing cold perception of the pro-Russian president’s activities in the eyes of the European partners.
Authorities focus on fulfilling the requirements of the Moldova-EU Association Agreement. Among the priorities set for 2020, special attention is paid to progress in the European integration and the development of relations with the external partners, the balanced and open nature of partnerships. The Prime Minister aims to increase the efficiency of trade and economic departments of the embassies of Moldova. Diplomats should focus on supporting the export of Moldovan products and attracting investments in the country’s industrialization. At the same time, the government does not forget to emphasize the importance of bilateral economic relations with other states, which will increase mutual trade and expand export markets for Moldovan products.
Photo: Moldovan government meeting.
Photo credits: Strategic Culture Fund