Transnistria in the Shadow of the Ukraine Crisis

In light of the events in Ukraine, the situation in Transnistria (the Pridnestrovian Moldavian Republic) may seem rosy. Although this takes nothing away from its drama. The most serious challenges arise due to two factors: the signing of an Association Agreement between Moldova and the European Union; and the policy of the new regime in Kiev, for which the pro-Russian enclave in Transnistria is as much of a thorn in its side as the breakaway Donbas region.

In light of the events in Ukraine, the situation in Transnistria (the Pridnestrovian Moldavian Republic) may seem rosy. Although this takes nothing away from its drama. The most serious challenges arise due to two factors: the signing of an Association Agreement between Moldova and the European Union; and the policy of the new regime in Kiev, for which the pro-Russian enclave in Transnistria is as much of a thorn in its side as the breakaway Donbas region.

The creation of a free trade area between Moldova and the European Union that does not include Transnistria could seriously damage the region’s economic situation, depriving it of both the European and the Moldovan markets. According to a governmental report, 40 per cent of Transnistria’s export goes to Moldova, with 33.6 per cent being directed to the European Union and 7.8 per cent to Ukraine. Customs Union countries (Russia, Belarus and Kazakhstan) accounted for just 18.2 per cent of Transnistria’s export, with Russia making up 17.6 per cent.

At the same time, Russia is the biggest importer to Transnistria (42.6 per cent), followed by Ukraine (17.4 per cent), Belarus (6.5 per cent), Germany (5.7 per cent), Moldova (5 per cent) and Italy (2.8 per cent). Despite the declared course towards “Eurasian integration” and its “reorientation towards the transport market”, the situation changed little in the first eight months of 2014. As a result, the Transnistrian authorities estimate that the country could lose 39 per cent of its production capacity, 65 per of its export revenues, 57 per cent of its foreign trade turnover, 36 per cent of its tax revenues and 23 per cent of its GDP.

REUTERS/Sergei Karpukhin
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Transnistria currently enjoys an Autonomous Trade Preferences with the European Union, which it will be able to use until the end of 2015. But it is already clear that Brussels and Chișinău will utilize that period to apply pressure on Tiraspol to change its foreign policy line.

On the other hand, the crisis in Ukraine has led to losses on this market: trade flow on the Ukraine–Transnistria border dropped by 43 per cent in the first half of 2014. At the same time, given the renewed political hostilities, Tiraspol can quite rightly expect anything from the Kiev authorities. Time and again, the new leaders in Ukraine choose the worst and most suicidal path of action. It would be easy to assume that they would hard pressed to resist the temptation to join Moldova in taking the strategic “pincers” and forcing Transnistria to capitulate. One such attempt was already made under Former President Viktor Yanukovych – the direct predecessor of today’s “Europeans” in Kiev.

I would like to think that there are some clear heads in Chișinău who realize that attempts to “push the country into a corner”, particularly against the backdrop of the Ukraine crisis, could provoke a repeat of the Donbas situation in Transnistria. All the more so because the November 30 parliamentary elections in Moldova showed that the country remains split almost down the middle on foreign policy. That the pro-European coalition was able to retain power was the result of direct violations of democratic norms (the pro-Russian Patria party was banned from running on the eve of the elections and limitations were placed on Moldovan citizens working in Russia from registering their votes). On the whole, the political fate of Transnistria depends largely on Russia. The Ukrainian situation has proven that the new-fangled Western sport of “teasing the Russian bear” comes at a price. The hardest hit will be those who accidentally get into the bear’s way. And there is little consolation that the bear himself will take a serious blow.