icon caret Arrow Down Arrow Left Arrow Right Arrow Up Line Camera icon set icon set Ellipsis icon set Facebook Favorite Globe Hamburger List Mail Map Marker Map Microphone Minus PDF Play Print RSS Search Share Trash Crisiswatch Alerts and Trends Box - 1080/761 Copy Twitter Video Camera  copyview Whatsapp Youtube
Moldova: Regional Tensions over Transdniestria
Moldova: Regional Tensions over Transdniestria
Table of Contents
  1. Executive Summary
Report 157 / Europe & Central Asia

Moldova: Regional Tensions over Transdniestria

Resolving the Trandniestrian secessionist dispute in Moldova is vital to remove a potential source of chaos on the periphery of the expanding European Union, to implement an important part of the post-Cold War settlement, and to make Moldova itself a more viable state.

  • Share
  • Save
  • Print
  • Download PDF Full Report

Executive Summary

Resolving the Trandniestrian secessionist dispute in Moldova is vital to remove a potential source of chaos on the periphery of the expanding European Union, to implement an important part of the post-Cold War settlement, and to make Moldova itself a more viable state. Greater U.S. and EU engagement with the stalled peace process is essential to bring a settlement to this impoverished and unstable part of Europe.

Russia's support for the self-proclaimed and unrecognised Dniestrian Moldovan Republic (DMR) has prevented resolution of the conflict and inhibited Moldova's progress towards broader integration into European political and economic structures. In its recent and largely unilateral attempts to resolve the Transdniestrian conflict, Russia has demonstrated almost a Cold War mindset. Despite comforting rhetoric regarding Russian-European Union (EU) relations and Russian-U.S. cooperation on conflict resolution and peacekeeping within the Newly Independent States of the former Soviet Union (NIS), old habits appear to die hard. Russia remains reluctant to see the EU, U.S. or the Organisation for Security and Cooperation in Europe (OSCE) play an active role in resolving the conflict because Moldova is still viewed by many in Moscow as a sphere of exclusively Russian geopolitical interest.

It has not been difficult for Russia to exploit Moldova's political and economic instability for its own interests. Despite having accepted concrete deadlines for withdrawing its troops, Russia has repeatedly back-pedalled while trying to force through a political settlement that would have ensured, through unbalanced constitutional arrangements, continued Russian influence on Moldovan policymaking and prolongation of its military presence in a peacekeeping guise. It has so far been unwilling to use its influence on the DMR leadership to promote an approach to conflict resolution that balances the legitimate interests of all parties.

Ukrainian and Moldovan business circles have become adept at using the parallel DMR economy to their own ends, regularly participating in re-export and other illegal practices. Some have used political influence to prevent, delay, and obstruct decisions which could have put pressure on the DMR leadership to compromise. These include abolition of tax and customs regulations favourable to the illegal re-export business, enforcement of effective border and customs control, and collection of customs and taxes at internal "borders". 

With backing from Russian, Ukrainian and Moldovan economic elites, the DMR leadership has become more assertive. Recognising that international recognition is unlikely, it has focused on preserving de facto independence through a loose confederation with Moldova. Unfortunately, DMR leaders -- taking advantage of contradictions in the tax and customs systems of Moldova and the DMR -- continue to draw substantial profits from legal and illegal economic activities including re-exports, smuggling and arms production.

The DMR has become a self-aware actor with its own interests and strategies, possessing a limited scope for independent political manoeuvre but an extensive web of economic and other links across Russia, Moldova, and Ukraine. However, it remains heavily dependent on Russian political and economic support and does not like to put itself in a position where it must act counter to Russian policy. Russian and DMR interests often overlap but in some instances DMR leaders have been able to design and implement strategies to avoid Russian pressure, delay negotiations, obstruct Russian initiatives, and undermine Russian policies by playing up disagreements between the co-mediators and capitalising on alternative sources of external support.

Russia's most recent attempt to enforce a settlement -- the Kozak Memorandum in October and November 2003 -- has shown that its influence, while pervasive, has clear limits. Russia is unable to push through a settlement without the support of Moldova and the international community, especially key players such as the OSCE, EU, and the U.S. A comprehensive political settlement requires an approach that can bridge the differences between Russia and other key international actors while fairly considering the interests of both the Moldovan government and the DMR.

Despite an understanding that Russia should not be antagonised, the gravitational pull of European integration is strong in Moldova. Recently, even its communist leadership has stressed the need to do more to achieve that goal. The country has rarely been on Western radar screens during the last decade, however, and it will need more demonstrable EU and U.S. backing if it is to resist Russian political and material support for the DMR and Transdniestrian obstruction of the negotiation process. International actors must also help Moldova to secure its own borders against the illicit economic activities which keep Transdniestria afloat and affect its European neighbours as well.

The conflict can only be resolved if the international community uses its influence on Russia bilaterally and within the OSCE. Only then, and with a substantially more determined commitment to political, economic and administrative reform on its own part, will Moldova be able to realise its European aspirations. A comprehensive strategy towards Moldova, Ukraine and Russia within the EU's.

Chisinau/Brussels, 17 June 2004

Report 175 / Europe & Central Asia

Moldova's Uncertain Future

With Romania’s expected entry into the European Union in 2007, the EU will share a border with Moldova, a weak state divided by conflict and plagued by corruption and organised crime. Moldova’s leadership has declared its desire to join the EU, but its commitment to European values is suspect, and efforts to resolve its dispute with the breakaway region of Transdniestria have failed to end a damaging stalemate that has persisted for fifteen years.

  • Share
  • Save
  • Print
  • Download PDF Full Report

Executive Summary

With Romania’s expected entry into the European Union in 2007, the EU will share a border with Moldova, a weak state divided by conflict and plagued by corruption and organised crime. Moldova’s leadership has declared its desire to join the EU, but its commitment to European values is suspect, and efforts to resolve its dispute with the breakaway region of Transdniestria have failed to end a damaging stalemate that has persisted for fifteen years. Young people have little confidence in the country’s future and are leaving at an alarming rate. If Moldova is to become a stable part of the EU’s neighbourhood, there will need to be much greater international engagement, not only in conflict resolution but in spurring domestic reforms to help make the country more attractive to its citizens.

Two recent initiatives by the EU and Ukraine gave rise to hopes that the balance of forces in the separatist dispute had changed significantly. An EU Border Assistance Mission (EUBAM) launched in late 2005 has helped curb smuggling along the Transdniestrian segment of the Moldova-Ukraine frontier, a key source of revenue for the authorities in Tiraspol, the Transdniestrian capital. At the same time, Kiev’s implementation of a landmark customs regime to assist Moldova in regulating Transdniestrian exports has reduced the ability of businesses in the breakaway region to operate without Moldovan oversight, striking a major psychological blow.

But optimism that these measures would ultimately force Transdniestria to make diplomatic concessions appears to have been false. Although EUBAM has had significant success, particularly given its small size and budget, widespread smuggling continues. Nor has the Ukrainian customs regime had a decisive effect on Transdniestrian businesses, which remain capable of profitable legal trade as they were in the past. Moreover, domestic political uncertainty has raised questions about whether Kiev will continue to enforce the new regulations. 

Russia has increased its support for Transdniestria, sending economic aid and taking punitive measures against Moldova, including a crippling ban on wine exports, one of its main revenue sources. Moscow refuses to withdraw troops based in Transdniestria since Soviet times whose presence serves to preserve the status quo. With Russian support, the Transdniestrian leader, Igor Smirnov, has little incentive to compromise in his drive toward independence. The internationally-mediated negotiations between the two parties are going nowhere, despite the presence since 2005 of the EU and U.S. as observers. Although some understanding had been reached about the level of autonomy in a settlement, Moldova has hardened its position to match Transdniestria’s intransigence.

Barring a softening of Russia’s stance, the best chance for moving toward a sustainable settlement is to convince the Transdniestrian business community that cooperating with Moldova is in its own interests. There is evidence that some business leaders are growing frustrated with Smirnov and may be willing to work with Chisinau. 

For this to happen, however, both Transdniestrians and Moldovans will have to believe in the country’s economic future. Its business environment is poor, foreign investment is low, and GDP per capita is on a par with Sudan’s. The Communist Party government, headed by Vladimir Voronin, has shown little will to root out corruption and improve the business climate, and its Transdniestria policy seems based more on easy rhetoric than engagement. Moldova’s relatively new commitment to a Western-oriented policy is opportunistic rather than deep-rooted.

The EU has the leverage to play a greater role in pressuring Moldova to carry out reforms; it can also help by lifting tariffs on agricultural products, including wine, that Moldova could potentially sell in its market, as well as on products from Transdniestrian factories such as steel and textiles. Transdniestria’s smuggling revenue must be further restricted, through long-term assistance to the Ukrainian and Moldovan border and customs services and a multi-year extension of EUBAM’s mandate. The Transdniestrian business community needs confidence it can make money in a united Moldova but it is equally important to limit the economic benefits of the status quo.

Even if efforts to alter the economic calculus are successful, however, the absence of mutual trust will remain debilitating. Addressing this will likely require years of confidence-building, through political dialogue, transparent customs rules and trade relations, and measures to increase democratisation and freedom of the media on both sides. It may also require international guarantees to convince Transdniestrian businesses that they will not be stripped of their assets by the Moldovan government following a settlement.

Moldova is increasingly reliant on the EU and so is vulnerable to pressure from Brussels for reforms that would increase its economic and political attractiveness to its own citizens, including Transdniestrians. These reforms will have to have a central place if the groundwork for a settlement is to be prepared. The U.S. has been content to let the EU lead on Moldova, and the EU has done so – to a degree. But it must do far more with both incentives and pressures if it is to secure peace and prosperity in its neighbourhood and strengthen the weak roots of Moldova’s European policy.

Chisinau/Brussels, 17 August 2006