Never let a good crisis go to waste. This seems to be the motto of the current political leadership of Moldova, which wants to take advantage of the pandemic to further weaken our democracy and economy and to advance shady deals, including a €200 million loan with Russia. As they have done in the past, the Western friends of Moldova should call out these actions and join the pro-democratic forces in combating corruption and democratic backsliding. Once again, Moldova is fighting the authoritarian and self-interested tendencies of its leaders, and the West should become more vocal. Despite COVID-19 legitimate concerns at home, the EU/NATO’s security also matters.
The world is caught up with mitigating the healthcare and economic consequences of the COVID-19 pandemic. It is hard for a country such as Moldova to get the attention of the international media and trigger reactions when the scope of the pandemic is so extensive. This seems to also be the thinking of Moldovan president, Igor Dodon and the government run by his former advisor, Ion Chicu. Although Russia has its own problems (a number of coronavirus cases higher than China, an economy destabilised by the plummeting oil price and the international sanctions), the President of Moldova announced in mid-April that the country has secured a €200 million loan from Moscow aimed at improving the country’s road infrastructure. The idea of the loan was initially launched in December 2019, with the agreement initially proposed to be finalised by February. The loan amount was also not very clear, as it went from €500 million down to €300 million before settling as €200 million in the agreement.
For the last few months, the loan has been like a unicorn – no one had seen it but President Dodon and his government have been periodically talking about it. When the agreement was sent to the Moldovan parliament for ratification last week, our worst fears for why there was so much secrecy surrounding the deal were confirmed. Simply put, the negotiated agreement is toxic for my country. Let me tell you why.
First, the sole aim of the loan is electoral. It is meant to boost the re-election chances of President Dodon in this year’s presidential elections. Although the loan is primarily directed at upgrading the infrastructure, half of the amount will be disbursed at the end of October, just days before the elections (and the start of the winter). Second, Moldova will pay a high interest rate of 2%, but the penalty for missed payments is unheard of at 150%. Third, Moldova would have to guarantee the participation of Russian companies to public procurement tenders for goods and services. Fourth, the most contested provision allows Russia to consolidate the debts that derive from the €200-million credit or any other credit borrowed by Moldovan private entities from the Russian banks, with the approval of the Moldovan authorities. Finally, no dispute settlement mechanism is defined, and any conflict should be solved through “bilateral consultations and negotiations.”
On top of all this, no one knows who negotiated the deal and under what mandate. The government did not approve any guidelines for the negotiations and refused to answer our call in parliament to disclose how the process took place. I even wrote a letter to the Russian prime minister, Mikhail Mishustin, to inquire about how the negotiations were conducted. Although the agreement has not been approved by the Russian side, the Moldovan government did not take into consideration our call to correct the controversial aspects of the deal.
Something is rotten in the state of Moldova and the reaction of the president and the prime minister only proves it. Given the lack of convincing answers, my party, the newly formed Pro Moldova group, has asked the Constitutional Court to analyse the constitutionality of the ratification law. The decision is pending, but already hinting at procedural flaws, the Court suspended the application of the bill last week. The president exploded, started to attack an independent court and threatened that pensions and wages will not be paid if the deal does not come through. The reactions are clearly exaggerated, and simply inconsistent with the idea that the loan would be used for road infrastructure, but this is so typical of the behaviour of someone whose true intentions have been exposed.
The deal is a blueprint for political corruption and economic inefficiency. Unfortunately, this is also consistent with our recent past, as $1 billion (€916 million) was stolen from the Moldovan banking system between 2012 and 2014. What is new is that our leaders try to frighten the population just to continue with their plans. Yes, Moldova needs all the resources it could find to get through this crisis. Fortunately, we have already secured $235 million (€215 million) from the IMF to address the COVID-19 pandemic.
Moreover, the European Union has chipped in with a €100-million assistance package for our country. Romania has also just announced direct support for our medical system. There are other resources Moldova can tap into, and all can be done with transparency and care for public resources. The current deal with Russia is so flawed that it should be immediately abandoned, and the loan process restarted only after basic norms of openness and democratic accountability are satisfied.
Things are becoming very serious in Moldova. Our leaders want to take advantage of the pandemic to weaken our young democracy and to enrich themselves. The masks are off and President Dodon and the government, together with those from the Democratic Party of Moldova who support them in the parliament, should be treated accordingly. Turning a blind eye to these schemes would only embolden these closeted autocrats. They should not be ignored but sanctioned for political and democratic corruption.
Any actions against them should not affect the Moldovan people, who struggle even more because of the pandemic and need all the support they can get. It is really the time to see some clear political gestures against political leaders who cynically use the language of European integration only to receive European/Western support and then siphon off the money in coordination with their partners in crime.
My hope is that the democratic, pro-European opposition will unite behind a credible candidate and put an end to the Dodon presidency in November. A strong international reaction to the government’s shenanigans could start the ball rolling.
Andrian Candu is leader of the Pro Moldova party, and a former Speaker of the Moldovan parliament.
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