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This is the fourth annual economic radiography made by the Independent Think-Tank EXPERT-GRUP. Similar radiographies were developed so far for the years 2008, 2009, and 2010. Their purpose is to provide an overview of the major economic developments of the year and help the readers understand better their implications.
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In this issue: Consumer rights are under focus again; // What revenues feed the consumption this year? // The reason underlying the slow increase in the budget revenue; // The trade expansion keeps beating records
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Getting closer to hour X... As we should have expected, this political autumn is hot, despite the cold weather outside. At the same time, the internal political life "is heating up" simultaneously with a clearer outlining of some external trends. Thus, it is extremely interesting to see what will result from the "synergy" of these developments.
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On the brink... The dire straits of the ruling coalition have been no secret for quite some time. This fall has been expected to turn out a torrid political season (see our predictions in MEGA no.4). And indeed, after a relatively calm August, abounding in routine bellicose political declarations, the thunder stroke. The raider attacks against several Moldovan banks, including the biggest “Moldova Agroindbank”, made a mockery of Moldova’s efforts at justice and economic reforms and, ultimately, of the country’s European aspirations. Behind the splendid facade of “success story of Eastern Europe” transpired the same old brutal reality of Moldovan political and business life. Indeed, in a country where property of middle and big business (if this is not ‘court’ business) is not protected, what should an ‘average Joe’ expect? In short what these latest events mean?
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New elections, old problems. In our State of the Country Report we elaborated in much detail on the dividing lines crossing Moldovan society. Now, more than one year since publishing the Report, we have to confess these dividing lines are alive and well. In this context, the capital city and Gagauz autonomy are the most eloquent examples. In the former case the electoral contest turned out very tight (and this is despite the fact that Chisinau has never been Communists’ fortress) but lacked meaningful substance; in the latter, it showed continued drift of the autonomy away from the national political process with most of ‘winnable’ electoral contenders running on independent platform with no connections with national political parties. While certain parties do not shy away from manipulating and capitalizing on these divisions, there are growing question marks whether country and society can bear any much longer in this way...
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In the EU we trust. Or so many major political statements, strategic documents and crucial reforms could well start and end... at least, if we judge by the words of Moldovan leaders starting 2005. Indeed, the last year has so far appeared as culmination of the Moldova’s stride on its euro-approximation path: Moldova has become a Mecca for the EU and Western leaders and now can boast the title of the “democratic success story” aptly dubbed by the US Vice-President Joseph Biden upon his visit to Moldovan capital.
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It is beginning of 2011 and we see replays of the familiar story: the ruling coalition in Moldova at odds with itself. As bickering and infighting within coalition becomes fierier, voter has more and more reasons to ask whether any ‘positive’ lessons were learnt from the first spell at power by the components of the Alliance for European Integration (AEI) in 2009-2010. And what on earth was discussed and sorted out during the lengthy negotiation process to form the AEI-II if now the Alliance cannot come to common ground on the election of President? Cannot endorse a draft of public budget? Cannot maintain normal dialogue within itself? If leaders of coalition’s factions are absorbed by muscle-flexing1 aimed at assertion of who should become ultimate ‘face’ of the Alliance?
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Traditionally, at the beginning of every year, the independent think tank Expert-Grup makes brief reviews - radiographies - for the previous economic year. Like in 2008-2009, the radiography of the 2010 economic year will cover three essential aspects: a) the most important 5 economic events of 2010; b) the most revealing 5 macroeconomic trends; c) the most noticeable 5 faults of the economic policy. On the top of this we will add another interesting element: d) top 5 major risks for 2011. // We have tospecify that these tops represent a joint vision of Expert-Grup team on the economic developments, but do not necessarily imply a strict ranking by their importance. In the annual economic radiographies we try rather to identify the events, statements and mega-trends that in our view were the key determinants for the previous economic year and will mark the medium and short term economic developments. // Before proceeding to these ratings, let's consider the difficult context generated by the 2009 financial crisis (Section 2) and how the Moldovan economy reacted in 2010 to the revitalization of the regional and global economic growth (Section 3).
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Political campaign began long before the Central Election Commission announced its official start. Party leaders and public officials started the rush in fall 2008, making generous social and economic promises to the public. However, at the moment the battle is given for the hesitant voters which according to social polls account for 40% of the population able to vote. Obviously, the ruling party possesses sufficient communication, administrative and budgetary tools to gain most of these votes. For this purpose the ruling party is considering many tactics,including the economic manipulation of the electoral behavior.
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