After the removal of political barriers, trade and economic cooperation between Russia and Moldova is developing by leaps and bounds
Export goes to the East
After the June events, Chisinau set a course for the restoration of Russian-Moldovan relations, primarily in the trade and economic sphere. But even earlier Igor Dodon started working in this field. After numerous trips to Moscow and meetings with Vladimir Putin, he managed to get liberalization for Moldovan goods and partially revive the economic ties between the two countries.
The President’s energetic diplomacy yielded results. In the first half of the year, Russia moved up in the list of key Moldovan economic partners: it proudly stands fifth in terms of imports from Moldova and second in exports to it. Compared to last year, Russia bought 6.5% more Moldovan goods, and Moldova bought 7.7% more Russian ones. Only the abolition of customs duties for five commodity groups in early 2019 gave Moldova a 30-40% increase in exports for apples, canned food and wine in the first six months.
The latter is especially important. Overproduction of wine materials has been observed in Moldova for a long time – the volume of wine produced in seven years is four times more than needed in the usual markets. Preferential treatment allowed increasing the supply of wine materials to Russia by 61 %. Its extension until the end of 2019 and its continuation next year promised by Dodon creates an attractive channel for exports. Especially given the expected (after the visit of the Rosselkhoznadzor and Rospotrebnadzor experts) expansion of the list of companies admitted to the Russian market. Perhaps soon Moldovan wine will again become a common ‘guest’ in Russian stores.
The head of state partially solved the issue of transit of Moldovan goods through Ukraine: Moscow will issue 1,250 permits for transportation of goods from Moldova. This opens up prospects for Chisinau to enter other markets, for example, the Eurasian Economic Union, Kazakhstan and Kyrgyzstan.
The revival of former economic ties is confirmed by two major events at Moldovan venues – the meeting of the Intergovernmental Commission on Trade and Economic Cooperation and the Moldovan-Russian Economic Forum.
The Intergovernmental Commission is held on September 18-19 under the co-chairmanship of the Russian Minister of Agriculture Dmitry Patrushev and Deputy Prime Minister of Moldova for Reintegration Vasile Sova. Its last meeting in a full format took place back in 2016, and relations at the government level were frozen for three years.
The priority of the Commission is trade, economic and energy issues, as well as social and humanitarian cooperation. An agreement on guarantees for Moldovan labour migrants is expected to be signed: accrual of period for retirement, pensions and allowances. Such a document cannot be overestimated – according to the latest data, there are at least half a million Moldovans in Russia.
“We will try to discuss all issues, including regional cooperation, in order to give impetus to our relations. Then both Chisinau and, I hope, Moscow will consider this a way out of the three-year stagnation,” Vasile Sova commented on the future meeting. In the long term, the Commission will also have to resolve the conflicts arising from the Moldova’s free trade agreements with the CIS and the European Union at the same time.
Following the Intergovernmental Commission, the second Moldovan-Russian Economic Forum will be held on September 20-21 under the slogan “Partnership without borders”. The first took place in September last year and gathered more than 500 people. This year the event will be even bigger: more than a thousand participants from 13 countries are expected. In addition to business representatives, the political establishment of Russia, such as Deputy Prime Minister Dmitry Kozak, governors of Bashkiria and Omsk, deputy heads of regions and other high-ranking officials will arrive at the forum. On the Moldovan side, President Igor Dodon will, of course, personally meet the guests.
Judging by the extensive program of the forum, the event won’t be ‘ceremonious’: discussions on tourism, agriculture, viticulture and winemaking, technology exchange, trips to the regions of Moldova are planned. It is expected that real contracts will be signed on the sidelines of the event. “I hope that the forum will give a new impetus to the investment climate and bilateral economic relations,” President Dodon said.
The growth of mutual trade, joint events in Chisinau – all this is a symbol of the reset of the Moldovan-Russian relations. Igor Dodon has already announced the return of the strategic partnership between Moldova and Russia “to the level desired by the majority of the country’s population”.
Cooperation between the two countries is really developing by leaps and bounds and this is not surprising: previously, it was constrained only by artificial political factors. Russia comes to Moldova seriously and for a long time, which brings obvious and not very benefits for both sides.
At first glance, the main profits go to Chisinau. Moldova gets an excellent opportunity to expand and diversify its export flows without relying only on volatile EU quotas. Moreover, stable access to the huge (and much less competitive in comparison with the EU) Russian market allows restarting and increasing many of the traditional Moldovan productions, which in recent years frankly languished.
Russia wins, first of all, politically through its economic preferences to Moldova. Apparently, the Kremlin for the first time in the post-Soviet space has managed to at least partially turn ove the situation in the country, which has long been under the jurisdiction of the West. Now the monopoly on influence is over, which Moscow’s taking advantage of, strongly increasing its presence in the region and wrapping Moldova with economic ties. Secondly, a beautiful picture of Russian-Moldovan relations works perfectly for the Russian public, which is clearly tired of conflicts in the CIS.
Finally, Russia is simultaneously pumping up popularity of Igor Dodon and the socialists, who, unlike the coalition partners, bring not just new loans for the country, but real investments and markets for Moldovan goods. ACUM bloc, extremely restrained in contacts on the Russian track, must be following with concern the strengthening of Russia’s influence in Moldova, remembering the saying ‘beware of Greeks bearing gifts’. However, given the deplorable economic situation of Moldova, any port in a storm.
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