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Experts: The economic impact of the pandemic crisis – the latest figures

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The coronavirus pandemic hit the Moldovan economy very hard. At the end of April, the United Nations Moldova forecasted that the blow to economic activity could reach 20% of the country’s GDP during the second quarter of 2020, especially when it comes to the most vulnerable areas. After 6 months since the beginning of the pandemic, economic experts reported the last figures.

The public budget revenues are 3 billion lei lower than initially anticipated. 

During March-May 2020, the budget revenues from taxes and fees were 1.8 billion lei lower (-17.8%) than in the same period of 2019. Taking into consideration that, initially, an increase of revenues by 11.4%was anticipated, the total difference reached 3 billion lei as compared to the initial planned budget, is mentioned in a note of the economic expert, Veaceslav Ionita. According to him, it is the biggest budget loss in the history of the Republic of Moldova.

The economist mentioned that, even though the public budget revenues increased beyond the expectations in the first 2 months of 2020, this surplus could not save the situation, as there was a decrease of revenues by 30.7% in April only. “Budget expenditures are 18 billion lei higher than possible revenues this year and, without external financial support, it is impossible to honour all budgetary obligations assumed by the Government,” said the expert.

Moldova’s foreign trade has fallen by 26.2% when compared to the same period last year. 

In the first 3 months of economic crisis (March-May), the volume of foreign trade of Moldova decreased by $ 582 million (-26.3%), as compared to the same period of 2019, as Ionita reported.

Imports fell by $ 414 million (-27.1%), the decrease being determined by the inactivity of commercial units during the quarantine, reduction of the population’s consumption and petroleum products fall in prices and consumption, as the expert also stated. Exports decreased by $ 168 million (-24.5%). Exports to EU countries suffered the biggest decline, as they dropped by $ 127 million (-29.2%) during this period.

The wine sector, as the most export-dependent industry (over 85% of wine production in Moldova is directed to export), would be hit the most. In 2020, exports of wine products could fall again below $ 100 million (the level of 1998), according to the forecasts of IDIS Viitorul experts.

See also: Coronavirus drains the wine industry

Moreover, the crisis affects not only winemakers, but also farmers, glass factories, carriers and other related industries. The wine industry in the Republic of Moldova is the only branch where the entire production cycle is local. Giving the current situation, experts advised domestic sales opportunities to be identified.

According to the information presented by the National Bureau of Statistics (NBS), both exports and imports started to recover in May, when a series of pandemic restrictions were lifted.

Passenger transportation services have decreased 4.5 times as compared to 2019.

In January – May 2020, 46.7% less passengers used public transportation in Moldova, when compared to 2019, as the NBS data stated. The number of passengers decreased 4.5 times compared to the period of March-May 2019, according to an analytical note of Veaceslav Ionita.

The expert claimed that, during this period, air transport suffered the most. It was reduced by 5.7 times, as compared to the same period last year. At the same time, the land transport has decreased 4 times. As the land transport is mostly operated by local companies, the domestic carriers were affected the most by the crisis.

The railway, road, river and air freight transport companies transported 5.8 million tons of goods in the pandemic period, that being 13.9% less than in 2019.

The real estate market has decreased by 36% in the second quarter of 2020.

In April – June 2020, 36% less transactions with (buying and selling) apartments were performed than the same period in 2019, according to Veaceslav Ionita. The reduction in the number of transactions also influenced mortgage loans. Thus, in the second quarter of 2020, there were 2.3 times less apartments purchased through mortgages as compared to 2019. However, both the number of transactions and mortgage purchases have reached the pre-boom level (2018-2019).

The nominal increase in salaries (recalculated in euro) and the decrease in the price of apartments led to the fact that a family’s effort to purchase an apartment was eased by 13% this year. Thus, for the purchase of an apartment of 70 square meters in Chisinau are required 7.6 annual salaries, as compared to 8.7 annual salaries in 2019, stated the economic expert.

The foreign exchange market has contracted by 42% when compared to 2019.

During the pandemic period, the foreign exchange market in the Republic of Moldova contracted by over 42%, that being much more than it was recorded in the crisis of 2015, when the foreign exchange market fell by 31%. “In fact, the foreign exchange market contracting was determined by the slowdown in economic life, caused by the COVID-19 crisis,” explained Ionita.

The total turnover of the foreign exchange market decreased by $ 543 million in 2020 – the lowest value in the last eight years.

Foreign currency sales to individuals fell by $ 93 million (-42%). This decline could be explained by the low demand of foreign currency purchases and reducing the population’s tendency for foreign exchange savings. Foreign currency sales to legal entities decreased by $ 159 million (-38%), that being determined by the sharp decrease of imports in the Republic of Moldova.

See also: Record remittances sent to Moldova during the COVID-19 pandemic – expert’s explanation

The number of people who had a job, but did not work at all increased 2 times.

The NBS reported that 33.2 thousand people (4.1% of the total employed population) and their situation at work was affected by the coronavirus pandemic. The number of people who had a job, but did not work at all increased 2 times (4.9%) in the first quarter of 2020 as compared to the same period of 2019. The number of people on unpaid leave increased 3.5 times, in annual leave – 2.9 times and those on technical unemployment – 1.6 times. More than a half of these people weren’t paid by companies while staying at home.

At the same time, 16.6 thousand people worked from home during the pandemic crisis, this number increasing 2.5 times as compared to the first quarter of 2019.  51.1 thousand people (6.3% of total employment) were employed on a part-time basis in the first quarter of 2020.

A recent survey conducted by the iData company during June-July, on 1 511 respondents showed that 22% of respondents lost their incomes during the COVID-19 crisis, while 4% had to sell their belongings to handle the crisis. About 48.4% of respondents used their savings, 35.2% saved on other items to handle necessity expenses, 30% borrowed money, and 3.9% sold personal goods.

55% of respondents said most expenses went to food, followed by healthcare and home maintenance.

The lockdown delivered a serious blow especially to such sectors as retail trade, restaurants, catering, tourism, recreation and cultural activities. The real economic impact on these sectors is yet to be assessed and reflected in future economic reports.

Photo: Michelle Ziling Ou| Unsplash

Society

“They are not needy, but they need help”. How Moldovan volunteers try to create a safe environment for the Ukrainian refugees

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At the Government’s ground floor, the phones ring constantly, the laptop screens never reach standby. In one corner of the room there is a logistics planning meeting, someone has a call on Zoom with partners and donors, someone else finally managed to take a cookie and make some coffee. Everyone is exhausted and have sleepy red eyes, but the volunteers still have a lot of energy and dedication to help in creating a safe place for the Ukrainian refugees.

“It’s like a continuous bustle just so you won’t read the news. You get home sometimes and you don’t have time for news, and that somehow helps. It’s a kind of solidarity and mutual support,” says Vlada Ciobanu, volunteer responsible for communication and fundraising.

The volunteers group was formed from the very first day of war. A Facebook page was created, where all types of messages immediately started to flow: “I offer accommodation”, “I want to help”, “I want to get involved”, “Where can I bring the products?”, “I have a car and I can go to the customs”. Soon, the authorities also started asking for volunteers’ support. Now they all work together, coordinate activities and try to find solutions to the most difficult problems.

Is accommodation needed for 10, 200 or 800 people? Do you need transportation to the customs? Does anyone want to deliver 3 tons of apples and does not know where? Do you need medicine or mobile toilets? All these questions require prompt answers and actions. Blankets, sheets, diapers, hygiene products, food, clothes – people bring everything, and someone needs to quickly find ways of delivering them to those who need them.

Sometimes this collaboration is difficult, involves a lot of bureaucracy, and it can be difficult to get answers on time. “Republic of Moldova has never faced such a large influx of refugees and, probably because nobody thought this could happen, a mechanism of this kind of crisis has not been developed. Due to the absence of such a mechanism that the state should have created, we, the volunteers, intervened and tried to help in a practical way for the spontaneous and on the sport solutions of the problems,” mentions Ecaterina Luțișina, volunteer responsible for the refugees’ accommodation.

Ana Maria Popa, one of the founders of the group “Help Ukrainians in Moldova/SOS Українці Молдовa” says that the toughest thing is to find time and have a clear mind in managing different procedures, although things still happen somehow naturally. Everyone is ready to intervene and help, to take on more responsibilities and to act immediately when needed. The biggest challenges arise when it is necessary to accommodate large families, people with special needs, for which alternative solutions must be identified.

Goods and donations

The volunteers try to cope with the high flow of requests for both accommodation and products of all kinds. “It came to me as a shock and a panic when I found out that both mothers who are now in Ukraine, as well as those who found refuge in our country are losing their milk because of stress. We are trying to fill an enormous need for milk powder, for which the demand is high and the stocks are decreasing”, says Steliana, the volunteer responsible for the distribution of goods from the donation centers.

Several centers have been set up to collect donations in all regions of Chisinau, and volunteers are redirecting the goods to where the refugees are. A system for processing and monitoring donations has already been established, while the volunteer drivers take over the order only according to a unique code.

Volunteers from the collection centers also do the inventory – the donated goods and the distributed goods. The rest is transported to Vatra deposit, from where it is distributed to the placement centers where more than 50 refugees are housed.

When they want to donate goods, but they don’t know what would be needed, people are urged to put themselves in the position of refugees and ask themselves what would they need most if they wake up overnight and have to hurriedly pack their bags and run away. Steliana wants to emphasise that “these people are not needy, but these people need help. They did not choose to end up in this situation.”

Furthermore, the volunteer Cristina Sîrbu seeks to identify producers and negotiate prices for products needed by refugees, thus mediating the procurement process for NGOs with which she collaborates, such as Caritas, World Children’s Fund, Polish Solidarity Fund, Lifting hands, Peace Corps and others.

One of the challenges she is facing now is the identifying a mattress manufacturer in the West, because the Moldovan mattress manufacturer that has been helping so far no longer has polyurethane, a raw material usually imported from Russia and Ukraine.

Cristina also needs to find solutions for the needs of the volunteer groups – phones, laptops, gsm connection and internet for a good carrying out of activities.

Hate messages

The most difficult thing for the communication team is to manage the hate messages on the social networks, which started to appear more often. “Even if there is some sort of dissatisfaction from the Ukrainian refugees and those who offer help, we live now in a very diverse society, there are different kind of people, and we act very differently under stress,” said Vlada Ciobanu.

Translation by Cătălina Bîrsanu

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Featured

FC Sheriff Tiraspol victory: can national pride go hand in hand with political separatism?

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A new football club has earned a leading place in the UEFA Champions League groups and starred in the headlines of worldwide football news yesterday. The Football Club Sheriff Tiraspol claimed a win with the score 2-1 against Real Madrid on the Santiago Bernabeu Stadium in Madrid. That made Sheriff Tiraspol the leader in Group D of the Champions League, including the football club in the groups of the most important European interclub competition for the first time ever.

International media outlets called it a miracle, a shock and a historic event, while strongly emphasizing the origin of the team and the existing political conflict between the two banks of the Dniester. “Football club from a pro-Russian separatist enclave in Moldova pulls off one of the greatest upsets in Champions League history,” claimed the news portals. “Sheriff crushed Real!” they said.

Moldovans made a big fuss out of it on social media, splitting into two groups: those who praised the team and the Republic of Moldova for making history and those who declared that the football club and their merits belong to Transnistria – a problematic breakaway region that claims to be a separate country.

Both groups are right and not right at the same time, as there is a bunch of ethical, political, social and practical matters that need to be considered.

Is it Moldova?

First of all, every Moldovan either from the right or left bank of Dniester (Transnistria) is free to identify himself with this achievement or not to do so, said Vitalie Spranceana, a sociologist, blogger, journalist and urban activist. According to him, boycotting the football club for being a separatist team is wrong.

At the same time, “it’s an illusion to think that territory matters when it comes to football clubs,” Spranceana claimed. “Big teams, the ones included in the Champions League, have long lost their connection both with the countries in which they operate, and with the cities in which they appeared and to which they linked their history. […] In the age of globalized commercial football, teams, including the so-called local ones, are nothing more than global traveling commercial circuses, incidentally linked to cities, but more closely linked to all sorts of dirty, semi-dirty and cleaner cash flows.”

What is more important in this case is the consistency, not so much of citizens, as of politicians from the government who have “no right to celebrate the success of separatism,” as they represent “the national interests, not the personal or collective pleasures of certain segments of the population,” believes the political expert Dionis Cenusa. The victory of FC Sheriff encourages Transnistrian separatism, which receives validation now, he also stated.

“I don’t know how it happens that the “proud Moldovans who chose democracy”, in their enthusiasm for Sheriff Tiraspol’s victory over Real Madrid, forget the need for total and unconditional withdrawal of Russian troops from Transnistria!” declared the journalist Vitalie Ciobanu.

Nowadays, FC Sheriff Tiraspol has no other choice than to represent Moldova internationally. For many years, the team used the Moldovan Football Federation in order to be able to participate in championships, including international ones. That is because the region remains unrecognised by the international community. However, the club’s victory is presented as that of Transnistria within the region, without any reference to the Republic of Moldova, its separatist character being applied in this case especially.

Is it a victory?

In fact, FC Sheriff Tiraspol joining the Champions League is a huge image breakthrough for the Transnistrian region, as the journalist Madalin Necsutu claimed. It is the success of the Tiraspol Club oligarchic patrons. From the practical point of view, FC Sheriff Tiraspol is a sports entity that serves its own interests and the interests of its owners, being dependent on the money invested by Tiraspol (but not only) oligarchs.

Here comes the real dilemma: the Transnistrian team, which is generously funded by money received from corruption schemes and money laundering, is waging an unequal fight with the rest of the Moldovan football clubs, the journalist also declared. The Tiraspol team is about to raise 15.6 million euro for reaching the Champions League groups and the amounts increase depending on their future performance. According to Necsutu, these money will go directly on the account of the club, not to the Moldovan Football Federation, creating an even bigger gab between FC Sheriff and other football clubs from Moldova who have much more modest financial possibilities.

“I do not see anything useful for Moldovan football, not a single Moldovan player is part of FC Sheriff Tiraspol. I do not see anything beneficial for the Moldovan Football Federation or any national team.”

Is it only about football?

FC Sheriff Tiraspol, with a total estimated value of 12.8 million euros, is controlled by Victor Gusan and Ilya Kazmala, being part of Sheriff Holding – a company that controls the trade of wholesale, retail food, fuels and medicine by having monopolies on these markets in Transnistria. The holding carries out car trading activities, but also operates in the field of construction and real estate. Gusan’s people also hold all of the main leadership offices in the breakaway region, from Parliament to the Prime Minister’s seat or the Presidency.

The football club is supported by a holding alleged of smuggling, corruption, money laundering and organised crime. Moldovan media outlets published investigations about the signals regarding the Sheriff’s holding involvement in the vote mobilization and remuneration of citizens on the left bank of the Dniester who participated in the snap parliamentary elections this summer and who were eager to vote for the pro-Russian socialist-communist bloc.

Considering the above, there is a great probability that the Republic of Moldova will still be represented by a football club that is not identified as being Moldovan, being funded from obscure money, growing in power and promoting the Transnistrian conflict in the future as well.

Photo: unknown

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Elections

Russia’s legislative elections: Why are there 27 polling stations in Transnistria?

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Legislative elections are currently being held in Russia between September 17-19, as 450 new members in the State Duma need to be elected.

The Central Election Commission (CEC) of the Russian Federation decided to open a record number of polling stations in the Transnistrian region – 27 polling stations, in addition to only 3 polling station opened on the right bank of the Dniester in such big cities as Chisinau, Comrat and Balti.

That is the largest number of polling stations opened by the Russian CEC in a foreign country, and five polling stations more than in the 2016 elections. Two of the polling stations were established in Tiraspol, being open from Friday to Sunday. The rest of the Russian polling stations on the Transnistrian territory are opened on Sunday only. The most astonishing fact is that no state other than Russia has ever opened polling stations in the separatist region of the Republic of Moldova. Actually, no polling stations are being opened on the Transnistrian territory when it comes to national elections of the Republic of Moldova either.

Therefore, one could say that the stakes are high when it comes to Transnistrian voters, especially since, most likely, the hopes of Russian authorities are not necessarily based on a large turnout and their real support, rather on the real possibility of electoral fraud on a territory that is not controlled by the constitutional authorities in Chisinau.

Before the presidential elections in 2018, Russian authorities announced that there are 220 thousand Russian citizens living in the Transnistrian region. That time, 24 polling stations were opened in the separatist area. Despite the fact that the Tiraspol Electoral Commission announced that, in the last year and a half alone, the voter turnout has officially fallen in the region by more than 7 700 people, the Russian CEC still decided to establish a record number of polling stations this year, which strengthened the argument about the possibility of election fraud.

Both Tiraspol’s administration and the regional media campaigned for the ruling political party United Russia and called for a high turnout at polling stations. Transnistria’s leader, Vadim Krasnoselski, urged the people on the left bank of the Dniester to come to the polls “because despite all the difficulties, Russia does not forget Transnistria and helps it as much as possible.”

It seems that the campaigning, along with the Russian sponsorship in the region, show great results during every election ballot, as Russian citizens voting in Russian elections in Transnistria are a more active electorate than Moldovan citizens residing in Transnistria and voting in the Moldovan elections at the polling stations arranged on the other bank of the Dniester, especially for them. In the previous Russia’s legislative elections, 56 thousand people voted in Transnistria, while just under 29 thousand inhabitants of the Transnistrian region voted in the recent Moldova’s parliamentary elections.

Before every election ballot held in the Russian Federation, Moldovan authorities make statements, suggesting the Russian side to abstain from opening polling stations in Transnistria, whereas Russian authorities ignore them every time.

This year, the Ministry of Foreign Affairs and European Integration of the Republic of Moldova also sent a note of protest against opening the polling stations in Transnistria. “The Ministry of Foreign Affairs and European Integration regrets that, despite the position consistently expressed by the Moldovan authorities, the Russian side acted in a manner that does not correspond to the principle of sovereignty and territorial integrity of the Republic of Moldova and the bilateral legal framework.”

The Ministry representatives noted that Russian authorities were informed of the lack of impediments to open polling stations in localities under the control of Moldova’s constitutional authorities and requested the Russian side to refrain from opening the 27 polling stations in the localities of the breakaway region, given the impossibility of ensuring the necessary security conditions for the current elections.

Moscow’s Central Election Commission also opened nine polling stations in Abkhazia and ten in South Ossetia – two disputed territories that were internationally recognised by Russia and a few more countries, while considered under military occupation, according to the Georgian Government. These lands, that are under the exclusive control of Russia, offer good opportunities to ‘correct’ any uncomfortable results obtained in the country, where the ruling political party no longer enjoys as much support as it wants to appear.

Photo: wjct.org

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