Moldova’s economic miracle decimated by the Russian war in Ukraine?
The ongoing Russian war against Ukraine has continued to send shock waves throughout the globe since Moscow invaded their neighbour in February 2022. Almost ten months later, with thousands of lives lost, millions of refugees displaced, billions of dollars’ worth of damage inflicted, and a global economy in free fall, its repercussions continue to be acutely felt. Like a corroding thread, the war has touched upon almost every facet of the modern world; its geo-political landscape changed irrevocably.
Moldova was granted EU candidate status in June 2022
While every nation across the world has been deeply impacted by the war, aside from Ukraine, no other country has felt its devastation quite as much as Moldova. Sandwiched between Ukraine and Romania, the land-locked nation has been plunged into a state of chaos. A refugee crisis, a catastrophic energy shortage, and perpetual security concerns have threatened to shatter the social and economic progress it has so tenaciously fought for - following its freedom from the Soviet Union three decades prior.
For years, the nation of 3 million, had been plagued by economic problems and corruption, after becoming isolated in the aftermath of the USSR collapse in the early 90s. While neighbours like Romania would ultimately reap the economic benefits of close EU relations culminating in full membership in 2007, seeing a surge in GDP and increased living standards, Moldova would languish behind. Complex geo-political relations at the end of the Soviet Union, including a strong pro-Russian contingent in the population, notably in Transnistria, left Moldova in a state of paralysis. Vulnerable, and with the prospect of reunification with Romania untenable, the nation was slowly forced towards Moscow.
Decades on, despite the obstacles, the country has made significant social and economic progress – with its economy growing by an impressive 14% in 2021 alone. And huge strides are being made in combating the insidious corruption that had been strangling the country’s growth. Such progress is indicative of Moldova’s increasing move towards the EU, culminating in its application for candidacy in March 2022. However, the devastating consequences of the war could derail progress for years to come.
Writing for Politico, Maia Sandu, Moldova’s first female president, has called for international aid, as the nation grapples with the crippling effects of decades of Russian energy dependence. She said: “Many, if not all, European nations are currently facing serious energy pressures — but ours are existential. The legacy of almost full dependence on Russia for gas and electricity, and the failure by successive governments to diversify supplies, is now threatening our economic survival.”
Maia Sandu, Moldova's president, speaking during the United Nations General Assembly in New York
Neighbour, and closest ally, Romania, has been supplying emergency energy in the interim, but its limited resources will scarcely fuel the country for more than a year or so. Sandu has implored the international community to act swiftly, to avoid Moldova facing an economic crisis akin to Ukraine’s. She said: “If we can light and heat homes in our country and make sure that schools and hospitals can still operate and the economy’s wheels keep turning, this would mean that Moldovans — alongside Ukrainians — need not seek refuge elsewhere in Europe during this upcoming cold season.”
Without intervention economic calamity almost certainly looms for Moldova. Furthermore, failure to do so by the EU could also result in a security-related disaster for the bloc. Strong support for Russia in the unrecognised pro-Russian territory of Transnistria, has afforded Vladimir Putin a significant tactical advantage in the country. Thousands of Russian troops have been mobilised in the region, leaving the bloc exposed and causing heavy disruptions to trade and incurring increased security costs. Ultimately leaving Romania exposed as a potential weak link in the EU-NATO zone.
The EU appears to be taking the threat seriously, with France becoming one of the first nations, aside from Romania, to offer an international aid package. How much aid and ultimately how impactful it will be remains to be seen. However, what is patently clear is that Moldova, once again, has become the victim of Russia’s aggressive international policy and warmongering. For those Moldovans bereft of resources and hope, this winter could be one of the bleakest in its history.Its EU aspirations and economic progress grinding to a halt, in an all too familiar fashion.