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Parliament
Government
Presidency

I. Activity of the public institutions

1. Parliament

Majority faction voted the alternative draft after opposition withdrew the draft it developed. For more details see bellow Studies. Analysis. Commentaries.

Law on extending the deadline for submitting the income declarations by public officers

Under the newly adopted amendments, the deadline for submitting the declarations has been extended until July 1, 2003. Afterwards the Control Commissions would examine them and make public some of the data.

Law on state policy on innovations and know-how, adopted in the first reading

The law defines the basic notions in the field of know-how. The law also regulates the responsibilities of local government in the field; priorities in the field of innovations and know-how; criteria for selecting innovation projects; sources of funding, etc.

Law on Local Public Administration

The Parliament passed a new Law on Local Public Administration in the first reading. The new law compiles the majority of 1998 law provisions, the only difference is that the prefect institution is abolished and the procedure of forming local government and their prerogatives are changed.

2. Government

At the recommendation of the President, the Government endorsed the draft law on the modification and completion of the Law on Political Parties and Other Socio-Political Organizations and abrogated its Resolution on approving the modifications and completions operated to the Regulation on Registration of Political Parties and Socio Political Organizations (January 15).

The Government also approved the Regulation on indemnification of bank deposits in the Savings Bank. Under the Regulation, deposits are to be indemnified in accordance with January 2, 1992 balance. The Regulation also sets the quota for indemnities (1 Ruble per 1 Lei for the first thousand, and 2.5 Rubles per 1 Lei for the rest) and the stages for repaying indemnities. Also the Regulation specifies conditions when indemnities are not payable, the responsibilities of the central and territorial commissions in charge of bank deposits indemnification. The Ministry of Finance is due to transfer to the Savings Bank the funds necessary for the indemnity payment by 20th of each month.

On February 25, 2003 the Government approved the Regulation on the Organization and Functioning of the State Service on Cults. State Service on Cults shall keep liaison with all the cults, religious communities and organizations; define the state policies in the field; monitor religious situation; control whether the legislation in the field is observed.

The same day, the Government approved the draft law on the modification and completion of the Law on Organizing and Hosting Rallies, as well as the draft law on the status of the Great National Assembly Square from Chisinau Municipality. Both draft have been severely criticized by political parties, civil society organizations and mass media.

Commencing March 20, fourteen regulations related to Customs that were adopted by the Government on February 26 shall enter into force.

On February 28 the Government approved the National Plan on gender equality in the society for 2003-2005, outlining the activities to be undertaken, deadlines, institutions in charge and their partners, as well as sources of funding. On March 1, the Government approved the National Program on labor market for 2003-2005.

The Government decided to establish a Governmental Commission, which is to evaluate by March 31 the works conducted for building Giurgiulesti petrol terminal and report its findings back to the Government.

On March 5, the Government appointed Victoria Eftodi to the position of Deputy Minister of the Ministry of Justice, and Vladimir Turcan, incumbent Ambassador to Russian Federation, to the position of Republic of Moldova Ambassador to Kazakhstan.

3. Presidency

On February 20-21 the President of the Republic of Moldova, Vladimir Voronin was on official visit to Hungary. President of Moldova and Hungary signed a joint declaration outlining the topics discussed by both parties: social-political situation in both countries; perspectives of future cooperation; regional processes and international developments, etc. Vladimir Voronin and his Hungarian counterpart, Ferenc Madl, opted for better Moldovan-Hungarian cooperation in various spheres, including trade. Hungarian President confirmed he would support Republic of Moldova within various regional initiatives, including its efforts to join EU.

President Voronin left for another four-day official visit to China on February 23. Vladimir Voronin and Jiang Zemin released a joint statement on exchanging experience in the field of Free Economic Zones. The parties also signed a Cooperative Agreement on joint training of medical workers; Cooperative Agreement on "Spark" technologies, etc. Territorial integrity of the Republic of Moldova and that of China was at issue during the meeting of President Vladimir Voronin and Zhu Rohgji of the State Council.

During his Asia tour President Voronin also visited the Socialist Republic of Vietnam. The following documents were signed: Agreement between the Government of the Republic of Moldova and Government of Vietnam on abolishing the visa regime for the holders of diplomatic passports; Protocols on consultations between the Ministry of Interior of the Republic of Moldova and Socialist Republic of Vietnam; Regulation of the Intergovernmental Moldovan-Vietnamese Economic, Commercial, Technical-scientific Cooperation Commission and the Cooperative Agreement between Chamber of Commerce of the Republic of Moldova and Chamber of Commerce of Vietnam.

II. Studies, analysis, commentaries

1. Economy: events & commentaries
by Anatoli Gudim

In the last couple of weeks economic issues were the major concern of the country leadership, representatives of international monetary organizations, and economic media outlets. Judging from a multiple perspective, one may conclude that there are major risks at stake as far as economy is concerned, but there are opportunities as well. Let's closely consider them.

Two months of the year already elapsed, but it is still not clear whether the Government would secure much-awaited assistance from IMF and World Bank for its activities? The two representatives of the said institution (E. Ruggiero, C. Elbert) hosted one after another press conferences in February and both of them reconfirmed IMF and WB commitment to provide assistance to Moldova, on condition Moldovan authorities meet the requirements stipulated in the previously agreed structural reforms program and establish a favorable business environment in the country. Indeed the said requirement may not be fulfilled all at once, however donors are mainly concerned by the frequent "non-market" initiatives of the Government (like changing the laws, introducing subsidies for the agricultural sector, limiting the exports, thwarting privatization process, etc).

Much-awaited IMF mission (M. Castello-Branco) would arrive in Chisinau only on March 13. However a mission of the WB (I. Hoffman) is currently in Moldova monitoring the elaboration of the Poverty Reduction Strategy. If positive $ 142 million might flow into the country for PRSP enforcement. Meanwhile, the state budget is highly volatile, especially as the salary payments are concerned. For instance the country's major intellectual center - Academy of Science - received its last salary in December. In an attempt to resolve the problem, Ministry of Finance allocated 18,6 million Lei ($ 1,3 million USD) incurred from the sale of T-bills to commercial banks to cover the budget deficit for January - February.

In the meantime, in February Ministry of Economy released its far-more optimistic macroeconomic forecasts for 2003: 7% GDP growth (initially forecasted 6%); 10% industrial growth; 9.6% exports growth; and 11% salary raise. Needless to say, agricultural growth has been surprisingly decreased from 5% to 2%. The decrease was probably determined by President's negative evaluation of the "catastrophic" situation in the agriculture. Production cooperatives were recommended as a last-ditch method to recover the agriculture, by reorganizing and exempting them from taxes.

In a related note, President Voronin indicated that the greatest achievement of the last two years was the industry recovery "privatization had lead to de-industrialization, whereas we have started to industrialize the country step-by-step, enterprise by enterprise, despite the lack of investments". Indeed, after 1995 the great majority of industry, except for machinery construction, managed to adjust to the market economy, mainly due to the foreign investments (CMC-Knauf, Ciment-Rezina, Glass Company, Ionel, Balteanca, Floarea Soarelui, etc - a total of 80 enterprises). Currently, industry and services are the ones pooling stabilization of the economy.

As energy accounts for one third of the foreign debt and for the considerable price of the production and services, the Government started a new round of negotiations with Gazprom on lowering the tariffs to $50 USD per 1000 m³ (currently $80 USD per 1000 m3). An agreement was reached that free-lance producers (ITERA from Kazakhstan) would deliver 1,300 million m3 of gas at $61.5 USD per 1000 m3. Other initiatives: Ministry of Energy suggested developing a network of mini-power stations, as well as the intention of the "Danube-Balt-Trans" Russian-Moldovan joint venture to build by April 1 a temporary wharf in Giurgiulesti, able to receive 6,000-10,000 tones of petrol per month.

As usual, Government agenda included the approval of numerous concepts and programs, such as: national policy in the field of aqua resources; renewal of heating system; road management, etc; as well as social issues, such as: obligatory medical insurance; payment of indemnities to the deposits in the Savings Bank; efficient administration of state housing, etc. Needless to say, there are some Government resolutions pointing to the poor enforcement of its decisions by state administration. An illustration of this is the failure to gather the income declarations from state officials in due term, the deadline being extended until July 1, 2003. Another example is the Decision on enforcing the Government Resolution "On fighting illegal passenger traffic no. 1054 of 08.05.2002" (February 26, 2003) reading that the decision had not been enforced, consequently a new deadline for fighting embezzlement and corruption was set.

Given President Voronin's statement that Moldova's economy would boom only if Transdnistria is reintegrated, a special consideration should be given to the activity of the recently established Ministry of Reintegration. The Ministry took part in the negotiations on Transdnistria under the auspices of OSCE (Tiraspol, February 27-28) and came up with several initiatives on establishing a Free Trade Zone "Nistru" with the support of Chinese investments. Meanwhile, Transdnistrian authorities set new customs tariffs on import and simplified the taxation from 10 to 1 tax for small business (commencing April 1), practice which although debated for a long time in Moldova has not been implemented yet.

Republic of Moldova has been in the spotlight of foreign media outlets as well. "The Economist" (edited since 1843), a well known political and economic magazine, featured an article Europe's failed state in its February 13 - 20 issue, presenting Moldova's economic situation as quite gloomy, even recommending outside administration of its financial sector. Ministry of Finance commented on the article: "the writer's findings are politically motivated, subjective and provocative, and were not supported by any realistic arguments".

It is worth mentioning that since mid-1990 The Economist published at least a dozen of articles on Moldova, with one of the first ones in March 1995 presenting the country as "laboratory of right reforms". The articles to follow were more and more gloomy: "Nowhere land", (June 1999); "Can Moldova Get Worse?", (July 2000); "The Land That Time Forgot", (Sept 2000); "Cold Christmas in Moldova", (Dec 2000); "A New Misery Curtain", (June 2001); "The Future of Europe's Must Dismal Country Looks Ever Bleaker", (April 2002). Former Prime-Ministers Ion Sturza (1999) and Dumitru Braghis (2000) complained about such a bad coverage. The Economist published their comments under the Letters Column but stayed on its position. The negative outlook on Moldovan reforms has been even further enhanced by the "unreformed and unapologetic communists back to power", but then what else might authorities expect from such a "bourgeois magazine"? Needless to say, Economist published its article on Moldova at the time another well-known magazine; BusinessWeek featured a "promotional article" about the Republic of Moldova presenting the situation in a more positive light (for further details see www.vegamedia.com).

On the other hand, The Economist Intelligence Unit producing for more than half a century economic analysis and forecasts on over 200 countries, provides in its latest (35 pages) review on Moldova a more promising forecast: "real GDP growth should remain moderately strong in 2003-2004" (for further details see www.store.ein.com).

2. Reformation of "Teleradio-Moldova" Company
by Cristian Untila

Reformation of the "Teleradio-Moldova" Company was in the spotlight of public attention last year. Further, it was the subject of the PACE Resolution recommending Moldovan authorities to turn "Teleradio-Moldova" into a public institution, and thus resolve the conflict between the ruling party and opposition.

Currently, the issue took the center stage again due to the approaching local elections. Also, the term allotted to Republic of Moldova to fulfil all the requirements set for taking over the Ministerial Council Presidency is expiring.

At the end of its summer session the Parliament passed the Law on National Public Audiovisual Institution "Teleradio-Moldova" Company. The majority faction was the only one to vote for the law, while opposition withdrew the draft law it developed. Once the law is enforced, the governing bodies are to be established, including Observer's Council that is responsible for coordinating the activity of state mass media.

Under the reorganization plan developed by the ruling party, a part of the Company employees were notified on being fired in compliance with the newly adopted law. Also a new management concept, including political events coverage, was made public. Changes followed immediately: Messager (Messenger) news program was replaced by Evening News, Parliament Hour, Government Hour, Presidency Hour programs were shut down and temporarily replaced by Elected officials. The latter was cancelled as well, which generated a huge public scandal. Prior to the changes, opposition was able to appear twice or three times a year on TV, after the said programs had been cancelled, neither opposition, nor ruling party has appeared in live broadcasts on TV. However, Evening News regularly report on the activity of government officials, their study and on site visits, press conferences, meetings with foreign delegations, etc. As for the opposition, it has to negotiate with the ruling party its access to mass media by threatening to boycott Parliament sessions unless access to TV is granted.

It was reported that the Company negotiated a credit worth millions of Lei for updating the equipment. However, the information on the pledges left for the credit wasn't made public, as was the fact that the credits are to be repaid from the state budget, which is the main source of funding for the Company. For example in 2002 by amending the Law on the State Budget, the Parliament cancelled a 17 million Lei "Teleradio-Moldova" debt to "Radiocomunicatii" State Company, incurred between 1997-2001. Needless to say, in 2003 the Company budget was significantly increased from 33 to 47 million Lei, out of which 6 million are to be covered from extra budget funds. And this despite frequently reiterated promises that "Teleradio-Moldova" public institution would be funded as little as possible from the state budget so as to avoid interference in the program design and content.

Notified by opposition, Council of Europe continues to insist that Chisinau authorities adjust the law to the democratic norms and pluralism. Recently, this was set as one of the requirements for the Republic of Moldova to take over the Ministerial Council Presidency.

Probably this fact determined President Voronin to convene representatives of all public institutions responsible for enforcing PACE resolution and oblige them to comply with all the CE requirements within 15 days.

The Parliament promptly reacted and immediately examined the three draft laws on "Teleradio-Moldova" Company.

All the three drafts referred to the establishment of Observers' Council. As the great battle would be fought particularly for this Council. The fact is that the Council is entitled to: designate the General Director; confirm the Administration Council; approve the Company Charter; oversee compliance with the legal framework; decide on other internal matters; notify the General Director on the violations found in the company activity and oblige him/her to eliminate the inconsistencies; decide on design and content of the TV programs, etc. Control over the Observer's Council automatically means the control over the entire Company, i.e. the only TV company with a nation-wide coverage, which is a huge advantage during elections.

Recently MPs employed the same tactics they did in the summer 2002, when they examined in the first reading 3 draft laws, but adopted only two of them. Back then they submitted for the second reading a draft compiling the great majority of opposition recommendations, except for the election of Company leadership, formation of the Administration Council and Observers' Council.

However this time, the Parliament decided to adopt in the first reading the draft developed by the Social Democratic Alliance as a basis for the second reading, whereas the remaining two drafts to be left as an "alternative". Parliament Regulation allows any provisions were substituted in the basic draft, which could be taken either from the alternative drafts or amendments proposed by MPs, on condition that those changes are accepted by the draft authors.

Communist intentions were quite clear. They voted Social-Democratic Alliance draft only after long and tiresome interrogations of its authors. They wanted to make sure that the authors accept other procedures of establishing the Observer's Council (for instance the French model, when 1/3 of its members are designated by the Parliament) and that they would not withdraw the draft if during the second reading other procedures than the one designed by them is voted.

Right from the beginning it was clear that the majority faction would not accept all the opposition recommendations, especially as some of them were loose (allowing maneuvers especially with regard to designation of Observers' Council members by civil society).

Opposition factions and the ruling party tried to negotiate for the second reading a compromise draft that would suit the authors and meet Council of Europe recommendations. During the plenary session representatives of the Communist faction stated they agreed authorities to designate 1/3 of the Observers' Council members, whereas non-governmental organizations the other 2/3, on condition the latter enjoy large public support.

Afterall representatives of the Social-Democratic Alliance withdrew their draft, protesting that not all their proposals were accepted. The ruling party acted exactly like it did last summer and voted an alternative draft. In line with the recommendations of the Chair of Parliament Commission on Mass Media, the Observers' Council would include:

• 2 representatives of the Presidency;
• 2 representatives of the Parliament (1 designated the opposition or independent candidates);
• 2 representatives of the Government;
• 2 representatives of the national minorities;
• 1 representative of the Supreme Magistracy Council;
• 1 representative of the "Teleradio-Moldova" employees;
• 1 representative from each of the following public associations: trade unions, artists' unions, mass media organizations, veteran's and cultural associations.

Overall the Council would include 5 representatives of the authorities, thus 1/3 quota has been observed.

Also, majority faction agreed to the fact that the President of Company shall not be confirmed by the Parliament, he/she will be appointed by the Observers' Council. Needless to say, in the end the Parliament yielded to PACE and opposition and gave up its right to appoint the Company President, prerogative which the previous legislatures used to hold on to. Both the Agrarian Parliament as well as the one in which the Alliance for Democracy and Reforms hold the majority refused to cede the right to appoint the Company President and even amended the law so as to be able to oust him/her.

Now the battle for "Teleradio-Moldova" would be fought on the civil society field. There are clear signs that the battle has already started and it's easy to foresee that the organizations (trade unions, artists' unions, veteran's and cultural associations) kept alive by the ruling party will be the ones to win.