25 Years under blockade: Transnistria – a fragment of an empire


October 15, 2015

Vadim Kovalenko


Translated by Kristina Rus

In this article I want to remind the reader that the unrecognized state formations that emerged during the struggle for the great idea of the Russian world, did not originate in DPR-LPR. In the 90’s, after the collapse of the Soviet Union, as a result of inter-ethnic conflicts emerged a number of unrecognized republics. Most of them have a common border with Russia and used its patronage. A special case is Transnistria, the Russian enclave, a fragment of the empire, which perfectly illustrates the tragedy and pain of the dismemberment of the once unified country. Surrounded by a completely hostile environment, with the support of the 14th army of General Lebed, a viable region has emerged. But it is hard to call a republic the narrow strip of land along the Dniester river.

The history of the conflict began in the last years of the USSR, when the nationalist movement intensified in Moldova. The power went to the people who wanted to break the Moldavian SSR from the Union. The beginning of the end of a unified Moldova in 1989 was the Rybnitsky referendum. Then the vast majority of residents were in favor of an autonomy. Later, in February 1990, elections to the supreme council of the MSSR took place. Deputies from Transnistria were a minority, and they could not in any way affect the legislative process.

It would have been fine, but according to the testimony of one of the Moldovan deputies, I. Russu: “Since May 1990, the fist chaos, threats of physical violence have become the main arguments of the parliamentary democrats”.

Remind you of anything? Eventually, on September 2, 1990, exactly a quarter century ago, the congress of deputies in Tiraspol proclaimed the Transnistrian Moldovan Soviet Socialist Republic (PMSSR) as part of the USSR. And on August 25, 1991 after the coup, a declaration of independence was adopted. Then followed an armed standoff, which has been later resolved. A considerable role was played by the presence on the territory of the conflict of the 14th army of the Russian armed forces.

On August 1, 1992, the conflict went from the military to the political realm, starting the peaceful construction of a new, unrecognized subject of international law with population of more than 700 thousand people. Ethnically, the republic consisted of approximately equal parts of Ukrainians, Russians and Moldovans. In total there are about 120 different nationalities in PMR. The starting position of Transnistria was much better in economic terms than that of the Republic of Moldova, since almost all large enterprises of the Republic of Moldova are located on the territory of Transnistria.

Fun fact, the PMR army is also more powerful than the Armed forces of Moldova and has 16 tanks, which their opponents don’t have.

From the first days of independence the leaders of PMR were consistently engaged in building a full functioning state. In December 1992 the Central Bank was founded. And two years later the national monetary unit – Transnistrian ruble – was created. Predatory privatization was prevented. Only in the beginning of the 2000’s the majority of enterprises of Transnistria have been privatized on a transparent basis. The purchasing power of the Transnistrian ruble is much higher than that of the Moldovan LEU. In the face of current upheavals associated with the devaluation of the Ukrainian hryvnia and the Russian ruble, Transnistrian currency feels much more confident in the CIS space. Through effective monetary policy to prevent panic and currency speculation the exchange rate of the national currency has been stabilized, which can not be said about the Ministry of Mrs. Nabiullina.

Because of this the average pension in the PMR is at the level of about $90. In comparison, in Moldova it’s $60, and in post-Maidan Ukraine it’s $48.

The country’s leadership did not install a floating exchange rate and did not undermine the stability of the financial system as a whole. And this, in turn, did not undermine the situation in the various sectors of the economy, preserving the purchasing power of wages.

There are 6 banks in the state which service all the business entities and individuals. Since 2005 the national currency is printed in Transnistria with its own mint.

The agro-industrial industry has achieved high results. Thanks to fertile soil and the availability of a water artery – Dniester river, food security is at par. Together with a favorable climate that allows to feed not only themselves, but also to supply food to foreign markets, primarily in Russia. High population density favors the development of agriculture and a full cycle of processing of agricultural products.

Due to the presence of the Moldavian SDPP and Dubasari HPP Transnistria fully provides its energy requirements. Moreover, it exports the excess to Moldova, Ukraine and Romania. Also there are a number of electrical instrument enterprises in Transnistria. Some, like the plant “Pribor” and “Bendery machine-building plant” are part of the military-industrial complex of Russia.

There is even a stock market in Transnistria. Tiraspol stock exchange trades shares of the privatized enterprises.

Education in the Republic functions as a single system at all levels. In schools the instruction is given in three languages: Russian, Moldovan and Ukrainian. Universities are certified by the Ministry of Education of the Russian Federation. For this reason young people upon completion of study leave for Russia.

There are weaknesses in the economy of the republic. One of them is the monopoly of the holding “Sheriff”. Of the fifty largest enterprises of Transnistria, thirteen belong to the monopolist. The state is struggling with this, but with such a small market it is rather difficult to fuel competition. In the sphere of retail trade the competitor of “Sheriff” is the Ukrainian retail network “Furshet”. Until recently, the holding company owned the only large supermarket in Tiraspol.

However, the main problem of the Transnistrian economy is the blockade, launched by Ukraine and Moldova in 2006. Because of this export to Russia is challenging, but new markets have been found in the EU. Due to lack of recognition PMR enterprises have dual registration in the republic and in Moldova. Export goods are labeled “Made in Moldova”. EU understands where the actual products come from, and is planning to raise the duties on Transnistrian goods by 10-15%. Thus the republican leadership is looking for new ways to increase exports to Russia. In this regard, the Transnistrian economy is highly dependent on the state of affairs in the Russian economy. The current devaluation of the ruble and the falling oil prices are hurting the unrecognized republic. The noose of the blockade, started in 2006, is pulled even tighter on the neck of the Transnistrian people. However, since the personnel and production facilities have been retained, there is a real opportunity to turn the tide in their favor.

Sooner or later the international community will be forced to acknowledge the existence of the republic not only de facto, but also de jure. We should not expect that Russia will take into account the will of the Transnistrian people and absorb the PMR. And upon recognition the Republic will make a new economic leap, as the combination of price and product quality will provide a powerful investment resource. But this is a perspective of many decades.

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