Dynamics Of Russian Power In Moldova – Analysis

By Andrey Devyatkov*

(FPRI) — Is Russian influence in Moldova expanding or declining? The real picture is mixed. This article argues that over the last ten years Russian influence has ceased to be exclusive, forcing Russia to adjust to a new situation in which it is only one of several players.

Yet, Moldova remains on the periphery of the Western economic and political system as well as a borderland between Russia and the European Union. This positioning means that Moscow retains many economic and soft power resources to influence Moldovan politics.

Declining Russian Influence in Moldova

Location of Moldova. Source: CIA World Factbook.
Location of Moldova. Source: CIA World Factbook.

Several factors have undermined Russian power in Moldova. First, the Moldovan government is dependent on Western financial assistance, especially since 2010. This assistance is channeled through programs from European Union (EU), other financial institutions, and through bilateral deals with Western countries. It now amounts to 300-400 million euros per year. This financial assistance is important both for the Moldovan state and Moldovan elites: it helps stabilize the budget and the currency, as well as funding development projects. Economic aid also satisfies the financial needs of some interest groups in Moldova. This financial aid has increased Western influence tremendously.

Location of Transnistria. Source: Wikipedia Commons.
Location of Transnistria. Source: Wikipedia Commons.

Russia is not ready to compete with the West in this area. Moscow funds the de facto statehood of Transnistria via subsidized gas and by supplementing the Transnistrian pension system. But the Kremlin avoids giving the breakaway republic any substantial hard cash.

The last example of Russia using foreign aid as an instrument of influence in Moldova outside of Transnistria was a decade ago, when Russia’s budgetary resources were growing. Today, they are stagnating or even decreasing.

Second, energy has ceased to be a powerful tool for Russia in Moldova. Gas prices dropped from $400 to $190 per 1000 cubic meters in 2016. They continue to fall. Consequently, the issue of gas prices has all but disappeared from the bilateral Russian-Moldovan agenda. Recently, Russia and Moldova extended their gas supply contract until the end of 2019.

At the same time, the European Union is revolutionizing the energy sphere in Moldova. A Romanian-Moldovan gas interconnector from Iasi to Chisinau should be completed in 2020. It will be able to cover all of Moldova’s gas needs and will provide the country with the option of importing gas from either Russia or Romania. That reduces Russia’s ability to use gas as a political tool.

In addition, the European Union is pushing Moldova to fulfill its obligations within the EU Energy Community, which means implementing the EU Third Energy Package. Doing so will deprive Gazprom of its assets in Moldova’s gas transmission networks because EU law requires unbundling. Russia was powerful enough to stop Moldova’s implementation of the Third Energy Package in 2012 by threatening to stop supplying subsidized gas unless Moldova refused implementation. But now, Gazprom has few resources to prevent Moldova from implementing the Third Energy Package. It must accept direct financial losses.

Third, due to Moldova’s decision to join the EU system of autonomous trade preferences in 2005, Moldovan trade reoriented itself from dependence on Commonwealth of Independent States (CIS) markets. For instance, in 2004, more than 50% of Moldovan exports went to Russia and CIS countries. Now, Moldova has more diversified trade relations. Exports to the EU managed grew from about $400 million in 2004 to $1.3 billion in 2016. The 2016 figures are double the size of Moldova’s trade with Russia in 2012, which reached only $655 million. And 2012 was the best year of Russian-Moldovan trade. The Russian import ban imposed on key Moldovan products in 2013-2014, which prohibited trade in wine, fruits, meat, and other food products, reduced Russian-Moldovan trade. So, too, did the economic crisis in Russia. Moldovan exports to Russia decreased to $230 million in 2016.

However, the Association Agreement that Moldova signed with the EU has not provided any further increases in EU-Moldovan trade. EU import quotas for agricultural products and the organizational and technological problems of Moldovan exporters limit trade growth with the EU. Nevertheless, in terms of trade, Moldova is gradually finding its place in Europe.

Finally, the role of Romania in Moldova should be mentioned. Bucharest sees the Europeanization of Moldova as in its own strategic interest. It focuses now not only on identity issues, but also on economic and soft power efforts to bring Chisinau closer to Europe. Romania is one of the key trade partners for Moldova, surpassing Russia and the biggest EU economies like Germany and France.

Russia’s Power Push in Moldova

Nonetheless, several factors continue to sustain Russian power in Moldova. First, Moldova remains—and likely will remain—on the periphery of the Western economic and political system. For now, the country has no prospects of becoming an EU member. Responsibility for the country’s development is in the hands of the local elites and the population. Political developments over the past few years, including oligarchic wars and billion-dollar thefts, demonstrate that local elites are not capable of developing the country. Moldova still suffers from overwhelming poverty and corruption, a deep cleavage between the cities and the countryside, huge emigration flows, and an oligarchic power system. The country urgently needs political and socioeconomic reform, but doing so would demand serious efforts and political will from the West.

While Brussels keeps Moldova outside of the EU, it nonetheless seeks to preserve the pro-European stance of Moldova. This explains why Western financial assistance and political presence are constantly growing. Yet, this Western presence is sufficient only for providing geopolitical loyalty, not for systemic development.

Frustration with the lack of economic development explains why “Soviet nostalgia” and leftist ideas are so widespread. Both of these trends are embodied by the current president, Igor Dodon. Moldovan elites are interested in Europe as a model of development, but for many ordinary Moldovans, Russia is attractive as a model of stability. For instance, according to a survey in April 2016, Vladimir Putin was the most popular foreign politician in Moldova. Putin gained support of 62% of respondents, while only about 30% backed Chancellor Angela Merkel of Germany or then-U.S. President Barack Obama. The survey shows the same indicators regarding people’s preferences to join either Eurasian Economic Union or European Union.

On top of this dynamic, for ordinary people and business leaders (at least those not affiliated with oligarchic networks), Russian labor and trade markets are still extremely important. Legalization of Moldovan migrants in Russia affects up to 300,000 Moldovans living illegally in Russia or have been prohibited from returning to Russia due to breach of migration law. Even though trade with the EU has surpassed trade with Russia, the relaxation of Russian sanctions on Moldova may return it to being one of Moldova’s main trading partners. During Igor Dodon’s visit to Moscow on March 17, several Moldovan vineyards received access to the Russian market. These measures are intended to increase the popularity of Dodon before the 2018 parliamentary elections.

Second, Russian influence remains strong in Moldova since the country is a borderland between Russia and the European Union. People in Moldova are bilingual; the cultural space exists at the intersection of the Slavic and Romanian worlds. This factor is one of the reasons why Russian media is still popular in the country. The most popular TV stations that rebroadcast Russian TV channels—which are mostly owned by Vlad Plahotniuc, a powerful Moldovan oligarch—care about their commercial interests first and do not necessarily have any political aims. The fact that Romanian language content on local stations is still underdeveloped is best explained as a result of these channels’ unwillingness to invest and their inclination to simply rebroadcast foreign content. Romanian mass-media programs are seen as lower quality than their Russian competitors.

Last, it is important to consider instruments of Russian hard power in Moldova. This type of power, which is represented in Moldova by Russian military forces—both peacekeeping and those guarding the remnants of the former 14th Army—has undergone a substantial transformation. Many analysts assume that Moscow tries to influence Moldova’s foreign policy by keeping the Transnistrian conflict unresolved and by stationing its troops in the region. This assumption is true to some extent, but primarily before 2010. Earlier, the resolution of the Transnistrian conflict was a priority for Moldovan governments. Negotiations were much more intense, and the conflict seemed to be solvable. Yet, after a pro-European government came to power in 2009, Chisinau decided not to pay much attention to reintegrating Transnistria because the region was perceived as a burden to Moldova’s integration into Europe. Instead, it promoted European integration for the rest of Moldova.

Despite Moldova’s recent lack of interest in Transnistria, Russia has not lost hard power resources in the country. Stationing of Russian troops there plays a role in terms of containing NATO, not only in Moldova, but also in Southeastern Europe in general. This is why Moscow stresses that the “constitutional neutrality” of Moldova is a prerequisite for resolving the Transnistrian conflict. But at the end of the day, Russian hard power is unable to influence political and economic processes in Moldova itself. Moldova has never sought to join NATO. Russia’s military only indirectly influences Moldova because its military presence and the unresolved conflict reinforce negative sentiments towards Russia itself.

The Role of Geopolitics in Moldova

Moldova’s status as a borderland has encouraged both Russia and the West to interfere in Moldovan affairs. For instance, the Obama administration, seeking to retain Chisinau’s pro-Western orientation after the Ukrainian crisis, forged close ties with the Pavel Filip government and with Vlad Plahotniuc. The European Union has tried not to diverge much from U.S. policy, but also has supported the right-wing opposition. After Igor Dodon failed to come to power in the aftermath of parliamentary elections in 2014, and even after the social protests in 2015-2016, Russia for some time abstained from interfering in Moldovan politics. The recent cancellation of trade and labor market restrictions and increasing media support for Igor Dodon are Russia’s attempt to increase its influence in Moldova in advance of parliamentary elections in 2018.

Geopolitics has always been a key issue for Moldovan internal politics, too. But geopolitical discourse cannot solve Moldova’s real problems. The omnipotence of “Moscow’s hand” in Moldovan politics is now increasingly doubted. During the last presidential campaign in 2016, this idea became widespread among many right- and even left-wing politicians. However, due to the political tactics of both Igor Dodon and the ruling Democratic Party, the geopolitical frame returned to Moldovan political discourse.

Local political forces used geopolitical arguments to manipulate public opinion. They also manipulate Russia, the U.S., and the EU into providing additional support for their efforts. Many observers even believe that Dodon and Plahotniuc—who are ostensibly political opponents—agreed to play up the geopolitical aspects of their campaigns, foregrounding the opposition between the “pro-European” and “pro-Russian” orientation of Moldova.

Such a move is useful for Moldovan political elites because it allows them to access foreign resources and distract Moldovans from the elite’s failure to reform the country. With parliamentary elections coming in 2018, Russia and the West may again split up along geopolitical frontlines. This struggle will be fruitful only for local political forces—not for Russia, the U.S., the EU, or for ordinary Moldovans.

About the author:
*Andrey Devyatkov
is Senior Research Fellow, Center for Post-Soviet Studies (Institute of Economy, Russian Academy of Sciences) and Associate Professor, Chair of Regional Problems of World Politics, Lomonosov Moscow State University

Source:
This article was published by FPRI.

Published by the Foreign Policy Research Institute

Published by the Foreign Policy Research Institute

Founded in 1955, FPRI (http://www.fpri.org/) is a 501(c)(3) non-profit organization devoted to bringing the insights of scholarship to bear on the development of policies that advance U.S. national interests and seeks to add perspective to events by fitting them into the larger historical and cultural context of international politics.

One thought on “Dynamics Of Russian Power In Moldova – Analysis

  • March 24, 2017 at 12:00 pm
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    Moldova’s presidents first name is IGOR, that says it all.

    Reply

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