Economy still strong in spite of sanctions

Helen Chernenko, PMR's Minister of Economy, vows to keep the economy going despite rough treatment by neighboring countries

TIRASPOL (Tiraspol Times) - When Ukraine sprung a surprise on March 3 and unilaterally closed the border to exports which were processed by Pridnestrovie's Customs authorities, anti-independence forces saw it as the beginning of the end and reacted with glee. A senior Western diplomat told the International Crisis Group in a recently published report: “With the customs regime in place, it’s the end of the game for Tiraspol.”

" - But these Chisinau-based enemies of independence were too quick to pop the champagne," says a source in Pridnestrovie's Ministry of Economy. Although the customs procedures are having an effect on the new and emerging country's economy, it is still doing a lot better than in nearby Moldova.

Helen Chernenko, the country's Minister of Economy, puts a brave face on the recent struggles:
" - Today, the total volume of industrial production and output in Pridnestrovie currently stands at 79% of its 1991-level, or approximately $700 US dollars per year. In comparison, the same number for Moldova is close to half of our figure: It stands at just 41% of 1991-levels."

Using Moldova as a yardstick for comparison makes it easy to look good. "GDP per capita [in Moldova] is on a par with Sudan's. The government, headed by Vladimir Voronin has shown little will to root out corruption," says Moldovan opposition MP and former Foreign Ministry spokesman Oleg Serebrian who calls his homeland "a failed state."

The numbers don't lie

A case by case comparison of exports, income and wages show that the population in Pridnestrovie is poor, but not as poor as in Moldova. The small country's GDP per capita is $756, compared with $720 in Moldova.

" - Pridnestrovie has long ago proven to the world that it can survive on its own and consider itself an independent state," she told journalists Friday at the country's international press center.

" - For sixteen years Pridnestrovie has survived on its own, without any financial aid from its two neighboring states. In that time, the republic has developed its own financial system and banking system, becoming a state completely independent from Moldova in all aspects of the economy."

According to data presented by the Ministry, and supported by customs and export numbers, in the past five years the economy has grown by a total of 235% percent relative to its 2000/2001 level. While growing from an admittedly low level, this is a significant achievement and one which sources in the Ministry claim is the main reason for what they see as "sabotage" and "economic blockade" by Ukraine, acting in concert with Moldova.

Sanctions and so-called "economic blockade" causing losses

A border customs conflict with Ukraine started on March 3, 2006, when Ukraine imposed new customs regulations on its border with Pridnestrovie by declaring that it will only import goods from Pridnestrovie with documents processed by Moldovan customs offices, in effect leaving exporters from Pridnestrovie at the mercy of what they themselves consider to be the customs office of a foreign country - in this case, Moldova. Pridnestrovie, also known as Transnistria, declared independence in 1990 in an act which rendered Moldovans laws null and void. Chisinau has not been able to enforce or impose its authority on the self-proclaimed country since that date.

Moldova sees things differently. Never accepting the validity of a unilateral declaration of independence, it considers the country a part of Moldova and stubbornly refuses to even use the word Pridnestrovie; instead calling it "the eastern regions of Moldova." Regions which are de facto independent and which in the past sixteeen years have severed all ties with Chisinau, to the point that economic links to Moldova now represent only 1% of Pridnestrovie's total trade numbers.

" - Instead of helping us, and improving trade and links between the two banks of the Dniester, shortsighted politicians in Moldova insist of hurting us all the time," says Lucia Buju, a resident of a village near Tiraspol.
" - They think that if they can bring us to our knees, we will surrender in shame and forget our dreams of living in our country, free from the dictates of central Chisinau and its vengeful government. But they forget the old adage that you reap what you sow. And today, when they wonder why most of us are opposed to joining their country, they are merely tasting the fruits of their old labor."

A billion here, a billion there...

The economy will survive, says Minister Chernenko, "but not because of any help from our neighbors on the other side of the Dniester river."

" - It goes without saying that our economic results would be substantially better if it wasn't for the many economic sanctions which the Republic of Moldova has orchestrated against Pridnestrovie," explained Helen Chernenko, heaping criticism on what she sees as an economic blockade by Ukraine, acting on the behest of Moldova:
" - The large-scale economic blockade by Kiev and Chisinau, which began in March, has so far cost us $301 million US dollars. Part of that consists of foregone earnings due to lost exports by our companies."

As most of the young state's income comes from taxes on corporate profits, the recent sanctions resulted in a direct loss for the budget of $47 million US dollars.

Helen Chernenko says that this is just the tip of the iceberg. When compounded with many other actions taken by Moldova over the course of the past sixteen years, all of them aimed at maiming the economy of the independent-minded state, the real losses are much, much higher.

Speculating on the total losses, the Minister of Economy pauses for a moment, pulls out a calculator, and then announces the figure:
" - We probably lost in all these years around $1 billion US dollars", estimates Helen Chernenko, referring to sixteen years of low-intensity economic warfare which peaked in 2003, 2004, and now - again - in March of 2006.

But, says Buju, "there is also another loss which is even more important. It is the loss of confidence in Moldova as a serious partner with whom we can build a common state in the future. By their actions, Chisinau has long ago lost whatever goodwill they could have hoped to build with us. Today, seeing how they want to hurt us, not help us, it is no surprise that hardly anyone who lives here can ever envision a future as part of Moldova. Impossible."