Sergiu Ion Chirc, University Professor, Chishinau, Republic of Moldova Honorable Member of the Romanian Academy

A step forward and three steps backward in Bassarabian market economy

Bassarabia a historical Romanian province, situated between two rivers, Prut and Dnister, during two hundred years was not developing according to a free and developed market economy. Although, geographically situated in the Center of Europe, as a constituent part of the European civilization, politically and economically is oriented to Eastern Europe. It is a territory in transition, moving to a democratic system and to a highly developed free market economy. Being a component part of Moldovian Kingdom till 1812, on its eastern side, in 1812, Bassarabia was annexed by force to the Russian Tsarist Empire, and till 1918 suffered a colonial exploitation and a heavy russification. The Rector of Humanitarian University from Moscow, the Russian professor, Iurii Afanasiev, describes the essence of the Russian Soviet Empire as follows: Russia always lived in expansions and conquests, annexing more and more territories In the history of Russia, there wasnt a single period of peaceful time. They were annexing new territories or, they were defending them. They have never thought how to develop and sustain these territories being permanently concerned only with annexations and conquests1).
Bassarabia was and remains a Romanian province, and the native populations are Romanians. Even Marxist-Leninist founders Marx, Engels, Lenin, realized this historical fact. See: F. Engels The External Policy of the Tsarist Russian ; Lenin The nations right to selfdetermination. Mao Zedon, in 1964, declared the following: The territories occupied by they URSS are numerous In 1954 Hrushciov and Bulganin visited China, but they were unwilling to discuss the problem concerning these territories. They occupied a part of Romania (Pravda, September 2, 1964). In 1914, only 4 years before the total integration of the Romanian nation, Lenin called the native population from Bassarabia Romanians (Lenin, Vol.25, edition I, page 271).

If at the beginning of the 19th century the rate of the Romanian population from Bassarabia was greater than 90 per cent, then in 1918-1919 it diminished to 60 per cent2). In 1918, due to the struggle for the national liberation, under the flag of entire Romanian nation, the struggle led by Sfatul rii (the Countrys Council), in favourite political conditions (the collapse of the Austro-Hungarian Empire, the Bolshevik coup detat from Russia and the proclamation made by Lenin about the rights of the oppressed nationalities to self-determination), Bassarabia was the first Romanian province which was reintegrated with her Motherland Romania, democratically and in a legal way3). According to the Molotov Ribentropp pact (in fact the pact between Stalin and Hitler) signed in Moscow in August 23, 1939, just with only 8 days before the beginning of the 2nd World War (on September 1, 1939, when the occupation of Poland began), Bassarabia was occupied for the second time by military forces, this time, by the Soviet Empire,in June 28, 1940. It was occupied officially because from 1700 and till 1812, Bassarabia, like other Romanian provinces, had undergone a lot of invasions by the Russian armies, that left behind disaster and ruins. In this way, the aggressive policy and the expansion of the Soviet Empire forwarded a lot towards the mouth of the river Danube and also towards Constantinople (Istanbul), Balkan countries and the center of Europe. To disintegrate Romania, the country that was and remains on the way of the Russian expansion to Balkans (a country that was occupied, in October 12, 1924) Stalin formed (on the territory of the Ukraine, between two rivers, Dnister and Southern Bug) the Moldavian Autonomous Republic, covering an area of 8100
One could read in the newspaper Pravda about the Bolshevik party of the URSS, from the very first day of 1941, the following: Our Motherland is large, the Earth should go for 9 hours round for the immense country could enter a new victorious year. Time is approaching when the Earth wont need only 9 hours, but all 24 hours, because every year represents a new step towards Communism and towards the entire worlds brotherhood. Nobody knows where we shall celebrate the New Year in 5 or 10 years: at what altitude and on what new soviet meridian; What kind of new soviet country and what kind of new soviet people there will be? (Pravda, 01.01.1941)

km2 and a population of 544,5 thousand with the capital in Balta (actually included in the Ukraine). When Bassarabia was occupied in 1940, Stalin formed the Soviet Socialist Republic of Moldova with the capital in Chiinu, dividing Bassarabia in three parts: the Central Part (covering an area of 30.000 km 2 out of the total territory of 44.442 km2), another part was a small territory taken from the former Autonomous Republic which was situated on the other side of the river Dnister (just only 4100 km2 out of the former Autonomous Republic which covered 8100 km2), The Southern Part of the republic which was situated on the Black See Shore, and the North of Bassarabia (approximately 14.4 thousand km 2) were given up to Ukraine. The disintegration of both territories and economies, the mixture of ethnic groups and rupture of traditions and families could lead to the creation of The Empire of Evil, as it was stated by the president of the USA, Ronald Reagan (1981-1989). After the disintegration of the Soviet Empire in 1991, prior to its final collapse (although the Russian Federation continues to extend beyond its natural borders), and due to the national liberation movement from 1988-1990, on the 17th of August, 1991, the former Soviet Socialist Republic of Moldova was declared as an independent state, which on the 2nd of March, 1992 was recognized by the UNO. During the last 10 years of transition to democracy and market economy, the Republic of Moldova, has become the poorest country in Europe, though in 19891990 the standard of living was much higher than in Albania and Romania. At the beginning, in 1991-1992, the country was strategically oriented to the European Union, but later, however, the external and internal neo-imperial forces diminished the importance of the victory of the national liberation movement and
Stalins policy left a heavy heritage for those countries, which appeared after 1991 on the territory of the former URSS, especially in the European part. The Ukraine gained mostly from this policy; it administrates the territories of the neighboring countries. The reunification with Romania was stopped by Moscow whose army was and still remains dislocated on the territory of Moldova, having the objectives to remain here and enter the Balkan states, Turkey and the North of Africa. Simultaneously, Moscow has created a separatist republic on the territory of Transnistria with the capital in Tiraspol.

reoriented the country towards the East, towards the former Metropolis. The last election victory of communists in 2001, lead the entire process to the total subordination of the Republic of Moldova. Due to all these facts, one could explain the dramatic drop of the GDP that actually totals only 1/3 of the 1989s could mean that the market economy is still not functioning. At the same time, there is a constant decrease of GDP budget revenues (by 39% in 1994, 24% in 2001 and 22,2% forecasted for 2002). From this point of view the country continues to remain with an unpredictable perspective. Although, in November 1994 the Republic of Moldova signed an agreement of collaboration with the European Union, during the last 7 years the countrys leadership did nothing. The entire activity of the Parliament and Government was oriented towards Russia. The social change for worse and the deepening of poverty in the conditions of a chronical corruption and governors irresponsibility as well as Moscows manipulation through Gazprom using it as a political instrument to influence Moldova, caused a massive outflow, i.e. a exodus, of workmen to lots of countries, including the West ones (according to certain data, the number of people ranging from 600 thousand up to 1 million people, out of 4,3 million citizens of the Republic have lately left the country). In these conditions the party in power of the Republic of Moldova began the abolishment of democratic and economic reforms and the setting up of an authoritarian regime, based on communist ideology. This being said, one may conclude that during the last two centuries Bassarabia and its economy has joined the following forms and systems of political and economic development:

Table 1
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Independent (national) and dependent (colonial) development of Bassarabia, its economy in 1800-2001
Time span
Years Characteristics

Number of years
Of colonial development 105 1 47 Of national development 12 22 3 10

Economic systems (years)

Colonial and weakly developed economy 105 Planned colonial economy 1 47 Free market economy 12 22 3 10

1800-1812 1812-1917 1918-1940 1940-1941 1941-1944 1944-1991 1991-2001

Within the feudal state Colony of the Russian Empire Independent state Colony of the URSS Within the National state of Romania Colony of the URSS Independent State

Total

153

47

105

48

47

The data from figure 1 shows that for 153 year out of the last 200 years Bassarabias population and economy was under foreign domination, leaving heavy and unfavorable consequences for a democratic system, a free economy, a true culture and further pperspectives to return to its identity and to a common European system. Only for 47 years this province enjoyed a spiritual and independent development, i.e. a national one. This very period the country had been oriented to a market economy, although it was subjected to tremendous difficulties both from the economic and political point of view. First of all, out of those 22 years, when Bassarabia was a constituent part of the entire Romanian nation, at least, 9 years were necessary for the economic recovering, destroyed by the World War I (1914-1918) and overcoming the world economic crises consequences of 1920-1933. Secondly, those 3 years of reintegration with the Motherland (1941-1944) were designed for recovering the free market principles and mechanisms, abrogated and changed by the occupational soviet regime in 1940-1941. However, it should be taken into account that there were hard years of the war when the world suffered enormous human, financial and material losses. It should be also mentioned that the soviet occupational regime from 1940 had demolished not only the market system of economy, but had also physically destroyed the free economy
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supporters. Thus, the soviet regime had deported to Siberia and physically exterminated 10 thousands of Bassarabian Romanians. Only after 11 days since the invasion of soviet military troops in Bassarabia, on July 9, 1940, the Chairman of Council of Commissars, V.Molotov had signed The Decision No.-1201-471 S About the military tribunals activity on the territory of Bassarabia and Northern Bucovina. On the 15th day of occupation, the Comissar Lavrientie Beria , on 12.07.1940, had applied to Stalin, for sending additional military forces amounting 1910 persons and for enrolling 1654 reservists, in order to organize urgently the Bassarabian and Bucovinian Romanians departure. According to L.Berias order of July 14, 1940, the heads of the families were deported from Bassarabia to Kozeliscenski camp 500 men, to Putilovschi camp 300 men, but the other members of the families (women and children) to Karaganda and Actiubinsk camps, amounting 11 thousands persons. According to Berias decisions, in the summer of 1941, before military operations between Germany and URSS, 6000 persons were deported to Omsk region, 10000 persons to Kirovsk region, etc4). Men were deported to some remoted regions and to GULAGs, but women and their children to quite different parts. Those men were the representatives of the most capable, well-to-do and the motive force of Romanians from Bassarabia. The massive departures and exterminations continued in greater proportions after the third official occupation of Bassarabia by Russians in 1944, and especially in 1949, on the eve when the private property was forced to liquidation. Simultaneously, there took place a forced collectivization in agriculture. At that time hundred thousands of Bassarabians were deported. If we take into account the fact, that, in the first half of 1940 and in the summer of 1944, on the eve of soviet occupation, ten thousands of intellectuals, businessmen, householders, priests, teachers and doctors refuged over the river Prut to the Motherland, Romania, one can notice that Bassarabia had huge losses of human resources, as well as highly valued resources. Historically, it happened the following: one decisive step toward
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free market economy forwarded ahead, while at the same time, three and sometimes more steps went backward. From the above mentioned we could conclude that the main force, which stopped socio-economic development of Bassarabia and caused its isolation was Russia, and its aggressive colonial policy, which could be felt even nowadays. As a result of a serious sociological investigation (1994) about the destiny of the Bassarabian Romanians this phenomenon was considered a major factor stating the following: In order to survive all Romanians should be united. A territorial integration is rather difficult as the most part of the population is desinformed. Russians contiune to excersise pressure on us by all possible means. We badly need a spiritual support, first of all, from all Romanians. All these problems may be settled by a wise leadership, but we miss it5). A scholar who knows the situation and forecasts the future better, he sees it as a similar one with the German phenomenon, that might happen with the Romanian territory. We have the same roots, same history, language and traditions as those two German countries had. But today there are many representatives of the older generation educated in a communist spirit without real knowledge of their history so, several years will pass for a new generation to grow up, the generation which will perform the integration6). Of course, the former societies left a special influence on men mentality: both on their destiny and on the development of the market economy. Just after the proclamation of the independence in 1991 a great part of the population accepted and supported the market economy, through during 10 years of transition, this type of market economy, especially among rural population, was less desired (the rural population is extremely poor and lives in an entirely informational gap because of lack of electric energy and there is an unbelievable small number of books and magazines there and, certainly, because of lack of money) and also because the number of retired persons is much greater here. On the country the young

generation, though it doesnt have enough jobs they do believe in the market economy, in the integration of the Republic of Moldova in the European Union. The data below (in table No.2) describes the actual economic situation of the Republic of Moldova compared with several countries with the same number of population. Here Romania, as a sister-country, is also included which might be a bridge to the European Union. Table 2 Gross Domestic Product in 1999*) Country Norway Ireland New Zeeland Lebanon Estonia Costa-Rica Romania Mauritania Moldova GDP per-capita Population, In USD taking million persons In USD into account the purchasing power 4,0 32880 26522 4,0 19160 19180 4,0 13780 16566 4,0 3700 4129 1,6 3480 7826 4,0 2740 5770 22,0 1520 5647 3,0 380 1522 4,3 370 2358 ) * Sourse: 2000-2001. . . , Moscova, 2001, p.296-297.

The dramatic cut off of GDP and the decrease of the population living standard in the last decade of the 20th century can be explained, first of all, by the fact that neoimperial forces and its bourgeois slave-nomenclature which appeared after 1991 stagnated the republic orientation to the West and subordinated it to the Russias interests which continues to dominate and dictate its interests in the Community of Independent States (CIS). All unfortunate development and the unpredictability of this republic are due to the lack of any geoeconomic policy during the last 10 years a territory without any success and civilized competition. Too much geopolicy is practiced here, and in CIS either, unfortunately, thus a maffioto-corrupted network
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appeared. In this way Bassarabia was isolated from the world economic centers, as it follows:

EU

ASIAPACIFI C

CI S NAFTA

Although geographically CIS is situated in the middle of economic-financial poles, it still remains isolated. And this was caused by the following historical factors: Russia has been developing in isolation. There is also a lack of stability in CIS, here, two diametrically opposite trends predominate: the first one is Russias interest and policy to maintain all 11 states in their subordination as to be able to distribute their goods and high technologies (Russia is present on the world market with the products of two branches of the national economy: natural resources and weapons). Russia is not totally politically isolated as it has several supporters. The second trend, which predominates on CISs area, concerns the interests of the former soviet republics to become really independent as to approach the geopolicy of world centers. These trends are being developing within several centrifugal forces. Being a member of CIS, Moldova, will further leg behind the world civilization and will run a weak economic development, which still depends on the Metropolis, because the technical and technological difference between CIS and the developed states is obvious by big, and in order to overcome this difference one needs decades.

Table 3 Comparative consumption per unit of product in Russia and some developed countries in 19907) Consumption (in %)
Fuels Resources Labour Fixed productive capital

Country USA Japan Germany France U.K. Italy Russia

100,0 64,5 82,5 70,5 70,5 64,5 300,0

100,0 90,5 105,5 100,0 115,0 95,5 225,0

100,0 120,0 162,5 170,0 187,5 191,5 385,0

100,0 100,0 125,0 137,5 137,5 150,0 190.0

During ten years, 1991 - 2001, the above-mentioned discrepancies havent been decreased, but just the opposite - increased. It is theoretically and practically proved by many economists, that the Republic of Moldova should join the European Union, but its further membership in CIS will lead to the loss of the niche on Russias market as well as other CIS-member markets. We could exemplify it: nowadays a bottle of Moldavian wine in the central regions of Russia costs 100-140 rubles, on the other hand, the same wine from Bulgaria costs 90-130 rubles, but the French ones are sold as well as ours, the difference is only that the latter is worldwide known. From the comparative cost analyses and also from the competitive point of view it was proved that the Republic of Moldova should be integrated in the European Union rather than in the Community of Independent States8). If the republic becomes a member of the European Union, its trade could be further maintained in CIS zone and it could deal on other markets too. Of course, besides CIS and EU there are other regional economic organizations in Europe, towards which Moldova could be oriented to. Among them there could be the following: CEFTA (Poland, Hungary, Check Republic, Slovak Republic and other countries) and Black Sea zone countries (11 state).

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The export of Moldavian products on the markets of these zones is badly desired but we should take into consideration that once CEFTA countries will join the EU, the importance and functions of this zonal organization will be completely modified and could even disappear.As for the Organization of Cooperation in the Black Sea Zone we also have not any perspectives, because some contradictory interests occure among Turkey and Greece and among Turkey and Russia. Thus, there remains only one credible territory for the Republic of Moldova and this is the European Union. And, certainly, there a question arises: which could be the way to the European Union? The answer to this question was found by end of 1991 9). From the national, economic, social, cultural and political point of view, the way to the EU is through Romania and together with it. Romania could help and does help the Republic of Moldova like it happens in the case with Finland and Switzerland, which had helped and does help Estonia now. Those ten years of uncertainty and lasting transition confirmed that this way it the most rational and the most credible one. Unfortunately, Russia opposes this economic policy; the same think the

neoimperialist forces from Bassarabia and, namely: the separatist regime from Tiraspol created by Moscow Metropolis. The Russian population from Moldova during the Soviet Regime maintained the key leadership functions and intensively exercised the policy of russification. Now they still preserve a substantial
The imperial and neoimperial continue to rely on the Russian church, which was and remains to be an imperial church, which participated in the policy of russification. When Bassarabia was annexed, the imperial church eliminated the studies in the Romanian language in the public schools and seminars replacing it by the Russian language. Simultaneously, the Metropolit Pavel Lebedev, destroyed the Romanian cult books (Mircea Pcurariu. Istoria Bisericii Ortodoxe Romne. Editura tiina. Chiinu. 1993, pag.364-368).Chiril the actual Metropolit, the Department Chairman of the International Church Relations says: In the Russian Empire the church wasnt excluded from the state. A Church structure was a constituent state apparatus and the Saint Synod, was governed by an ober-procurator and was directly subordinated to the Tsar. The church was considered by the state as an institution with administrative functions and was used as an ideological leverage. ( , 2002, 1, pag.25). The Patriarch of Moscow and entire Russia, Alexei the 2 nd, also declared: Russia needs to obtain a new moral leverage which it had possessed in order to renew its own mission in the world ( , 2001, 12, pag.15, 17).

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economic power. At Moscows insistency they want to legiferate the Russian language as a state language, they helped the communists to come to power in 2001, they were, are and will remain the main actors of the Metropolis. The latter, unfortunately, throw obstacles in Moldovas way toward the EU. They have already managed to initiate the centralized economy through nationalization. At the beginning of the 21st century, Bassarabia, for the third time is kept at a distance from the market economic development and from the civilized Europe. These phenomena are dangerous both for Moldova and neighboring countries as well as for the entire Europe.

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Literature:
1. , 46, 1997, .14. 2. Zamfir C. Arbure. Bassarabia in the XIXth century, Bucureti, 1898, Chapter II. 3. Mihail Bruhis (Izrail). Russia, Romania and Bassarabia.1812, 1918, 1924, 1940. Chiinu, Universitas, 1992, p.191. 4. Sergiu I. Chirc. Mechanisms of Economic Functioning. ASEM. Chiinu, 1997, Volumul I, p.109. 5. Sergiu I. Chirc. Bassarabia. The Struggle Continues. Arc, Chiinu, 2000. p.141-142. 6. Sergiu I. Chirc. Bassarabia. The Struggle Continues. Arc, Chiinu, 2000, p.142. 7. Sergiu I. Chirc. Mechanisms of Economic Functioning. ASEM. Chiinu, 1997, Volumul II, p.205. 8. Ruxanda Cheiba. Re-specialization of Countries in Transition and Reorientation of Commercial Flows. Report on the PhD theses in Economics. Chiinu, 2002. 9. Sergiu I. Chirc. Bassarabia. The Struggle Continues. Arc, Chiinu, 2000, p.286-298.

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