Background Notes: Moldova

Contributed By RealAdventures

Moldova occupies most of what has been known as Bessarabia. Moldova's location has made it a historic passageway between Asia and southern Europe, as well as the victim of frequent warfare. Greeks, Romans, Huns, and Bulgars invaded the area, which in the 13th century became part of the Mongol empire. An independent Moldovan state emerged briefly in the 14th century but fell under Ottoman Turkish rule in the 16th century.

After the Russo-Turkish War of 1806-12, the eastern half of Moldova (Bessarabia) between the Prut and the Dniester Rivers was ceded to Russia, while Romanian Moldova (west of the Prut) remained with the Turks. Romania, which gained independence in 1878, took control of the Russian half of Moldova in 1918. The Soviet Union never recognized the seizure and created an autonomous Moldavian republic on the east side of the Dniester River in 1924.

In 1940, Romania was forced to cede eastern Moldova to the U.S.S.R., which established the Moldavian Soviet Socialist Republic. Romania sought to regain it by joining with Germany in the 1941 attack on the U.S.S.R. Moldova was ceded back to Moscow when hostilities between the U.S.S.R. and Romania ceased at the end of World War II. The present boundary between Moldova and Romania was established in 1947. Moldova declared independence from the Soviet Union on August 27, 1991.

Mircea Snegur was elected president of Moldova in October 1990 by the parliament. A former Communist Party official, he endorsed independence and actively sought Western recognition. Moldova declared its independence from the Soviet Union in August 1991. However, Snegur's opposition to immediate reunification with Romania led to a split with the Moldovan Popular Front in October 1991 and to his decision to run as an independent candidate in a December 1991 presidential election. Running unopposed, he won after the Popular Front's efforts to organize a voter boycott failed.

Moldova's transition to democracy initially had been impeded by an ineffective parliament; the lack of a new constitution; a separatist movement led by the Gagauz (Christian Turkic) minority in the south; and unrest in the Trans-Dniester region, where a separatist movement-- assisted by uniformed Russian military forces in the region and led by supporters of the 1991 coup attempt in Moscow--declared a "Dniester republic."

Progress has been made on all these fronts. In 1992, the government negotiated a cease-fire arrangement with Russian and Trans-Dniestrian officials--although tensions continue--and negotiations are ongoing. In February 1994, new legislative elections were held, and the ineffective parliament that had been elected in 1990 to a five-year term was replaced. A new constitution was adopted in July 1994. The conflict with the Gagauz was settled peacefully by granting the region local autonomy in 1995.

The February 1994 parliamentary elections were conducted peacefully and received good ratings from international observers for their fairness. Authorities in the Trans- Dniester region, however, refused to allow balloting there and tried to discourage inhabitants from participating. Inhabitants of the Gagauz separatist region did participate in the elections.

Prime Minister Andrei Sangheli was re-elected to his post in March 1994, as was Petru Lucinschi to his post as speaker of the parliament. Moldova's Government was restructured somewhat with parliament's approval of a new cabinet in April 1994. The new parliament is considerably smaller than the previous one, numbering only 104 deputies. The July 1994 constitution and the law provide for freedom of speech, press, assembly, and religion, though with some restrictions.

The largest political group in parliament now is the Agrarian Party, which has a plurality of 46 seats following the departure of 10 deputies in August 1995. The 10 left the ruling Agrarians to join a new party, the Party of Renewal and Conciliation, founded by President Snegur. The Socialist-Edinstvo bloc has 28 seats, while the pro-Romanian parties--the Peasants and Intellectuals Bloc and the Popular Front--have 11 and nine seats, respectively. Several other parties did not receive large enough percentages of the popular vote to gain seats.

The independence of Moldova's judiciary has increased since the 1991 dissolution of the Soviet Union, partly due to provisions for tenure designed to increase judicial independence. A series of reforms approved in 1995 have begun to be implemented, including creation of a court to deal with constitutional issues and a system of appeals courts.

Political parties and other groups publish newspapers which often criticize government policies. There are several independent news services, radio stations, and an independent television station. Peaceful assembly is allowed, though permits for demonstrations must be obtained; private organizations, including political parties, are required to register with the government. Legislation passed in 1992 codified freedom of religion but required that religious groups be recognized by the government.

A 1990 Soviet law and a 1991 parliamentary decision authorizing formation of social organizations provide for independent trade unions. However, the Federation of Independent Trade Unions of Moldova, successor to the former organizations of the Soviet trade union system, is the sole structure. It has tried to influence government policy in labor issues and has been critical of many economic policies. Moldovan labor law, which is based on former Soviet legislation, provides for collective bargaining rights.

The Trans-Dniester Region

The population of the Trans-Dniester ethnic area is 40% Moldovan, 28% Ukrainian, and 23% Russian. Moldova has tried to meet the Russian minority's demands by offering the region rather broad cultural and political autonomy. The dispute has strained Moldova's relations with Russia. The July 1992 cease-fire agreement established a tripartite peacekeeping force comprised of Moldovan, Russian, and Trans- Dniestrian units. Negotiations to resolve the conflict continue, and the cease-fire is still in effect. The Organization for Security and Cooperation in Europe (OSCE) also is trying to facilitate a negotiated settlement and has sent an observer mission.

Tensions continue in the region, but no serious violations of human rights have been reported in the areas controlled by the Moldovan Government. Strains over language were defused when the parliament voted in 1994 to delay until 1997 the implementation of a 1989 Moldovan law. The law would make Romanian the official language, replace the Cyrillic alphabet with the Latin one, and mean language testing. Although the law would protect the use of Russian and other languages, it has raised much skepticism, especially among Russian speakers.

President--Mircea Snegur Prime Minister--Andrei Sangheli Foreign Minister--Mihai Popov Ambassador to the U.S.--Nicolae Tau Ambassador to the UN--Tudor Pantiru

Moldova's embassy in the U.S. is at Suites 329 and 333, 1511 K Street, NW, Washington, DC 20005; tel: 202-783-3012; fax: 202-783-3342.

Moldova is a landlocked area bounded by Ukraine on the east and Romania to the west. It is the second-smallest of the former Soviet republics and the most densely populated. Moldova's economy resembles those of the Central Asian republics more than those of the other states on the western edge of the former Soviet Union. Industry accounts for only 20% of its labor force, while agriculture's share is more than one-third.

Moldova's proximity to the Black Sea gives it a mild and sunny climate. This makes the area ideal for agriculture, which accounts for about 40% of the country's GDP. The fertile soil supports wheat, corn, barley, tobacco, sugar beets, and soybeans. Beef and dairy cattle are raised, and beekeeping and silkworm breeding are widespread.

Moldova's best-known product comes from its extensive and well- developed vineyards, which are concentrated in the central and southern regions. In addition to world-class wine, Moldova produces liquors and champagne and is known for its sunflower seeds, prunes, and other fruits.

Like many other former Soviet republics, Moldova has experienced economic difficulties. Since its economy is highly dependent on the rest of the former Soviet Union for energy and raw materials, the breakdown in trade has had a serious effect, exacerbated at times by drought and civil conflict.

But despite its difficult economic situation, Moldova has made substantial progress in economic reform. The government has liberalized most prices and has phased out subsidies on most basic consumer goods. A program begun in March 1993 has privatized 80% of all housing units, and nearly 2,000 small, medium, and large enterprises.

Inflation was brought down from over 105% in 1994 to about 24% in 1995. The Moldovan leu, introduced in November 1993, is fully convertible, and its value has remained relatively stable against the dollar since introduction. A stock market opened in June 1995. Moldova has International Monetary Fund standby and systemic transformation programs in effect.

Moldova's parliament approved the country's membership in the Commonwealth of Independent States (CIS--a group of 12 former Soviet republics) and a CIS charter on economic union in April 1994.

In 1995, the country became the first New Independent State admitted to the Council of Europe. In addition to its membership in NATO's Partnership for Peace, Moldova also belongs to the United Nations, the OSCE, the North Atlantic Cooperation Council, the International Monetary Fund, the World Bank, and the European Bank for Reconstruction and Development.

As noted, Moldova has sought a peaceful resolution to the conflict in the Trans-Dniester region by working with Romania, Ukraine, and Russia; calling for international mediation; and cooperating with the OSCE and UN fact-finding and observer missions.

The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created the opportunity to build bilateral relations with the New Independent States (NIS) as they began a political and economic transformation. The United States recognized the independence of Moldova on December 25, 1991, and opened an embassy in its capital, Chisinau, in March 1992. U.S. ambassador to Moldova John Todd Stewart assumed the post on November 14, 1995.

U.S.-Moldovan Economic Relations

A trade agreement providing reciprocal most-favored-nation tariff treatment became effective in July 1992. An Overseas Private Investment Corporation agreement, which encourages U.S. private investment by providing direct loans and loan guarantees, was signed in June 1992. A bilateral investment treaty was signed in April 1993. Generalized system of preferences status was granted in August 1995, and some Ex-Im bank coverage became available in November 1995.

U.S. Assistance to Moldova

From 1992 through September 1995, total U.S. assistance to Moldova included about $59 million in humanitarian shipments; $104 million in U.S. Department of Agriculture food assistance--including about 80,000 metric tons of food aid, valued at $20 million, in FY 1994-95; and $61 million in technical assistance.

In January 1992, the U.S. initiated the Coordinating Conference on Assistance to the New Independent States in response to the humanitarian emergencies facing those countries. The resulting Operation Provide Hope provided desperately needed food, fuel, medicine, and shelter. By January 1996, the total in humanitarian medical supplies, food, and clothing provided by the U.S. to Moldova had risen to about $61 million. Initiatives included the 1993 shipment of Department of Defense excess medical supplies, the 1994 donation of a military hospital to Moldova, and the 1995 provision of U.S. equipment that allowed for mass immunization of the Moldovan population against diphtheria.

Recently, the focus of U.S. aid has shifted to technical assistance in support of Moldova's transition to a market economy and democratic society. The establishment of a Western NIS Enterprise Fund was announced by President Clinton in January 1994, to provide investment capital to privatizing firms in Ukraine, Moldova, and Belarus. The Enterprise Fund is the capstone of focusing assistance efforts on creating the institutions necessary to support market economies. The Fund's Chisinau office opened in October 1995 and as of early 1996 had committed investment capital of over $3 million to companies in Moldova.

In 1995, the U.S. provided assistance and training that played an important role in the Moldovan parliament's passage of the Law on the Circulation of Securities and Stock Exchanges. In July 1995, U.S. advisors were placed at Moldova's Central Bank to help with the bank sector's transition to international accounting standards. The U.S. has also provided training in a variety of related areas, including entrepreneurship, agribusiness development, and international trade and investment. Technical assistance has been provided to support implementation of Moldova's privatization programs.

Training and technical assistance programs have been provided in law school curriculum reform, rule of law, law enforcement, assessment of the draft Moldovan constitution, municipal organization and staffing, political parties and elections, independent media, pluralism, protection of minority rights, and diplomacy and foreign policy. Educational exchanges play an important role in these areas. Resident advisers have worked with the executive and legislative branches of the Moldovan Government. Peace Corps volunteers are working in Moldova with a focus on teaching English and advising small businesses.

Principal U.S. Embassy Officials

Ambassador--John T. Stewart Deputy Chief of Mission--Louis Licht Political/Economic Officer--Sarge Cheever Consular Officer--Melissa Hudson Administrative Officer--Wayne Reed Regional Security Officer--Harold Countryman (resident in Bucharest, Romania) Agricultural Officer--William Huth (resident in Sofia, Bulgaria) USAID Officer--Paul Morris Public Affairs Officer (USIS)--vacant

The U.S. embassy in Chisinau, Moldova is at Strada Alexei Mateevici #103; tel: 373-2-23-37-72; fax: 373-2-23-30-44.

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