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Moldova: New Government Gives Mixed Signals

Moldova's Communist-dominated parliament has approved a new government consisting mainly of technocrats. Independent Prime Minister Vasile Tarlev pledged to bring the former Soviet republic out of its deep economic crisis, but he gave mixed signals about his commitment to market reforms. RFE/RL correspondent Eugen Tomiuc reports.

Prague, 23 April 2001 (RFE/RL) -- Moldova's new Prime Minister Vasile Tarlev and his government were sworn in Friday (20 April), after winning the approval of the Communist-dominated parliament.

The 101-seat legislature voted 75 to 11 to appoint as prime minister independent Vasile Tarlev, the 37-year-old former head of a state candy factory. Communists control 71 seats in parliament, following a landslide victory in general elections two months ago. Early this month (4 April), they elected Communist Party leader Vladimir Voronin as Moldova's new president.

Tarlev's 17-member cabinet contains only three Communist ministers, while 11 ministers are former members of the previous technocrat government led by Dumitru Braghis.

Moldova, a country of some 4.5 million, is Europe's poorest state, with an average monthly wage of $30 and an unemployment rate of some 15 percent. The country's mostly agriculture-based economy has shrunk by two-thirds during its 10 years of independence.

In his acceptance speech, Tarlev said his government faced a difficult task, but vowed, in his words, to "put order" in the Moldovan economy.

"We are being pressured by worries, by pessimism and lack of trust in the future. But we have an obligation to get rid of these fears and put our house in order."

Tarlev said his program targets a 5 percent growth in gross domestic product, or GDP. He also said it would seek to reduce the budget deficit by more than a half to 1.5 percent of GDP, and to bring inflation below 10 percent from its current rate of almost 20 percent.

Tarlev described his government's priority as the "rebirth" of the manufacturing and agricultural sectors, and pledged to turn Moldova into "a full-fledged market-oriented economy." But the new premier gave mixed signals about his commitment to continuing the timid market reforms initiated by his predecessors, saying his government will not privatize "at any cost."

"We are in favor of privatization and reforms, but we will not privatize only for the sake of privatizing. After a careful analysis, we will also look for other ways. We do not want privatization at any cost, only in order to report it to some [international financial] organizations."

In addition, Tarlev said that he did not rule out, under "certain circumstances," introducing a state monopoly in some economic sectors. Seeking to reassure the country's largely rural population, he said his government recognized farmers' right to own land privately. But he added that his government would "stimulate the farmers' voluntary cooperation."

Moldova's new Communist President Voronin has pledged to bring the country politically and economically closer to Russia and to pursue admission into the fledgling Russia-Belarus Union. Tarlev followed the same line in his acceptance speech, urging closer economic ties with Russia. He said his government would pursue possible membership in the customs union among Russia, Belarus, Kazakhstan, and Kyrgyzstan, and subsequently, in the economic structures of the Russia-Belarus Union.

But Russia has shown little enthusiasm toward economic integration with Moldova, which is almost totally dependent on Russian energy imports and owes Moscow some $600 million in unpaid natural gas bills.

Russia is not Moldova's only creditor. The impoverished state also owes some $800 million to international financial organizations and it is due to pay back about $90 million by the end of this year and some $200 million in 2002.

Some analysts believe that by appointing a government of technocrats, the country's Communist leaders hope to maintain relations with the International Monetary Fund, the World Bank, and the European Bank for Reconstruction and Development -- the country's main lenders. Analyst Vladimir Socor of the U.S.-based Jamestown foundation says that by appointing a technocratic government, the Communists want to secure more international funding.

"The [Communists'] first [goal] was to appoint several ministers acceptable to the IMF and the World Bank so that it creates the appearance of continuing the reform, thus allowing Moldova to get more loans."

Good relations with international financial organizations are especially important now, with the World Trade Organization due next month (8 May) to consider Moldova's membership application. The new government has also pledged to adhere to a memorandum with the World Bank on economic and financial policies, mapped out last December. The World Bank wants Moldova to privatize its tobacco and wine industries -- the country's most profitable sectors -- as a condition for continued financial assistance.

But analyst Socor doubts that the new government's program will help the country gain more credibility with foreign lenders. He says the document has little practical value and gives no hint of the government's real intentions.

"This only confirms what is already known from Moldova's and other former Soviet states' experience -- that governmental programs have very little value, being meant only to satisfy as many parts of society as possible, without giving a clear indication of the government's real intentions."

The appointment of Tarlev, a newcomer to the political scene, as prime minister has also raised doubts about the new government's ability to move toward a final settlement of Moldova's ongoing dispute with its breakaway Transdniester region. Moldova -- wedged geographically between Romania and Ukraine -- has been engaged in a decade-long dispute with this Russian-speaking region.

Transdniester broke away from Moldova in 1990 over fears that Moldovans would seek reunification with their ethnic kin in neighboring Romania. Moldova was part of Romania before World War Two.

Moldova and Transdniester fought a short war in 1992, which left several hundred people dead. Fighting ended with a Russian-mediated settlement, but a final settlement has yet to be reached. Some 2,500 Russian troops are still deployed in Transdniester, and a huge Soviet-era arms arsenal is stockpiled in the region.

President Voronin has pledged to make solving the conflict a priority, and appeared ready to make unprecedented concessions to the Transdnestrians. But Prime Minister Tarlev's announced program carries no proposals for ending the dispute. Instead, it speaks only of a desire to "find a permanent and peaceful resolution [of the conflict] within a united Moldova."

Tarlev's program also offers little detail on general foreign policy questions. It speaks of the development of "multilateral relations" with neighboring Romania and Ukraine, cooperation with the United States, and closer ties with a number of West European countries. The government also says it plans to come up with a strategy to integrate the country into "the European community and other international communities."

But the commitment of Moldova's new Communist leadership to such goals remains doubtful. President Voronin over the weekend told delegates to a Communist Party congress that capitalism has failed and that there was "no alternative" to building a socialist society in Moldova. Voronin added that Moldova, in his words, "must resist Europe" in the same way the Cuban communist regime has resisted the United States.