CHISINAU (Reuters) -Moldova’s pro-Russian separatist Transdniestria region faces a dire economic crisis triggered by this year’s halting of gas supplies from Russia and a collapse in industrial and farm production, a senior minister in the enclave said on Wednesday.
WHY IT’S IMPORTANT
Moldova’s pro-European President Maia Sandu has warned that Russia could use instability in Transdniestria to sow chaos and influence a September election to secure a parliament and government more favourable to Moscow.
Sandu is seeking European Union membership by 2030.
KEY QUOTES
“Forecasts for Transdniestria’s economy are not encouraging, based on uncertainty over gas supplies, a lack of a contract on power exports from the thermal plant and the fact that major industrial plants are idle,” Economic Development Minister Sergei Obolonik told a government session on Wednesday.
“There remains a risk that Moldova could introduce new sanctions and restrictive regulations,” he said, according to local media.
CONTEXT
Transdniestria broke from Soviet Moldova in 1990. Other than a brief 1992 conflict, it has lived alongside the rest of the now-independent state with little upheaval for more than 30 years thanks largely to assistance provided by Moscow.
But Russia halted supplies of virtually free gas in January after Ukraine shut a transit pipeline. Separatist authorities secured alternative gas through a Hungarian supplier with Russian funding, but that supply has proved insufficient to keep the economy afloat.
BY THE NUMBERS
Obolonik forecast a 12% drop in gross domestic product in the second half of the year from a year ago, a 30% plunge in industrial output, a 6% slide in agricultural production, a 20% slide in foreign trade and inflation of 16%.
Improvement next year, he said, depended on finding reliable gas sources and on Moldova introducing no punitive measures.
“We can expect no real growth in the economy,” Obolonik said. “The best scenario is for indicators to remain at this year’s levels.”
(Reporting by Alexander Tanas, writing by Ron Popeski, Editing by Rosalba O’Brien)
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