· Moldova elects new parliament on February 24 under new electoral system
· Country split between pro-EU and pro-Russia factions
· Slowing economic growth will suffer further from political realignment
Stockholm (Ekonamik) – The Republic of Moldova goes to the polls on Sunday, February 24 under a new electoral system that critics fear will favour the large established parties, and amid mutual distrust and recrimination between political factions.
Moldova is one of Europe’s poorest countries, split politically between pro-Western and pro-Russian parties. Its government is pursuing a pro-EU agenda, while President Igor Dodon was elected on a pro-Russia platform. Russia is accusing the U.S. of meddling in the election, while liberals in the country say Mr Dodon is blackmailing citizens into submission to Russia.
Half of the 101 Members of Parliament will be elected on party lists, with the other half elected in single-seat constituencies in the new electoral system, despite warnings against the changes from the European Council’s Venice Commission. A simultaneous referendum will be held on cutting the number of deputies in parliament from 101 to 61.
The changes are expected to ensure that about half the seats will go to Mr Dodon’s PSRM Socialist Party and its allies, with the other half going to the ‘Acum’ platform, which includes the pro-European Party of Action and Solidarity (PAS), and the Dignity and Truth Platform Party (PPDA). However, PSRM and the Democratic Party (PD) have been making common cause as of late, suggesting a political realignment in Russia’s direction. PSRM currently stands to gain 35% of the vote.
Moldovan courts annulled the results of a mayoral election in Chisinau in June 2018 in which a pro-European candidate won, causing the EU to suspend €100 million in financial aid until after the parliamentary elections. Despite flirting with the PSRM, the PD is expected to mend bridges with Europe if it remains in a ruling coalition with the other pro-European parties.
Moldova’s economy depends heavily on good relations with the EU in terms of both financial aid and trade. Exports to European markets rose 67% in 2018 and GDP grew by 4.8% in 2018 according to a forecast by the World Bank. Economists expect more growth if Moldova remains oriented towards the EU after the elections, but it could decelerate to 3.5% in the more pessimistic scenario, according to a study from Expert-Grup, a Moldovan think-tank.
Moldova GDP Growth Rate 2018 (Source: trading economics.com)
Under either scenario, growth would nevertheless lag behind the 7-8% pace required for relevant convergence towards regional economies, according to the group. In addition, it finds that revenues projected in the 2019 budget are already overestimated. “Missing the foreign assistance and incurring smaller tax revenues than expected will force the government to increase internal borrowing, or might even require increasing certain taxes,” Expert-Grup warned. An economic slowdown in Europe could also have a major impact on Moldova.
A decision by the parliament, which still has a pro-European majority, to meet on Thursday triggered a warning from Mr Dodon earlier this week of an “attack” on the institution of the presidency and a threat a “flock to the square to declare the election invalid” if, as he claimed, political factions are “removed” by parliament.
The political and economic risk associated with the election is therefore high. In addition, the autonomous region of Gagauzia will elect a new leader in May, and Moldova will hold local elections in June to elect new councils for all municipalities in the country. Combined, worsening economic conditions and the 2019 elections could cement a longer-term shift in the direction of Russia, on which the country also remains heavily dependent for energy supplies.
Update (February 25) – As of Monday, preliminary results based on 98% of the votes, suggest the Socialist Party received 31.4% of the votes, followed by the opposition “ACUM” platform with 26.2% and the Democratic Party with 24%.
Image: Moldova Parliament Building, Wikimedia Commons