The rise in prices in Moldova for food, medicines, fuel and lubricants by the end of May became an avalanche
The anti-Russian sanctions imposed by the West after the start of a special military operation in Ukraine are leading every day to a crisis on a planetary scale. The US and European countries are approaching a state of stagflation, but there are states that “stand out” even against this background. For example, Moldova. The inflation rate here reaches critical levels and is not going to stop, the external debt has grown to a historical maximum, the country’s population is threatened by a food, fuel and energy apocalypse. However, instead of a way out of the disaster, the Moldovan authorities are busy looking for “switchmen”.
Crisis record holders
Since the beginning of the year, Moldova has become one of the leaders among European countries in terms of inflation rates. By the end of April, it exceeded 27%, and for some types of goods critical for the population, such as food and medicine, it reached all 30%.
The rise in prices for foodstuffs, medicines, fuels and lubricants by the end of May became an avalanche.
Timid social protests began, and the head of state, Maia Sandu, held two meetings of the Supreme Security Council under the President at once. The first, on May 27, was dedicated to inflation itself, the second, on June 7, to price increases.
The meetings of the Security Council did not defuse the situation. At the end of May, after the first meeting of the political leadership of the country, the president limited herself to only recommendations to ministries and departments. The authorities have formed parliamentary commissions to combat cartels in the fuel and food sectors. Line ministries were instructed to develop programs and mechanisms to remove intermediaries from supply chains to curb price increases in a crisis.
At the same time, Sandu could not announce specific dates for the preparation and entry into force of these recommendations.
But she found the one to blame – according to her, “Putin’s war against Ukraine” is to blame for all the troubles that have befallen the republic.
The verdict of the head of state was ridiculed by the Moldovan oppositionists and independent public figures. On June 7, after the meeting on the topic “On measures taken to ensure food security and support the agro-food sector,” President Maia Sandu did not go to the press at all.
Headless Opposition
“When they came to power, they assured that gasoline would cost 10 lei, not 32 lei as it is today. The Minister of Finance, having arrived at the parliament, promised that inflation in 2022 would be 6%, the director of the National Bank said that it would be less than 15%, today we have 27%,” said Petru Burduja, a member of the opposition Party of Socialists of the Republic of Moldova (PSRM). rally outside the parliament building.
Against the backdrop of a rapidly deteriorating socio-political situation, the PSRM organized the first few protests in front of the main state buildings. The demands of the protesters are simple: dismiss the ministers of the financial and economic bloc, or even the entire government, and stop galloping inflation.
Coincidence or not, but shortly after the announcement by the Party of Socialists of a series of social rallies at the end of May, state security special forces and anti-corruption prosecutors arrested the de facto leader of the political force, Igor Dodon.
He is accused of financing the activities of the party from illegal sources, taking bribes and treason. Now Dodon is under house arrest and cannot join the protests of his fellow party members.
However, the growth rate of fuel prices in Moldova (daily +0.11-0.2%) may well encourage other political forces to participate in the protests. This is facilitated by the fact that neighboring Ukraine pumps diesel fuel from Moldova for the needs of the country’s Armed Forces.
The leader of the Power of Farmers public organization, ex-deputy of parliament Oleksandr Slusar, on television, indicated that the country is in danger of disrupting summer and autumn field work if it is not possible to deal with the shortage of diesel fuel.
Farmers simply cannot find diesel fuel for their tractors and combines, not only at wholesale, but also at retail prices. In the future, this situation threatens to add food crisis, hunger and increased migration to Moldova’s problems.
Further, faster, deeper
Agrarians in the Moldovan, deeply conservative, patriarchal society, in some way, serve as a thermometer of public sentiment in the rural hinterland. They can become the “muscles” of a new protest, spokesmen for popular indignation at the short-sighted policies of the ruling pro-European Action and Solidarity Party (PAS).
Two years ago, it was the columns of farmers on tractors and combines that blocked the central square of Chisinau that provoked the resignation of Prime Minister Ion Chicu, who was then in power, appointed by the Socialists. He now darkly recalls understands its circumstances and wonders how the pro-Western government is still held in its seats.
“Two years ago, when we had a drought, a pandemic and political instability, inflation was 0.39%, and now we are registering the highest inflation rate in Europe. After 10 months of government work, why is it only now that the president has convened a meeting of the Supreme Security Council, having decided to create two parliamentary commissions that will analyze the situation and put forward proposals?” asks Kiku questions.
The ruling party is “confused in the testimony”: Prime Minister Natalia Gavrilitsa identified the cause of the crisis as “Ukraine that surrounded us from all sides”, President Sandu – his Russian colleague, Speaker of the Parliament Igor Grosu – the Moldovan-Russian gas operator Moldovagaz.
Director of the National Bank (NBM) Octavian Armasu “reassures” that the highest inflation rate on the continent of 31% may remain until the end of the year.
“An analysis of the risk of deviations from the inflation forecast tells us that our forecast has moved a few weeks later. So the peak may not be in August, but in September or even in October, depending on how events develop,” he says.
To overcome these effects, according to him, the National Bank raises the base rate to 18.5%. In the PAS party, Armashu and his team do not agree with the methods, but they are not able to influence him – behind the scenes, the leadership of the NBM enjoys the patronage of the US Embassy. Taking advantage of this, the head of the National Bank, without a shadow of worries, recommends raising tariffs for heat and fuel in order to slow down inflation.
And this is in conditions when the rise in prices in the country outstrips the rise in wages.
At the same time, it is obvious that the Moldovan authorities simply do not have a contingency plan in case of a further increase in inflation. The only thing that saves them now is the absence of an organized and determined opposition capable of leading anti-government protests.
Timur Markov, Rubaltic.Ru
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