Original Russian version is here
The chronicle of governments*
On the eve of creation of
the new Government, its program, organizational structure and persons involved,
it's time to look back: how was it for the predecessors? What patrimony they
They speak, that the history
goes on in spiral. The chronicle of governments of Republic Moldova is not an
exception, though all happens here much too quicker - each turn takes about one
year. Western "advances" are replaced by wind "from east",
liberal views by conservative ones. Although, the circle of persons involved
"in ruling", is usually limited, and, probably, time will be required,
that it is refreshed, at last, by new generation.
Government of Druc, May
1990 - June 1991
On the dawn of
"perestroika" the last Supreme Soviet of Moldovan Soviet Republic was
elected. It has gathered in May, 1990. And the majority in it were oriented
towards radical and fast changes. But for the position of Premier
the deputies did not find a local "radical", and thus with a majority
they have elected Mircea Druc he then in Moscow was studying Latin
philology, afterwards he studied at H. Popov's Chair in Moscow State University
the art of management, and he later joined the Popular Front.
It was Druc who suggested to
call the country "Republic of Moldova", so that it differs from the
other Moldova on the other bank of river Prut. He also made order with
Communist Party's property: he gave the buildings to courts, science and
children. Then he gathered directors of enterprises working for USSR and told
them: "I don't need you!". Then he gathered State Planning Committee
and said: "So, this is that force, which slows down the transition to
market economy" etc. And the drain of specialists started.
Mircea Druc was the first to
reorganize state apparatus: number of ministries and departments was reduced to
16. However, also began the so called "cumatrism" (Romanian: people
promoting relatives in job positions): state minister became his cousin... There
was no problem with personnel because all were in a big euphoria. The only thing
that counted was that "it's better to have our boys in place honest and
worthy guys". However, there was no corruption in today's scale
conscience was still holding the people.
Upon submission of
Government, through Parliament, the "first wave" of laws with market
orientation has passed. A lot was copied from the Romanian legislation and from
popular at the time the Baltics. These laws were in many respects too
declarative: regarding the property, local self-administration, bankruptcy, tax
reform. But the main thing was said: from plan to market! The Program of socio
economic development of village was also approved, which remained on paper. On
the other hand, then the land Code was accepted, which was consequently updated,
but has survived.
The first "Program of
transition to manageable (!) market economy" was adopted in the autumn of
1990. Among others, its preamble said: "the transition to market economy
will be difficult, but will take no more, than one - 1,5 years". And 40
people wrote in good moods this program in Holercani (region famous for its
resort places for officials)...
Druc's government was
also the first to raise the question about
integration of the territorial-administrative system of the country (i.e. to
make bigger administrative units). But in the foreground was the politics
aiming at destroying the Soviet party nomenclature in the field, because
in every district or town there were 300-500
such persons. Three variants were offered: 9, 12, 24 districts (elaborated by
the research institute of Planning and the Department of local administration of
the Government). The idea was to take into account the historical factors, as
well as demographic, natural, economic specialization, labor gravitation etc.
But nothing was about national criterion! The project has remained
There were also thoughts
about the national currency: to convert it to "silver". This was
suggested by professor Rugina, US national born in Basarabia. All ended in prose
- in 1990 upon Government's proposal, enterprises and organizations have
input considerable amounts in rubles to defend
the territorial integrity, and the largest part of these funds ended up outside
this very territory.
The first visit as a
Premier, although informal, Druc was to Rome, on a plain "Volga" car.
In memory of this event we see the she-wolf before the History Museum. While the
first economic oriented visit was done by the minister of supply of materials
Constantin Iavorschi to Burundi, Central Africa.
After returning, he was
telling on TV that Burundi badly needed our wines, textiles and metal for
construction, while we needed their coffee in grains and papaya. This papaya
thing then became a commonly used funny phrase.
Government of Muravschi,
June 1991 - June 1992
There were many undertakings
by the first Government, but the explosive character of the Premier, absence of
compromises, including in the field of the interethnic relations, have led to a
renewal of the Cabinet. Parliament appointed as Premier the more tolerable
Valeriu Muravschi, former minister of the finance. A key figure of the second
Government was Gheorghe Efros, Vice-premier, chief of the Committee for
economic reform. New style of
the Cabinet were discussions. One of its results
was creation of Academy of economic studies (first rector prof. P. Bran,
This government did not take
too revolutionary measures, much was developed by inertia, economy and ruble
rolled down. However searching for a "own path" never stopped. One of
the outcomes was creation in June, 1991 of the National Bank and arrival from
Leningrad of its governor. Preparation for introduction of the national currency
In the same time, for the
first time in Moldova, as well as in entire post-soviet space, have arrived
methodologists "from outside". It is curious, that in the first
missions there were also graduates of Moscow University of People's Friendship
named after P. Loumoumba, who were taught to planning in Moscow, but later they
arrived to orientate us towards the market.
During President Snegur and
Premier Muravschi started the movement of Moldova towards international
organizations: in 1992 it entered the United Nations, IMF and International bank
of reconstruction and development.
The government of Muravschi
stood for one year. It was a difficult and tragic year - blood in Transnistria
and splitting of the country, downfall in economy. Bitter statistics of 1992:
inflation - 1200 %, deficit of the budget - 22 %, recession in an industry - 27
% and in agriculture - 16 %. A massive stoppage of enterprises, unemployment,
depreciation of deposits in Savings Bank, rise in prices.
A change of government was
imminent. Right wing submitted Mircea Rusu (an industrialist from "Moldavhidromas",
and also secretary of district communist party cell), and left wing Andrei
Sangheli, agrarian, deputy chairman of council of ministers till 1990. The
parliament chose Sangheli by virtue of its economical thinking and pressing
circumstances (discontinuance of gas, transport blockage, loss of the
traditional markets etc.). And the wind from the East began to dominate over
gusts from the West.
With arrival of the third
Government started the strife for macrostabilisation and resumption of economic
growth. The long-living premier Sangheli was allocated by destiny four and a
Two governments of Sangheli,
June 1992 - April 1994 - February 1997
Period of two Sangheli
governments under the presidency of M. Snegur will enter our history as a
beginning of coordinated (first of all, with the help of IMF and World Bank)
actions for entering the market economy.
In the beginning of this path a
hand was also offered to Transnistria: for example V. Repkin, presently
chairman of Tiraspol executive committee, was chosen as minister of
finance, but the plate with his name hang in the Ministry of finance for about
one month and he didn't come...
The legal and organizational
preparation of reforms impresses: the first program of stabilization (1993),
introduction of the Moldovan Leu (there were variants: taller, dinar), laws
regarding support of small business (1994), restructuring of industrial
enterprises (1995), free enterprise zones (1996), first credit auctions, mass
privatization of enterprises and housing, cancellation of limitations on export
and import, increase of salaries and pensions, introduction of compensations
etc. We have shown an example to Europe also in solving a regional conflict:
through referendum (1994) and law (1995) have established Gagauz-Yeri. We came
out to Danube with the construction of oil terminal.
IMF, World Bank, as well as
Russia, fuelled Moldova with credits (and by 1997 the external debt has exceeded
1 bn dollars), while the famous "The Economist" (London), a magazine
with a almost 200-year history, has called in March 1995 Moldova "as a
country of sound reforms, by its size most suitable as a laboratory". First
among CIS countries Moldova was accepted in Council of Europe (1995).
was working easily, as the President had the right to issue
"working" decrees, and in the second Parliament the majority of
agrarians and socialists was permanently supporting the Government, which
gradually fuelled with ideas and draft laws the Coordination council for
However, miracle did not take
place. In spite of the fact, that for 1994-1995 "the plan on
macrostabilization" was successfully executed (inflation was defeated, the
Leu was stable, the deficit of state budget was not so large), the economic
growth did not start. Following the canons of liberalization, the state
practically went away from the economy, creating for it only the
The state property (in 1989 it
was 86 % of country's fixed assets) suddenly became ownerless and in conditions
of mass privatization, similarly with cooperative-collective-farm property,
started to be massively plundered. Having recognized in the new Constitution
(1994) private property and entrepreneurship as driving forces, the state,
nevertheless, did not stimulate them with taxes, credits, protection. The
business, generally, has gone into the shadow economy, and the capital went
abroad. Although, a part of it) afterwards has come back as investment from
Liechtenstein and Malta.
The structural reforms under the
influence of Parliament were slowed down. In industry a group of 40 enterprises
supported by ARIA began restructuring, but in agriculture the delay of reforms
has only prolonged agony of collective farms and state farms: 490 of them in
1996 were loss making.
Gradually the corruption began to
take the scale of a national disaster. As fertile soil for it were -
pseudo-legal privatization, non-transparency of import of energy resources,
vacuum of state power in territories - in districts and municipalities, actions
of new monopolists such as "Moldfarm", tax amnesties and writing offs
of taxes to the budget, tax exemption of firms assisting Olympic events 1996,
metropolies etc. The first blow which affected image of Moldova: disruption of
arrangement of Government with the tobacco giant British-American Tobacco in favor
of some unknown Reemtsma (also without money, as soon was discovered). Social
situation and political instability, in the meantime, kept aggravating.
For the course of reforms the
year 1996 became fatal, when political favoring and group interests have blown
the economy, the Government got involved in presidential elections, which were
lost by the Premier, and soon the ruling agrarian-democratic party has left the
Two governments of Ciubuc,
February 1997 - May 1998 - March 1999
In his position as the President
P. Lucinschi began the term with the Decree "On pressing measures for
improving the socio economic situation" (Jan. 1997). The task set was to
clean up the "dead end" of debts on salary and pensions, low payment
discipline of economic agents, imperfection of taxation, debts for energy
resources and numerous delinquencies.
Remaining devoted to the market,
Premier I. Ciubuc attempted to make order in the situation, first of all, by administrative methods.
Branch-oriented programs were elaborated, though having no financial support.
More rigidly meetings of Government were conducted. Number of vice-premiers was
reduced, for the purpose of strife with familiarity doors of members of
Government had only titles and positions on them, while names were taken out.
State agencies for attracting foreign investments, and on state purchases, were
set up. Realization of the law "On public service" started.
successful negotiations with World Bank (May 1997) regarding the $100m credit
for structural transformations (SAL-II), the Government began campaign for
increase of tariffs on electricity, heating, and price for gas. Pickets on
central city's square appeared.
More laws were adopted,
especially regulating financial sector. System of arbitration was replaced by
economic court. The first swallow of agrarian reform was reorganization of
70 collective farms, heading towards the National program "Land" in
1998. Parliament, in the meantime, blocked "the second wave of market
laws" (regarding sale and purchase of land, on pension reform, on
bankruptcy etc.). Action from the President (June 1997) was required, under the
threat of Parliament dissolution.
For the first time statistics of
the totals of 1997 indicated a GDP growth of 1.6 % and lowest inflation ever
11.8 %. The external debt, though, reached 52.4 % of GDP, and internal 9.6 %
, while trade balance showed a deficit of $348m. Budget crisis could not be
overcome. Tax collection did not exceed 70 %, and for servicing the state debt
10.4 % of budget expenditures were used, and for capital investments 6.6 %.
The second government of I.
Ciubuc, with personnel filling and with operating activity dictated by
Parliament, has tested the bad-luck algorithm "2+2+1", when
professionalism and logic were replaced by the criterion of party affiliation.
Although the year 1998 was declared as year of struggle with corruption (one of
actions was halt of activity of free enterprise zone
"Expo-Business-Chisinau"), manifestations of administrative and clan
interests were outrageous when customs warehouses were created, when prices
were set on wheat for state needs, when function of state property management
was transferred to branch ministries, when foreign cars were imported for state
By the end of the first half of
1998 the state budget in essence has collapsed, revenues were executed only at
33%, revenues of local budgets sharply reduced, constituting only 27% of the
total consolidated budget revenue. More than 50 % of the budget was consumed for
current payments and settlement of debts for salary and pensions, for purchases
of energy resources and state debt service.
The period of "stable
depression" installed in Moldova since mid-90s, was blasted by financial
crisis in Russia. Its consequences were felt both by the country, and by
economic agents, and by population. Foreign exchange reserves of the NBM
dangerously fell by about 3 times at the end of 1998, the Leu has depreciated by
78 %, state budget revenues fell sharply. Between that, only half a year before,
the Government approved the program of anti-crisis measures, first of all, in
Government of Sturza,
March 1999 - December 1999
Peculiarity of this Government
was that for the first time it rested on the parliamentary mandate of the
Alliance for democracy and reforms, called "Program aims and priority
actions of the governmental coalition" signed by M. Snegur, D. Diacov, V.
Matei, and I. Rosca. Only 2 pages and 12 bullets: actions in the budget sphere,
making order in export-import transactions and customs control on Nistru river,
rescheduling of external debt, acceleration of structural reforms in agriculture
and energy sectors, privatization of tobacco and winemaking enterprises, actions
in social sphere (pension reform, liquidation of privileges with introduction of
compensations); administrative and territorial reform; realization of balanced
foreign policy with a clearly set objective - integration into Europe.
The program of Government was
written by I. Sturza, A. Muravschi, A. Arapu plus V. Solonari, and they were the
ones who implemented it with favorable support from IMF, World Bank and European
partners. In CIS summits Moldova was marked by a young and English speaking
team, although showing arrogance - a fact which spoiled many times their
relations with the President.
Much from the Alliance's Program
was "put in production" by the Government: default was avoided, GDP
decline was slowed down (-3.4% in 1999 against -6,5 % in 1998), managed to
"strangle" the system of reciprocal clearings, accelerated the
"Land" program and started the administrative-territorial reform,
improved the trade balance with a an increase of share of export - import with
countries of European Union,
managed to hold the growth of the external debt. The government has taken up the
impact, insisting to start the pension reform and to cancel the privileges, an
action being prepared since 1995, but continuously postponed. NBM's foreign
exchange reserves have grown, however the exchange rate of Leu at the end of
year fell to 11.59 Lei/1 dollar, the inflation was 43.8 % (highest after 1994),
and dollarization of deposits I commercial banks for the first time has exceeded
Attempts to recover the real
sector and revive the entrepreneurship proved to be not so efficient (strangely,
though, since I. Sturza proved to be a good businessman before becoming
Premier), shadow economy equaled the official one. The operations, realized on a
criminal base, got such a wide scale, that the Government's almost last decision
was approval of the "State program on fighting organized crime and
corruption" (November, 1999).
The cause of the forced
resignation of Sturza team was dissolution of the Alliance for democracy and
reforms and claims towards him and his team
that they were playing too much with macroeconomics instruments being
afraid to do rough work at "low" level at enterprises and with the
Government of Braghis,
December 1999 - March 2001
The year 2000 began dramatically:
after the cabinet crisis (November - December) and refusal of Parliament to
privatize wine-making and tobacco enterprises, that was stipulated by the
Memorandum of the previous Government with IMF/World Bank, Moldova faced real
threat of default and social shocks.
After Messrs. V. Bobutac and V.
Voronin failed to be approved by the Parliament, the third candidate to the
Prime Minister post became D. Braghis, and since December 21 his Government,
with a program similar to the one of the predecessor, has started work
under the patronage of the President, and later of the Parliament, which, after
the transition to parliamentary republic, after
July 5, 2000 should have demonstrated efficiency of its work.
The year was difficult:
Government had to face the both political challenges (absence of "own"
majority in Parliament, May rallies on main city square - students and war
veterans), and financial challenges (discontinuance of support from IMF and
World Bank), and nature-linked (drought, showers, ice).
To the honor of the Government,
it has held a situation under a control, to what greatly contributed everyday
optimism, organizational skills and rapid responsiveness towards "external
influence" of the Premier, and also smooth operation of the economic block
- Ministry of Economy and Reforms (A. Cucu), Ministry of Finance (M. Manoli)
and, as usual, National Bank (L. Talmaci).
They managed to come to the end
of the year with dignity: with a GDP growth (1.9 %) and a growth in industry
(2.6 %), with a large reduction of debts on pensions and wages, servicing the
obligations on external debt, maintenance of moderate inflation rate and
exchange rate stability, as well as improvement of tax collection. The whole
being said, it should be noted that 31% of the increase in budget revenues had
an inflationary component.
For a perspective the Government
approved a number of strategies regarding socio economic development of
Moldova till 2005, on fighting poverty and on economic growth, on separate
problems and branches. However, the aged troubles remained: non compliance with
the laws, unfavorable investment climate and weakness of export base, negative
trade balance, growth of internal debt, self-destruction of systems of public
health services and education, corruption and expansion of poverty. Plus a new
phenomenon - massive outflow of people for work abroad. And now "The
Economist" (July 2000), which only five years ago named Moldova as
"laboratory of right reforms", publishes a pitiful article "Can
Moldova get worse?".
This was the fourth government
with the President P. Lucinschi. According to the common opinion, D. Braghis
quite "corresponded to the position he had", although he still could
not leave the "shade of the big man".
New government, April 2001
For the new Government financial
possibilities are sharply narrowed, referring to the choice of socio economic
policy and methods of its practical realization. Inheritance received from the
predecessors depresses: a huge external debt, inefficient economy, massive
poverty, professional weakness of state apparatus, also affected by the
"virus of temporary status".
What can new authorities oppose
to this? If we look into the draft program of the candidate for Prime Minister
V. Voronin (Dec. 1999), then we see: "strengthening of statehood, increase
of efficiency of public management, recovering of territorial integrity of the
country", "maintenance of continuous state regulation of the market
economy", "stoppage of falling of population's standard of living,
fighting with poverty and unemployment, reduction of discrepancy between the
incomes of different strata of population", "stimulation of the
processes of integration in international and regional structures",
"fight with corruption and organized crime".
At first, apparently, the floor
will be given to actions not requiring financial expenses (civil consent, active
capacity of state apparatus, Transnistria, tax collection, making order in
customs and tax inspectorate, legitimacy of privatization, suppression of
corruption). Afterwards long-term actions may follow - support of domestic
manufacturers, revival of the system of state purchases etc.
But for this time is needed. In
the meantime, right ahead there is the "debt hole", dug by the
predecessors. Till the end of 2001 it is needed to pay back not less than $100m
of external debt, and in following year - twice more. And in this situation,
Moldova similarly to baron Munchausen will not be able to drag itself out of the
bog by the hair. While continuation of cooperation with international financial
organizations, surely, is possible only at a reasonable, in the opinion of both
parties, solution of the problem with coordination of freedom of the market and
regulationary role of state.
It is possible, that the coming
years will be very dramatic for the country. If in 90s the fall of production
and of social standards was compensated by "wasting" the previously
stored national wealth, then a decade of degradation led to exhausting of all
resources of the productive sector, stagnation of science and education,
deterioration of cumulative health of population and destroying of social
infrastructure a system.
The hope is that the leaders and
population of the Republic Moldova, as a democratic state which made the choice
in favor of political plurality, civil consent and socially oriented market
economy, will finally agree upon what country Moldova shall be and what are its
long-term interests. Due to the community of historical fates of its population
and geopolitical advantages of the country on the junction of Central Europe,
Balkans and CIS, the Republic Moldova is quite able to realize the model
of "small open economy" in conditions
of a state which is politically stable, neutral and attractive to cooperation.
Table: Number of Governments and Quality of
for assessing results
yearly average, %
deficit (incl. SF) as share of
rate of national currency, lei/ 1 US dollar)
per capita, US dollars
debt as share of GDP, %
external debt, millions of US dollars
May 1990-June 1991,
June 1991- July 1992, 12
June 1992-April 1994,
1998, 14 months
May 1998-March 1999,
1999, 9 months
2001, 15 months
A. Gudim, 28 March 2001
Also published in "Chisinau Observer" weekly
Computer translation from Russian language with some editing