Monday, November 5, 2007

The Transnistrian Question

I've mentioned Transnistria before-- that mysterious country that's not really a country. (In most tourist guides it's recommended you spend a few hours there to see what it's like to live in a Communist police state, buy some postage stamps that no country will honor, and then get the heck out).
(It's widely feared as a no-man's-land where money is laundered and arms, drugs, and people are heavily traded/smuggled).

The #1 obstacle to foreign investment in Moldova isn't the red tape, or Communist-led government, or the World Bank's ranking of Moldova as just the 92nd easiest place in the world for Doing Business in 2008.
Fears over Transnistria are what is keeping Wall Street out. It's also what will keep Moldova from ever joining the EU. The latest issue of The Economist has an article on new developments in the situation.

"This summer, the president, Vladimir Voronin, privately flirted with a private peace deal that gave the separatists guaranteed representation in a new federal parliament and government. That produced lots of protest—from patriotic Moldovans who thought the terms too soft, and from outsiders who feared that it would end up giving the Kremlin too much sway in the new country."

Rumors of Voronin making a deal with the Kremlin were prevalent in Western blogs a few weeks ago when Voronin and Putin met in Kazakhstan. The result of the meeting was that Russia finally lifted its ban on Moldovan wines, ending a sanction that had hurt the Moldovan economy for almost 2 years. "What was the price and what secret deal was made?" is the question.

Political hypothesis #1 (The Economist's optimistic view):
Russia has gotten tired of spending the money and troops to support Transnistria. Voronin has agreed to slowly integrate the country into Moldova, making concessions. Eventually, all will be peaceful and Moldova can slowly continue to look Westward to EU membership.

Political hypothesis #2 (taken from this news source, which you have to now pay to read):
Russia has pulled out of the Conventional Forces in Europe treaty to ensure keeping its troops in places like Transnistria because it is ticked off that the West supports independence for Kosovo. Russia will never leave Transnistria, and will never allow Moldova to join the EU. The deal was made in Kazakhstan: Russia resumes imports and Moldova's government remains pro-Russia.

Political hypothesis #3:
Transnistria will declare its independence, supported by Russia. Moldova can then move on and eventually elect a liberal pro-Western government, attract foreign investment, and become a part of the EU and/or Romania.

Political hypothesis #4:
The Communists fear losing the next election in 2009. Voronin's son is the richest person in Moldova, and they have many vested interests in maintaining their control of several state and private industries. In order to keep their majority they may allow Transnistria to reunite and give them enough seats in parliament to ensure the Communists will keep control of Moldova. The Communists will keep their vested interests and continue to hamper progress toward joining the EU and/or Romania, thus pleasing the Kremlin.

The next 10 years here may be really interesting.


Jessica said...

Which hypothesis do you lean towards?

JTapp said...

I'd rather not say, as no telling who reads this blog. All I could do is lean, really, not betting on any particular one.