Moldova By Victor Gotișan Capital: Chisinau Population: 3.5 Million GNI/capita, PPP: $5,670 Source: World Bank World Development Indicators. Nations in Transit Ratings and Averaged Scores 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 National Democratic 5.75 6.00 5.75 5.75 5.50 5.50 5.50 5.75 5.75 5.75 Governance Electoral Process 4.00 4.25 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Civil Society 3.75 3.50 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25 Independent Media 5.75 5.75 5.50 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Local Democratic 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.50 5.50 5.50 Governance Judicial Framework 4.50 4.75 4.50 4.50 4.50 4.75 4.75 4.75 5.00 5.00 and Independence Corruption 6.00 6.00 6.00 6.00 5.75 5.75 5.75 6.00 6.00 6.00 Democracy Score 5.07 5.14 4.96 4.89 4.82 4.86 4.86 4.89 4.93 4.93 NOTE: The ratings reflect the consensus of Freedom House, its academic advisers, and the author(s) of this report. If consensus cannot be reached, Freedom House is responsible for the final ratings. The ratings are based on a scale of 1 to 7, with 1 representing the highest level of democratic progress and 7 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year. The opinions expressed in this report are those of the author(s). EXECUTIVE SUMMARY During the course of 2017, Moldova’s democracy continued on the negative trajectory of the previous years. Political processes were dominated by the adoption of a new, mixed voting electoral system and what appeared to be a tacit agreement between the ruling Democratic Party of Moldova (PDM) and the Party of Socialists of Moldova (PSRM). By mimicking a “geopolitical fight,” PDM and PSRM have created a false internal agenda aimed at eclipsing real problems faced by society such as poverty, corruption, migration, unemployment, or the “billion-dollar theft.” In May, the PDM–Liberal Party (PL) coalition government broke up. Following the breakup, the new government consisted exclusively of ministers appointed by PDM with the exception of three ministries, the Ministry of Defense, Ministry of Justice and Ministry of Economy. During the year, the parliament became a forum for PDM and PSRM to express their geopolitical preferences—with PDM expressing pro-Western views and PSRM expressing pro-Russian sympathies—and champion legal initiatives benefitting their own political futures, such as the mixed electoral system. Meanwhile, President Igor Dodon transformed the presidency into a platform for relaunching dialogue with Russia and promoting pro-Russian opinions, thus creating confusion about the sustainability of the country’s European integration agenda. Even though there were no elections in Moldova in 2017, the modification of the electoral system from a proportional to a mixed system was one of the most controversial and heavily debated subjects in the country. The mixed electoral system, adopted by the joint vote of PDM, PSRM, and members of the European People’s parliamentary group, was strongly criticized by civil society, parliamentary and extraparliamentary opposition parties, and international organizations, including the Venice Commission. This electoral modification will likely disadvantage extraparliamentary parties and encourage electoral corruption. Civil society was quite active in 2017, while relations between the government and the civic sector deteriorated. Attempts to pass contradictory laws or legally mandate funding restrictions from external sources for civil society organizations (CSOs) have fueled a lack of confidence in the government. Additionally, there were a number of political attacks on CSOs. The media sector continued to be politicized, facing the same new-old challenges. An outdated legal framework, excessive influence from politicians and oligarchs, limited independence for the broadcasting regulatory authority, unfair competition on politicized advertising market, and the use of the media for political purposes continued to hamper Moldovan media independence. The justice reform stagnated in 2017. The appointment procedure for judges and key officials remained one of the main problems of this sector and continued to be a source of concern, especially when it comes to candidates’ integrity. High-profile cases, such as those of Ilan Shor and Veaceslav Platon, to which the society requested free and direct access countless times, continued to be examined behind closed doors. Justice was also used to hide political motives and was unevenly used in the examination of files involving representatives of local and central public administration, showing once again that political influence is the greatest challenge for Moldova’s judicial system. Lack of progress and reforms in the justice sector led the European Union (EU) to announce in October its decision of cutting budgetary support program for judicial reforms and stop the last tranche of support in this sector in the amount of €28 million ($33.1 million). Anticorruption initiatives did not contribute to reducing corruption in 2017, as none aimed at depoliticizing public institutions and regulatory agencies. Open competitions for positions of responsibility were nontransparent in most instances, organized not by merit but instead relying on controversial regulations and political loyalty to, or membership of, the ruling political group. The year saw an excessive politicization of the fight against corruption. Although the number of big corruption cases grew compared to 2016, these concerned current or former senior figures of political parties other than PDM. Law packages and initiatives adopted in 2016, which were to play an important role in fighting corruption, had yet to yield concrete results at year’s end. The reform of National Integrity Authority (NIA), which was envisioned as the key anticorruption institution in the public sector, moved very slowly. The NIA director was selected and appointed in late December—after a year of deadlock 2 and several failed attempts. The ruling coalition also seemed to lack political will to effectively fight corruption in the public sector. While the local public administration (LPA) is one of most trusted institutions in the society, local governments risk losing independence and are increasingly used as political instruments ahead of the parliamentary elections in the fall of 2018. As a result, in 2017 LPA representatives, especially those belonging to parties other than PDM, faced intimidation and verbal threats. The threats seemed to take place because they were reluctant to join PDM or promote certain ideas of the party. The Moldovan economy managed to slightly recover after the decline from 2014-2016 and registered a 3 percent growth in 2017. However, Moldova remained the country with the lowest GDP per capita in the region. Moreover, the discrepancies in the industrial and energy sectors increased, as well as of the export and gross capital formation. The Transnistrian conflict resolution saw some progress, including signed agreements on the apostilization of educational documents issued in Transnistria, as well as the opening of the bridge across the Nistru River between villages Gura Bicului and Bychok for traffic of light vehicles. On November 27–28 a new round of negotiations in the 5+2 format took place in Vienna. However, President Igor Dodon’s attempts aimed at defusing the situation and discussing proposed solutions with the de facto authorities in Tiraspol only resulted in new tensions. Towards the end of the year, due to the lack of real reforms, the passing of contradictory laws, and wiggling out of international commitments, external partners’ distrust in the government led to the postponing of EU macrofinancial assistance (MAF) in the amount of €100 million ($119 million). According to the Memorandum of Understanding (MoU) signed by EU and the Moldovan authorities, the MAF now includes 28 conditionality measures in areas such as public governance, financial sector governance, energy sector reforms, and tackling corruption. At the same time, all disbursements under the program are tied to political preconditions regarding respect for democratic mechanisms, the rule of law and human rights, media, and electoral process. No score changes in 2018. Outlook for 2018: The year 2018 will mark a turning point for the Republic of Moldova, when the government will either start implementing reforms—judicial and anticorruption reforms, as well as a new a legal framework for the media sector—and regain its credibility in the eyes of its partners, or inch closer to semiconsolidated authoritarian regimes. Internally, the political “fight” between PDM and PSRM will continue. The East/West geopolitical dichotomy will be further debated by the two parties, dictating the country’s political agenda. PDM and the government will play the role of defender and supporter of pro-Western vector; while PSRM and the presidency will advocate for the pro-Eastern vector. This will lead to the further polarization of Moldovan society. The parliamentary elections in the fall will most likely reconfigure the political scene, with several parliamentary parties polling close to the parliamentary threshold (such as the Action and Solidarity Party (PAS), “Dignity and Truth” Party (PPDA) and National Unity Party (PUN)). The modification of the electoral system, from a proportional to a mixed one, will clearly benefit PDM and PSRM. For extraparliamentary opposition parties—in particular PAS and PPDA—the parliamentary elections will be a test of their ability to consolidate their upward trend in public and political life, at the risk of being excluded from government. Economic prospects for 2018 are uncertain. The main risk for the economy relates to political developments.