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Activity of Public Institutions

Government
Presidency

Robin Hood seat distribution method by Igor Botan

Activity of Public Institutions

Government

Events of major importance

Treaty on the border regime with Romania

Participating in the Danube Summit in Bucharest, Prime Minister of Moldova Vlad Filat signed with Teodor Baconschi, Foreign Minister of Romania, the Treaty between the Republic of Moldova and Romania on the state border regime, cooperation and mutual assistance in border matters. The Treaty defines the legal status of the border, describes the state border line and the way of determining it, defines the field marking of the border, regulates the river navigation regime, the management of border waters, bridges and other communication facilities that cross the state border. According to the statements of Moldovan Prime Minister, the European Commission President, Jose Manuel Barroso, has expressed the enthusiasm and appreciation for signing the Treaty.

Appointments. Dismissals

• Nicolae Onilov is dismissed from the position of director general of the Medicines Agency, because pharmaceutical market in the Republic of Moldova witnesses serious problems, especially those concerning the drug pricing;
• Maria Cojocaru-Toma was named as director general of the Medicines Agency.

Decisions

Decision on equipping with computers and providing access to Internet for the student hostels. The Ministry of Education, Ministry of Health, Ministry of Culture, Ministry of Internal Affairs, Ministry of Agriculture and Food Industry, jointly with the administrations of higher education institutions, the medium specialized and vocational ones were assigned to provide Internet connection to student hostels under the framework of public-private partnership. State Chancellery, together with the Ministry of Finance, through technical assistance projects, as well as from budget allocations, shall identify the necessary financial means to purchase 1,400 computers for equipping a computer hall in all hostels of the institutions of higher education, medium specialized and vocational ones. The decision shall be executed within six months and it concerns about 30 thousand students.

Decision on marking the Science Day. The Cabinet of Ministers decided to record 10th of November for the Science Day, on same day as the International Day of Science. At the same time, it repealed the earlier decision according to which the Science Day had to be celebrated on last Sunday of May.

Decision on approving the 2011 Statistical Work Program. The decision sets the list of works and statistical surveys to be conducted by the National Bureau of Statistics and other institutions responsible for providing the central and local public institutions with economic, social and demographic relevant statistical information that is authentic and internationally comparable.

The decision on restoring direct interconnection of electronic communication networks on both banks of Nistru. According to the decision, the S.E. "State Registration Chamber" shall register the Transnistrian economic companies working in communications and shall issue a business registration certificate to them. Also, the National Regulatory Agency for Electronic Communications and Information Technology shall issue the necessary licenses for this activity. According to presented information, facilities for the registration of Transnistrian economic companies and their interconnection in economic area of telecommunications on the right bank of Nistru will determine the telephone calls between subscribers on both banks to get cheaper, and the quality of services will increase.

Decisions to approve some strategies, plans:

• National Strategy for integrated state border management for the years 2011–2013;
• The Concept of reforming the Ministry of Internal Affairs.

Decisions on allocating funds:

• 450 thousand lei are allocated to Soldanesti District Council for the construction of three thermal plants at: gymnasium in Chipesca village; the kindergarten in Chipesca village; high school in Raspopeni village;
• funds amounting to 152,568 lei are allocated to Dubasari District Council from the Government’s Reserve Fund for material aid to inhabitants of Vasilievca and Cocieri villages, Dubasari district, to purchase LPG cylinders, firewood and coal in the cold season of the year;
• 90,000 lei allocated are allocated to the Interethnic Relations Bureau to carry out the Language Training Program for National Minorities in Moldova.

Meetings. Decisions

Social compensations for the 2010 cold season started to be paid

Prime Minister held a briefing where he announced the start of paying compensations for the November and December months of 2010 to the persons from socially vulnerable families and pensioners. Over 521,000 pensioners and over 33,000 vulnerable families will benefit of 260 lei each.

Meeting on equipping the student hostels with computers

The Prime Minister chaired a meeting on the implementation of Governmental decision on equipping the students hostels with computers and connecting them to Internet. The meeting was attended by rectors of higher education institutions, representatives of operators providing Internet services, the Ministry of Education and Ministry of Technology Information and Communications. Connecting student hostels, colleges and vocational schools to Internet and equipping a computer room for each of them is part of the e-Governance project, and representatives of Internet companies have shown their readiness to help implement this project and presented several models of connecting the student hostels to internet. It was decided to set up a joint working group composed of representatives of the companies providing Internet services and of the educational institutions that should develop the principles of cooperation and a regulation setting out the quality parameters for Internet access service. In order to ensure transparency in the selection of operators, as well as for providing quality services and best prices, it was proposed to organize tenders. According to information presented at the meeting, there are 90 student hostels in Moldova belonging to the higher education institutions, 68 hostels belonging to colleges and 117 to vocational schools. Currently, only 45 student hostels have an Internet connection.

Concerns regarding the prices of medicines

At the request of the Prime Minister, director of the Centre for Combating Economic Crimes and Corruption (CCECC) communicated that prices were increased by 3–4% just for 15 out of over 6000 items of medicines registered in the country. Also, the Service for approving and registering the manufacturer’ price on drug has registered about 4,000 drug positions at an importing cost by up to 50% lower than it was before the new rules were enforced in November, which would considerably decrease the medicines price, starting with January 2011. According to the CCECC Director, the increase in the medicines price is due to the enforcement sometimes abusive of old rules for registering in customs the manufacturer’s prices. The prime minister proposed to examine the possibility of creating a National Agency that will monitor the market pricing in Moldova for all goods and services and requested a detailed analysis on the functioning of the institutions currently responsible for monitoring the price formation.

A meeting on the situation on the drug market has evaluated actions to reduce drug prices and destroy the mafia schemes, created during the previous governances. The prime minister said that the results are below expectations and declared that these energetic measures have to be taken so that citizens would benefit from quality medicines at real price. According to the Prime Minister, the situation on the drug market has not been monitored effectively enough and requested the policy makers to develop and present an objective analysis of the measures taken and a concrete action plan to settle the situation in this area.

Concerns about the liquidation of flood consequences

Prime Minister chaired the meeting of the National Commission for liquidation of the floods consequences, were the authorities of 1st and 2nd level were requested to expedite the procedure of finalizing the lists of farmers who have suffered from the summer floods, so that farmers could get compensation from the Government. According to the presented information, on the plateau of construction of houses in Nemteni 1300 meters of pipeline were built, and the Commission has decided to allocate 500,000 USD, the equivalent of the Chinese governmental donation, for the construction of water pipes in localities affected by floods. Prime Minister called for the mobilization of all decision makers to honour the commitments to people who have suffered from the floods.

Meeting with farmers

The meeting convened by Prime Minister have reviewed some of the actions following a similar of Prime Minister with farmers on 18 March and the problems that farmers face in the agriculture. According to the Ministry of Agriculture and Food Industry, following the liberalization of trade with food products, the export volume of agricultural and agro-industrial products in the first nine months of this year amounted to 469 million USD, which is 10.2 percent higher compared with the same period of last year. Due to cancellation of some taxes and mandatory procedures in the wine-making and viticulture, exclusion of restrictions on grape exports, the tax and administrative burden for business conduct in the sector got reduced, the competitiveness was increased by reducing production costs, the overall farm incomes in this branch have increased, as related by the representative of the branch ministry. The prime minister mentioned the need to improve the agricultural subsidy system, to subsidize those companies, who work efficiently and achieve performances.

MIA Reform

Ministry of Internal Affairs will be subject to reform, district police commissariats will be renamed the territorial commissariats, the national police will be delimitated from the local one, not the police will be any more responsible for ensuring public order, but the carabineers. The measures are provided by the MIA Reform Strategy that includes a number of objectives, including reforming the legal framework, creation of two new departments, local police reform, MIA demilitarization and restructuring the carabineers. It is also envisaged to modify the concept of assessing the MIA activity, which won’t be any more based on statistics, but based on public opinion. However, the reform will start with the entry into force of a new law on police and law on the carabineer troops.

Presidency

Events of major importance

Letter to NATO

The interim President of the Republic of Moldova held a press briefing where he read the letter sent to the NATO Secretary General, Anders Rasmussen, whereby he tackles the withdrawal of Russian troops from Moldovan territory, in the context of discussions on the revitalization of the "Treaty on Conventional Armed Forces in Europe" and the preparation for the OSCE Summit in Astana. Ghimpu hopes that during the current negotiations on the regime of arms control, Moldova’s position on the illegal presence of Russian troops on its territory – precisely, an immediate, orderly and full withdrawal of Russian troops from Moldovan territory – will be heard and taken into account by state parties to the "Treaty on Conventional Armed Forces in Europe". Otherwise, the ratification of this treaty, even "revitalized" one, will be problematic, the Interim President of Moldova considers.

Decrees

Country’s interim president has signed a series of decrees granting state awards to representatives of various spheres of activity (administration, culture, science, ecology etc.).

Decisions. Meetings

SIS Collegial Council

Interim President participated at the meeting of the Collegial Council of the Intelligence and Security Service (SIS), which discussed the Concept of transformation, modernization and development of the institution. Ghimpu stressed that during SIS modernization process it is necessary to implement democratic principles, to observe lawful rights and interests of citizens, so that the institution would be a body that protects every citizen, every man of good faith and a fearful one for any malefactor. Interim President believes that in the process of SIS reform it is necessary to improve proactive and reaction capacity to the risks associated with international terrorism, proliferation of weapons of mass destruction, regional instability and transnational organized crime, as well as to the changes in the manifestation forms of classic threats.

Declassification of SIS files

Mihai Ghimpu, the country’s acting president, attended the ceremony of transferring the files from special SIS storage to National Archive. These are 5000 file of the persons who have been subjected to political repression during the totalitarian regime. Ghimpu expressed concern that, every year, the number of files decreases, and according to some historians, hundred thousands of stored units have been destroyed, and even in 2007 SIS has destroyed five files, facts that may be qualified as attempt of the totalitarian regime to obliterate the traces of committed crimes.

Despite financial crisis, the Republic of Moldova has to build a National Memory Museum, which would also include the case-files of the archives of SIS, MIA, General Prosecutor Office, as well as other materials documenting the crimes of totalitarian communist regime, as shown in the statement of Mihai Ghimpu.

Statement on the International Day of the Victims of Communism

The interim President of the Republic of Moldova has issued a statement reviewing the events related to commemoration of the International Day of the Victims of Communism and mentions the activity of the Commission for studying and assessing the totalitarian Communist regime in Moldova, which found that totalitarian communist regime was a criminal and repressive, abusive and inhumane one, lacking legitimacy. Ghimpu hopes that after the parliamentary elections of November 28, there will be a possibility to hold in Parliament a hearing and adopt the Commission’s Report to end the accounts with totalitarian past.

The President promises houses to flood victims by winter

During the working visit to three sites in localities Obileni, Cotul Morii and Nemteni, Hincesti district, the interim President of the Republic of Moldova, Mihai Ghimpu, declared that all citizens who lost their homes during floods will enter new hoses by early December. Mihai Ghimpu appreciated the efforts of workers working at those three construction sites, emphasizing the importance of completing the construction works before the onset of cold.

Economic Policies

Prices and inflation

Inflation seems to be reasonable…

According to BNS data, the consumer price index (CPI) was 101,5% in October 2010 compared to September 2010, and 108% – compared to October 2009 (for information: CPI was 101.5% in October 2009 compared to September 2009 and compared to October 2008 – 98.4%). However, the consumer prices have increased by 6.1% since the beginning of this year (in October 2010 compared to October 2009), the inflation rate being around this level. The increase of the average consumer prices in October 2010 compared to September 2010 by 1.5 p.p. was determined by the increase in food prices by 3.1%, non-food products – by 0.9% and tariffs for public services rendering by 0.1%. Increasing in prices to foodstuffs in October had largely a seasonal nature. However, the prices (the inflation, respectively) could grow in the next period following the transposition of several price increases for some housing maintenance services (natural gas etc.).

The external position of the state

Moldova’s foreign debt increased by 42% during one year, but…

Mostly it grew because of contracting more loans from international financial institutions, as well as from other institutional creditors. Moldova’s state foreign debt increased during the last year with 42 p. p. and it is slightly more than USD 1.1 billion. Reported to the GDP level, external debt tends to a level of about 20%, which is a quite acceptable level. For example, on 1 November 2009 this index was about USD 777 million. No doubt that the growth of state debt is conditioned by the inflow of credits to the country, which in January-October 2010 was almost USD 180 million. Also foreign debt payments during the reference period exceeded USD 43 million. As mentioned above, the main generator of the external debt growth rate was the agreement with international financial institutions. The big question is whether this accumulation of debt – a global phenomenon that has gained proportions due to the crisis – can be stopped. However, we believe that with a new loan from the IMF (but this will happen after the parliamentary elections only) Moldova will not defer its payment deadlines, but will continue to accumulate debts. Until when? Until when the state would restrain its budget device, would reform its social insurance system and would impose upon a prudent policy of public expenditures.

Labor market with electoral expectations

Wages, on the top of promises…

Most political parties when launching in electoral campaign are very generous in making promises, and big salaries and pensions are not an exception, in fact, they prevail on the current list of promises. However, the level of populist wages and pensions, such as those of 700 Euros and 300 Euros, respectively, set out by parties during 2009 spring campaign or even during the summer of the same year, is lower. Perhaps, the parties came down to earth and understand the socio-economic situation in the country. Despite the fact that generous salaries and pensions were always on the top of the list of promises made by parties and often were very popular with voters, maybe rather for a specific segment out of them. This campaign also provides offers that are apparently quite realistic. A minimum pension of 1300 MDL or an average salary of 5000 MDL declared by a political party, for example, seem to be more realistic. Of course, they are a bit far from the regional average, but still seem to be more connected to the reality of the Republic of Moldova. Other parties are more generous when it comes to the average pension, displaying a level from 1500 to 2000 MDL, or some social payments such as child birth allowance – from 5000 to 10000 MDL. However, these levels, even in the next 4 years, if believe that we would have a political stability, are very unlikely to be achieved. The fears are related to the fact that the economy of the country, taking also into account the internal and external conjuncture, will hardly cope with much higher accumulation in the budget that could increase the level of payments and social benefits. Furthermore, the employment rate has fallen markedly in recent years and it is an alarming mark.

The party said it should be so…

In spite of economic growth that was recorded in statistics and the one declared by authorities, the productive sector and the economic system of the Republic of Moldova, in general, is still recovering relatively difficultly, due to economic crisis consequences. Thus, there is a need for a longer period of stabilization to create new jobs. But, if we go back to wages and explain more theoretically on what depends their level, then in a market economy the wage is the marginal product of labor factor, i.e. labor productivity. But in an open economy like that of the Republic of Moldova, directly influenced by import prices, which also are largely dictated by world prices and, often, the size of wages has nothing to do with labor productivity. Salaries will be comparable or higher than in other countries, especially in the region, when per capita GDP will be higher. But, at this chapter, Moldova lags behind, so to speak. The most funny is the language used by parties. For example: "the salary or pension will be or should be". But how will be it? From where it will come? It does not matter. The party said it and let it be so, ultimately ignoring the market mechanism for determining the labor price. That is to say, we set the level of salaries, pensions and allowances to our liking. However, we should not forget that we are in full election campaign and the parties do not lose the opportunity to display their promises and offers. The campaign will pass away, and the wages will return to "normal".

Transnistrian Problem

Letter of the interim President Mihai Ghimpu to NATO Secretary General

On November 12, 2010 the Interim President of the Republic of Moldova, Mihai Ghimpu, sent a letter to NATO Secretary General, Anders Rasmussen. The message refers to the context of current discussions on the revitalization of the "Treaty on Conventional Forces in Europe" and the preparations for the OSCE summit in Astana. The letter states position of the Republic of Moldova towards the Russian military presence in Moldova; it comes up with assumptions vis-a-vis an eventual conduct of Russia under the conditions of CFE Treaty revitalization; it expresses the possible option of not ratifying the revitalized Treaty and asks for assistance in favour of the Republic of Moldova as follows:

• at OSCE Summit in Istanbul in 1999 Russia committed to withdraw military units from the eastern districts of Moldova, but it has not honoured its commitments, "violating the rules of international law and Moldovan Constitution, which prohibits foreign troops stationing on the territory of sovereign and independent Republic of Moldova";
• Russian troops "are not only a constant source of threat towards the security of the Republic of Moldova, but also a source for feeding the Transnistrian separatism…, seriously undermining the international community’s efforts aimed at peaceful conflict resolution";
• discussions on the revitalization of the "Treaty on Conventional Forces in Europe" try to "save" this important document for European security, "overlooking the Russia’s failure to enforce the Istanbul commitments on Moldova";
• revitalization of this Treaty "can not be done with this price and an injustice to the Republic of Moldova should not be allowed";
• the idea to present the "principle of host state acceptance" as a substitute in the "Treaty on Conventional Forces in Europe" for the commitments made in Istanbul by the Russian Federation on the withdrawal of Russian troops from Moldova is not convincing. This principle is not new, since it is also present in the up-dated text of the "Treaty on Conventional Forces in Europe";
• "principles of host state acceptance" doesn’t imply withdrawal of troops, but they deployment in Transnistria with the consent of the host state. Therefore, "the principle of host state acceptance" may become "a lever for blackmail in the hands of the Russian Federation in its relations with Moldova";
• Russian Federation will be able to blackmail the Republic of Moldova in the sense that "if it does not give its consent to the Russian military presence in Transnistria, then Russia will have nothing to do but to recognize Transnistria in order to get "the principle of host state acceptance" from the alleged "Moldovan Nistrian Republic";
• currently Moscow claims it doesn’t need the Georgia’s consent to maintain its troops in Abkhazia and South Ossetia, because it has the consent of these two unrecognized entities";
• Russia will continue to argue that given that "principles of host state acceptance" is contained in a treaty that refers to conventional armaments, the recalled principle don’t refer to the Russian troops deployed in Transnistria, because there are no conventional weapons any more;
• within the current negotiations on arms control regime, the Republic of Moldova’s position on the illegal presence of Russian troops on its territory is – "immediate, orderly and full withdrawal of Russian troops from Moldovan territory";
• Moldova’s position should be taken into account by states parties to the "Treaty on Conventional Forces in Europe". Otherwise, "the ratification of this treaty, even if "revitalized", will be problematic";
• complete withdrawal of Russian troops from Moldovan territory "will create necessary conditions for the peaceful settlement of Transnistrian conflict and will also contribute to the strengthening of stability and security in the region".

Tiraspol is against the modification of the EU and USA status in the negotiation process

Foreign minister of Tiraspol, Vladimir Yastrebceac, stated on November 4 that Transnistrian authorities consider that status of the EU and USA in Transnistrian conflict settlement process does not need to be changed. According Yastrebceac there is no ground for such an approach, because "the EU and USA have sufficient opportunities to participate in the "5+2" format negotiations in the current status of observers". He considers that in order to resume the activity in "5+2" format it is necessary to observe the formula of "the presence of two equal, efficient and legitimate partners – Republic of Moldova and Transnistria", since "none of arithmetic combinations will replace those two high level parties in the conflict". Previously, the proposal to change the observer status of the EU and USA in the negotiation process into that of mediators, similar to that of Russia, Ukraine and OSCE, was made by Moldovan deputy Prime Minister for reintegration, Victor Osipov.

Garmisch Conference on confidence building measures

On November 9–10, 2010 in German city of Garmisch a conference was held on the confidence building measures between the two banks of Nistru. The position expressed by Transnistrian side was based on stressing three principles:

• resolution of any problems between Chisinau and Tiraspol must be based on the principle of equality of parties.
• observance of the Transnistrian constitution, which allows the inter-ministerial cooperation with the Republic of Moldova in order to solve common problems to improve the lives of people on both banks of the river – combating the crime, health protection etc. All issues regarding Moldovan-Transnistrian settlement must be based on real agreements and a guaranteed mechanism for achieving them.
• Chisinau should give answers to three important documents for Transnistria, that were submitted to it – a) Agreement of Friendship and Cooperation between Transnistria and Moldova, which is based on the agreements reached in the past, b) the document referring to the main elements to eliminate the possibility of applying military force and other measures of pressure in Moldovan-Transnistrian settlement, c) Agreement on the basis system of guarantees in Moldovan-Transnistrian settlement.

Fixed phone communication between the two banks of the river Nistru will be made not any more through intermediaries

State Enterprise "State Registration Chamber" has announced on November 11 that it will register the economic companies from Transnistria in the area of communications, providing them with company registration certificate. At the same time, the National Regulatory Agency for Electronic Communications and Information Technology will issue the licenses for those companies that are necessary this activity. In the same context, the Finance Ministry should develop the procedure for mutual settlements.

Studies, Analyses, Comments

Robin Hood seat distribution method
Igor Botan, November 10, 2010

The new seat distribution method is bizarre in essence, as it may eventually assure after redistribution a surplus of mandates to a party higher than the proper score. This method makes the electoral system certainly disproportional. On the other hand, this method makes the Republic of Moldova popular for innovations in electoral systems

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