8
exercise power over the whole Moldovan territory. As a state within a state, the secessionist part of
Transnistria on the east shores of the Dnjestr has its own political institutions, legislation and even
currency.
27
2.1 The Risks of Weak Statehood
Moldova ranks 115 of 177 in the UNDP Human Development Index.
28
In the last 15 years economic
activity has declined to 40% of pre-independence level and in 2004 the GDP per capita was only US-$
463.
29
Due to legal uncertainty, government interventions and corruption, foreign direct investment
and trade figures are extremely low. Thus, the country’s main foreign currency income is the high
amount of remittances of Moldovans working abroad (16% of the Moldovan BIP) and Official
Development Aid (ODA).
30
Eighty two percent of the Moldovan population lives below the poverty
line.
31
The problems of Moldova are the typical symptoms of unconsolidated statehood and the unsettled
conflict in Transnistria questions the territorial integrity of the country. Yet, Moldova’s sovereignty is
not only limited geographically, but also functionally. Deficits can be observed in the rule of law and
in the country’s administration capacity. Corruption is a constant feature of daily economic life. In the
Transparency International Corruption Perception Index 2004, the country ranks in the position 114 of
145.
32
The limited ability of law enforcement and long borders without effective border management
makes the country a safe haven for organized crime groups, especially in the Transnistrian region.
Because of the presence of organized crime and the unsettled Transnistrian conflict Moldova presents
a security risks for its neighbors and the European Union.
The two problems are intertwined. The critical political and economical situation in Moldova is at least
partly the consequence of the unsettled conflict in Transnistria. The self-proclaimed republic is ruled
by parts of the former Soviet nomenclature that profits from the situation by relying on structures of
organized crime. Transnistria has become a processing center for the trafficking of migrants and drugs
as well as weapons and ammunition. The breakaway region of Transnistria is especially a safe-haven
for organized crime. Measures by the Moldovan government to consolidate statehood have often had
only a limited effect due to geographical limitations. The Transnistrian leaders even actively thwart
some measures. The settlement of the Transnistria problem would therefore not only lead to more
regional stability. It is also a prerequisite for effectively combating organized crime as the separatist
region can be considered a criminal offshore zone.
Because of the situation in Transnistria, the Moldovan government cannot control the country's border
with the Ukraine. For many years, the Ukrainian authorities tolerated the trade of Transnistrian
companies and the seaports in Odessa and Illicivis were illegally used for Transnistrian exports.
33
Yet,
the situation changed in 2003 when the Ukraine committed itself only to accept the newly introduced
Moldovan custom seals. In the first half of 2005, the Ukraine agreed on common Moldovan-Ukraine
27
The official name is Dniester Moldovian Republic (also Transdniester Moldovian Republic following the Russian
Pridnestrovskoi Moldavskoi Respubliki).
28
The United Nations Development Programme, Human Development Reports 2005, New York: United Nations
Development Programme 2005, p. 221.
29
The United Nations Development Programme, Human Development Reports 2005, p. 268.
30
The World Bank, Moldova Data Profile, Washington: The World Bank, 2005.
31
Population below income poverty line ($4 a day). The United Nations Development Programme, Human Development
Reports 2005, p. 231.
32
Transparency International: Transparency International Corruption Perceptions Index 2004, Berlin: Transparency
International, 2004. [http://www.transparency.org/cpi/2004/cpi2004.en.html#cpi2004]
33
Nicholas Whyte, “EU must tackle Moldova’s frozen war,” European Voice 18 June 2004,
[http://www.crisisgroup.org/home/index.cfm?id=2814&l=1].
Convention