TENSION AND INSECURTY IN MOLDOVA

The ongoing crisis in the Caucasus has undoubtly rebounced upon the lands of Moldova. Although ruled by a revisionist and in name only Communist Party, Moldova has followed Ukraine and neighbouring Romania in adopting a clear pro-western stand. Despite not being outright pro-american, the Chisinau leadership has approached Europe eagerly. Administrative reform, the re-organization of the Parliament and numerous state-building projects are EU funded and initiated. The orientation of the regime is clearly pro-western and quite annoying for Moscow's Moldova watchers.

The main concern for Moldova's leadership and a source of strain that justifies insecurity is the pending issue of its secessionist province of Transdientsria which split from Chisinau during a brief but bloody conflict in 1992. The Russian minority in Transdniestria felt that its rights would not be guaranteed by a new, ethnically Moldovan state and began waging a separatist war. Moscow eventually got involved, siding with the Russian minority in Transdniestria, and elements of the Russian 14th Army — originally headquartered in the Moldovan capital during the Cold War — acted on their own to support the separatists.

There have been serious efforts during the last years for a settlement to be formented. Moldovan President Vladimir Voronin met frequently with the leader of Transdniestria, Igor Smirnov for the purpose of agreeing upon a viable solution. The war between Russia and Georgia however appears to have undermined all ongoing negotiations. Transdniestria has frozen all contacts with the Moldovan government, Russian news agency Interfax reported on Aug. 12. The statement from Transdniestria’s government said the reasons behind the breaking off of relations are the Moldovan government’s support for Georgia in its recent conflict with Russia, and Moldovan government officials’ failure to attend a scheduled meeting on economic cooperation with their Transdniestrian counterparts.

Moldova is a member of the, rather inactive, GUUAM security alliance (Georgia, Ukraine, Uzbekistan, Azerbaijan, Moldova) which upon its creation was considered by the Russian media as an anti-Russian alignment of nations diplomatically recognized by the USA. Since then many things have changed. Primarily, Uzbekistan became hostile to the West and did not pursue its membership in the group. Irrespective of these developments, Moldova had managed to keep a fair balance and avoided at all costs any acts of provocation towards Moscow.

The latest crisis however appears to have shifted the existing power relationships in the area. Russia sent the 58th army across the border to attack an American-backed state. Even the USSR's invasions of Hungary, Czechoslovakia and Afghanistan, the only precedents for such a war, were launched against countries solidly within Moscow's sphere of influence. Georgia is different: its pro-western government has close links to Washington, a Harvard-educated president and more than 100 US military advisers. Having established the precedent of defending Russian citizens by the use of military force - South Ossetians have been issued with Russian passports for two years - the Kremlin could put the same divide-and-rule techniques to use in Crimea, the province of Ukraine that is dominated by ethnic Russians, in ethnically Russian northern Kazakhstan, or in Baltic states with large Russian minorities. And obviously, the same can be true for Transdniestria.

Transdniestria has been seriously emboldened by the Russian intervention in Georgia. Nestled between Moldova proper to the west and Ukraine to the east, and with no access to the Black Sea, Transdniestria is far away from Russia, its main backer and security guarantor. Russia maintains a contingent of 1,200 troops there, leftovers from the once massive 14th Army. However, the encirclement of Transdniestria by Western-leaning powers was completed when Ukraine’s 2004 Orange Revolution brought pro-Western politicians to power in Kiev.

Russia’s willingness to actually use force, as it has done in Georgia on behalf of South Ossetia, reaffirms Transdniestria’s belief that Russia will not abandon it despite the geographic distance between them. With Russian “peacekeepers,” as Moscow calls them, present in Transdniestria, Moldova — and its potential allies Romania and Ukraine — will think twice about attempting to change the mainly Russian-speaking Transdniestria’s status quo. The reasoning goes that if Russia invaded Georgia for South Ossetia, it could take similar action to protect Transdniestria’s de facto independence.

'Russia will start taking on the US around the world more actively', says Dmitri Trenin, a Carnegie Moscow expert, as quoted in the Financial Times. 'This attitude wasn't there a month ago - we're in a different environment now. Russia wants to assert regional hegemony.'

Ukraine, which like Georgia has a pro-western government, has much at stake. Russia has accused Ukraine of selling arms to Georgia that have killed Russian soldiers. In turn, Ukraine has warned that if Russia's navy attacks Georgia, it will not be welcome back to the Crimean port of Sevastopol, where Russia's Black Sea fleet is based. Kiev wants Russia's fleet to leave Crimea when a 2017 lease agreement ends. Moscow is keen to stay.

Few expect the conflict to spread to Ukraine, a country of 46m citizens that borders and wants to join the European Union. But it could inspire separatists in Ukraine's Crimean peninsula and delay security guarantees for both Kiev and Tbilisi, which are both seeking Nato membership. The same of course is true for the Russians in Transdniestria. Although Chisinau does not expect outright acts of provocation, a clear nervousness has settled in. If Transdniestria stops shunning talks with Moldova it will at any rate be bolder and qute demanding. In short, the Transdniestrians feel that, with the events in Georgia, the tide has turned in favor of the Kremlin’s client regions.

The business environment, as things stand now in Moldova, is not settled. Expectations are abound. Some wait for the west's response to Moscow's bold move. Others fear for the Russian next step. As things stand now Washington does not have many cards to play. There is a possibility that islamic reactions in Russian territories may be encouraged. In the south Caucasus and in the middle Volga and the Urals ditsricts (Tatarstan and Vashkosrtostan) there may be a stirring aong local islamists. Saudi influence is considerable in these areas, especially through the funding of religious institutions. Some upsets may occur also in the Great Turan areas of central Siberia (Tuva, Yakutia, Buriatia).

At any rate, none of these developments, which will deepen the split with the west, will materialize in the immediate future. It appears, therefore, that this is not a bad time for entering the Moldova market. Moldova's political regime is fairly stable. There is only the pending insecurity because of Russia'a newly acquired sense of over-confidence - and latent aggression, of course. With almost everyone in a limbo situation, opportunities arise. The climate of immobility that curretly prevails encourages daring moves which may be later accordingly appreciated. I would recommend that now is the time to enter the market.