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Parliament
Government

I. Activity of public institutions

1. Parliament

The deputies accepted integrally the objections of the President, although when they initially adopted the draft the parliamentary majority vehemently denied the arguments of the opposition who saw a series of provisions unconstitutional and likely to be rejected by President Voronin.

2. Government

Changes in personnel

On 14 May 2003, the Government made a number of personnel changes. Dumitru Tintiuc, Deputy Minister of Health, Valeriu Sirghi, First Deputy Director of the State Agency for Land and Cadastre, and Petru Bolun, Deputy Director of the Agency for the Development of Tourism, were released of their duties. The latter was suspended following the re-organisation of the Agency into a Department. On the same day, Ion Turcan was appointed General Director of the State Agency for Material Reserves and Humanitarian Aid, and the Extraordinary and Plenipotentiary Ambassador of Moldova to the Russian Federation Vladimir Þurcan was appointed the diplomatic representative of Moldova to the Republic of Armenia.

Decisions

The Government adopted in 6 May 2003 the Regulation of the Superior Commission for Attestation (SCA), the administrative structure of the SCA, the structure of the system of training and attestation of highly qualified academic personnel, as well as the criteria of recommending candidates to the position of member of the SCA Plenary, and the share of representation of scientific and higher education institutions and the scientific fields in the SCA.

Another adopted document was the Statute of the State Information Agency "Moldpres". The Statute envisions the tasks, functions, rights and obligations of the Agency; its leadership bodies, assets, funds and sources of funding etc. The statutory capital of the enterprise is 4,128,600 Moldovan Lei. The income of the enterprise will be distributed as follows: 40% - to the fund for the development of production; 45% - to the fund for material stimulation and 15% - to the reserve fund.

On 7 May 2003, the Government approved the Regulation on Public Purchases from a Single Source, whose provisions are to facilitate the activity of economic agents. Thus, it allows for contracts of public acquisition from monopolist supply enterprises without the interference of the National Agency for Public Acquisitions.

The draft of the Regulation on Military Records provides for the principles of organising the military records, the relevant duties of ministries, departments, administrative-military bodies and local authorities, and was adopted on 14 May 2003. The Regulation also provides for the financial support of the measures of organisation of military records to of recruits and reservists at military centres and mayoralties to be covered from the local budgets. In the same context, it is to be mentioned that the public institutions and the economic agents are to cover expenditure related to military record keeping from their own sources.

On the same day, the draft law for the amendment and completion of the Code on the Commercial Maritime Navigation of Moldova was adopted and is aimed to grant the right to navigate under Moldovan flags to ships owned by both indigenous and foreign natural and legal persons.

II. Foreign affairs

On 8 May 2003, Moldova ratified the Free Trade Agreement between the Government of the Republic of Moldova and the Council of Ministers of Bosnia and Herzegovina. The Agreement provides for the extension of the mutual trade and ensuring conditions for loyal competition in the trade relations between the Republic of Moldova and Bosnia and Herzegovina. Following the entry into force of the Agreement, customs duties on exports and imports, equivalent taxes and other fiscal taxes will be lifted. The goods exported from Moldova will not be subject to tariff and non-tariff measures. Also, restrictions on trade in goods are to be gradually abolished, including for agricultural products. The Agreement is to be implemented by December 2005.

Another important event likely to mark the Moldovan foreign policy, at least for the next half of year, was the participation of a group of Moldovan officials, led by the Minister of Foreign Affairs Nicolae Dudau, on 14-15 May, in the 112th Session of the Committee of Ministers of the Council of Europe (CE) at which he took over the Chairmanship of the Committee of Ministers. During the session, the high Moldovan dignitary presented to the 45 ministers of the CE Member States the programme of the Moldovan chairmanship for the next half of year. The programme is entitled "Unity through Diversity" and comprises two fundamental goals: enhancing unity among CE Member States and of the European continent in general, and building on the social, cultural, linguistic, religious and spiritual diversity with a view to a common European patrimony. Mr Dudau mentioned that during the chairmanship, Moldova would ratify the Criminal Convention on Corruption, the European Convention on the International Validity of Judicial Decisions and the European Convention on the Transfer of Criminal Procedures, and will promote the signature of other important European conventions. The Moldovan programme also refers to the fight against international terrorism, smuggling and human trafficking, the resolution of "frozen" conflicts, CE relations with Monaco, Belarus and other states that have recently joined the European body etc.

The meeting also discussed the role of the CE in the "wide Europe", as well as the method of enhancing the efficiency of the European Court for Human Rights.

The event was commented upon by the Prime Minister Tarlev as one like to allow Moldova to achieve better progress in solving the Transdnistrian conflict, attract funds for socio-economic programmes, and improve bilateral relations with the European states.

It is to be reminded that the Moldovan Foreign Minister took the Chairmanship over from the Maltese Foreign Minister Joe Borg. Moldova became a full-fledged member of the Council of Europe in July 1995; Moldova was the first CIS State and the 35th state to join the Council. For the purpose of carrying out the Chairmanship of the Committee of Ministers, the European Union will grant Moldova 200,000 Euro worth of technical assistance.

III. Studies, analyses, comments

1. Moldova's Agriculture: Crisis or Rehabilitation?
by Alexandr Muravschi

Moldova's agriculture has demonstrated certain success during the last two years. After a decade of decline one can observe for the first time growth in agricultural production. It is also important that in 2002 there was growth in the livestock products. With the account of the developing tendencies, the Ministry of Agriculture projects a 10% growth in the agricultural goods production volume in 2003. At the same time, on the initiative of the same Ministry, the Government accepted on March 31 a special Resolution on the situation existing in the agrarian sector of the Republic and the measures to be taken in order to do the 2003 agricultural spring works within optimal time. Mass media reveals more and more materials about a critical if not catastrophic situation in the agrarian sector. This leads to the conclusion that our agriculture has not yet developed any resistance to weather contingencies and the slightest changes of the latter cause considerable positive and negative differences in the production volume. But can this go on forever? Every year Moldova experiences a heavy hail, spring frosts or drought. These phenomena often serve as a justification for the governing bodies in their failures. However, developed countries' experience shows that it is possible to resist nature knowing how to use the agrarian's economic leverage. Can Moldova create such mechanisms?

In order to answer this question, we should shed light on the main factors that have brought about the production growth during the last two years and focus on their further intensification. For the time being, they are not so numerous, which simplifies the analysis. It is true that no serious change has taken place in the policy of the current Government as compared to that of the predecessors. The fiscal policy in agriculture has remained practically unchanged. The subsidies did not grow. No collectivization happened. Only the administrative pressure on economic entities has grown, some export restricting steps have been taken, while the number of the meetings held has increased. Thus, the Resolution mentioned above emphasizes the need for teleconferences, discussions, meetings and so on. But all this has rather a negative than positive impact on the agricultural development. The growth results from the following factors:

• overall economic growth of Moldova's products major consumers, i.e. Russia, the Ukraine and Romania, which increased the volume of its agricultural export to these countries and consequently resulted in the production growth;
• private sector in agriculture has practically finalized its stage of formation and entered the stage of adaptation to the market conditions. This is the reason for the Republic's quick recovery after the crashing regional financial crisis of 1998-1999;
• performance of the projects created with donors' financial support in order to create market infrastructure in agriculture (farm stores, business cooperatives, machinery and technological centers);
• grown increase of financial resources in agriculture coming both through commercial bank system and through alternative sources (Savings and Credit Associations, Microfinance Alliance, etc.);
• private (privatized and newly created) processing enterprises started more actively creating their own raw materials source and support farmers.

All this means that Moldavian agriculture has overcome its most difficult period and started recovering. However, a lot is still to be done for the success to be strengthened.

First of all, owners should be given the right for choosing the ownership form and type of economic activities. In this context, the growing pressure of authorities on peasants and their leaders aimed at the rehabilitation of the collective sector disguised as creation of production cooperatives is difficult to understand. No other country sets the goal of creation of production organization forms as a matter of paramount importance in its agrarian policy. All types of enterprises appear as a result of owners' interests and aspirations. This is the reason why production cooperatives cannot practically be found in the developed countries' agriculture because in them an owner loses its individuality and a de-facto ownership rights. The production cooperatives that our collectivization advocates are so fond of speaking have nothing in common with farmer cooperatives in the West. The major purpose of the first stage in the agrarian reform was to form a class of owners able to independently take decisions on the ways of their development. This class is coming into being in agriculture and needs to be supported.

Secondly, it is necessary to strengthen the efficiency of the economic mechanisms stimulating agricultural land consolidation and concentration in the hands of the most effective users. For this purpose, it is necessary to maximally simplify the land sale/purchase procedures and adopt a law on lease that would strengthen the lessees' rights. It is necessary to study Hungary's experience on the payment of special compensations to the pensioners having decided to sell their land.

Thirdly, it is necessary to ensure the influx of funds in agriculture. At the same time, it is necessary to take into account that agriculture by itself is not very attractive for investments, which is true not only for Moldova. The major flow of agricultural investments may come only through the processing industry. For this reason, it is necessary to quickly finish privatization of the remaining wineries and tobacco factories including the Chisinau tobacco factory and to ensure full guarantees for the investors' normal work regardless of the political leadership changes.

Fourthly, the Government and the Ministry of Agriculture should specifically focus on improving the export regime. At the same time, the possibilities that Moldova obtained in the context of its joining the WTO should be used to the maximum including settlement of disputes caused by some restrictions imposed by the EU countries.

Fifthly, with the account of Moldova's limited possibilities in the state subsidizing of agriculture, the subsidies should be concentrated in the most perspective directions. The losses caused by hail, downpours, etc. should be compensated mainly from the agricultural production risk insurance system.

Sixthly, the work on the agricultural sector's infrastructure should be continued, i.e. networks of veterinary centers, artificial insemination centers, wholesale markets, agricultural machinery repair and maintenance centers should be created.

The dependence of Moldova's economy on the whims of nature will decrease and the Republic's agriculture will become competitive on the world markets, while the villagers' income will grow only provided that all the measures mentioned above are observed along with the macro-economic stability preserved and other industries of economy and primarily the non-agrarian sector in the rural areas developed.

2. The Moldovan Army
by Viorel Cibotaru

On 18 April 2003 the Moldovan governmental paper published an interview with the Minister of Defence Victor Gaiciuc on the issue of Moldova's international military co-operation. The article also touched upon a number of important issues of "internal use", such as the optimal numerical composition of the Moldovan armed forces and the prospects of unification of the armed forces from the two banks of Nistru river. This interview was significant in that it was the first public appearance of the minister of defence after the severe reprimand from the Supreme Commander of Armed Forces of Moldova, President Voronin, two months ago. Back then, during a meeting of the Supreme Security Council, the leadership of the ministry was accused of "insufficient measures to fight delinquency in the army". In the meantime, the minister announced that despite the military hysteria in Transdnistria, whose authorities ordered "total mobilisation" on the eve of the football match between Moldova and the Netherlands in Tiraspol and the beginning of military operations in Iraq, the Moldovan armed forces were not on alert and were minding their daily business.

A number of independent observers tend to conclude that the National Army in general and the Ministry of Defence in particular have been affected less by the destructive zeal of the administration which took office on 21 February 2001, and by the incompetence of the new 'old" government officers, who are ready to adapt to the "real circumstances of the moment". Although the fact that a military was appointed to lead the ministry of defence was qualified by many as a "step backwards" in the process of applying the principles of civil control on armed forces in a democratic society, the two years of communist government have showed the obvious advantages of this decisions. Promoted to colonel of brigade, Victor Gaiciuc quickly adjusted to his new ministerial seat and managed to assert his authority both in the military circles and in the civil society. Officers in the ministry and in the military units have mentioned in private talks that the minister of defence takes an active part in the resolution of the daily problems of the military, undertakes a detailed account of the military training, and, unlike his civilian predecessors, is "fair and equidistant" in his interpersonal relations and "does not pursue personal profit" at the expense of military patrimony.

For the first time in the last 5-6 years the army started to be funded almost according to its immediate needs. On 26 June 2002 the Parliament adopted the Conception of Military reform, which entered into force on 15 August 2002, after it was published in the "Official Monitor". The Conception provides for an increase in defence expenses from the current 0,4 percent of GDP to 2,4 percent to be reached in the last stage of the reform (2009-2014). This is in fact the standard expenditure level in the countries that are now joining NATO. In the state budget for 2003, the amount provided for the Ministry of Defence has grown significantly to 109.5 million Moldovan Lei. The topic of the budget and financial allocations for defence needs, has always been an extremely "thorny" topic, ever since the National Army was set up. Whenever a new state budget is about to be adopted, this topic stirs new debates at all levels of state leadership. For many years, such debates on the budget have had a bitter taste to them. This bitter taste is explained by the fact that every year the military budget is getting smaller as compared to the real needs. In 1993-2001, the share of military spending in the Moldovan GDP varied by year, and was dropping continuously, in infamous proportions of 0.4 - 0.7 percent, and approximately 2-3 percent of the state budget were provided. In reality, only 40 to 60 percent of these amounts were covered.

Years after Moldova proclaimed sovereignty, there are still politicians who, regardless of their political colour, argue that Moldova does not need an army since it is a neutral state. Such a thing could be argued only by dilettantes, who often invoke examples of Western countries but seem to overlook the fact that the army is not only a war instrument, but also a body of educating patriotism, love for one's motherland, and a school for the young. Switzerland, Sweden, Austria and other neutral states have never stopped having an army. All states maintain an army as the most important attribute of their statehood and a guarantee for their independence, sovereignty and territorial integrity. In view of this, funds are allocated for keeping armies and allow them to be equipped and function by existing laws and regulations. Unfortunately, these elementary truths have not yet been fully understood in Moldova and we do not only have the smallest army in the world, but also the smallest defence budget in the world.

Interestingly, the Prime Minister Vasile Tarlev has made upsetting (for the military) statements on a number of occasions and expressed a so-called "naive pacifism" urging cuts in military expenses and a reduction in military forces. He shocked many when he said that the dissolution of the national army could become a reality. The Parliament's Commission for National Security does not seem to be too enthusiastic about enhancing our state's defence capacity either. The said Commission has organised a number of investigations and hearings on the issue of administration of the military patrimony (such as the hearings on the sale of MiG planes to the US in 1997). Still the Commission has approved all draft laws and documents in the military field submitted by the Supreme Commander Voronin.

In this context, the meeting of the Supreme Security Council of 6 March 2003 on delinquency and the protection of the constitutional rights of the military in the army is a good illustration of existing relations between the communist government and the military circles. The outcome of the meeting was the release of an ample report on the issue by Vladimir Gorbulea, secretary of the Council (former employee of prosecution bodies). A closer analysis of the report reveals a number of hidden points: 1) reasons were made up to dismiss several military prosecutors (one of them, General Zafton, is an exceptional prosecutor, who was uncomfortable to all powers, and was loyal only to the letter of the law); 2) a pre-electoral populist move was staged, one that proved popular with the masses at large as it was a display - but not more than that - of fighting the dedovschina (practice developed in the Soviet Army and still present in successor armies of the ex-Soviet republics whereby the fresh recruits are enslaved by the older ones); 3) it was a subtle warning to some high officials from the communists party who were involved in smuggling the military patrimony (the sale of 20 tones of fuel for "Samin" Rockets, the preparation for "commercial sale" of important quantities of fuel belonging to the artillery brigade, as well as using military planes and helicopters outside Moldova, in particular in Africa). In none of these affairs, well informed sources argue, is the opinion of Minister Gaiciuc determinant.