BRIEF POLICY TRANSNISTRIA: A BOTTOM-UP SOLUTION Nicu Popescu and Leonid Litra In June 2010, German Chancellor Angela Merkel launched SUMMARY Transnistria has long been seen as the most the Meseberg process. Under the plan, Russia would be “solvable” of all the post-Soviet secessionist included in European security policymaking through a joint conflicts. There is little ethnic hatred and most committee with the European Union. The price was concrete stakeholders accept in principle the need to progress towards the resolution of the Transnistrian conflict reintegrate Transnistria into Moldova. The in Moldova. For almost two years, Russia showed little election of a new Transnistrian leader and interest in the exchange and very little progress was made. Chancellor Angela Merkel’s engagement with the issue as part of Germany’s security dialogue But in 2012, the conflict settlement process received a boost with Russia have also fuelled hopes of a resolution with the election in Transnistria of a new leader, Evgeny of the dispute. However, the conflict will not be Shevchuk. Moldova finally managed to elect a president after solved through a diplomatic offensive. A quick a three-year constitutional deadlock, removing the cloud of and dirty solution based on a grand bargain political uncertainty that hung over the Moldovan political with Russia would almost certainly impair the elite. And Russia appointed a political heavyweight, Dmitry integration of Moldova into the EU. Rogozin, as Putin’s special representative on Transnistria. The EU and Moldova should instead pursue a Merkel sought to re-energise the conflict-settlement process bottom-up policy of de facto reintegration. The through a visit to Chisinau in August 2012. EU should keep high-level diplomatic pressure on Russia to expand the scope for confidence building These new developments create the conditions for potential measures between Moldova and Transnistria, progress on the Transnistria conflict. But they also mean modifying the peacekeeping arrangements, and that new policy choices are needed, not least from the EU. removing military checkpoints. The EU should Europe is already heavily invested diplomatically in conflict expand its interaction with the Transnistrian authorities through joint projects and seek to settlement in Transnistria. It has a 100-person strong EU connect the region to EU-Moldova cooperation, border assistance mission in the region, deployed in Ukraine including free trade. But by far the most and Moldova. And it has allocated substantial funds to important contribution the EU can make to the confidence-building measures. The EU also has a significant conflict settlement process is to anchor Moldova regional trade presence. It is the largest trading partner both in Europe by supporting the reform process, a of Moldova and of the secessionist region of Transnistria. visa-free regime and free trade between the EU What the EU does not have is a strategic framework into and Moldova. which to integrate its substantial but scattered actions on Moldova and Transnistria. Transnistria has long been seen as the most “solvable” of all However, the Transnistrian economy is in dire straits. Once the post-Soviet secessionist conflicts. There is little ethnic the economic powerhouse of Soviet Moldova, Transnistria’s hatred and most stakeholders accept in principle the need to industry sector now generates huge losses. The region’s reintegrate Transnistria into Moldova. The EU and Ukraine GDP per capita is roughly the same as Moldova’s, close both want to help solve a conflict right next to their borders. to $2,000 per capita in nominal terms, or $3,300 per Russia might accept a settlement that gives Transnistria a capita in purchasing power parity. Both are low, but the significant degree of power and influence in the potentially numbers behind these figures are much more disastrous for reintegrated Moldova. Transnistria itself might prefer Transnistria. Moldova’s external debt amounts to around 80 independence or being part of Russia, but is not completely percent of its GDP. But Transnistria’s is close to 400 percent averse to re-joining Moldova under the right circumstances, of the region’s GDP. As of mid-2012, Transnistria’s debt to if prodded, nudged, or pressed to do so, especially by Russia. Gazprom, the Russian natural gas supplier, stood at $3.8 But in practice the interests of all parties have never aligned billion. This is almost double the $2 billion gas debt owed by properly and it is not clear whether and when they would. Ukraine to Russia, which sparked the 2009 gas cut-off that left several EU member states freezing in mid-winter – and TRANSNISTRIA: A BOTTOM-UP SOLUTION Thus a rapid settlement is neither realistic nor desirable. A Ukraine’s population is over 100 times that of Transnistria. top-down solution is unlikely to be accepted by the societies As much as three-quarters of the Transnistrian budget is on either bank of the river Dniester; while a rushed solution reliant on direct or indirect subsidies from Russia. Russia’s could impair Moldova’s reform and its integration into the tolerance for Transnistria’s non-payment of gas debts is EU. Instead, the EU should help Moldova slowly to resolve one such indirect measure of support. The ability to run up the conflict from below by pursuing de facto reintegration debts is reflected in lower utility prices for the population, between Moldova and Transnistria through confidence- forming a key element of the Tiraspol authorities’ support. building, joint economic projects, and a greater EU presence One Transnistrian expert estimates that only around 25 in Transnistria. The EU should aim to consolidate Moldova’s percent of the population is employed. democracy, prosperity, and integration with the EU and to boost Moldova-Transnistria links and the EU’s presence and Shevchuk’s main goal in his first year in power was to leverage on Transnistria. It will take several years of such consolidate his authority. He moved quickly to appoint measures – perhaps even a decade – before Moldova and some of his few trusted people to key positions in the de Transnistria can realistically hope to achieve a sustainable facto state apparatus. He also ousted all former ministers, constitutional arrangement for conflict settlement. as well as some of Smirnov’s most notorious loyalists, such as the head of the local security apparatus. Shevchuk also sought to clip the wings of Sheriff. Under Smirnov, the Shevchuk’s power consolidation company was allowed to monopolise entire sectors of the local economy, from mobile telephony to imports and from In December 2011, Transnistrian politics underwent a supermarkets to petrol stations. Shevchuk moved to open serious shock. The region’s autocratic leader, Igor Smirnov, some of Sheriff’s monopolies to competition. He announced a Soviet-era apparatchik who led the region to secession a bid for a second mobile licence. And he lifted a 100 percent in the early 1990s, did not even make it into the second duty on imports from the rest of Moldova, which had round of leadership elections. Tired of Smirnov’s corrupt benefited Sheriff’s retail chains by effectively banning trade rule, the local population voted overwhelmingly for 43 between the two banks of the river Dniester. year-old Evgeny Shevchuk, a modern and pragmatic leader. Shevchuk was speaker of the local legislature between 2005- Shevchuk’s focus on consolidating power has two key 2009 and opposed Smirnov’s Soviet-style rule. implications for the conflict-settlement agenda with Moldova. His domestic power struggles mean that he is However, Shevchuk’s transition to leadership has not been unlikely to undertake any grand steps towards conflict easy. In spite of his overwhelming public support, Shevchuk resolution. He was not elected to reintegrate the region came to power from a relatively weak political position and into Moldova. Nor does he have the power to bring about against the preference of most local powerbrokers. He was reintegration, even if he wanted to, which in itself is very opposed not just by the Smirnov-built de facto state and its unlikely. And he is not willing to risk being portrayed by www.ecfr.eu security apparatus, but also by the presidential candidate hard-liners as a sell-out to Moldova. So, Shevchuk’s election of the Renewal party. Renewal is the political front of the should not be seen as dramatically increasing the chances biggest local business conglomerate, Sheriff. It controls for a settlement, at least not in the near future. There are the region’s legislature and, during the campaign, enjoyed also concerns that Shevchuk’s rapid assertion of power could undisguised support from Russia, Transnistria’s main lead to the consolidation of a less than pluralist system. This patron. And although Shevchuk is popular, his support is could also limit the possibilities for engagement with the September 2012 predicated on his ability to fulfil his campaign promises Transnistrian leadership and population. to bring change to the region, in particular economic improvement. At the same time, if he is to maintain his authority, Shevchuk needs not only to avoid political war but also to quickly ECFR/63 come up with some deliverables for the population. This 2 makes him open to cooperative endeavours that benefit Moldova’s views on reintegration the local population. So, Shevchuk’s personal pragmatism, along with a structural predisposition to cooperation, Through all the ups and downs of conflict settlement, has led to intensified dialogue with Moldova. In his first Moldova has continuously been affected by one underlying month in power, Shevchuk established a good personal dynamic: indifference to Transnistria. According to working relationship with Moldovan Prime Minister Vlad various opinion polls, Transnistria ranks as the ninth or Filat. He has also succeeded in intensifying Transnistria’s tenth priority for the population.