Commission on Security and Cooperation in Europe

Testimony :: Ambassador Louis O’Neill
- Former Head of the OSCE Mission to Moldova

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Statement of Ambassador Louis O’Neill, former Head of the OSCE Mission to Moldova, before the Commission on Security and Cooperation in Europe

Briefing:

“Moldova’s Recent Elections: Prospects for Change in Europe’s Poorest Country”

August 6, 2009, U.S. Congress, Washington, DC

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Mr. Chairman:


Thank you for inviting me to share my views on the situation in the Republic of Moldova and the prospects for change following the repeat parliamentary elections there on July 29. I very much appreciate the Commission on Security and Cooperation in Europe’s interest in the fate and well-being of this small, but not insignificant country. I join many others in gratitude for your public statements, Mr. Chairman, in advance of these most recent elections and following the troubles after the April vote. It is a pleasure to join Ambassador Chirtoaca, Mrs. Cusnir and Mrs. Gogu today in briefing the panel, and I am grateful to Vlad Spanu and the Moldova Foundation for their vital, ongoing work in publicizing and explaining events in Moldova to a large audience.


The Current Political Situation




The results of last week’s elections have the potential to represent an important step forward for Moldova, as like-minded reformist parties won a slim simple majority in the legislature over the ruling Communists in a contest seen as largely representing the will of the people.




These parties – the Liberal Party, the Liberal Democratic Party and the Our Moldova Alliance, joined by a Democratic Party revitalized thanks to new leadership under former parliament speaker Marian Lupu – now hold 53 seats to the Communists’ 48. The four parties are currently in serious coalition talks, which if successful would put the Communists in opposition for the first time in eight years. Should they come to agreement among themselves, their simple majority gives them enough votes to elect the next speaker of parliament and to ratify the selection of the government by Moldova’s president.

Just as after the April vote, however, the very serious problem remains that no group of likely allies currently has the sufficient super-majority of votes – 61 – required to elect the country’s president. This means that absent some kind of coalition with, or defection from, the Communists, Moldova faces the same danger of deadlock and dissolution of parliament that followed the last elections. Only this time the roles are reversed, with the Communists enjoying a blocking minority vote. Moreover, if no president is elected on two secret votes in parliament, then on the one had the legislature must be dissolved within a short period, but on the other hand the Moldovan constitution only allows for one dissolution of parliament per year, and that has already taken place in 2009.




What this means in practice is that if no presidential candidate garners the requisite 61 votes, then parliament can only be dissolved, and new elections held, sometime in 2010 1. This means that Moldova would have a lame-duck legislature for a significant period of time, and would have an acting president designated along the lines of succession outlined in the constitution: parliament speaker, followed by prime minister. The lack of a stable, permanent government would present a formidable challenge to moving forward with a comprehensive reform program.




As mentioned, the opposition plus Mr. Lupu’s Democrats would have enough votes to elect the speaker of parliament, who might2  then become acting president (via succession, because there would be no president elected due to the deadlock) and select a government, all subject to approval by a simple majority. But in any event, this hinges on how long the current acting president, Communist leader Vladimir Voronin, is allowed to remain acting president under a circumstance where no new president is chosen. Moldovan legislation is hopelessly tangled on this point, and even the opposition has stated that this issue can only be resolved by the constitutional court, in whose fairness and balance it has expressed doubt.




Despite all this confusion, we can be sure of two things. First, acting president Voronin will attempt to remain acting president for as long as possible unless and until his preferred candidate, former prime minister Zinaida Greciani3, is elected president. Second, the opposition will argue that acting president Voronin’s mandate to serve as acting president must dissolve upon seating of the new parliament and a vote for speaker. Neither argument seems to have a stronger basis in law, as this question appears to be one of first impression.




Although Mr. Lupu is now in talks with the opposition, it must not be overlooked that his 13 seats, combined with the Communists’ 48, would give such a coalition sufficient super-majority seats to elect the president outright, throwing the three allied opposition parties once again into opposition. Thus far, however, Mr. Lupu has conditioned such coalition talks with the Communists on Mr. Voronin’s departure from politics, an outcome that does not seem likely. Finally, given Mr. Lupu’s strong contacts in parliament thanks to his years as speaker, he has expressed optimism that he might coax eight Communist legislators to vote with the four-party bloc to elect Moldova’s president, setting him on a collision course with Mr. Voronin and the Communists’ well-known party discipline.




The July 29 Vote




Before addressing the implications of these events for Moldova’s further democratic and institutional development, U.S.-Moldova relations and regional policy, it is important to take a closer look at the conduct of the recent elections, as well as those of April 5.




Both votes were heralded by observers from the OSCE, the Congress of Regional and Local Authorities, the Council of Europe and the Commonwealth of Independent States, among others, as largely free and fair4 . As regards the April 5 vote, a certain portion of the populace strongly disagreed with this assessment and took to the streets to express its displeasure with the process. I will not address here the origins of the unprecedented violence by protesters and the human rights abuses by authorities after the April 5 elections, as these have been both widely reported and remain wrapped in a degree of murkiness as to causation and responsibility.




It must be stressed, however, that many of the irregularities and violations (and the perception of irregularities and violations) that led to the rampages of April 7 and 8 also reappeared in the July 29 elections. These include:




• A campaign environment colored by subtle intimidation

• Bias in media coverage and advantageous media reach in favor of the ruling Communists

• Real problems with the voter lists and insufficient cooperation by the Central Election Commission in resolving them5

• Numerous election day problems, including carousel voting, “dead soul” voting, harassment of voters, intimidation and a host of technical violations

• The use of administrative resources by the incumbents

• The threat of politicized criminal prosecutions in the run-up to the vote




These kinds of issues are corrosive to the democratic process and hinder the free expression of voters’ will. They all still need to be addressed and eliminated by the Moldovan authorities and by Moldovan society in order to inculcate greater trust and confidence in the political system among the Moldova people.




Moreover, an analysis of the exit-polls that were run during the April and July elections provides an interesting window of corroboration of the effect of the irregularities reported by observers. These exist-polls were administered by a consortium of NGOs under the well-regarded and balanced leadership of the Institute of Public Policy. They show that in both elections the Communists improved their showing from exit polls to final results by nearly the exact amount, 4.78% in April and 4.57% in July.




By contrast, the three opposition parties lost nearly the same percentage amount both times, falling by -3.07% in April and -3.97% in July. Mr. Lupu had been a member of the Communist Party and participated with the Communist Party in the April elections. On June 10 he quit the Communists to reconstitute the Democratic Party. Many observers and opposition candidates raised the concern that Mr. Lupu was acting as a Trojan horse for the Communists to draw votes away from the opposition alliance. Mr. Lupu’s subsequent statements and actions appear strongly to belie this theory, but it is interesting to note that he saw his results virtually unchanged from exit poll (12.8% and 13 seats) to final tally (12.61%, still at 13 seats) in the July contest.

It is also worth noting that support from April to July increased for the three opposition parties by only 2.86%. Some analysts suggest that had there been a level playing field and none of the alleged fraud discussed above, then the opposition would have taken a much greater majority in parliament. Putting aside this unanswerable question, several factors help account for the non-Communist forces winning more than half the seats in July.




The first, of course, was the popular Mr. Lupu’s departure from the Communist party and decision to run an independent campaign; Mr. Lupu’s seats, combined with those the Communists won in July, roughly equal the number the Communists with Lupu garnered in April. The next was a narrowing of the field from 12 parties and five independent candidates in April to eight parties and no independents in July. Such a situation, where only the most viable parties participated in the campaign, is a new development for Moldova, which has seen as many as 30 candidates on the ballot in past votes. Because there were so many more candidates the first time around, but only four crossed the necessary minimum-vote threshold to enter parliament, a greater number of votes were redistributed to the entering parties in proportion to their success6 . This meant that the better a party’s showing, the bigger the boost it got from the vote redistribution. With fewer reformist parties participating in July and Mr. Lupu’s party pulling votes from the Communists, we saw much less cannibalization among parties with similar platforms in these latest elections, giving the opposition a further push. Finally, interest was very high in these elections and the number of voters actually increased by some 35,000 over the April vote, despite the fact that they took place in the dead of summer when many in Moldova are away.




In any event, it is important to remember that Mr. Voronin’s Communists remain the single most popular party in Moldova. Although it is clear that they have profited from their control of significant administrative resources, including Moldova 1, the only television station that reaches the entirety of this rural nation, the Communists nonetheless have a strong base of support throughout the country and the best grass-roots organization in Moldova. They are also very popular with Russian speakers and in the Gagauz autonomous region in Moldova’s south, where they performed extremely well this time. These facts must be taken into consideration when we discuss ways to get past the rancor of April and help the Moldovans find political consensus and reconciliation that might reflect the competing views in a society still closely split.




The Economy




Moldova may be Europe’s poorest country, but it should not be. It enjoys a good climate and rich soil in which everything grows. It is positioned between east and west, being a direct neighbor of the European Union and a member of the Commonwealth of Independent States. Its people are smart, talented and multi-lingual. Nonetheless, Moldova has failed to throw off its Soviet legacy and modernize its economy, even as other neighboring or similarly situated countries have moved ahead quickly and decisively. What went wrong?




The last years have seen the unfortunate situation where Moldova’s economic and human potential has been trapped due to the lack of a transparent, reliable and fair economic and legal playing field. Corruption, misuse of official position and the predatory advancement of personal interests over national ones remain serious problems. Rule-of-law failures mean that resolving disputes in court is not seen as an optimal solution. Inexplicable restrictions on business and arbitrary rules stifle creativity and expansion. Moldova’s impressive growth during the pre-crisis economic expansion years was largely due to remittances; by some estimates up to one-quarter of the population lives and works abroad, sending back funds that at one point equaled about 25% of GDP.




Now, in light of the global economic meltdown, those remittances have plummeted by 33% year-over-year. Overseas workers – who are split roughly between Russia (mostly men in construction, roughnecking, and labor) and the west (a more typically female destination involving health care and services) – are beginning to return due to economic contractions in their host countries. Before the elections, the Communist government burned through its foreign currency reserves to support the Moldovan leu and to ensure that the social-benefit payments were made on time, especially to its key constituents. It is not clear how much longer this can continue, and it appears that very hard economic times may be ahead. Moldova’s penury is also a significant human rights issue, for without doubt it contributes to putting people who have few alternatives at risk of being trafficked for sexual and labor exploitation, a grave and continuing problem in Moldova.




Whoever becomes the next president of Moldova will have a daunting array of economic issues to face, including an enormous budget gap, little value-added production and serious structural deficiencies. These challenges require that the new government waste little time in implementing a comprehensive program of economic liberalization combined with serious measures to combat corruption and attract foreign capital and investment. There is also a chance that if it does not act quickly to establish a substantive base for real economic development (and not just the remittance-driven consumption that gave the mere appearance of growth) then the country’s new leadership could be held responsible for continuing poverty in Moldova and punished for it by the electorate.




During the second campaign, the Communists were very successful in drawing pledges of highly attractive foreign loans from the Russian and Chinese governments. These countries do not appear to be using such loans to encourage conformity with human rights norms, or improvements in legislation or greater transparency. A month before the July elections, Moscow proposed a $500 million credit, which acting President Voronin described as a “political decision” by Moscow, implying for the electorate the Kremlin’s support for him. The loan’s first tranche, according to Russian Prime Minister Putin, “could reach Moldova within the next six weeks or two months.” That means that the money might appear by mid-to-late August. But if the Communists move into the opposition, it remains an open question whether any of this money will be forthcoming.




The Chinese loan, amounting to $1 billion to be run through China’s largest construction company, Covec, would be dedicated to infrastructure and industrialization projects using Chinese equipment and expertise and Moldovan labor. Although the Chinese credit seems to be consistent with China’s larger economic interests abroad and at home, Beijing may also be reconsidering its move in light of the electoral outcome.




This underscores the importance of the U.S. Millennium Challenge Corporation’s engagement with Moldova. MCC has been working with government and civil society leaders in Moldova over the past three years to implement a $24.7 million grant to reduce corruption in the public sector through judicial reform, civil society and mass media monitoring, and reforms in health care, tax, customs and police administration. This program is largely complete and the threshold money has been disbursed.




Moldova is currently eligible for a larger-scale assistance package, called a Millennium Challenge Compact, and has been developing proposals for potential investments in transport and agricultural projects intended to reduce poverty through sustainable economic growth. The MCC Board of Directors is expected to decide this year whether to fund this program. The grant money contemplated would be based on Moldova’s demonstrated commitment to policies that promote political and economic freedom, investments in education and health, the fight against human trafficking, the sustainable use of natural resources, control of corruption, and respect for civil liberties and the rule of law, as measured by 17 different policy indicators.




It is very important that Moldova’s new leadership move quickly to assure the preconditions necessary for the release of MCC money. It is equally necessary that the MCC Board take a careful look at the political and economic situation in which Moldova now finds itself and not hold this country to a higher standard than other countries which have successfully moved to the Compact phase. With up to $700 million at stake, if disbursed rapidly but carefully, these funds could do much to improve the lives of ordinary Moldovans while reinforcing such key areas as the rule of law, fairness in society and judicial independence. The MCC, the EU’s new Eastern Partnership program and the IMF7 should coordinate to unlock the capacity of this country and help its people to reach their full economic and democratic potential.




Transnistrian Settlement




As they have during every Moldovan election, the Transnistrian authorities complicated voting in the Moldovan-controlled villages on the left bank of the Nistru River, most notably in Corjova. This heavy-handedness is another reminder of the obstacles remaining to Transnistrian settlement with respect for Moldova’s territorial integrity and sovereignty, but with a special status for the breakaway region.




The election outcome has done nothing to soften the Transnistrian leaders’ insistence on independence for their region and “good neighborly relations” with Moldova. Absent an unexpected sea change in the Kremlin’s policy, Moscow will likely keep the Transnistrian conflict on a very low simmer and continue to block any meaningful chance of real, good faith negotiations between Chisinau and Tiraspol in the 5+2 format.




In light of this, as I have long advocated, the only way to change the game is by helping Moldova make itself more attractive to its own population, to the European Union and to its own Transnistrian region8. Given the systemic problems in Moldova, this approach requires a steady step-by-step fortitude to bring real results through the hard work of reform. It is not an overnight solution, but if the Moldovans do pursue meaningful structural change to build a more just, open and prosperous society, they will certainly make it harder for Tiraspol to argue that there is no benefit in being a part of Moldova. What Moscow says, of course, is another matter. But with a linguistic, political and cultural divide growing each year between Moldova and its Transnistrian region, there is no time to waste.




Reform and Prospects for European Integration


1

Public opinion polls consistently show that the vast majority of the Moldovan population favors a sovereign, independent Moldova with a European future. For most of the last decade, the Communist Party has co-opted this desire for political purposes but largely paid lip-service to it when it comes to undertaking the arduous work of reform that would realize this aspiration. We have seen the Communist leadership tack the country’s foreign policy orientation east and west repeatedly, most recently turning to the orient once again in advance of these elections.




For cultural, historical, linguistic, economic and territorial reasons, there is no doubt that Moldova should have good relations with Moscow. Its immediate neighbor, however, is the European Union and the demographic reality is that a new generation demands European integration. Now that a coalition of reformist and solidly pro-European parties have won a slim majority, it is important that the country strike while the iron is hot to begin the long-deferred reforms that will make it a more vibrant, attractive, prosperous nation. Progress is particularly urgent in the following areas:




Legal and Judicial Reform. Moldova has had a significant problem with politicized prosecutions against the political and business rivals of those in power. These undercut trust in the rule of law and fundamental fairness in society and must be stopped immediately. Moldova’s judiciary has not yet been up to the task of acting as a serious check to executive power. Creating a truly professional, independent judiciary is perhaps the most significant – and likely the most difficult – reform challenge facing Moldova9.




Police Reform. The brutality by law enforcement officers following the events of April 7 and 8 illustrate a problem that has existed in Moldova since long before young protesters got out of hand and attacked government buildings. Some progress has been made, but torture occurs far too frequently in Moldovan police stations and prisons. Moldova needs to better police its police and provide a more trusted independent review process for claims of torture or other arbitrary behavior by agents of the state.




Freedom of the Press and Assembly. Monitoring reports from the April and July elections emphasized bias in media coverage and advantageous media reach thanks to control of Moldova’s only truly national station, Moldova 1, by the ruling Communists. Ideally, Moldova would not have a government-controlled station. In the past, concerns over crony privatization suggested that a better route would be transformation of Moldova 1 into a legitimate public broadcaster. If this is undertaken, great care needs to be taken to depoliticize its regulatory body, the Audiovisual Coordinating Council. Consideration should even be given to adding directors from the European Union to such a reformed broadcaster’s board of overseers. Similarly, freedom of assembly must be guaranteed without undue and unreasonable restriction – this has not always been the case in Moldova.




Combating Corruption. There is no issue that more directly touches more Moldovans than the fear of being shaken down for a bribe. From university students taking exams to businessmen trying to expand, corruption remains a bitter tax on this country’s potential. Urgent measures need to be taken to change the country’s culture of corruption.




Economic Liberalization. As already discussed, Moldova’s economy cannot grow without fair business rules that apply to all, without exception. In the face of economic crisis, it is crucial to create a legal structure that encourages small and medium enterprises, foreign investment in Moldova and the de-linking of political power from business success.




Political Maturity. As our Russian friends say, “the fish rots from the head.” Although it cannot be legislated or brought about through a program of reform, it is very important that Moldova’s new government lead by an example of rectitude and transparency. This means that power must not be seen as a means to advance one’s personal agenda but rather to promote the national interest. The opposition will be tempted – we have already seen danger signs10 of this – to exact retribution from the Communists for what it sees as the indignities it has suffered for eight years at their hands. For the good of Moldovan society, it must not fall prey to this temptation, particularly given the structural weaknesses in the rule of law already discussed.




U.S. Support




The outcome of these elections does not represent an end in itself. Rather, Moldova’s new political configuration should be seen as merely setting the table for the laborious steps of reform that still must be undertaken. There is much that the United States can do to help Moldova move beyond its Communist legacy to become a more open and prosperous society.




First, as this Committee has laudably done, is to shine a spotlight on Moldova and keep attention focused on the country’s democratic development. The world is filled with serious international threats that are of a higher priority than reform in a small, post-Soviet nation. But even modest support and encouragement – things as simple as regular visits by top policy makers – will give more bang for the buck here than they might elsewhere. It is important to send a clear and early signal that reform must be undertaken now, and sustained without backsliding.




Second, Moldova must avoid the descent into petty, ambition-driven squabbling that has so enervated momentum for reform in neighboring Ukraine following the Orange Revolution. Dislike for the Communists among the opposition will not wish away their significant support among certain segments of the Moldovan population. Moldovan society is looking for leadership and direction from its politicians, not score-settling. The U.S. must encourage principles – reconciliation and collaboration – over personalities and must steer clear of being drawn into someone else’s fight.




Third, the time is ripe for greater assistance to Moldova’s political parties and civil society. The National Democratic Institute and the International Republican Institute should be encouraged to expand their programs in Moldova to advance good governance, provide better openness and accountability in government, develop youth leadership and continue the necessary work on electoral reform that has been revealed by the irregularities in April and July.

Fourth, legal and judicial reform in Moldova must be a top priority. Groups like the American Bar Association’s Central European and Eurasian Law Initiative have done yeoman’s work to advance this cause. More training for prosecutors and judges is needed, and self-regulatory organizations, like local bar associations, should be strengthened. Coordination could be improved among the OSCE Mission, the various European groups and U.S. initiatives working to promote development in this area.




Fifth, the MCC’s Board of Directors should take a careful and expedited look at moving ahead with Compact status for Moldova. U.S. financial help is sorely needed now, but of course it should not come at the expense of standards. Excitement over the results of one election must not, alone, change the calculus in determining whether to proceed, but at the same time Moldova should not be held to a higher grade than similarly-situated countries which have already passed the threshold.




Finally, in the spirit of “reset,” the U.S. should encourage Moscow to engage in real, sustained, good-faith talks at a decision-maker level in the 5+2 format on resolution of the Transnistrian conflict. There are many reasons why this long-standing issue is eminently solvable – Moldova’s constitutional neutrality, its linguistic plurality, distance from Russia, and the lack of any cultural or religious enmity between the sides – and having genuine negotiations where significant give-and-take is required would, I believe, help improve the situation both across the Nistru River and between Washington and Moscow. It might even solve the conflict.




Moldova’s people have expressed their desire for a better future, and now it is up to their leaders to follow through with concrete results. The reform steps outlined in this briefing are by no means simple, but they can be accomplished with focus, dedication and appropriate assistance. Thank you, Mr. Chairman for the opportunity to present these thoughts.



Louis O’Neill



August 4, 2009

Washington, D.C.


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1- Unfortunately, the Moldovan constitution and explicative legislation contain significant holes and discrepancies. For example, some scholars have suggested that article 85(3) of the constitution means that dissolution of parliament and repeat elections can take place only after April 5, 2010, i.e. one year from the date the first dissolved parliament was constituted. Others argue that the same section means that such events could take place as early as January 1, 2010.




2- Again, Moldova’s constitution is not clear on this point and this situation has never before been faced.


3- Mrs. Greciani is a well-respected technocrat who served as Moldova’s prime minister from March 31, 2008 until May 4, 2009 and is currently acting prime minister as well.


4- It must be noted that the purely Moldovan observer groups, such as the League for Defense of Human Rights (LADOM) and others, were much more critical of correctness of the electoral processes in April and July than were the international groups.


5- A number of independent Moldovan NGOs reported problems with the lists, including the Moldovan Institute for Human Rights, directed by Vlad Lupan, who testified before this commission in September 2008.



6- Moldova has always used the D’Hondt Formula for redistributing votes of those parties which fail to pass the threshold for entry into parliament. Now, the Liberal Party is challenging this approach in court.


7- Which hopefully will be able to return to Moldova in the nearest future. The IMF left the country in June in frustration over the political uncertainty following the April impasse.




8- Transnistrian lead negotiator Valerii Litskai once quipped to me that “Transnistria would join Moldova tomorrow if it were like Switzerland. Alas, it is not and it won’t be.”


9- In 2007 the OSCE Mission to Moldova released a valuable road-map for improvements in the Moldovan judicial system with its "Six-Month Analytical Report: Preliminary Findings on the Experience of Going to Court in Moldova."


10- For example, Moldovan Political analysts Petru Bogatu declared on August 4 that Voronin “should be treated like Milosevic.” “The Parliamentary Majority Should Not Negotiate Immunity With Voronin,” Info-Prim Neo, August 4, 2009, http://www.info-prim.md/?x=553&y=24954.