1 – Moldova. Great expectations
BSSB.BE freedomhouse.org 12.10.2016
Political infighting, extensive corruption, and deep social divisions have put Moldova’s democratic development on hold. In 2015, the country experienced further setbacks to developing inclusive, transparent, and efficient governance.
From the start of the year, the country’s deep political crisis triggered instability that pushed reforms into the background. Conflict between two oligarchs formally in coalition, Vlad Filat of the Liberal Democratic Party of Moldova (PLDM) and Vlad Plahotniuc of the Democratic Party of Moldova (PDM), disabled the functioning of the state and led to three changes of government during the year. Despite positive technical efforts in the modernization and European integration of state institutions, reforms have stalled and trust in institutions like the parliament and government has fallen below 7 percent.
The banking scandal that emerged at the end of 2014, in which over $1 billion—equivalent to one-eighth of Moldova’s GDP—disappeared from the state-owned Banca de Economii and two other private banks, dominated politics in 2015. The theft fed into a worsening economic situation and fueled protests starting in February against the failure of law enforcement institutions to investigate.
Piggybacking on the initial civic protests by the “Dignity and Truth” platform, pro-Russian parties organized parallel demonstrations with a similar agenda beginning in September. The protests, political infighting, and finally a self-denunciation by Ilan Shor, a powerful oligarch suspected in the theft, eventually resulted in the arrest of former prime minister Vlad Filat.
The circumstances of Filat’s arrest cast doubt on its efficacy in Moldova’s fight against corruption, however, since it came only after Shor’s statements although much additional evidence had accumulated by that time. Furthermore, despite being named from the start as a key figure in the theft, and despite implicating himself in his own statements, Shor remains at liberty after being elected mayor of Orhei in June 2015.
The formal and informal competition between these main actors to control the public narrative also caused an increase in pressure on the media. Oligarch-controlled business groups that distort information for their benefit control most of the country’s media, albeit with some notable exceptions. During the year, the parliament also made attempts to change legislation in ways that would increase the role of these groups in the media market under the guise of fighting propaganda. Yet civil society, with the support of international organizations, effectively put these changes on hold and successfully fought for regulations governing transparency of media ownership.
Reform of Moldova’s judicial sector has stagnated. Positive steps, like the parliament’s first reading of a new law on the prosecutor’s office, or the 2012 establishment of a National Commission of Integrity to deal with conflicts of interest and declaration of assets, have been offset by political interests’ blocking legislation and preventing the consolidation of strong institutions and practices. There is a clear unwillingness among the competing political elites to implement necessary reforms.
Surprisingly, local elections in June 2015 were well managed and largely considered free and fair, despite fierce competition. The results were not disputed, and even though the governing alliance secured a majority in many regions, left-wing opposition parties also gained significant control of certain areas.
- In local governance, implementation of a new law on local public finances was a positive development, changing the system of transferring funds from the central government to local entities and thus freeing local authorities from a significant mechanism of political influence. Aside from this law, however, other steps foreseen under the decentralization strategy that expired in 2015 have not been taken.
- Implementation of Moldova’s Association Agreement with the European Union was limited to more technical issues, while relations with the EU worsened due to a lack of progress in internal reforms. Negotiations within the 5 + 2 framework to settle the Transnistrian conflict have been on hold since 2014, and with the exception of a decision to expand the application of the economic part of the Association Agreement to Transnistria, there were no significant changes in that area.
- National Democratic Governance rating declined from 5.50 to 5.75 due to political infighting and unremitting political turmoil resulting in constant government instability.
- Local Democratic Governance rating improved from 5.75 to 5.50 due to the implementation of a law on public finances that significantly reduced the ability of national authorities to pressure local authorities.
- Corruption rating declined from 5.75 to 6.00 due to the state’s inability to investigate and take action against the theft of $1 billion from the banking sector and other corruption scandals.
As a result, Moldova’s Democracy Score declined from 4.86 to 4.89.
Outlook for 2016: The conditions that caused the political crisis throughout 2015 are unlikely to be resolved in 2016 without a wide national political compromise, which seems improbable. In a country where reforms have barely progressed when political stability was ensured, the crisis has rendered them nearly impossible. The economic prognosis is grim. The banking sector theft, endemic corruption, and a worsening regional context will impact quality of life even more in 2016 than in the previous year.
National Democratic Governance:
- After a relatively stable political year in 2014, Moldova saw in 2015 the most intense political turmoil and instability since the regime change in 2009, with three different governments in the course of the year.
- The coalition barely functioned at a minimum level of competence—in April it adopted a state budget without a parliamentary vote, as required by law—and did not last long. Infighting led to its collapse in June, and a new coalition was formed by PLDM, PDM, and the Liberal Party (PL), headed by Valeriu Strelet of PLDM. The Strelet government was sacked in late October, formally on allegations of corruption. It then took two months for president Nicolae Timofti to nominate businessman and public figure Ion Sturza to form a new cabinet
- Public protests begun in February by the civic platform “Dignity and Truth” over the failure of law enforcement to investigate the $1 billion banking theft and the country’s worsening living conditions gathered momentum through the year and into the fall. Although some leaders of the platform were connected to Victor and Viorel Topa—oligarch brothers who fled the country five years ago due to conflict with Plahotniuc and later convicted of a variety of crimes—the initial protests were authentically civic in nature.
“Our Party” (of Renato Usatii), piggybacked on civic protests with a similar goal to force early elections, while also backing the idea of a referendum for direct election of the president to replace Moldova’s current system of selection by parliament.
- With protests ongoing in October, prosecutors detained former prime minister Vlad Filat on accusations of masterminding the $1 billion banking theft and taking a $250 million cut. The arrest was hardly a credit to investigators, however, as it was based on self-denunciation by the newly elected mayor of Orhei, Ilan Shor, whom many had named as involved in the theft at the time it was committed.
- Through all of these events, the population’s trust in governing elites dropped to a new low. Clear evidence of oligarchic capture of state institutions and use of ostensibly independent institutions for political ends decreased the level of trust in the parliament to 6 percent (compared to 41 percent in 2009) and similarly low levels for the government and president.
- Against this backdrop of deep disappointment in the ruling elite, new parties started to form. In March, former prime minister Iurie Leanca, who had avoided both camps in the political dispute, split from PLDM to form the European People’s Party of Moldova (PPEM). In December, Dignity and Truth became a political party, polling a solid 12 percent of public support in surveys, although ties between party leader Andrei Nastase and Victor Topa may damage its credibility.
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