Moldova Country Brief
Introduction/overview
Moldova is a landlocked country in Eastern Europe, located between Romania to the west and Ukraine to the north, east and south. Moldova emerged as an independent republic in 1991 following the collapse of the Soviet Union. The majority of Moldova’s 3.4 million citizens are of Romanian descent, and the two countries share a common cultural heritage. The official language is Moldovan. The city of Chişinău is Moldova's capital.
Political overview
Moldova is a republic with a President as its Head of State and a Prime Minister as its Head of Government. Its parliament is unicameral, comprising 101 seats, to which members are elected from party lists on a proportional representation basis. The President is directly elected by the parliament for a four-year term. The President in turn appoints the Prime Minister with the approval of the parliament.
Moldova declared its independence from the Soviet Union on 27 August 1991, and celebrates its national day on the anniversary of this date. However, after parliamentary elections in 2001, Moldova became the first former Soviet republic to return the Communist Party to power since the fall of the Soviet Union. Vladimir Voronin was elected President, and Vasile Tarlev was appointed Prime Minister. In April 2005, parliament re-elected Voronin as President for a second term and he in turn re-appointed Mr Vasile Tarlev as Prime Minister. After Mr Tarlev resigned in March 2008, Ms Zinaida Greceanii was appointed Prime Minister after a vote of confidence of the Parliament.
The most recent parliamentary elections were held on 29July 2009, and saw President Voronin’s ruling Communist Party lose 20percent of its seats. Earlier elections held on 5 April 2009 had resulted in a hung parliament and failure to elect a new president. Under President Voronin, Moldova has actively participated in the EU's European Neighbourhood Policy (ENP). Moldova has requested a new agreement to replace the EU-Moldova Partnership and Cooperation Agreement which entered into force in 1998. On 3 December 2008, the EU announced an Eastern Partnership proposal to build on the ENP with its Eastern Partners, including Moldova, and confirmed that its funding for bilateral programs to Moldova between 2007 and 2010 would amount to €209.7 million.
Moldova is a member of the GUAM initiative for co-operation between pro-western former Soviet Union states (Georgia, Ukraine, Azerbaijan and Moldova). In May 2006, GUAM became the "Organisation for Democracy and Economic Development" (ODED) with headquarters in Kyiv, Ukraine.
Transdniestr (or Transnistria) dispute
The fall of the Soviet Union led to a debate in Moldova over its ethnic and cultural identity, including whether Russian should continue to be recognised as an official language, and in September 1990 Transdniestr, the area east of the Dniester river, attempted to break away. This eventually led to a brief civil war in early 1992, following which a ceasefire agreement was signed in July 1992. Transdniestr separatists established their own administration and Russia deployed peacekeeping troops into the region. A Memorandum of Understanding guaranteeing a degree of autonomy for the region was signed in 1997.
In February 2003, President Voronin proposed a new Moldovan constitution in which Transdniestr would be a separate federal unit. Transdniestr authorities participated in the negotiations, but differences of opinion over the structure of the federation and its powers stalled negotiations. In late November 2003, Russia put forward a new proposal for settling the dispute. Although the paper was initially welcomed by President Voronin, opposition from other parties again stalled the negotiations. The region has been under OSCE (Organisation for Security and Cooperation in Europe) supervision since 1993.
The Russian military remains in the breakaway region. Chişinău offers a large degree of autonomy, while Tiraspol (the second largest city in Moldova and the capital and administrative centre of Transnistria) demands independence. Transnistria is internationally recognized as part of Moldova, but the authorities in Chişinău do not exercise any control over that territory.
Economic overview
Moldova is one of the poorest countries in Europe, has significant foreign debt and high unemployment. The economy is based on agriculture, including horticulture, viticulture and tobacco production. The country does not have any significant known mineral deposits and relies heavily on Russian energy.
Economic reform measures have included the introduction of a stable convertible currency and real interest rates, the end of price fixing and export controls, the privatisation of land and the eradication of preferential deals for inefficient state-owned enterprises. The continuing reliance on agriculture, however, means that Moldova's economy is extremely vulnerable to adverse weather conditions and fluctuations in international markets.
Moldova has experienced a recent downturn in its economy as the effects of the global economic crisis have begun to be felt. In April 2009, the International Monetary Fund (IMF) forecast that Moldova's economy would contract by at least 5 per cent in 2009. It also noted that exports had dropped by 20 per cent and that foreign direct investment had been sharply curtailed due to the slump in neighbouring countries.
Bilateral relationship
Australia’s Ambassador in Moscow is accredited to Moldova. Moldova has no resident representation in Australia.
Bilateral economic and trade relationship
Australia's trade and investment relationship with Moldova is currently very small. Total two-way merchandise trade in 2008 was $889,000.
Updated: 23 August 2009