region, are at an impasse. Moldova (the former Bessarabia) lies between Ukraine and Romania. Transdniester, a largely ethnic-Russian region between the left bank of the Dniester and Ukraine, seeks legal parity with the Moldovan-Romanian region between the right bank of the Dniester and Romania — a confederate state of co-equal regions. To gain its object, Transdniester has been harassing commerce across the Dniester river, and between right-bank Moldova and points east. President Lucinschi may have international law on his side, but he has so far been unable to turn that into any decisive advantage.

The disruption of commerce has badly hurt Moldova’s economy. The central government’s budget deficit is almost 8% of Moldova’s GDP, equivalent to a U.S. budget deficit of about $660 billion. The IMF, which has loaned Moldova $52 million since 1996, has suspended further disbursements until performance improves. The Ministry of Finance claims the economy grew 1% in 1997, which would be the first growth since independence. Other government agencies, however, report that GDP fell in 1997 by as much as 5%.


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