YOUNG MOLDOVANS RIOT WHILE STATE NEARS BANKRUPTCY.

From April 17 through 20, tens of thousands of young Moldovans took part in riots and clashes with the police in central Chisinau. The riots were the first in Moldova since the 1989 mass movement against Soviet rule. This time, however, the protests had no visible political motivation. Triggered by the authorities’ decision to cancel student gratuities on public transportation, the demonstrations put forward some far-reaching demands which the government is in no position to meet. Most of the protesters were university students–70,000 of whom are enrolled in Chisinau’s higher institutions–but the rampaging crowds also included younger students and lumpen elements. Laying siege to the government building, the parliament and the city hall, the crowds caused considerable destruction of public property in Chisinau. The police reacted brutally at times, severely beating many protesters. Scores were injured on both sides.

The government made some vaguely worded promises to the protestors on April 20. Protest leaders, whose control of the crowds seems questionable, accepted a call for a timeout of demonstrations at Easter. Other students threaten to resume the actions should the government go back on its word. The root of the problem is the government’s inability to finance even minimal social programs, including student benefits, as a result of the state’s dwindling ability to generate export income by an unreformed economy.

One of Europe’s best-endowed agricultural countries, the source until not long ago of up to one-third of the USSR’s internal marketable output in a number of product categories, Moldova is losing her export potential and, with that, the basis of both her economy and her already fragile statehood. The responsibility lies primarily with the political class which, after a promising start on reforms, has proved slow and reluctant to privatize the economy, failed to reorient exports from the Russian to international markets, and is now watching the country’s agriculture in general and the processing industry in particular degrade in the absence of foreign investment.

On April 17, the Moldovan parliament overwhelmingly turned down the last chance to vote the privatization of the wine and tobacco industries, Moldova’s largest and most lucrative (see the Monitor, April 18). At stake were five major wine- and cognac-making enterprises, the Chisinau cigarette factory and eight tobacco-processing plants, representing the bulk of Moldova’s export potential in those two categories. Not only the Communist deputies, but many centrist and center-right deputies as well refused to vote for the privatization of those enterprises. And even before the Communists had reentered the parliament in 1998, the legislature and successive governments declined advantageous privatization offers, notably those of the British American Tobacco and the Reemtsma companies. In November 1999, a parliamentary majority formed itself long enough to reject the privatization of those two sectors and to topple the reformist government of Ion Sturza only eight months after it had taken office.

The wineries and tobacco plants are now technologically obsolete. Some of them are now operating in the red. The deputies were undoubtedly aware that only foreign private investment can save the day. Nevertheless, ideological considerations, political opportunism in a presidential election year and economic group interests combined to produce the antiprivatization majority in parliament and more generally in the arena of party politics. President Petru Lucinschi tried in vain to persuade the parliament and even his own supporters to support the privatization bills.

Under the 1999 memorandum between the Moldovan government and the International Monetary Fund, privatization of the wine and tobacco industries is a basic condition for IMF lending to Moldova. The IMF had suspended lending in 1997 in response to Moldova’s reluctance to reform, resumed it when the Sturza government took office with a reformist program, and suspended it again in November 1999 when the privatization bills were rejected and the Sturza government fell. The World Bank and the European Bank for Reconstruction and Development have taken similar action.

International lending has been critical to the viability of the Moldovan state. The government has been unable to cover its expenses with internal sources of revenue. Instead, it has piled up debts to Western lenders on the one hand and to Russia on the other. Even so, the state seems to be approaching virtual bankruptcy; its ability to pay salaries and pensions and to finance even a modicum of social benefits seems set to decline even further; and that in turn holds the prospect of more social unrest (Flux, Basapress, Infotag, April 17-22).

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