Moldova risks becoming the second post-Soviet country, after Belarus, to reject market reforms in general and cooperation with the International Monetary Fund in particular. On April 17, the parliament turned down its last chance to vote on the privatization of the wine and tobacco industries, Moldova’s largest and traditionally the most lucrative. Out of 101 deputies, only sixteen voted in favor. The parliament also blocked, indefinitely, the downsizing of Soviet-era social benefits financed from the state budget.
In taking these actions, the deputies were aware that Moldova would forfeit the resumption of vitally needed lending by the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development, as well as turning foreign investors away and driving down the price of all state-owned assets, thereby discouraging their privatization. Those effects may well have been desired by the Communist Party, whose bloc of forty well-drilled deputies dominates the legislature. President Petru Lucinschi pleaded eloquently, and his Prime Minister Dumitru Braghis half-heartedly, for passage of the legislation. The pro-reform minority split on the vote, with the Popular Christian-Democrat Party–the renamed Popular Front–voting for privatization, while the other center-right groups declined to vote.
The latter groups have a point. Last November, Lucinschi tactically joined forces with the Communists and the self-styled Christian Democrats to topple the center-right, reformist government of Ion Sturza and install the colorless but pro-presidential government of Braghis in anticipation of this year’s elections. Dependent on Communist support, the government stopped the reforms. The IMF, followed by other lending institutions, suspended credits to Moldova. The country now risks bankruptcy.
An estimated 10,000 students staged violent demonstrations and clashed with police yesterday in downtown Chisinau, and an estimated 20,000 are demonstrating today. They protest against the cancellation of gratis travel for students on city buses–an entitlement that the students, like other social groups, are reluctant to abandon, even as the state faces bankruptcy in the absence of foreign lending, and even as most politicians are loath to bite the bullet in an election year (Flux, Basapress, April 16-18).
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