Tiraspol offers an “economy without politics” - what are the chances?

Dmitry Astakhov, RTA Transdniestria or the ‘Pridnestrovian Moldavian Republic’ is both a classical and a unique example of frozen conflicts in the former USSR countries. The Transdniestrian statehood arose on ruins of the socialist empire as a result of militant policy of the Moldovan national elite and irresponsible steps of the central Kremlin leadership that ‘cut’ the union republics without regard for historical and national background. The Transdniestrian conflict is typical as it had ethnolinguistic preconditions, it happened in the years of the USSR collapsed; and Moscow supporting the PMR with financing and mentoring took the self-proclaimed republic under patronage. So that was the case in South Ossetia and Abkhazia, besides, all three republics Russia guaranteed security through the presence of their peacekeeping forces. The case of Transdniestria is unique as the conflict between Tiraspol and Chisinau had deep worldview origins that had no direct relation to the national factor, but were related to language, self-awareness, attitude to history, vision of the future, etc. Contemporaries of those events note that in fact there were people of one nationality in the trenches on opposite sides, including Russians, Moldovans, Ukrainians, etc. Eventually, due to its ambiguity and complexity, the Transdniestrian conflict for many years turned out to be really frozen without clear and applicable settlement models. Economy of the unrecognized republic as a whole corresponds to the multifaceted political situation around the ‘PMR’. According to various estimates, Pridnestrovie ‘inherited’ the majority of industrial production of Soviet Moldova. A significant part of these enterprises are industrial giants, factories of ‘all-Union’ significance that cannot exist without greater sales markets, in other words, they are export oriented. Some of them were doomed to fail in a free economy, the others managed to adapt. Until 2006, the PMR industry worked mainly with Russia and the CIS countries – more than 50% of Transdniestrian exports went to the East. However, light industry, metal industry and electric power industry were actively developing Western markets. In 2006, Ukraine tightened its customs rules for Transdniestrian goods – exporting enterprises were required to register in Moldova and pay respective payments to the budget of the Republic of Moldova. At the same time, the European Union provided the Republic of Moldova with trade preferences, which could also be used by the registered in Moldova Transdniestrian business. The result is predictable – markets of Moldova and Europe today hold about 60% of exports from the ‘PMR’. That’s interesting that at the political level Tiraspol adheres to the previous guidelines, the leadership of the unrecognized republic emphasizes the course toward independence and rapprochement with Russia. For Transdniestria, the pro-Russian development is applied ‘by default’, which is connected, first of all, with the population’s identity. People in the republic watch Russian TV and learn from Russian textbooks, the management system in one way or another adopts Russian experience and develops it following the Russian practice of public management. Transdniestria is also one of the largest Russian diasporas in Europe, therefore in terms of value orientations its population associates itself with the Russian Federation (and the older generation also with the Soviet Union). Transdniestrian ruling circles, in particular, its President Vadim Krasnoselsky are consistently making attempts to intensify trade cooperation with Russia. Representatives of the local parliament and government regularly attend Russian economic forums and other potentially promising events. Transdniestrian Foreign Minister, Head of the Government, and even the President himself are often guests in Moscow. As long as former Russian Deputy Prime Minister Dmitry Rogozin retained the position of Special Representative for Transdniestria, all his meetings with the leader of the self-proclaimed republic touched upon possible investment projects of Russia in Transdniestria. For example, the Transdniestrian leader repeatedly put forward an initiative on concessional lending to the Transdniestrian enterprises by Russian banks, and also called on to simplify access of goods from the ‘PMR’ to the Russian market. It is unclear to what extent the ideas of the Transdniestrian leadership have found a response in Moscow. In the public sphere, there is almost no information on how the interaction goes between Moscow and Tiraspol after resignation of Dmitry Rogozin. On the part of Tiraspol, however, certain signals are heard that the format of humanitarian cooperation needs revision. Transdniestrian media published that the construction firms of Transdniestria, who built infrastructure projects at the expense of the Russian ANO Eurasian Integration, did not receive money for the work done. It is about more than two million dollars, which, according to Tiraspol, were withdrawn through the fly-by-night companies created around the ANO Eurasian integration. It is interesting that the ANO Eurasian integration was a personal point of pride for Dmitry Rogozin, an exemplary project, symbolizing the humanitarian mission of Russia in the ‘PMR’. Published information about the embezzlement that was committed is a very concrete signal and a very bold step for a de facto state, which, according to experts, has always been a ‘mentee’ of Moscow. Tiraspol declares attraction of foreign investments a strategic goal and, obviously, seeks to bring Russian capital into the economy. Against the backdrop of traditional high political and economic activity of the European Union and growth of the trade turnover of Transdniestria with European countries, Transdniestria sends signals to Russia, realizing that political partnership in the long term needs to be recharged with real practical deeds. On June 5, Tiraspol hosted a unique event, ambassadors and diplomatic representatives of twenty countries and some international organizations accredited to Chisinau arrived in Tiraspol at the invitation of the republic’s leaders. There was presentation of a new investment legislation of Transdniestria, President Krasnoselsky and heads of government and parliament attended the event. Website of the Transdniestrian leader shows a group photo of the PMR leadership with European ambassadors – an unusual event for the republic, which none of the countries represented officially regards as an international entity. Local media reported that there were organized tours around leading enterprises of the unrecognized republic for the foreign diplomats. The Transdniestrian officials did not hide the fact that they expect a specific economic effect from that visit in the form of European investments. Ambassadors who arrived in Tiraspol commended this idea in communication with the local press and promised to hold consultations with their domestic business. The Russian Ambassador to Moldova also visited the organized investment presentation – he is also on the photo. Truth be told, the Russian media outlets markedly ignored the event. Classical approaches to the political process theory suggest that politics and economy are inseparable. The Transdniestrian republic as of 2018 demonstrates the situation when trajectories of politics and economy are to some extent different and this trend will only increase over time. Tiraspol in every possible way demonstrates interest in intensive development of production and in construction of a self-sufficient economy. Most likely, the Transdniestrian leadership also does not get inspired by the experience of Abkhazia and South Ossetia, which remain closely dependent on Russian budgetary subsidies. The intention to attract investments from the West and the East is distinctly pragmatic, since, unlike direct financial subsidies, investment support has a less pronounced ‘binding’ effect, and therefore less political risks. Tiraspol offers to key regional players interesting investment opportunities on the scale of such territory, suggesting “to separate economy from politics” (formula of the Transdniestrian leader Vadim Krasnoselsky) and to build pragmatic relations. Over the past year and a half, this ‘package’ proposal was presented to both Moscow and the European Union, and thus attitude of the main actors of the Moldovan-Transdniestrian settlement process to this offer will largely determine their future status. The Transdniestrian agenda requires new approaches, and those who propose them will at the current stage receive an initiative in determining the future of the entire region. Such a hypothesis seems reasonable in the context of long overdue reloading in the relations between Moscow and Brussels, including revision of positions on the situation in Ukraine. In the framework of this narrative, neighboring Transdniestria can be a subject of discussion and a platform for developing new models and approaches. The only question is who will be best able to prepare for the new level of the regional ‘game’ and to concentrate factors and resources of influence. Taking into account the political processes close to the bifurcation point in Moldova and Ukraine, there is no doubt that a new round of the Great Game on the ‘small field’ will take place.