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The Free Trade Agreement escaped from the collapse of the economy of the transnistrian enclave

2017.12.26 Economie Victor Ursu Print version

Companies in the left bank of the Dniester region export 40% of goods and products to EU countries, and alleged Tiraspol authorities are willing to extend the Free Trade Agreement next year, but Chisinau must insist on respecting the commitments made by Tiraspol. This is the opinion expressed by IDIS expert "Viitorul" Ion Tăbârţă during the 15 minutes of ”economic realism” show.

"In recent years the economy of the Transnistrian region has experienced a profound regress. Since 2014, the main macroeconomic indicators have worsened. The gross regional product dropped by 7.5%, industrial production by 20%, exports by 26%, imports by 47% and the consumer market capacity by 21%. Population revenues decreased by 33%. At the same time, the consolidated budget revenues of the region covered only 60% of the expenditure needs.

"The regression of the economy of the Transnistrian region is explained by the fact that, structurally, the economy on the left bank of the Dniester has been slightly upgraded, and it remains essentially a Soviet type. At the same time, there is the monopoly of Sheriff, which dictates the rules of the game for all economic entities", Tăbârţă said.

According to him, the cause of the economic recession in the region is geopolitical. This is the Ukrainian crisis, following the annexation of Crimea and the invasion of the Russian Federation in Donbass. This has changed the optics of Kiev, which until 2014 tolerated the actions of the unconstitutional authorities in Tiraspol to look at and address the situation in the region. As a result, Kiev has drastically stopped the Transnistrian smuggling in the Odessa region, which was a source of income for regional elites. The Iliciovsk port - a hub of Transnistrian smuggling to the rest of the world - has been closed to illicit trade, which has caused significant economic damage to the Transnistrian region. In Tiraspol's rhetoric, Ukraine is being blamed for the difficult economic situation of the region, which imposed the economic blockade on the left bank of the Dniester, and Chisinau, which hinders the economic relations of the region with the rest of the world.

"In the second half of 2017, there is a slight improvement in the economic situation in the region. In January-October 2017, the volume of industrial production amounted to USD 601.7 million, a slight increase compared to the same period of the previous year, when industrial production amounted to USD 595.1 million. The increase in industrial production is explained by the resumption of the normal working activity of the Ribnita Metallurgical Plant in April. An important role in the economy of the region on the left bank of the Dniester is the production of electricity. In April-May the power supply to the right bank was stopped, causing significant economic damage to the Transnistrian region. At that time, Chisinau imported electricity from Ukraine but later returned to the old supplier, the Cuciurgan Electric Power Plant", Tabartea added.

As far as exports are concerned, they increased by 17.3% compared to the same period of 2016, in the first 10 months of 2017 they amounted to USD 515.9 million and imports increased to 809, 1 million USD, with 69.2 million USD more. Most deliveries of goods and products produced from the left bank of the Dniester River made it to the right bank of the Dniester, followed by Ukraine and Romania. Imports are dominated by the Russian Federation, Ukraine and the right bank of the Dniester.

The IDIS expert "Viitorul" draws attention to an important detail in the trade of the Transnistrian region. It is the Free Trade Agreement, which, contrary to the apocalyptic scenarios delivered on the geopolitical route, that the region will be invaded by EU goods, proved to be of benefit to Tiraspol delivering goods and products to the EU without taxes and excise duties. the thing saved some of the economic agents. At the same time, the expert points out that there is no official monitoring mechanism known to the public to apply the Free Trade Agreement in the Transnistrian region.

In conclusion, Ion Tăbârţă mentioned that Chisinau must insist on the observance of the commitments assumed by Tiraspol upon the signing of the Free Trade Agreement. This presupposes that Chisinau will receive greater access to influence the economy of the Transnistrian region. Thus, afterward, the Transnistrian region can be put in a positive economic dependence on the right bank. Thus, creating the conditions of socio-economic, and then political, approach to the left bank of the Dniester towards the right.

The show is made by IDIS "Viitorul" in partnership with Radio Free Europe.

For more details contact IDIS "Viitorul" Public Relations Coordinator, Victor URSU at or call 069017396.

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