2020 has sorely challenged Moldovan citizens with the ongoing pandemic pushing the society to adapt to the upcoming tendencies. The 2020 being an electoral year provided certain optimism for Moldova and its foreign partners with the newly elected president Maia Sandu who stands for the European development vector. Beyond the international sympathy and support addressed toward Sandu, there is a lot to do so as to bring Moldova back to the rule of law,recover trust of its strategic partners, and most importantly to come up with a pandemic recovery plan as soon as possible to avoid financial collapse. Since there is no majority support in the present Parliament for President Sandu and her ambitious agenda, snap parliamentary elections in 2021 seem to be the only solution as the pandemic recovery path looks to be long-term and difficult.
Domestic policy
Igor Dodon’s Inheritance for Maia Sandu
The year 2020 leaves a political and social-economic crisis along with exhausted healthcare system and resumed farmers’ protests. The pandemic crisis management failed in Moldova so far, mostly because of political factor interference in healthcare system at the onset of the pandemic. The number of confirmed Covid-19 cases is increasing and has reached over 139 thousand. Lack of coherent response, miscommunication and misbehavior from top to down as well as discredited ex-president Igor Dodon, all resulted into the loss of credibility for Moldovan leadership. Nevertheless, the election of Maia Sandu as the new president of the Republic of Moldova offers new prospects for the country.
Dodon’s priority after presidential elections defeat was to figure out a backup plan through the de facto ruling coalition formed of his Socialist party, Șor party and the turncoats from democrats “For Moldova”. Hence, on December 16 a controversial package of bills, infringing all legislative procedures and hindering rule of law principle was voted by this coalition, undermining the financial sustainability of Moldova. In addition, the Chicu Government resigned on December 23 before the Parliament could examine a vote of no confidence on the day when Dodon’s presidential mandate ended. President Maia Sandu officially took office on the next day, and now she is running the table. Subsequently, she invited all parliamentary fractions for consultations starting from December 28, as the Presidential institution webpage published. Obviously, the recent Dodon’s movements are his ace in the hole for future snap parliamentary elections.
“Moldova’s partnerships with neighbors and the West will to a great extent depend on political configuration of the future Moldovan government and parliament”
Economy
Controversial Laws Put IMF Support at Risk
The pandemic crisis generated disproportionate economic effects on different social groups and entrepreneurs, according to financial experts. The most affected are micro and small businesses with less financial management experience. Women, young and older people have been more exposed than men to layoffs, reduced working hours and earnings. Farming, HoReCa, transport sectors, and domestic trade have been drastically affected in terms of incomes. According to the International Monetary Fund (IMF) estimation so far the Moldovan authorities provided less support toward its citizens and business sector as anti-crisis measures package in comparison with other countries from the region (the total amount of about $300 million from the budget while in Romania – $13,5 billion of dollar, in Ukraine – $4,8 billion). The World Bank analysts forecast that a double shock of 2020 will lead to severe recession and Moldova’s real GDP will shrink by 7.2% in 2020, hence “more effective and better-targeted support is needed to facilitate a speedy recovery”.
Thus, the controversial bills approved on December 16 on Moldova’s macrofinancial, healthcare and social sectors will have negative impact. These laws put at risk the future programs with the IMF and the World Bank, which would reverse the progress achieved so far in key areas for the country’s financial sustainability. In the end, lowering the retirement age, tax exemption for specific tobacco products, enabling new market for mobile and online drugstores or the abrogation of the billion law (the mechanism to recover money from the one billion theft dollar) are of populist and malign nature and will only deepen pandemic consequences. The National Bank Governor also warned about the harmful effects of the billion law repeal such as damaging relations with the IMF, limiting foreign funding opportunities, weakening national currency, and leading to inflation etc. On December 22, the Constitutional Courtsuspended the parliament’s decision to abolish the billion law after the appeal of the “Pro Moldova” MPs group. Likewise, the budget law for 2021 was contested at the Constitutional Court by the Action and Solidarity party.
Foreign policy
A New Phase in the Moldovan Foreign Policy Course
The election of pro-European president Maia Sandu created new opportunities to relaunch the collaboration with the West, and first of all to resume the relationships of Moldova with its neighbors Ukraine and Romania, which have been put on hold for the last four years. Obviously, the quality of these partnerships to a great extent depends on political configuration of the future Moldovan government and parliament.
During the former president mandate, Moldova followed Dodon’s rather pro-Russian agenda sliding away from his declared “balanced foreign policy” principle. Even so, there were no substantial achievements addressing important issues in the field of social, trade, energy or security sectors between the two countries after all. Surprisingly now we might witness a shift in Chisinau’s cooperation with Moscow, as president Sandu emphasized the need for constructive relationships between the two states, as well called for withdrawing Russian military troops from Transnistrian region. However, the Transnistrian settlement might be far from a top priority since the pandemic and economic crisis seriously affected the entire country including the region. There is no genuine political will in this regard as well.
The country’s relationship with the EU is still conditioned by the implementation of the EU-Moldova Association Agreement agenda. Fragile democratic state institutions, narrow interest of obscure political figures, lack of proper progress in justice reform and fighting corruption, and no results in billion theft investigation led to the EU’s fatigue. The chief of EU Delegation to Moldova underlined that as Covid-19 raised many challenges, and Moldova will have to participate in the competition for funding, use all available chances and achievements, leaving in the past everything that held it back on the path of reforms.
Another priority is defense and security sector. Some experts suggest that president Maia Sandu “will have to overcome the fixed perception that collaboration with NATO could lead to war.” Enhancing cooperation with NATO and other important regional and international organizations will enable Moldova to act as an international subject being a “provider” instead of “consumer” in regional development.
Maya Sandu during the inauguration of the presidency of Moldova, December 24, 2020
Photo: Bogdan Tudor (AFP)
