Moldovan election pits Moscow’s man against top local oligarch

Moldovan election pits Moscow’s man against top local oligarch
The Socialists leave the snow for their al fresco final press conference ahead of the election. Polls show they are likely to take the largest share of the vote on February 24.
By Clare Nuttall in Glasgow February 23, 2019

The polls leading up to Moldova’s February 24 general election point to a three-way race between President Igor Dodon’s Socialists, the Democratic Party that leads the current government, and the pro-EU opposition alliance ACUM (NOW). But controversial recent changes to the electoral rules — made in the face of heavy criticism from the Council of Europe’s Venice Commission — mean the system is loaded in favour of those who already hold power, namely Dodon and Democratic Party leader Vlad Plahotnuic, the oligarch behind Prime Minister Pavel Filip’s government. 

Pre-election polls have consistently shown the Socialists taking the largest share of the vote, but not enough to form a majority in the parliament alone. ACUM typically takes the runner up position, with the Democrats trailing in third place, though the complex new electoral system, under which half the MPs are elected through a majority vote and half through a proportional vote, could well result in surprises. 

The February 24 general election will be the first test of the new mixed proportional-majority system that sparked thousands-strong protests in Chisinau when it was adopted. Critics say it will favour the Democrats as the party currently in power, and also make it easier for businesspeople to influence politicians standing in single constituency seats. It could therefore provide a much needed boost for the Democrats, which managed to gain a majority in the current fragmented parliament thanks to Plahotnic’s ability to win over MPs from various other parties using various tactics, but which is not very popular with the electorate. On the other hand, ACUM, an alliance of the two main pro-EU parties outside the parliament, is expected to lose out. 

“The country’s new electoral legislation, jointly adopted by Plahotnuic’s and Dodon’s parties in mid-2017 … pre-determines a parliament dominated by these two political factions, whose common goal is to minimise NOW’s representation,” wrote Jamestown Foundation senior fellow Vladimir Socor on February 7. 

Balazs Jarabik, a non-resident scholar of the Carnegie Endowment for International Peace, and Leonid Litra a senior fellow at the New Europe Center, based in Kyiv, wrote in a February 21 comment of a “serious three-way contest” but go on to add that, “There is no need for [election day] fraud as the two main parties have redesigned the electoral system to their advantage. The new system … gives Vlad Plahotnuic, the country’s de facto leader, a chance to remain as power broker.”

Turning the tables 

But which of the parties will come out on top? If the polls are to be believed it will be Dodon’s Socialists, who consistently benefit from the support of the substantial proportion of the population who — whether for sentimental or economic reasons — want to see Moldova align itself with Russia rather than the EU.

ACUM has recently said it will not form a coalition with either the Socialists or the Democratic Party. But despite their divergent stances, an alliance between Dodon’s and Plahotnuic’s forces cannot be ruled out. On the surface the two are rivals — as demonstrated by the parliament’s repeated suspensions of Dodon from his post when he has refused to make appointments or sign legislation requested by the ruling coalition — but there have long been rumours of an unofficial behind the scenes alliance between the two, witness their joint adoption of the new electoral rules. 

What the ballot will determine is which of them is predominant post-election; polls indicate it will most likely be the Socialists looking for a junior coalition partner to form a government, which would represent a shift in the current balance of power from Plahotnuic to Dodon. 

On the other hand, analysts don’t rule out dirty tricks — from either side. “[I]f things look desperate for the current ruling party, tricks cannot be excluded. Moldova’s democratic credentials have been significantly weakened under Plahotnuic,” commented Jarabik and Litra. 

Meanwhile, Socor focusses on Dodon’s possible reaction: “The Socialist Party is widely expected, in Moldova and abroad, to emerge on top and claim a corresponding share of government ministries; or, if that is denied, to try forcing repeat elections.” 

Indeed, ACUM’s Nastase and Sandu have already claimed to be the victims of some very dirty tricks. The two opposition politicians said on February 21 that they have been poisoned, saying a series of tests revealed high levels of heavy metals in their blood. 

“I am telling you with all certainty that we are the targets of attacks by this government that wants us dead,” said Nastase, reported. 

The claims were dismissed by a Democratic Party spokesman who said he was “sure they are unfounded” and that they should be viewed in an electoral context. 

Meanwhile, the Russian interior ministry announced two days before the vote it has launched a money laundering probe into Plahotnuic and convicted corporate raider Veceslav Platon, concerning flows of money through two Russian banks. 

The issues at stake 

The campaigns run by the main parties have focussed on a mixture of domestic social and economic issues, and geopolitics, the eternal question of Moldova’s orientation to east or west. 

“Plahotnuic’s and Dodon’s parties — each in its own way — define these election as a ‘geopolitical’ struggle, whose outcome would allegedly determine Moldova’s future relations with the west and with Russia, respectively. Those two banners are convenient for Plahotnuic and a matter of conviction for Dodon’s party,” writes Socor. “The former Moldovan politician is bidding for Washington’s endorsement after losing Brussels, while the latter is loyally counting on the Kremlin’s support.” 

Plahotnuic’s actions received a drubbing in a European Parliament resolution on the country approved in November 2018, and the same month the European Union suspended €100mn of macro financial aid for the country due to concerns over the state of democracy and slow pace of reform. 

On the other hand, the last couple of years have been relatively stable politically, enabling the economy to flourish, one of the reasons Plahotnuic and the Democrats are a bit less unpopular than they used to be. Once the poorest country in Europe, Moldova has now handed over that dubious honour to neighbouring Ukraine, and international financial institutions project robust growth going forward. The IMF forecasts 3.8% GDP growth this year, considerably ahead of other CIS states. Moldova has been helped by the labour market squeeze and rising costs in Romania and Central Europe, which has led some investors to look further east for low cost manufacturing destinations. 

Moldova is also putting the crisis in its banking sector — from where $1bn was infamously embezzled earlier this decade, with the cost ultimately to be borne by taxpayers — behind it. 2018 saw the sale of the country’s largest bank MAIB to the EBRD and two investment funds, while foreign buyers are also targeting smaller banks. 

However, rather than either Moldova’s geopolitical orientation or the state of the economy, 49% of respondents to a survey carried out by the International Republican Institute (IRI) in autumn 2018 named corruption as the most important issue guiding their votes. This is hardly surprising given that Moldova is invariably one of the worst performers in Europe on Transparency International’s annual Corruption Perceptions Index. And if further evidence was needed, the businessman convicted for playing a leading role in the $1bn bank frauds, Ilan Shor, not only remains as mayor of the Moldova city of Orhei, he is now running for a parliament seat at the helm of the eponymous Shor Party.  

The captured state 

This election will be an interesting test of how deeply entrenched the state’s capture by its leading oligarch has become. EU institutions have become more explicit recently in calling out state capture in Moldova, where Plahotnuic is widely believed to control “key state institutions, the prosecutor general, the judiciary, financial flows, and media,” says the Carnegie commentary. 

In its resolution adopted in November, the European Parliament expressed grave concern about Moldova’s “ruling political leaders” colluding with business interests to form an oligarchic group that captured the state and exert their influence over most of the country’s institutions. While mentioned only indirectly, Plahotnuic is implied as the head of the “oligarchic interests”. 

As the election approaches, the OSCE/ODHIR’s interim election observation report talks of an environment of “growing public distrust in state institutions”. The outcome of the last election that didn’t go the ruling coalition’s way — opposition leader Nastase’s victory in the Chisinau mayoral election — is telling. The result was cancelled by the courts, and the post has since been held by interim mayors linked to the ruling coalition. “The annulment of the results of the 2018 earl elections for the mayor of Chisinau by the courts further aggravated this distrust,” says the report. 

It goes on to raise other issues, among them allegations of the misuse of administrative resources, as well as the concentration of media ownership, and political and economic influence on the media. Plahotnuic is a major media owner, even though he transferred ownership of two of his TV channels to an advisor in 2017. He holds the country’s two dominant advertising agencies, while numerous news websites are linked to him or his party, according to a 2018 Freedom House report. Dodon’s Socialists are linked to the owners of three TV channels and several web portals. 

And February 24 will see a referendum that could lead to further erosion of Moldova’s fragile democracy. As well as casting their ballots in the presidential election, voters will have to say whether they want to cut the number of MPs from 101 to 61, and if MPs “not doing their job for the benefit of the electorate” could lose their seats before the expiry of their term. The decision to hold the referendum was rushed through on the last day of the current parliament, as the government that did not expect to survive post election sought to extend their influence a little further.