This sorrowful country of 4.5 million people between Ukraine and Romania seems completely adrift, economically and politically. To judge by results, it may be the most ill-governed of the post-Soviet states.
The country for all practical purposes is bankrupt. Gross domestic product is about $9 billion. The current account (a measure of net transactions with the rest of the world) is in deficit by close to $2 billion. The currency is down 60 percent against the dollar since the Russian crash of August 1998. Inflation is running at over 40 percent per year. A stalemate in the parliament has left the government with no budget. Borrowing capacity is exhausted, domestically and abroad. Unpayable debts to Russian natural-gas suppler Gazprom leave the country vulnerable to energy blackmail.
Moldova is divided geographically, ethnically and politically. On the west bank of the Dniestr River live some 3.5 millions Moldovans who speak Romanian and look to the national government in Chisinau. On the east bank, in a region called Transdniester, live a million Russian and Ukrainian speakers, many of them supporters of a pro-Russian separatist government in Tiraspol. A Russian military contingent remains in place in Transdniester, despite formal promises of its withdrawal by 1994. The Russian troops give some muscle to the separatist regime.
Moldova’s legitimate government won a major victory at last November’s summit of the Organization for Security and Cooperation in Europe, when the Russians agreed to remove their arsenals by 2001 and their troops by 2002. But that diplomatic victory has been squandered.
President Petru Lucinschi faces elections in November, and he believes he needs Russian support to overcome the deterioration in his own base as a result of his administration’s economic failures. To win that support, Lucinschi last December invited the Communist Party, which controls forty of the 101 seats in parliament, to form a government. Last week he went further, proposing to grant Russia military basing rights, a move that could make recovery of sovereignty over Transdniester effectively impossible.
Lucinschi’s prime minister said the deal should be seen “through the prism of economics…. If we can as a result of it receive natural gas and other benefits, I don’t see why we should not take that step.” Many Moldovans disagree, calling the political deal with the Communists a “Molotov-Ribbentrop pact.” That 1939 treaty divided Central Europe between Stalin and Hitler. Lucinschi’s deal could divide Moldova into Russian-Ukrainian and Romanian autonomies, each less viable than Moldova is today.