The economy of Pridnestrovie in the 21-th century
1. Main economic indexes of the Pridnestrovian Moldavian Republic.
A diversified economics had been formed in Pridnestrovie by the beginning of the ‘90-s. Among the most important industries were labour-intensive and material-intensive machinery construction, food industry and light industry, production of construction materials. Electric power engineering and metallurgy had been developed much. There was also a labour-intensive and high productive agriculture in the republic. The system of the macroeconomic management, proprietary relations, legal and organized forms of the enterprise, a financial and monetary credit sphere, a reproductive and branch structure of the economy, a mechanism of stimulating the labour, a system of foreign economic relations have changed greatly since the ‘90-s. Control functions and work conditions of organizations and enterprises have changed too.
The most significant factors, which influenced the macroeconomic development of the republic, were:
- uncertainty about a political and legal status of Pridnestrovie that led to a recurrent economic crisis caused by an economic blockade; it distracted a great number of executives and complicated the foreign economic activity;
- necessity of transition from a centralized economic system to a market economic system in a short time; absence of the experience in management in market conditions;
- absence of institutional bodies and a necessary legal basis for an effective macroeconomic direction;
- a worsening situation at the foreign market (breaking off foreign economic relations, an economic crisis in main partner states, the increase in prices for energy supply, various tariff and non-tariff restrictions, etc.);
- a demographic crisis caused by a natural diminution and migration of the population, including “brain drain”;
- heavy expenses for the internal and external security of the republic;
- insufficient domestic investments and absence of an access to foreign financial resources (credits of IMF, IBRD, EBRD, and other international organizations; external state and private credits);
- limited opportunities of effective training the personnel in foreign professional educational institutions;
- a lack of considerable foreign investments useful for Pridnestrovie;
- coincidence of the process of an economic transformation with main stages of the state formation; (it differs our region from other post Soviet republics).
At first, problems of the economic transformation and state formation (an establishment of the legislative, executive and judicial bodies, bank and financial system, other institutions of state and macroeconomic direction) had to be solved at the first stage of a transitional period.
The transition to the market economic relations accented a marketing aspect of the enterprise. It was necessary to search effective solvent partners, reliable markets, and optimal adaptation to changeable domestic and foreign conditions of functioning.
The absolute amount of gross domestic product, the amount of gross domestic product per capita, national labour output and a structure of gross domestic product are the most important for the macroeconomics of the republic.
An absolute amount of gross domestic product of the Pridnestrovian Moldavian Republic fluctuated from 200 to 450 million dollars; the amount of gross domestic product per capita calculated disregarding a purchasing power of the pridnestrovian rouble varied from 300 to 700 dollars. The national labour output was 1000-2000 dollars per a person engaged in the national economy.
The analysis of gross domestic product structure according to the index of a surplus value shows a leading role of the industry (40-55 %) and a high degree of industrialization of the republic. The dynamics of the industrial production influences a social economic development of the republic. Despite a leading role of the industry in the republican economy, a tendency of gradual intensification of a service sector is observed.
A part of the household prevails in gross domestic product structure. It proves a social orientation of the economy and state policy.
2. A dynamics of social development rates.
The dynamics of the real amount of gross domestic product per capita, a strategy of distribution of gross domestic product, a structure of the budgetary expenditure, a policy of an exchange rate, the amount of a living wage have a great influence on a dynamics of the real income of the population.
A nominal increase in the income of the population was of no principal importance before 1996, as real incomes had decreased at a great rate because of a hyperinflation. The situation managed to be radically changed in the process of elaboration, adoption and execution of the Budget Law in 1996. Pension and salary rates were fixed considering the amount of a living wage. As a result of measures provided by the law, a rate of inflation managed to be decreased; it influenced the income of the population positively.
Real and suppositional incomes of the population increased much in 1997-1998. Worsening of the economic situation in Russia (a major economic partner of Pridnestrovie) as a result of the default on August 17 complicated a social economic situation in the republic; it caused reduction of the income of the population.
In consequence of anti-crisis measures in 1999 the real income of the population increased in 2000-2001. In 2001 the income per capita was 355.3 dollars a year, or 29.6 dollars a month; whereas, in 2000 the income per capita was 251.7 dollars a year, 21 dollars a month. However, the income of the population was lower than an average income in 1997-1998.
A total income of the population had changed to a considerable extent for the specified period. The tendency of reduction of salaries (from 59.1 to 33.5 %) was observed in 1996-1999. There was an absolute decrease in salary rates (from 53 to 31 $). In 2000-2001 the real amount of salaries increased much. In 2001 an average monthly salary was 44$ and it exceeded an average living wage by 137.9 %.
The incomes of social security funds and made from the sale of foreign currency play a vital part in the income structure.
The analysis of the dynamics of pension rates revealed analogous tendencies.
An average monthly pension.
An average monthly
There was practically no positive dynamics in the growth of the securities owners’ income. In 2000 an income from securities was 0.007 % of the total income of the population; in 2001 it was 0.013 %. It reflects inadequate level of development of modern corporate forms of the economy and securities market.
The real income of the population depends on the system of privileges for different categories of citizens. The sum total of those privileges is 100 million dollars a year.
A consumption of goods and services per capita reflects a level of the social development. Expenses for foodstuffs, payments for services and obligatory payments are heavy as compared with expenses for durable goods including the real estate. The means in the funds of a voluntary insurance are negligible because of undevelopment of an insurance service market and insufficient activity of insurance companies. Investments in securities (stock in particular) have no savings importance.
3. The industry.
The republican economy is based on the industry. A share of the industry in gross domestic product is 45-55%. Almost 30% of people engaged in the economy of Pridnestrovie, over 25% of funds, over 70 % of means and immaterial assets. An industrial share in the republican gross income is 75 %.
Industrial enterprises play an important role in the formation of the income of the Republican budget and budgets of large municipalities (Tiraspol, Bendery, Rybnitsa, Dubossary, Dnestrovsk)
They determine peculiarities of the development of a social sphere and a level of income of the population. Industrial goods absolutely prevail in the republican export.
Non-material-intensive, non-power-consuming and labour-intensive branches of industry mostly of an export orientation had a leading position in an industrial branch structure. The Moldavian hydroelectric power plant, being a base of a power engineering of Pridnestrovie, was of great importance according to industrial rates.
A proportion of an industrial production changed much in 1990-2001. A share of traditional industries in manufacturing decreased in a food industry (23.6 % in 1990; 6.9 % in 2001) and in the engineering (21.4% in 1990; 8% in 2001). But a share of a ferrous metallurgy, represented by the Moldavian metallurgical plant, increased abruptly (3.4% in 1990; 35.5% in 2001). A share of a light industry didn’t change much (33.5% in 1990; 29.7% in 2001).
An industrial potential of the republic is mostly concentrated in cities such as Tiraspol, Bendery, Rybnitsa, Dubossary. Dnestrovsk, where the Moldavian hydroelectric power plant is located, plays a vital part in overall production. Various (diversified) industrial complexes arose in Tiraspol and Bendery. Rybnitsa occupies an intermediate position in the set of branches and the number of goods.
In 1990-2002 a peculiarity in the development of the industry was the formation of branch and inter-branch alliances. For instance, “ The concern of light and textile industries”, “The association of enterprises of garment and knitted industries of the Pridnestrovian Moldavian Republic”, “The association of furniture enterprises of Pridnestrovie “ were formed. “ The alliance of manufacturers, landowners and entrepreneurs” was also founded.
In 1998 realization of the program of reorganization of a number of enterprises started in order to overcome the crisis, to stimulate production, to increase working capital and solvency of enterprises, to increase a competitive ability of industrial goods at foreign markets. The Supreme Soviet and government of the Pridnestrovian Moldavian Republic adopted some acts concerning the state support of enterprises during the period of reorganization. The acts provided state tax remissions, freezing of debts, a proclamation of a moratorium for debts to the budget and extra budget funds. As for enterprises, they had to take organization, technical, marketing and financial measures to increase capacity, to update production, to renew and expand (diversify) a range of goods. Mutual obligations were fixed in Memorandum-Agreement.
27 organizations of the republic (24 industrial and 3 construction organizations) were involved in the process of reorganization.
The program of the reorganization allowed:
1. To create financial and natural conditions for updating production and improving industrial production at most enterprises;
2. To keep a considerable number of work places;
3. To get positive influence on the budget, a solvent demand of the population, a balance of payments, social stability, etc.;
4. To discharge debts to the state budget and Pension Fund, to pay off freezing debts;
5. To increase solvency of organizations;
6. To carry out technical re-equipment and modernization of production, to increase a competitive ability of goods.
The efficiency of entrepreneurs’ activity was conditioned by growth of a competitive ability of pridnestrovian goods, which was caused by measures provided by the program “Quality”. International quality standards (ISO series 9000) were introduced at the joint-stock company “The Moldavian metallurgical plant” (the system Lloyd Register, England), the joint-stock company “Electromash”, the joint stock company “Tirotex”, the state enterprise “Moldavcable”(the system TUF, Germany), the joint-stock company “Moldavizolit”, the state enterprise “Tigina”, the state enterprise “KVINT” (the system Bureaus Veritas, Switzerland). International standards in the field of environment protection (ISO series 14000) were also introduced according to the Resolution N58 of the government of the Pridnestrovian Moldavian Republic “On the establishment of international standards ISO 14000 within the territory of the Pridnestrovian Moldavian Republic” on March, 27, 1999. The introduction and certification of international quality systems and environment protection systems led to a successful competition at foreign markets and extension of selling market of home goods.
Considerable changes occurred in organization and legal forms of industrial activity in the ’90-s. If state enterprises had predominated by the end of ’80-s, then a corporative sector took a leading position in production by 2001.
In the ’90-s a ferrous metallurgy, represented by the Moldavian metallurgical plant (MMP), developed dynamically among industries. It has gained a considerable authority and experience at international markets lately. The system of quality at MMP is certified by the company Lloid’s Register Quality Assurance in accordance with a requirement of an international standard ISO EN BS DIN 9002:94. The plant is a member of IREPAS – International association of manufacturers and exporters of rolled iron, a member of LISI – International institution of cast-iron and steel, Association of manufacturers and exporters of metal production of CIS. The plant was awarded some prestigious international rewards such as a Brilliant Star for the quality, a Golden Star “Arch of Europe”, an International Silver Award for the quality.
MMP renders consulting service to metallurgical plants of Russia, the Ukraine, Latvia, Uzbekistan, India and other countries. Some joint ventures attached to the plant were established with assistance of foreign investors. The assembly of video recorders and TV sets from South Korean components was organized at the plant.
A fuel and energy complex of Pridnestrovie is represented by electro power engineering, systems of distribution of fuel oil, petrol, diesel fuel and coal, also electric, gas and heat supply.
Despite a considerable decrease in overall energy production, Pridnestrovie still was notable for energy amount per capita among modern countries in the world in the ’90-s.
The program of gasification of the republic had been elaborated, adopted and carried out. A gas industry is one of developed branches of the national economy.
Natural gas is transported through gas mains under hard pressure to Pridnestrovie, Moldova, the Ukraine, Romania, Bulgaria, Macedonia and Turkey.
During the existence of the Pridnestrovian Moldavian Republic the length of gas nets doubled. Gas mains are constructed of polythene tubes according to international standards. It saves a considerable sum of money.
Measures in reduction of power consuming of domestic industry and general introduction of power savings technologies were elaborated and established by the Cabinet in the ’90-s
Light industry is the most important branch in Pridnestrovie. It occupies the second place in an overall industrial production and in export supply of the republic to foreign countries. The industry has a complicated structure; it is represented by textile, garment, knitted, boot and shoe enterprises.
Light industry enterprises are mostly concentrated in Tiraspol, Bendery, Rybnitsa and Dubossary.
The joint stock company “Tirotex” works successfully at domestic and foreign markets. Its share in the light industry production was 65.1% in 2000 (67.3% - in 1998; 63.4% - in 1999). In 1998 a certificated auditing was held by international agencies. Certifications of the quality system ISO 9001-94 were given to “Tirotex” that led to consolidation of the position at the foreign market. In 1991 an International consumers’ society awarded the enterprise with “Brilliant Star”. Products of “Tirotex” were mainly supplied to foreign markets, for instance, to Austria, Greece, Italy, Netherlands, Russia, Romania, Scandinavian countries, Croatia, Switzerland. In 1999 a Concern of light industry was created on the basis of “Tirotex” with a view to extent the market and to make production more efficient. It included a cotton-spinning factory, a textile-weaving factory, a quilt-spinning factory (in Bendery), a spinning factory (in Tiraspol) and garment enterprises.
A large-scale garment production is located in Tiraspol (the joint-stock company “Odema”, the trade industrial firm “Intercenter-Lux”, the firm “Odema”, the educational industrial enterprise “Progress”), in Bendery (a garment factory “Vestra”),etc. In 2000 the Association of enterprises of knitted and garment industry was organized in order to diversify a range of goods, to re-equip enterprises, to train the personnel and to extent the market. It included the firms “Odema”, “Intercenter-Lux”, “Olimp”, “Vestra”, “Inex”, Dubossary garment factory, Rybnitsa knitted factory.
Bendery is a large center of boot and shoe industry. The boot and shoe association “Floare”, the industrial commercial firm “Tigina”, a boot and shoe factory “Danastr” and its branch establishments “Ortobuv”, “Chobitok” are located here.
Machine building plays a key role in industrial production of Pridnestrovie, in scientific and technological progress; it determines a specialization of the republic.
Most of engineering plants are situated in Tiraspol and Bendery. There are some new enterprises such as assembling enterprises in Rybnitsa (it produces TV sets and video recorders “Daytek”) and in Bendery (it produces minibuses “Gazel” and TV set “Vityaz”).
An electric technical industry keeps a leading position; its share is 70 %. The most important producers of electric technical goods are the joint stock company “Electromash”, the joint-stock company “Tiraspol electric equipment plant”, the joint- stock company “Moldavizolit” (in Tiraspol); the factories “Moldavcable”, “Electric equipment”, “Electric porcelain” (in Bendery).
Branches of agrarian industrial complex such as food, microbiological, flour-grinding industries and a branch of mixed fodder are of great importance.
Branches of the food industry can be divided into intra-republican (meat, milk, bread-bakery, brewery, confectionary branches and a branch of non-alcoholic drink) and export-oriented (wine-making, cognac-making, liqueur-making and vodka- making, fruit conservation, vegetable conservation, sugar, tobacco, creamery and fat-products industries).
In 1990-2000 many enterprises worked rather efficiently at the foreign and domestic market. They were Tiraspol wine- and-cognac making factory “KVINT”, which produces a wide range of high-quality cognac (“Suvorov”, “Ubeleiny”, “Surprizny”, “Tiraspol”, “Doina”, “Nistru”, “Tiras”, “Bely Aist”), liqueur and vodka; a factory “Buket Moldavia” (in Dubosary), which produces liqueur and unique flavorous wine; canneries (an agrarian-industrial firm “1May”, tentative factory of children’s nourishment, agrarian-industrial firm “Varnitsa”), sugar and spirit mill (in Rybnitsa), oil-mill (in Bendery), tobacco factory (in Dubossary). In 2000 Tiraspol wine-and-cognac making factory “KVINT” was given an international certification of quality ISO 9001-94 by an international technical association “Bureau Veritas”. It proves the fact that production of the factory meets world market requirements.
Rybnitsa cement and slate factory, Tiraspol glass-packing factory, Grigoriopol factory of polymeric wares, Tiraspol enterprise “Tiraspolplastmass”, a furniture enterprises “Eurostyle”, “Nadezhda”, “Romanitsa”, “Benderymebel”, a mill of souvenirs “Luchafer”, Tiraspol brickworks, Bendery factory of heat-insulating materials, a factory of ferroconcrete wares, a factory of panelling house-building, a factory of technical information vehicles (in Bendery), Tiraspol printing-house “Tipar”, Bendery printing-house “Polygraphist” are worth marking among industries, which play a vital part at the internal market and provide the increase in export potential and import substitution.
In 1990 the agriculture of the republic was mostly represented with 54 kolkhozes, 30 sovkhozes and 15 inter-economic associations. A share of a personal household in production was high. As a result of reorganization of agrarian relations new forms of agrarian production such as cooperative agrarian enterprises and farms had appeared by the end of the ’90-s. Their number is gradually increasing.
During the ’90-s the agriculture had a main land-tenure in the republic. Plough-lands and perennial plantations predominated, because of the leading role of plant growing in the agriculture of Pridnestrovie.
When traditional economic relations concerning industrial and agricultural supplies were broken off the structure of areas under crops was changed in order to increase a number of foodstuffs and a level of the provision of the republican agriculture with agrarian products. The sown area under cereals and industrial crops increased. The sown area under potato, vegetable, melons and gourds, fodder crops was reduced. The structure of grain farming has been changed. Winter wheat took a leading position in the structure of crops. Corn crops were absolutely and relatively reduced. A share and absolute area of beet crops were cut down, but area under sunflowers was expanded.
During the ’90-s a great number of standard acts and programs for the stimulation of agricultural production and reorganization of agrarian relations were elaborated by the government of the republic. President Decrees “On reorganization of production relations of agricultural enterprises and enterprises of processing industry of Rybnitsa district of the Pridnestrovian Moldavian Republic” and “On the following reorganization of agricultural and processing enterprises of the agrarian-industrial complex of the Pridnestrovian Moldavian Republic”, the government resolution “On confirmation of legal acts for reorganization of agricultural enterprises in Rybnitsa district” were directed to the achievement of the specified goals. According to those acts an experiment in reorganization of kolkhozes into cooperative agricultural enterprises was carried out. A positive experience was put into practice in other districts of the Pridnestrovian Moldavian Republic. The reorganization of kolkhozes was based on conditional distribution of property and allotments to agrarians. As a result new, more personified production relations arose. It ensured a social security of an agrarian; results of past work were taken into consideration.
A provisional regulation “On farming” was confirmed by the President Decree that led to the increase in a number of land-users. A law of the Pridnestrovian Moldavian Republic “On the state support of farming” played a key role in the development and formation of that new managerial-legal form of agriculture. The correlation between public and private sector changed greatly at the end of the ’90-s. A share of the latter is gradually increasing.
According to the President Decree “On reorganization of enterprises of agro-industrial complex into joint-stock companies” some shares are given to producers of agricultural raw materials and packing with a view to combine their economic interests with a processing industry.
During the second half of the ’90-s the ministry of agriculture was elaborating a program of formation of an agrarian holding company, including specialized (foodstuff) concerns, insurance companies, an investments fund “Agroinvest”, the Pridnestrovian scientific research institute of agriculture, a wholesale and retail market “Agroproduct of Pridnestrovie”. It was supposed to organize the following concerns “Wine and cognac”, “Oil and seeds”, “Sugar”, “Tobacco”, “Meat and milk”, “Fruit and vegetables”. State programs of special purpose “Support of farming”, “Grain”, “Viticulture”, “Fertility” have been elaborated.
5. Services sector.
Services sector has great influence on macroeconomic rates, reproduction of labour force and employment level, a level of education and vocational training of population, life conditions, accumulation and spreading scientific knowledge, formation of ideology and political views of people, satisfaction of special ethnic, confessional, sexual, age and social needs of population. Organizations and institutions rendering social and institutional services are main users of budgetary resources.
The structure of services sector changed greatly in market conditions:
- a share of institutional services increased because of formation of the system of state control, bank and insurance systems, army forces;
- an absolute number of people engaged in the industry decreased;
- a share of social infra-structure increased for keeping a necessary level of social welfare;
- a share of services of individuals and institutions of a private sector increased.
A services sector is characterized by a large-scale dispersion of institutions. It is directed toward production potential, a number of the population, a social structure.
A retail trade, including catering, was of great importance at the consumer market. A normative base for regulating internal commercial activity was created in the republic. Laws “On internal trade”, “On advertisement”, “On protection of consumers’ rights” were adopted. A law “On privatisation of smaller establishments” influenced the development of a trade activity to a certain extent.
New kinds of distributing enterprises such as supermarkets, trade houses, shops of local enterprises and foreign firms, trade firms of round-the-clock service were organized in the ’90-s. A firm “Sheriff”, the owner of some supermarkets in Tiraspol, Rybnitsa, Dubossary, plays a vital part in a retail trade and services sector. It provides a wide range of high-quality services (motor service, mobile communications, cable television, printing, etc.). An active marketing, a search of optimal variants of capacity growth and diversification of a range of commodity output, a search of efficient ways of realization of consumer goods were carried out by commercial enterprises of the republic in the specified period. As a result, a range of goods was expanded and the adequacy to a demand of the population increased.
Communication is a main branch of a services sector. A material and technical base were being updated gradually; now it answers international standards.
In 1994 seven state enterprises “Telekom” and “Pochta” based on city and district communication centres were organized. In 1997 a state enterprise “Pochta” was given a status of a territorial post operator of communications. A closed joint-stock company “Interdnestrcom” became a major unit of communications system. The system of government communications including new digital communications was established on the base of “Interdnestrcom”. It is possible to connect 12,000 mobile subscribers, 4,000 cabling subscribers and 3,000 international communication channels of CDMA standard, which is considered to be a base of the global system of mobile communications in the 21st century. A new system made it possible to eliminate a technological dependence on an international telephone system of Kishinev, to save some monetary resources, to increase quality, confidentiality and economy of communications. A new science-oriented sector of services market including mobile communications, individual radio search (paging communications), e-mail and “Internet” service had been formed. The introduction of new systems of communications caused gradual increase in a number of telephone subscribers of the republic and in the length of international telephone channels (in 2000 it was 79,500 km; in 1995 5,700 km).
The structure and volume of communication services were cardinally changed in 1990-2002. Post service was on the decrease, but local and international telephone service was on the increase.
There were 40 television broadcast stations, 8 broadcast VHF and MF stations. The signal power of a broadcast centre “Maiak” (in urban-type settlement Maiak of Grigoriopol district) makes it possible to broadcast at the distance of 3,000 km. A specified period is characterized by intensive development of cable television (over 20 channels could be received). The overwhelming majority of apartments in Tiraspol, Bendery, Dnestrovsk, Slobodzeia, Pervomaisk were connected to the system of cable television.
A transport system is of great importance in the national economy. The republic is provided with transport means; a quality of main lines and internal highways is rather high.
The territory of the republic is crossed with two international railway main lines, three gas mains and three mains of international significance (Odessa-Brest; Kishinev-Volgograd; Tiraspol-Vinnitsa). It is possible to receive modern aircrafts of different modifications and carrying capacity at the aerodrome of Tiraspol.
The work for keeping operating characteristic of highways, reconstruction and increasing in capacity of some sections of roads was carried out in the ’90-s. A motorcar bridge was restored in Dubossary. A motorcar bridge, connecting Tiraspol and Bendery, was put into operation. It had a great influence on foreign economic relations, the transit of the load and passengers between Moldova and the Ukraine. A trolley-bus line Tiraspol-Bendery was commissioned and a trolley-bus system was formed in Bendery in 1993. At the end of the ’90-s a large-scale system of intra-urban and inter-regional routes was established. A level of negative influence on the environment was reduced because gasoline was used in some transport means.
An optimal replenishment of transport means is a major problem of the last decade. It was solved by means of organization of assembling production of mini-buses “Gazel”, the extension of a repair and maintenance system. The import influenced a dynamics in the number of personal cars.
Railway and motorcar systems predominated in fright and passenger traffic. A trolley-bus system also is of great importance in Tiraspol and Bendery.
A legal base for regulating transport means and transport organizations activity was created. Laws “On highway fund of the Pridnestrovian Moldavian Republic”, “On transport means”, “On highways” were adopted. Transport enterprises of all proprietary types joined “Association of transport workers and road-workers of Pridnestrovie”. It provides optimal cooperation and coordination of transport means activity. A modern transport system of the republic satisfies the demand for passenger and freight traffic.
A range of educational and scientific services was expanded in the ’90-s. There is the Pridnestrovian State University named after Shevchenko, which includes 14 faculties and 84 chairs. Specialists of 54 professions and trends are trained there. Over 10,000 students are taught in the Russian, Moldavian and Ukrainian languages; over 1000 lecturers including 36 Doctors and 220 Masters of Science work here. There are other educational institutions such as the Higher Music College (in Tiraspol); filiations of foreign higher educational institutions – Moscow Institute of Entrepreneurship and Law (in Tiraspol), Moscow Academy of Economics and Law (in Tiraspol and Rybnitsa), Moldavian Humanitarian University (in Tiraspol), Inter-regional Academy of Personnel Management (in Tiraspol), St. Petersburg Polytechnic Institute (in Rybnitsa). Scientific potential of the republic is represented with the Pridnestrovian Scientific Research Institute of agriculture, the Scientific Research Institute of ecology and use of natural resources, 28 scientific research laboratories of the Pridnestrovian State University named after Shevchenko, scientific research units of industrial corporative institutions (a scientific research institute “Textile” of the joint-stock company “Tirotex”; a scientific technical centre of the joint-stock company “Electromash”).
6. Development of proprietary relations and legal forms of the economy.
At the beginning of the ’90-s a state property predominated in the economy of Pridnestrovie. The transition to the market economy conditioned a necessity of cardinal changes in proprietary relations and legal forms of the economy.
On July 17, 1991the Supreme Soviet of the Pridnestrovian Moldavian Republic passed the resolution “On immediate measures of execution of a law of the USSR about basic principles of denationalisation and privatisation of enterprises”. It emphasized that the specified law of the USSR was a legal basis for denationalisation and privatisation of enterprises. Then a Fund of state property of the Pridnestrovian Moldavian Soviet Socialist Republic was formed for execution of the law; the law of the Pridnestrovian Moldavian Soviet Socialist Republic “On denationalisation and privatisation of enterprises” was elaborated. Some basic laws “On property of the Pridnestrovian Moldavian Republic”, “On entrepreneurial activity and enterprises” were adopted for legitimating new proprietary relations.
The government of the Pridnestrovian Moldavian Republic passed a series of resolutions with a view to put into force laws of the republic: “On the State Committee of reforms in the Pridnestrovian Moldavian Republic”, “On the following measures for execution of the law of the Pridnestrovian Moldavian Republic about denationalisation and privatisation”. It confirms regulations “On the State Committee of the estate control in the Pridnestrovian Moldavian Republic”, “On activity of the privatisation commission in the Pridnestrovian Moldavian Republic”, “On registration of issue of shares of joint-stock companies in the process of privatisation”, “On privatisation of state and municipal enterprises under competition”, “On privatisation of state and municipal enterprises at the auction”, “On reorganisation of state and municipal enterprises into joint-stock companies”, “On the order of consideration of claims for privatisation of state and municipal enterprises”. “State program of privatisation of the Pridnestrovian Moldavian Republic “was adopted in 1992.
On June 23, 1993 the Government Resolution N 161 confirmed the classification of enterprises, institutions and organisations of the Pridnestrovian Moldavian Republic for denationalisation and privatisation. In 1999 the Supreme Soviet of the Pridnestrovian Moldavian Republic adopted the Law of Privatisation of Smaller economic institutions and new version of the Law of the Pridnestrovian Moldavian Republic “On denationalisation and privatisation”. A new “State program of denationalisation and privatisation” was elaborated according to that law. The government of the Pridnestrovian Moldavian Republic confirmed regulations “On the sale of the state (republican) and municipal estate”, “On privatisation of smaller economic entities by means of redemption by workers”, “On joint activity of the State Committee and local authorities for the control during the process of privatisation of state (municipal) property”, “On privatisation of state and municipal property by means of redemption by tenants”
The process of denationalisation and privatisation led to the formation of new legal forms of the economy, re-distribution of people engaged in the economy and increase in macroeconomic indexes of non-public (corporative and private) sector. Among new legal economy forms it’s worth marking joint-stock companies, joint ventures (with foreign investments), municipal enterprises, limited companies, leasehold enterprises, financial-industrial corporations, branch establishments, production cooperative societies and farms. A large-scale joint stock companies, state unitary enterprises played a leading part in the industry and economy of the Pridnestrovian Moldavian Republic.
In contradiction to highly developed countries where a share of small business in production, total number of people engaged in the economy, gross domestic product is rather high, in our republic it is low. About 15 % of people are engaged in small enterprises, which produce about 10% of gross domestic product and are involved in trade and catering, industry and construction. Small business stimulates increase in employment and income of the population, satisfies the demand for goods and services.
7. Monetary system.
A real macroeconomic direction of Pridnestrovie is connected with formation of monetary-credit system, pursuing independent credit and monetary policy, formation of a fiscal system and elaboration of the budget.
As a result of spadework and numerous negotiations with “Agroprombank of the USSR” an agreement concerning formation of the first pridnestrovian bank was signed. On April 1, 1991an official resolution concerning registration of the Pridnestrovian regional joint-stock bank “Agroprombank” was adopted at the board meeting. In February 1992 cash-reckoning centre of the Pridnestrovian Moldavian Republic was registered in Moscow as a result of successful negotiations with the Central Bank. It ensured timely inter-republican payments.
The Pridnestrovian regional joint-stock commercial bank “Agroprombank” combines functions of the commercial and central bank from the moment of registration till the end of 1992. On December 22, 1992 the Supreme Soviet of the Pridnestrovian Moldavian Republic passed a resolution “Concerning formation of the Pridnestrovian Republican Bank on a material, technical, financial and stuff base of Tiraspol branch of “Moldsotsbank”. A legal status of the Pridnestrovian Republican Bank as a central bank was legitimated with laws “Concerning the Pridnestrovian Moldavian Bank”, “Concerning banks and bank activity in the Pridnestrovian Moldavian Republic”. A legal basis for organisation and regulation of a bank activity was formed.
The republican bank system was being formed when the republic was unrecognised. It prevented interaction with financial establishments in countries of CIS and foreign states. The Memorandum that led to the financial independence was signed in May 1997. According to the Memorandum the Pridnestrovian Republican Bank acquired a right to act at the international scene as a Central Bank of the Pridnestrovian Moldavian Republic. Commercial banks, which are given a licence of the Pridnestrovian Republican Bank, have an opportunity of establishing business relations with foreign banks.
A two-level bank system (a higher level – the Pridnestrovian Republican Bank; a lower level – a system of commercial banks and their branches; branches of non-resident banks) was formed. At the end of the ’90-s measures for enlargement, increase in reliability rates and stability of commercial banks were taken. It led to a considerable decrease in total number of commercial banks and increase in their statutory funds. In1995 fifteen commercial banks work in Pridnestrovie. In 2002 there were nine resident banks and two branches of non-resident banks. Four banks, functioning in Pridnestrovie, (the joint-stock commercial bank “Ipotechny”, the electronic regional bank “Laminat”, the joint-stock commercial bank ”Promstroibank”, the joint-stock commercial bank “Dnestrindkondbank”) have shares of foreign investors in their statutory funds. Republican banks are united in the Association of banks of Pridnestrovie.
It was necessary to put a new monetary unit into circulation for functioning of a financial system in full value. There were some stages in formation of the republican monetary system.
At the first stage (September 1990 – July 1993) Soviet bank notes were used for payments, because the Pridnestrovian Republican Bank didn’t issue bank notes.
At the second stage (July 1993-August 1994) new currency was put into circulation in post-Soviet republics. On July 27, 1993 all bank notes of the State Bank of the USSR and the Central Bank of the Russian Federation of 1961- 1993 were confirmed as a circulating medium according to the resolution of the Supreme Soviet of the Pridnestrovian Moldavian Republic. Soviet bank notes were modified with a special mark (where Suvorov A. was imprinted) for protection of the republican internal market.
A new monetary unit – a pridnestrovian rouble – was put into circulation at the third stage. At the same time bank notes were denominated the scale to be 1:100. In August 1994 a pridnestrovian rouble was established as a single circulating medium.
The President Decree №534 “Concerning face value modification of pridnestrovian bank notes” was adopted at the fourth stage (October 24, 2000). According to that Decree the pridnestrovian rouble was denominated and new currency was established on January 1, 2001.
In 1991 state administrative bodies for financial control were organised. The first financial institution (the Board of economics and finance) was formed according to the resolution of the Supreme Soviet of the Pridnestrovian Moldavian Republic in 1991. The Ministry of Finance was established as a result of reorganization of the government of the republic in 1992. In August 2000 it was reorganized into the State Treasury of the Pridnestrovian Moldavian Republic, the Budgetary Board of the Pridnestrovian Moldavian Republic and the Ministry of Revenue of the Pridnestrovian Moldavian Republic.
The Pridnestrovian Republican Bank and financial administrative institutions regulates money circulation, an inflation rate, an exchange rate, a discount rate, fiscal charges, budgetary process and inter-budget relations.
In the late ’90-s some methods of the control of money circulation, an exchange rate and inflation were elaborated owing to the spadework of the Supreme Soviet, Government and the Pridnestrovian Republican Bank. That bank started monitoring economic process and elaborating “The main directions of the monetary-credit policy” that led to the abrupt decrease in a level of devaluation of the pridnestrovian rouble and inflation, to prognostication of an exchange rate dynamics.
A factor of monetization increased from 7,7% in 1996 to 15% in 2001. The inflation rate was reduced from 40,1% in 1995 to 26,8% in 2001. The reduction of inflation rate and devaluation rate of pridnestrovian rouble led to the development of the economy. Denomination of pridnestrovian rouble had positive influence on a money demand in 2001. As a result of reduction in a nominal value of a monetary unit attractiveness of pridnestrovian rouble rose.
One of special features of Pridnestrovie is a non-monetary character of inflation. A share of monetary factors (connected with an increase of money supply) wasn’t over 10% of an inflation growth. Inflation was mainly caused by non-monetary reasons: a rapid growth of services tariffs, increase in production costs, heavy taxes and customs for an entrepreneurial activity, a great volume of imports and unfavourable balance of foreign trade.
The Pridnestrovian Republican Bank put securities (bonds, deposit certificates, bills) into circulation with a view to provide an optimal turnover of money and payments and to accumulate spare capital. In 1997 two bill auctions were held. Bills of economic subjects of the Pridnestrovian Moldavian Republic and bills of economic non-resident partners prevail in bill holdings. In 1999 the Ministry of Finance put exchequer bills into circulation. Three auctions were held to invest the bills. In 2001issued deposit certificates – inscribed stock with fixed yield.
At the end of the ’90-s some measures for optimising bank activity were taken. On February 1996 the President issued the edict “Concerning introduction of electronic system of payments in the Pridnestrovian Moldavian Republic and legitimation of electronic payments documents.” It was directed to improvement of the system of payments, its efficiency, speed-up of inter-bank payments and formation of a reliable system of protection of bank information. According to the edict legal and operating documents for functioning an electronic system of inter-bank payments were elaborated and confirmed. Banks were provided with programs and means of protection of bank information. As a result a level of protection of bank system and information increased. Banks were given an opportunity of operating to any bank and filiation in real-time conditions.
In 2001 the Board of the Pridnestrovian Republican Bank confirmed the Regulation “Concerning a procedure of emission of bank plastic cards and operations with them”. The state program of introduction of plastic cards within a territory of the Pridnestrovian Moldavian Republic was elaborated. The experiment was a success.
In 2001 introduction of new international accounting of credit institutions was started. It’ll give an opportunity to accounting all financial operations, increasing transparency of bank sphere and integrating financial-credit system of Pridnestrovie into world financial and monetary-credit outer space. The introduction of remittance system “Western Union” made it possible to increase reliability and speed of transfer payments.
A modern monetary system of the republic includes all kinds of financial relations and infrastructure of a market economic system.
8. Fiscal policy and budgetary system.
A lot of legislative acts for regulation of taxation, a list of republican, local and mixed taxes, interrelations of natural persons, juridical persons and budget were adopted in the Pridnestrovian Moldavian Republic in the ’90-s. Considerable changes of a tax system were provided by the law of the Pridnestrovian Moldavian Republic “Concerning the state budget of 1996”. According to that law all export taxes, import taxes on raw materials, primary goods, semimanufactures for internal needs of enterprises and a tax on extra fixed salary were abolished. There were also some changes conditioned by elaboration and realization of reorganization program of industrial enterprises.
A tax system had changed greatly by the end of 2001 a value added tax, a profit tax, a tax on juridical persons’ property, a tax on high ways users and fuel were eliminated, an aggregated tax on realization was established. The tax was put into practice at reorganized enterprises.
A share of taxes and fees in the gross domestic product doesn’t exceed 35%. Fiscal charges are rather optimal. nm
In 2001 budge=tary revenue changed much because of reformation of tax system and introduction of a single revenue tax. A share of revenue tax was rather high in the republican budget and local budgets. Monetary resources predominated absolutely in the republican revenue.
The republican budget is socially oriented, that’s why a social security sphere was financed in the first place (salary, scholarship, medical equipment, social and compensatory payments; financing kindergartens and boarding schools, financial support of orphans., who study at educational institutions).
Social expenses for education, public health, housing and community facilities, social security prevail in expenditure of local budgets.
9. Currency policy and dynamics of an exchange rate.
The introduction of a new monetary unit (a pridnestrovian rouble) in August 1994 led to the formation of institutional structures and systems that control a national currency, its quotation and converting into foreign bank notes.
A special currency department and regional foreign exchange market were organized in 1995 for elaboration of foreign exchange policy.
A currency exchange policy and exchange rate were cardinally changed in 1996, 1998, 1999.
Optimisation of monetary and foreign exchange policy is connected with elaboration and realisation of a budget law for the specified year and attachment of a pridnestrovian rouble to a conventional monetary unit.(CMU) that is equal to a dollar in fact. But an exchange rate was reconsidered and fixed on a base of non-market system. From April till August 1998 an exchange rate was formed according to results of exchange tender. The default in Russian Federation (on August 17 1998) had a destructive influence on a monetary system of Pridnestrovie and exchange rate. In September-December 1998 inflation rates increased abruptly, but overall production and export of pridnestrovian goods decreased as a result of worsening demand at the market of Russia and other post Soviet republics. The currency reserve was reduced much; it was impossible to pursue an active foreign exchange policy.
In 1999 a foreign exchange policy was cardinally changed. There were some stages of the policy that influenced macroeconomic indexes and exchange market:
- On January 18, 1999 a fixed official rate of salary, pension and other payments of a budgetary sphere was established according to the President Decree№19 “On stabilization of an exchange market, a rate of a pridnestrovian rouble for protection of the population from inflation” (112,000 roubles for a USA dollar);
- From July 23, 1999 the Pridnestrovian Republican Bank started tenders at the currency auction according to the President Decree№264 “On measures of stabilization of a financial system of the Pridnestrovian Moldavian Republic. An exchange rate was fixed according to auction rates and it was used for exchange buy and sale rates, for compulsory sale of currency return to the currency reserve of the Pridnestrovian Republican Bank;.
- On October 6, 1999 a discount rate was established with the view of accountability. That rate was fixed according to the results of auction tenders of the Pridnestrovian Republican Bank once a month. It was valid for a month. The discount rate was fixed thrice: in October, November, December, 1999.
According to the Resolution of the Supreme Soviet of the Pridnestrovian Moldavian Republic “On immediate measures for stabilization of the economic situation in the Pridnestrovian Moldavian Republic”№318 (October 28, 1999) and the verdict of the council of the Pridnestrovian Republican Bank (December 21, 1999) an official fixed exchange rate was abolished, a new procedure of fixing an exchange rate was established. On January 1, 2000 a single official exchange rate of the pridnestrovian rouble was fixed in accordance with the results of tenders at the exchange auction. According to main directions of a monetary-credit policy in 2000 new range of an exchange rate (4-4,5 million rubles for a dollar ) was fixed.
The policy of keeping an exchange rate of the pridnestrovian rouble within the limits ensures its moderate devaluation. Prognostication of an exchange rate led to the stabilization of the economy and some other positive results:
- stabilization of a general economic situation;
- deceleration of inflation rate and increase in internal prices;
- improvement of financial results of the activity of economic institutions;
- optimization of a currency market;
- increase in real and suppositional incomes of the population.
There were no unforeseen leaps of an exchange rate. The analysis of a currency policy proves the fact that a flexible currency policy is more viable than strict currency systems. They react to a dynamics of the market adequately and adapt to financial-credit crises.
10. Credit policy and investment sphere.
Investments to the fixed capital were reduced in the ’90-s. A share of investments in gross domestic product was low (7.4%-in 1997; 6.9%-in 1998; 10.7%-in 1999; 15.8%-in 2000; 8.3%-for 9 months in 2001)
There is a lack of investments for the economic development and reproduction of funds. The structure of gross domestic product isn’t oriented for investing but for consuming. There can be an abrupt recession of a competitive ability of enterprises at the foreign and domestic market.
The industry predominates in a branch structure of investments. Its share increased much in 1996-2001.
A regional distribution of investments is characterised by concentration (Tiraspol, Rybnitsa, Bendery ); other regions aren’t involved in investing.
The analysis of investing resources shows a considerable growth of investments at the expense of resources of enterprises and organisations (their profit and depreciable resources). A share of such investments increased from 66,8% in 1995 to 93,4% in 2001. Despite an active part of the state in re-distribution of financial resources, its share in investing is rather decent. In 2000 a share of budgetary means in a total amount of investments was 6,8% (6,3%-in 2001)
The Pridnestrovian Republican Bank reduced a rate of refinancing with the view of optimization of circulation and reduction of value of credit resources. The Pridnestrovian Republican Bank used a differential way of fixing rates. The percentage of long-term credits wasn’t the same as for medium-dated credits. As a result, the total amount of credits and the amount of long-term credits increased.
Direct and portfolio investments play a certain part in crediting the republican economy. But their amount is negligible.
Foreign commercial (trade) credits play a vital part in financing non-financial enterprises because of a lack of internal resources.
11. Labour market and employment sphere.
Demographic processes (natural movement and migration of population) had a considerable influence on the labour-market. Negative balance of migration and natural diminution of population led to the absolute decrease in the total number of population and work force.
Natural and migration diminution of population caused considerable changes of age, sexual, professional and qualification structure of population. The process of aging led to some problems connected with the social security of pensioners.
Structural changes in the economy were the most important factors that influenced the regional labour market.
They were conditioned by positive economic processes (establishment of mobile communications, a series of supermarkets, modern service stations, partial computer automation; introduction of new technologies at some enterprises) and by stoppage of some enterprises and reduction of a number of work places and economic activity.
An institutional factor had a great influence on the employment structure. The formation of the system of the state government (the President administration, the Parliament, the Cabinet, force structures, including army) caused the necessity for high skilled government personnel.
The labour-market is characterized by entrepreneurship, hired labour, unemployment. In the ’90-s the flexibility of the labour-market increased (salary, forms of employment and unemployment, organization of working process, methods of regulating employment and unemployment, the system of training the personnel, inter-branch and inter-territorial mobility of work forces).
Modern processes in the employment sphere are conditioned by the privatization of the state property and development of the corporative, group and private property. Economic reforms led to the expansion of opportunities of self-realisation, independence and entrepreneurial initiative. Work activity didn’t increase in the industry, but in the field of trade, finance and services.
In the ’90-s the absolute number of employees reduced within the republic. There is a positive dynamics of the absolute number of employees in such fields as ferrous metallurgy, power engineering, administration, crediting and insurance.
Distribution of employees into branches and sectors of the economy is the main feature of labour-market and employment. The conclusion is:
- the number of employees in the primary sector corresponds to the same rate in countries of transitional economics and a medium level of social-economic development. But the primary sector of the Pridnestrovian Moldavian Republic is formed by the people engaged in the agriculture in contradistinction to the specified countries where a share of people engaged in the extracting industry, timber and fishing industry is rather high (for instance, in Poland, Russia, etc.);
- a share of employees in the second sector (in the processing industry and construction) exceeds the rate in the most of the countries of the modern world and corresponds the standards of medium and highly developed countries;
- the number of people engaged in the third sector ( services sector) corresponds to rates of east European and post Soviet countries.
The industry plays a vital part in the second sector (1/3 of an average number of employees). It shows high level of industrialization of the republic. According to the employment structure administrative units of the Pridnestrovian Moldavian Republic could be divided into two groups:
a) industrial – predomination of people engaged in the industry (Tiraspol, Bendery, Rybnitsa district);
b) agricultural – predomination of people engaged in the agriculture (Slobodzeya, Grigoriopol, Kamenka, Dubossary districts).
The industrial employment depends much on the size of cities. The employment structure of cities (Tiraspol, Bendery) is more diversified than in towns (Rybnitsa, Dubossary, Dnestrovsk, Grigoriopol).
During the transitional period the number of people engaged in the public sector reduced, but the absolute number and share of people working in the corporative and private sector increased.
Trade unions take an active part in social labour relations. Their activity is regulated by the legal acts “On trade unions, rights and guarantee of their activity”, “On collective agreements “, “On protection and safety of labour”, “On the order of settlement of collective disputes”. In 1994 a general agreement between the Federation of Trade Unions of the Pridnestrovian Moldavian Republic and the Cabinet was made. In 1999 some agreements between trade unions and the local authorities were concluded. Trade unions have the right of legislative initiative according to the existing law.
12. Foreign economic relations.
The economy of the Pridnestrovian Moldavian Republic, the efficiency of its functioning is determined by the foreign economic activity. There is a necessity of selling goods at highly competitive foreign markets, which aren’t under supervision of the republican government.
Foreign economic relations influence a capacity, range and dynamics of manufacturing; consumption of material resources; life standards and employment, technical level of production and non-production sphere, financial stability of the republic. The exchange market and exchange rate depend on the foreign economic sector. Export is the only way of currency receipt because the republic has no legal status and there is no access to the financial resources of international organisations.
The foreign trade turnover of Pridnestrovie exceeds the amount of gross domestic product. This index is much higher than in Russia, the Ukraine, Kazakhstan and Byelorussia.
Both traditional factors (lack of raw materials and fuel resources, high soil and agro-climate potential, favourable economic and geographical position, skilled work forces and developed industrial funds) and new factors conditioned by social-economic and military-political processes in the post-socialist world had a great influence on foreign economic relations.
The lack of own currency, legitimation of the foreign economic activity and institutions for direction of the foreign economic activity affected inter-state economic relations. Nowadays foreign economic activity is carried out according to international standards.
Despite the negative influence of the specified factors, republican enterprises took an active part in the international economic exchange. Such forms of interrelations between countries as organization of joint enterprises, currency-credit and financial operations, the exchange of scientific, technical information, work force migration, staff training, participation in international exhibitions and fairs, advertising, leasing, tolling, cooperation, rendering international services (transport, mediatory, insurance, consulting, marketing and others) were developed much as well as the foreign trade.
The foreign trade is of great importance in the international economic exchange. In 1997-2001 annual foreign trade turnover fluctuated within 1-1,500 dollars.
Products of the manufacturing industry prevail in the export of Pridnestrovie (99% in 1997-2001). The Pridnestrovian Moldavian Republic is a supplier of rolled iron, production of engineering, light and food industry, electric power, some kinds of construction materials.
The republic also supplies power cable, winding cable, insulting materials, non-explosive engines, power transformers, and current generators, press-forms for shoe making, electric technical goods, lighting cable, low-volt equipment and pumps. The main suppliers of engineering production are the joint-stock enterprise “Electromash”, the joint-stock enterprise “Moldavizolit”, the joint-stock company “Tiraspol electro equipment plant”, the factory of founding machines named after Kirov, Rybnitsa pump factory, “Moldavcable’ and “Electroapparatura” in Bendery.
Among export wares of the light industry it’s worth marking cotton fabric (the joint-stock enterprise “Tirotex”), ready-made garments (“Intercenter-lux”, “Odema”, “Vestra”, Dubossary garment factory, Rybnitsa knitted goods factory), footwear (“Floare”, “Tigina”, “Danastr”, the joint enterprise “Metlax” in Rybnitsa)
As for agricultural products, Pridnestrovie exports fruit and vegetables tinned goods (the agro-industrial firm “May 1”, a tentative factory of children’s nourishment in Tiraspol, the agro-industrial firm “Varnitsa” in Bendery, Kamenka and Grigoriopol caneries); wine, cognac, vodka (Tiraspol factory “KVINT”, Dubossary sovkhoz-factory “Buket Moldavia”, Rybnitsa distillery); vegetable oil (Bendery oil factory); sugar (Rybnitsa sugar-rafinery); fermented tobacco; fresh fruits and vegetables; ethyl alcohol.
A share of high quality rolled iron, produced by the joint-stock enterprise “Moldavian metallurgical plant” in Rybnitsa is high. (46,6% - in 1998, 52,1% - in 1999, 52,5% - in 2000, 48% - in 2001).
Products of the fuel-power industry, engineering, ferrous metallurgy, light and food industry predominate in the import. Import supplies the demand for energy, mineral fertilization, non-ferrous metals, paper, agricultural machinery, cranes, machines, loaders, transport means (excluding minibuses), tropical and subtropical products, tinned fish goods, cotton, audiovisual and computer science, cigarettes, perfumery and cosmetics, tyres, synthetic resin, plastic, synthetic detergents, fur; also wood, technological equipment, scrap and rolled iron, chemicals, medicines, light industry wares, foodstuffs, furniture, trimming construction materials, beer and non-alcoholic drinks.
But import is of no importance in providing some sorts of goods of light, food and wood working industries, some kinds of construction materials and agricultural products. Tiraspol, Rybnitsa, Bendery, Dnestrovsk play an important role in foreign trade.
A range of trade partners of Pridnestrovie was steadily expanded in the ’90-s. If in 1992 the republic had trade relations with 15 post Soviet republics and 13 foreign countries, then in 2000 seventy six countries including 11 post Soviet republics took part in trade exchange. The expansion of the range of partners was the evidence of the active marketing policy of enterprises, the growth of a competitive ability of pridnestrovian goods and services at foreign markets, the trust in the Pridnestrovian Moldavian Republic as a reliable partner.
Russia, the Ukraine, Moldova and Byelorussia; the USA, Germany, Switzerland, Italy, Romania, Great Britain, Poland, Cyprus, Turkey were the main trade partners of Pridnestrovie in the ’90-s. CIS market was the primary market for realization of goods, produced in Pridnestrovie in the ’90-s.
Russia plays a special part in foreign economic relations of Pridnestrovie. It has been a major foreign economic partner of the Pridnestrovian Moldavian Republic for many years after disintegration of the USSR. It’s worth marking that the Russian Federation interacts with the Pridnestrovian Moldavian Republic in some directions:
- Russia is a country-guarantor in negotiations concerning the political settlement of the Pridnestrovian conflict;
- Russian military forces ensure peaceful coexistence of the Pridnestrovian Moldavian Republic and Moldova;
- A considerable number of people in the Pridnestrovian Moldavian Republic (over 80,000 people, over 12% of the total number of population) are citizens of the Russian Federation; it has certain legal consequences for both parts;
- Educational institutions of Pridnestrovie are headed for legislative base of the Russian Federation and Russian educational standards, plans, programs and textbooks. There are some agreements concerning legitimating Pridnistrovian educational documents within the territory of Russia, handing out diplomas and certificates by the Supreme Examination Board of the Russian Federation to scientific and teaching staff of the Pridnestrovian Moldavian Republic.
Despite the reduction of the share of Russia in the trade turnover of the Pridnestrovian Moldavian Republic it kept leading positions in export-import operations, especially, energy supply to Pridnestrovie. Natural gas supply from Russia has great importance for the development of the republic, determining its international investment position, cost price and price competitive ability of a great number of Pridnestrovian goods at foreign markets, living and housing conditions of the population.
Foreign economic relations with Russia aren’t limited to the mutual trade. Russian enterprises are co-founders of some joint enterprises and take an active part in the development of the production cooperation. A certain part of the work force of the republic is employed at the Russian labour market that led to the reduction of the tension at the regional labour market and growth of incomes of the population of Pridnestrovie. Some filiations of Russian higher educational institutions were organized in the republic. The elite personnel for enterprises and institutions of Pridnestrovie is trained in leading higher educational institutions of Russia.
Russia is interested in import of Pridnestrovian production, because a considerable number of machinery and equipment, light industry wares, alcoholic drinks, chemicals, food and agricultural products, produced in Pridnestrovie were realized at the Russian market.
Economic relations with Russia ensured social, economic and political stability of Pridnestrovie in the ’90-s. The economic development of the republic is associated with the integration with Russia.
The joint enterprise became an important form of interstate economic relations in the ’90-s. the first joint enterprise was organized in the republic in 1988. There were 6 joint enterprises (605 people employed) in Pridnestrovie at the end of 1993. Over 40 joint enterprises were organized in the Pridnestrovian Moldavian Republic in the ’90-s. Organisations and enterprises of Tiraspol, Bendery, Rybnitsa, Dubossary, Slobodzeya district and such foreign countries as Bulgaria, Hungary, Germany, Ireland, Canada, Poland, Russia were co-founders. The total number of employees at the joint enterprises exceeded 5,500 people.
Such joint enterprises as “Moldavian steel works”, “Gazaks”, “Tiraslaminat”, “Ortex”, “Rida”, “Interdnestercom”, “Mixsoil Tiras”, “KVINT-Market”, Romtek”, “Terry-Pa” are worth marking for their efficiency. The joint enterprise “Gazpolimerservice”, the closed stock -company “Dnester-avto”, the closed stock-company “Alexander Suvorov”, the closed stock-company “Pridnestroviegazrealizatia”have been organized lately.