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Moldova Reality Check

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Moldova Reality Check December 2013 Moldova Reality Check Success Story Before the Storm? 2nd Non-Paper Introduction additional fact-checking and peer review, is released to contribute to the policy debate in The “Reality Check” is a policy review process and outside of Moldova. aiming to gather insights from top domestic and international analysts, practitioners, Conclusions diplomats and policy-makers working in and Domestic Affairs: Reforms lost in geopolitics on the Eastern Partnership (EaP) countries, Among the EaP countries, Moldova is a with the ambition to provide a realistic policy frontrunner in understanding that European framework based on evidence on the Union (EU) integration is primarily about ground. The first such a review was the domestic reforms rather than about foreign Belarus Reality Check enacted in Vilnius, policy. But being distracted by geopolitics – Lithuania in October 2012. now with a lot of help from Russia – the main Following the first Moldova Reality Check homework, the transformation of the session held in Bratislava during the GLOBSEC governance model, is lagging behind. 2013 conference on 20 April 2013, the second If you had to choose between event took place on 5 November, 2013 in adherence to the Eurasian Customs Union or the European Union, which Vilnius, Lithuania at the premises of the option would you vote for? Ministry of Foreign Affairs of Lithuania. The Do Not meeting was organised after the first hundred Know - 10.4 days of Leanca’s government and only a few None - 4.9 weeks before the EaP Summit in Vilnius. The review group comprises top Western, EU - 44.3 Moldovan and regional analysts with a particular emphasis on the independent ECU - 40.4 character of the group in order to deliver evidence-based and balanced policy advice for the post Vilnius Summit period. Reality Check meetings are held under the Chatham House Rule and the list of Source: What Do Moldovans Think? Public Opinion Poll, Slovak Atlantic Commission and Central participants is not distributed. This non-paper, European Policy Institute, SlovakAid, November 2013 summarizing the debate held in Vilnius with 1 Moldova’s ruling elite accepted the EU’s offer concessions (such as the case of the Chisinau for modernisation and signed up for a wide- Airport deal) would send a strong political ranging reform process. This process would message. The whole political spectrum should November 2013 run counter to its short-term political priorities, be covered in order to reduce the zero-sum though. In addition to that, serious challenges framework, however, intensified monitoring as – polarised political climate, political well as tactful assistance to pro-European instability, weak political institutions and lack parties (although distinction between them of trust vis-à-vis state institutions – have a should be made, finally) should be provided strong impact on implementation of any by the European Parliament along with other reforms. European partisan institutions. Ending the “Moldova as a success story” Throughout this process the EU may strongly rhetoric, which has caused cynicism among consider putting re-integration with many Moldovans, would be the first Transnistria back on the table – first through a important post-Vilnius Summit step in order to cost benefit analysis, while the establishment re-gain a power broker position. Geopolitical of a re-integration and investment fund tattering before Vilnius caused the Moldovan should follow in order to make re-integration ruling elite to continue its previous rent- a realistic possibility and provide an seeking practices, further alienating the alternative to Russia’s ongoing subsidies in Communist opposition, widening the “either Transnistria. Without changing the incentives or” political framework, with Russia growing for well-cemented interest groups around more resilient and the EU favouring the ruling Transnistria (including in Russia, Ukraine, and coalition. Realistic expectations should be Moldova) the association process is unlikely framed: transformation – as well as the to be turn into an integration one – unless the association process itself – will take time. EU risks another Cyprus. Recommendations: While the EU should Economy and Energy: Key issues not in public increase reform assistance, it should move discourse away from being viewed as a partisan Who is actually aware in Moldova that the player. Its desirable role combines close Deep and Comprehensive Free Trade monitoring of the political situation as a Agreement (DCFTA) does not imply joining neutral public actor, supporting technical the EU, while the Customs Union (CSU) is an implementation (reforms) implying actual political decision (CSU being like the conditionality, and supporting civil society EU’s single market)? That a certain focusing on accountability and civic compatibility model is possible, with Serbia for education issues. Tangible deliverables of the example having both Association Agreement reform process, such as visa liberalization, (AA) with DCFTA as well as a free trade should be made visible in a much bolder agreement (FTA) with Russia? That Moldova manner. Other benefits, such as better roads, does not have a common border with the need to be better communicated to the CSU, which makes participation impossible by public too. current rules (similarly to Armenia)? Or for that Concentrating on judiciary and law matter that Moldova negotiated a ten-year enforcement would be necessary for the EU, transition period for the agriculture sector while using the regulatory framework to under DCFTA? On top of that, that energy eliminate dubious privatization deals and 2 prices are out of scope of the CSU deal and size and funds, but about the visible progress will depend on the Kremlin`s political will? and benefits it brings. The bulk of the EU’s assistance targets state actors and public Indeed, the DCFTA dynamics is set up for administration involved in the AA and DCFTA longer-term and it is a trade framework negotiations and implementation, but a intended to change the country’s operation significant amount of obligations stemming as such. Short-term costs could be mitigated, from the DCFTA is to be borne by the private though. Still, Moldova’s economy cannot sector – what is the EU doing for the private afford an immediate and exclusive pro- sector? The EU should target the private Western vector as both markets are sector in a close interaction and coordination important, CSU (and CIS more generally) is with the European Bank for Reconstruction critical for agriculture where one third of the and Development (EBRD). When raising country’s workforce is employed, while the EU awareness a clear distinction between the is crucial as a source of technology, AA and DCFTA should be made too – the two innovations and imports, as well as being quite confusing to the general public – competitiveness and investments. Such points as this is not only about trade, but rather a are absent in the political discourse, thus process including visa liberalisation and other leaving only “either-or” zero-sum game and benefits. geopolitical thinking. External (F)actors: EU’s inroads - Resurgent Energy independence will be achieved only Russia in the longer-term, but there are two key projects in gas and electricity sectors (Iasi- It needs to be acknowledged that domestic Ungheni and Vulcanesti-Isaccea politics of the EU and Russia interact with their respectively) supported by the EU already foreign policies. Too often both of them are underway, while Moldova can and should presented as monolithic blocks, but there are devise a clear domestic strategy to reduce its important nuances within the Russian political own consumption and invest into alternative elite when it comes to Moldova and energy sources. Russia’s offer is quite Transnistria. Also in the case of the EU, the different: Russia offers no long-term internal developments and foreign policies development model, but short-term are even more tightly interwoven because of incentives such as lower energy prices, and is the EU’s multilevel system of governance. willing and able to use punitive measures and The EU is making inroads in Moldova when it pressure immediately, e.g. by using comes to assistance, Moldova now being the Transnistria and Gagauzia, and selectively biggest aid recipient per capita in the funding opposition parties, with the goal of neighbourhood. The political will and backing undermining the EU’s attractiveness in the have been there despite the lack of reforms, short-term. and Ukraine suspending the signature of the Recommendations : To lower the cost of its AA will further increase that political support. policies in short-term, the EU should focus In case of a continuing zero-sum game with both on delivery (assistance) and on raising Russia, the EU could be ready to accept the awareness in the society. Information on AA aspiration of Moldova to get membership – and DCFTA is now confined only to a very something that should naturally come after narrow group of actors and experts. the next parliamentary elections in 2014. Communicating assistance is not about the 3 Moldova needs a much better track record of) participation of Russia, the EU’s best to persuade all EU member states, which can intentions should not lead towards a blind- be achieved especially with the necessary eyed policy. reforms as well as handling the next elections. Detailed Findings Moldova can even act as if it signed the AA, but a realistic timeframe should be drawn: Domestic Affairs: Reforms Lost In the Vilnius Summit is the initiation, while Riga Geopolitics in 2015 is likely to see the AA signed and Choice between the European and Eurasian ratified (after). The visa-free regime should be model has become the subject of major in place within a year. focus in Moldova before the Vilnius Summit, The EU, and especially certain member thus reducing focus on and capacity for states, will push for more support for Moldova actual reforms.
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