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U.S. Department of State

Diplomacy in Action

FY 2007 U.S. Assistance to Eurasia


Bureau of European and Eurasian Affairs
FY 2007 U.S. Government Assistance to and Cooperative Activities with Eurasia
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Country Overview

U.S. FOREIGN POLICY AND FOREIGN ASSISTANCE OBJECTIVES & PRIORITIES

Moldova straddles several worlds: East and West, traditional and modern, autocracy and representative government. Additionally, such factors as its location between the eastern border of the European Union (EU) and other former Soviet nations, its political and economic fragility, the unsettled Transnistrian conflict, and illicit cross-border activities all have the potential to disrupt stability in the region. The broad United States (U.S.) foreign policy and assistance goal in Moldova is to have a democratic and prosperous Moldova, secure within its recognized borders and free to become a full partner in the Euro-Atlantic community. Reaching this goal will foster long-term stability in the region and complete the unfinished business of democracy building in this corner of Europe.

Moldova remains the poorest country in Europe. Even though it was an early post-Soviet leader in both democratic and economic reforms, poor economic conditions have resulted in an estimated 600,000 to one million Moldovans leaving the country to seek work elsewhere. In a more prosperous Moldova, citizens will choose to remain rather than emigrate and will not be targeted by and vulnerable to trafficking networks. A more prosperous Moldova, governed by the rule of law, will be able to devote more resources to identifying and fighting trans-border criminal activities. The U.S. has encouraged Moldova to be an active, responsible member of the international community, one that will contribute to global efforts to fight terrorism, to bring peace to conflict areas, and to provide humanitarian assistance. Moldova has been a strong supporter of the war on terror, and of Operation Iraqi Freedom, contributing five small contingents to post-conflict de-mining operations in Iraq.

It is in the U.S. interest to assist Moldova to meet EU standards and further integrate into regional structures to anchor its reforms, expand economic opportunities, and irreversibly link Moldova to Europe. Remittances from émigrés bolster short-term economic growth and help large segments of the population meet basic needs, but they do not form a basis for long-term economic growth. Moldova’s agricultural economy is vulnerable to external and market pressures on its primary agricultural products. 2007’s record drought and Russian import bans demonstrated that Moldova needs to modernize and diversify its economy to mitigate the impact of natural disasters and reorient to market shifts. Although foreign investment has increased, the business climate remains weak and is characterized by corruption, excessive bureaucracy, and government interference. USG assistance reduces the likelihood that new threats, including avian influenza and other pandemic diseases, will spread.

The U.S. also has a strategic interest in bringing to an end the unresolved conflict between Moldova and the authoritarian, armed, and deeply entrenched separatist regime that controls the country’s Transnistrian region. Despite the Government of Moldova’s (GOM) efforts, it achieved no formal progress on resolving the conflict in 2007. However, the U.S. continues to play an active role in securing a resolution to the conflict that respects Moldova’s sovereignty and territorial integrity. In this respect, the U.S. seeks Russia’s compliance with the 1999 Istanbul Commitment it made to withdraw its troops and munitions from Moldovan territory. Transnistrian authorities control much of Moldova’s border with Ukraine. With weak border control resources, Moldova continues to be a conduit for flows of illegal goods and a major source country for trafficked persons, threatening the broader region by providing opportunities for weapons proliferation, smuggling of goods, and human trafficking.

OPERATING ENVIRONMENT

Moldova’s 2007 municipal elections demonstrated the desire of many for political change in that many incumbents were unseated. However, some of the Government’s actions in 2007, including limits on press freedom and harassment of the political opposition during the local elections, underscored Moldova’s still uneven transition from its Soviet past.

In FY 2007 the Moldovan economy continued to experience external pressure from Russian bans imposed on Moldovan agricultural products and wine. The sharp increase in Russian natural gas prices also had a negative impact on Moldova’s economic performance. Following a series of meetings between Presidents Voronin and Putin, the two countries made incremental progress throughout the year on improving economic relations, including the lifting of Russian bans on imports of Moldovan fruits, vegetables, meat products and wine, and the signing of a long-term supply contract for natural gas with Gazprom.

Because of the damage to Moldova’s economy caused by the higher natural gas price and Russian bans on Moldovan exports, in late 2006 the International Monetary Fund (IMF) increased lending to Moldova. Moldova struggled, but stayed on track with its IMF program, meeting almost all the macroeconomic targets established in the agreement. In October 2006 the U.S. rescheduled certain Moldovan debts owed to the U.S. Department of Agriculture, thus fulfilling the U.S. Paris Club commitment and helping to alleviate Moldova’s foreign debt payments.

Despite external pressures, the Moldovan economy recovered in 2007, recording 8% growth in the first six months of the year. Remittances from abroad of approximately $1 billion (one of the highest in the world on a per capita basis) continued to fuel consumer spending and drive economic growth. Although the investment climate remained weak, 2006 was a record year for foreign direct investment (FDI), which reached $242 million. FDI continued to grow throughout the first half of 2007. In the summer of 2007, Moldova suffered its worst drought in 60 years, which the GOM estimated caused $1 billion in crop losses. The United States Government (USG) provided modest drought relief assistance in the form of seeds for winter wheat, which it delivered in a timely and targeted manner, and which both the GOM and Moldovan farmers greatly appreciated.

Moldova also made some progress in 2007 in removing barriers to economic development and raising its norms to (EU) standards. Throughout FY 2007 the GOM continued to espouse European integration as it implemented the Action Plan signed with the EU in 2005, which is a “roadmap” of reforms designed to strengthen the democratic and economic situation of the Moldova, and to facilitate its Euro-Atlantic integration. USG assistance complements the EU-Moldova Action Plan.

USG foreign assistance in Moldova expanded in 2007 with the launch of the Millennium Challenge Corporation’s (MCC) Threshold Country Program (TCP). The TCP is a two-year, $24.7 million program aimed at reducing corruption and its negative economic and social costs. It also provides a basis for a future MCC Compact program that could provide significant resources to help Moldova address poverty through economic growth. MCC funding is providing the USG a significant voice in Moldova and prompting positive actions by the GOM that demonstrate the seriousness with which Moldova takes the reform process. For example, as part of the Compact development process, the GOM held unprecedented, transparent and nationwide consultations with citizens from the public and private sectors to identify impediments to economic growth. The GOM’s MCC team also prepared an objective analytical report identifying the constraints to economic growth in Moldova.

International efforts to resolve the Transnistrian conflict stalled in early 2006 with the withdrawal of the Transnistrian representatives from the negotiation process following the agreement between Ukraine and Moldova to enforce a customs regime. The countries involved in the dispute made little progress toward a resolution, or the removal of Russian forces and munitions from the Transnistrian region. Moldova, Ukraine and the EU agreed to extend the mandate of the EU’s border assistance mission that helps stem the flow of illegal trade between Ukraine and Moldova. Communication between Embassy officials and civil society in Transnistria has increased and opened doors for future assistance.

FY 2007 Country Program Performance

PEACE AND SECURITY

In FY 2007 USG assistance in Peace and Security focused on promoting Moldova’s territorial integrity, strengthening law enforcement and border security capacity to fight transnational crime, redirecting expertise on weapons of mass destruction (WMD) toward sustainable peaceful research, and helping Moldova to facilitate interoperability between Moldovan and Western forces involved in peacekeeping and humanitarian missions. In the law enforcement field, the USG emphasized assistance to enhance Moldova’s capacity to fight terrorism and transnational organized crime, including cyber-crime, money laundering, trafficking in persons and narcotics in a manner consistent with international standards and best practices. Many of these crimes have a direct link to criminal activity within or affecting the U.S.

Another objective for USG assistance is to improve the GOM’s ability to fight corruption. This includes enhancing government transparency, responsibility, and accountability at both the national and local levels, and supporting increased adherence to the rule of law.

Stabilization Operations and Security Sector Reform - In FY 2007 USG supported Moldova’s Supreme Court of Justice in reviewing dozens of files of closed corruption cases to identify the impediments to the effective investigation and prosecution of corruption cases. Identifying impediments is a prerequisite to addressing them in legislative reforms and training programs that will improve criminal investigations and trials. The final report is expected in early 2008.

In April 2007 the Moldovan Parliament adopted amendments to the tax code intended to regulate Moldova’s informal economy, forgive tax debts, and stimulate investment. Some provisions of the draft law were flawed, and so between April and July 2007 the USG and GOM worked to improve the legislation to ensure that Moldova would be able to honor its international obligations to prevent money laundering and terrorist financing. As a result of USG engagement, the Moldovan Parliament adopted amendments to a capital amnesty law that brought all amnesty-related transactions under the purview of Moldova’s anti-money laundering authorities. The Parliament also adopted a new anti-money laundering bill.

The USG provided a Basic Officer Safety and Survival Training program to Moldovan customs officials and donated simulation guns and protective gear. This training dramatically reduced on-the-job injuries and fatalities in the customs service.

In FY 2007 the USG assisted the GOM to combat crime by donating ten vans and five automobiles, handcuffs, and flashlights to law enforcement units responsible for combating organized crime such as illegal narcotics, money laundering, and cyber crime. These basic equipment donations complement other regional training initiatives implemented by GUAM (Organization for Democracy and Economic Development: Azerbaijan, Georgia, Moldova, and Ukraine) and Southeast European Cooperative Initiative (SECI), as described in the section of this report on transnational crime. In addition, the USG performed an assessment of the Ministry of Interior’s Explosive Ordnance Detection and Disposal Unit’s capacity to investigate a post-blast scene and manage a crime scene; provided the Moldovan military with individual equipment and body armor for peacekeeping missions; sent 25 Moldovan officers to professional military education courses in the U.S.; and, conducted a seminar for 36 representatives from nine different GOM agencies on civil-military responses to terrorism. Eleven Moldovans are serving as deminers in Iraq.

Transnational Crime - To bolster Moldova’s collaboration with neighboring countries to combat domestic and transnational crime, the USG supported virtual law enforcement centers (VLECs) in the region that reinforce these international links and facilitate joint investigations and operations. The development of GUAM law enforcement task forces and the VLEC directly reduced the ability of organized crime to use the region for trafficking in persons, narcotics, and deadly contraband and allowed for a quick response to queries among law enforcement agencies. Moldova hosts the GUAM anti-Trafficking in Persons (TIP) Task Force, and it has led the way in exchanging information with its neighbors, exchanging over 300 messages on nearly 100 investigations. The GUAM TIP Task Force completed a six-month criminal-intelligence exercise and a one-week interdiction operation. As a result of the exchange of information on 200 cases, Georgian authorities investigated nine TIP suspects and freed five victims. Regional law enforcement training improved regional law-enforcement cooperation, spurring participating law enforcement officers to continue to work together independently to facilitate joint cooperation and training.

Seven Moldovan agencies participated in a USG-funded seminar on money laundering and terrorism financing. As a result the GOM adopted a framework to combat money laundering and terrorism financing. Moldova also formed a task force to investigate a major transnational organized-crime enterprise, based in Moldova, with ties to shell companies in the U.S. The investigation continues.

The USG supported Moldova’s first ever training in basic cyber-crime investigations. As a result of this course, the units initiated contact with Western Internet auction companies and began working with them to combat international fraud schemes. In one investigation, Moldovan law enforcement units recovered 35 pieces of jewelry worth an estimated $250,000, which an organized criminal enterprise based in Moldova and Romania had stolen from Americans.

USG assistance efforts also led to the GOM’s establishment of a witness protection unit at the Center for Combating Trafficking in Persons (CCTIP). In FY 2007 the USG financed the renovation of the Center’s office space, the CCTIP opened, and personnel were selected. USG technical assistance included: skills training on decreasing human trafficking crimes; recommendations for revisions to Moldovan criminal laws, procedures, and practices in combating TIP based on international standards and best practices; and training on cooperation with foreign law-enforcement agencies. A USG-funded legal advisor published and presented the final report for the FY 2006 TIP Closed-Case Files Review Project, which detailed impediments to the effective investigation and prosecution of TIP cases.

In 2006 the USG arrested and charged a U.S. citizen with traveling to Moldova to engage in sexual activity with minors. During FY 2007 the USG worked closely with Moldovan officials from the CCTIP and others on many aspects of trial preparation. The trial against this criminal took place in the summer of 2007 and resulted in a U.S. federal court returning guilty verdicts on all counts. In addition, as a result of the cooperation and training provided by this intense collaboration on an actual case, the Moldovan prosecutors were able to pursue the convicted criminal’s Moldovan collaborator, who was subsequently convicted by a Moldovan court and sentenced to almost 20 years in prison.

Combating Weapons of Mass Destruction - In FY 2007, the USG helped to provide a stable and productive working environment for Moldova’s former bio-weapons scientists by supporting Moldovan science and technology capacity-building and entrepreneurial development, creating partnerships between U.S. and Moldovan science and technology entrepreneurs and companies, funding a research grant program, and co-financing with the GOM Moldovan centers that employ former weapons researchers and provide services to students, researchers, and industrial clients. The centers are largely self-sustaining – USG funding provided only equipment, spare parts, and travel grants. Moldovan Government co-funding totaled $750,000 in FY 2007. Eighteen grantees were trained in the fields of strategic planning, financial planning, and the development and identification of U.S. partners.

GOVERNING JUSTLY AND DEMOCRATICALLY

The objectives of the USG’s Governing Justly and Democratically program are to strengthen democratic institutions, enhance the role of civil society, and promote rule of law. Programming built on the momentum of Moldova’s movement toward adherence to EU norms and promoted a more decentralized, participatory, and transparent political environment.

Rule of Law and Human Rights - USG assistance efforts in FY 2007 focused on improving citizens’ access to justice by increasing public education, competent legal services, and judicial effectiveness, and assisting Moldova’s legal system to operate transparently, efficiently, and independently. Training programs and workshops were provided to develop the capacity of defense lawyers. The USG also provided technical assistance to the Moldovan Bar Association on the effective implementation of the national anti-corruption and anti-trafficking strategies. Seven USG-sponsored traveling lawyers provided legal aid to over 4,400 socially disadvantaged individuals living in rural areas. With the support of USG assistance, four legal clinics and a legal aid component of a domestic violence shelter collectively provided services to nearly 1,200 clients. USG-backed written analyses and comments were submitted to the GOM on draft laws related to the criminal-law system. Twenty-five members of parliament were trained to recognize lobbying as a potential source of corruption. USG grantees also produced several public information documents, including the Second Annual Judicial Reform Index and a report that measured the degree to which Moldovan laws promoted and protected the human rights of women. USG assistance also supported the selection of four pilot courts envisioned in the TCP. The pilot courts will be studied for workflow and case flow analysis. Based upon this analysis, the administration, systems, software, and training for courts will be developed in the pilot courts and then rolled out throughout the court system. Longer term impacts of these activities are not yet evident.

During FY 2007 USG-sponsored recommendations helped the GOM improve draft laws affecting criminal justice. The Moldovan Supreme Council of Magistrates passed on first reading a code of ethics that the GOM developed with extensive comment and assistance from the USG. Also with USG assistance, the Chairperson of the Criminal Collegium of the Supreme Court of Justice established a working group to develop sentencing guidelines for criminal cases. The proposed sentencing guidelines will increase the uniform application of criminal law provisions when imposing sentences. Sentences that are more well-founded and well-reasoned will also increase the credibility of the justice system in Moldova.

In July 2007 the USG sponsored a roundtable discussion for the Procuracy, law enforcement, civil society, and the judiciary on investigating corrupt investigators. Also in July 2007 a MCC TCP program began to reform the organization and operation of Moldova’s anti –corruption agency, the Center for Combating Economic Crime and Corruption (CCECC). In September 2007 CCECC leadership agreed to several significant changes that will streamline the organization to decrease opportunities for internal corruption and also improve CCECC enforcement efforts. These reforms include improved personnel management procedures, an improved financial disclosure regime and the creation of a corruption prevention unit. Work on the creation of a Civilian Oversight Board also began.

Political Competition and Consensus Building - Observers declared that Moldova’s June 2007 local elections mostly met international standards. However, concerns remained, including misuse of power by the ruling Communist Party of Moldova (PCRM) to support its candidates and the lack of unfettered access to media for opposition candidates. The PCRM suffered a serious defeat as the party’s share of the vote fell from 46% in 2003 to 34% in the 2007 elections for mayors and district councils. The PCRM’s control over local districts fell drastically, from 30 districts to only 10. In Chisinau, an opposition candidate for mayor was elected with 61% of the vote in a run-off election against the PCRM candidate.

In FY 2007 the USG provided technical assistance to campaign managers, staff, and candidates from the major political parties in the run-up to the 2007 local elections. Over 6,000 individuals received USG-assisted training in campaign management, voter mobilization techniques, door-to-door campaigning, message development, communications, and fundraising. These efforts played a key role in increasing political competition. Political parties at the grassroots level improved campaign management; many of those trained successfully used their new skills during the campaign period. The 2007 local elections also saw considerable electoral gains by previously less well-organized opposition parties.

Civil Society - In FY 2007 seventy-eight community initiative groups led their communities in identifying and prioritizing community problems and in developing appropriate solutions. Over 100 non-governmental organizations (NGOs) and community-based organizations were awarded grants to advocate for social issues such as voter education, human trafficking, and youth leadership. Three Transnistrian NGOs received grants to advocate for counter-trafficking measures and to train 50 young journalists from Transnistria. The USG also provided grants to promote and enhance public engagement and oversight of the pressing issues of poverty reduction, democratic elections, European integration, and fighting corruption. For example, several grants were provided to local independent media outlets for election debates. The USG also provided support to a broad coalition of NGOs and media partners to monitor corruption at the national and local levels. One vehicle for these activities was a coalition of NGOs dedicated to exposing and eradicating corruption. In May, the USG hosted a roundtable discussion for members of the coalition entitled, “GOM Reform Process, Anti-Corruption Activities, and the Role of Civil Society.” The coalition group held four quarterly meetings with the Prime Minister to discuss the national anti-corruption strategy and other anti-corruption initiatives. Further, the GOM included three members of the coalition in the TCP Development Working Group and in the official GOM TCP Monitoring and Implementation Working Group. These are key achievements, as NGOs are now becoming more effective monitors of GOM reform polices.

As part of its role in the implementation of the MCC TCP and with USG assistance, the GOM drafted and distributed for public comment a “TCP Information and Communications Strategy” and a draft “Concept on Cooperation of Public Institutions and Civil Society in the TCP.” Broad elements of Moldovan civil society participated, making extensive comments and suggestions for each draft. The USG also completed both a NGO capacity and needs assessment and a media assessment to establish baseline data as required under the MCC Threshold Country Program.

Under the aegis of the MCC TCP, the USG launched a major effort in September to monitor media reporting on corruption. The project will publicly report results on a monthly basis. A Moldovan association of legal clinics also received a USG grant to provide legal assistance to victims of corruption, as envisioned in the TCP.

Moldovan citizens are now making greater demands on the GOM to respect their rights, as illustrated by the growing number of complaints filed by Moldovan citizens against the GOM at the European Court for Human Rights (ECHR). The complaints filed by Moldovans before the ECHR totaled over 1,700 at the end of 2007. Community initiative groups have been successful in developing grassroots organizational structures to advocate for critical community needs, such as the repair of government schools, roads, and other infrastructure. Due in part to USG efforts, the GOM is now more accepting of the efforts of Moldovan civil society, as grantees successfully created fora for cooperation between civil society and government that led to more inclusive policymaking and to better representation of civic groups’ interests in the government and parliament.

ECONOMIC GROWTH

In FY 2007 USG assistance for Economic Growth focused on promoting broad-based and sustainable economic growth by helping to create a business environment and an investment climate that reward the performance of competitive enterprises. USG assistance also helped to increase economic opportunities and reduce unemployment among vulnerable populations, particularly women at risk for trafficking.

Private Sector Competitiveness - USG assistance targeted private-sector competitiveness as a means to help mitigate the negative effects of Moldova’s low per capita GDP and its large outflow of workers seeking jobs abroad. Russia’s ban on Moldovan agricultural products and wine severely aggravated Moldova’s poverty and labor outflow. To increase Moldova’s ability to compete in alternative markets in the West, the U.W. targeted assistance at three sectors: wine, information technology (IT), and apparel. In all three sectors, the challenges to long-term competitiveness are significant, but positive momentum exists and is likely to accelerate in the coming years.

The USG provided support to private companies to increase their productivity and thus allow them to compete more effectively in international markets. Assistance focused on enabling enterprises to better use existing human and fixed assets, and encouraging their adoption of new technologies and production practices. In IT, USG assistance focused on helping companies improve the ways they develop software. As a result of the program, the software companies now use state-of-the-art methods to better plan and execute software projects and reduce defects. In apparel, assistance focused primarily on helping companies to use more efficiently their existing equipment and personnel. Drawing upon technical assistance from foreign winemakers, the USG helped local wineries to develop improved harvesting and production plans, to get more output using existing equipment, and to prioritize investments in the new equipment essential for better wine quality. As a result of USG assistance, private enterprises in each of the target sectors made important changes in their business practices. For example, seven leading wineries recently formed a guild that establishes common standards for quality and marketing to the West. It is expected that the guild will make it possible for these wineries to develop brand recognition for Moldovan wine in Western markets. Similarly, technical assistance and training in the apparel sector resulted in better management of workflows and performance targets that led apparel companies to increase their productivity by at least 20%.

During FY 2007 over 2,500 young women received training in trafficking awareness through a seminar entitled “Work Abroad: Myths and Reality,” which enabled young women to gain a more realistic view of their educational and career options abroad. Over 1,900 young women attended a training course on identifying job opportunities, drafting a resume, interviewing, and basic employment rights and responsibilities. In addition, women vulnerable to trafficking benefited from 117 paid and 49 unpaid internships, and 202 worked with mentors. USG efforts also helped to equip young women with both introductory and advanced training in entrepreneurial skills, such as business planning, operations, budgeting, accounting, marketing, and sales. Over 1,300 individual beneficiaries attended one- or two-day training programs in entrepreneurship that were led by NGO partners. As a result of the training programs, 485 beneficiaries found jobs.

Under the TCP the USG is providing assistance to the State Tax Service to develop a Customer Service Center. USG technical assistance and recommendations will incorporate international best practices, including the Intra-European Organization of Tax Administrations guide for call centers.

Trade and Investment - One USG effort in the trade and investment area builds partnerships and provides technical assistance by training Moldovan business leaders in U.S. business practices. The program helps American organizations create new relationships and strengthen existing ties with Moldovan partners and customers. In FY 2007 fifty-eight Moldovans participated in events through this assistance. This included ten participants who traveled to the U.S. on sector-specific business internships in agricultural business associations, hotel management, hospital management, and road construction. Another 48 participated in training on strategic planning. As a result of this program, Moldovan professionals and government officials are better equipped to work with Western institutions. For example, two participants of the 2007 program were senior officials from the GOM’s Road Administration Agency. The skills they acquired as a result of participating in this program enabled them to successfully negotiate a $48.7 million loan with international financial institutions. The Road Administration Agency was subsequently named by the GOM as the implementing agency for the national road rehabilitation project.

In FY 2007 the USG continued to provide technical assistance to the GOM to implement the commitments it made when it acceded to the World Trade Organization (WTO) and in drafting Moldovan accession offers to join multilateral international trade agreements. This included an assessment presented to the GOM on Moldova’s WTO compliance and related legislative deficiencies that needed reform. This past year work began on producing a manual on rules of origin for the Moldovan Customs Service, which will provide a practical guide to determining the origin of imported goods. USG assistance supported the Stability Pact working groups and helped organize regional meetings on such issues as sanitary and phytosanitary (SPS) measures, customs, agriculture, and technical barriers to trade. During these meetings, the Stability Pact countries signed bilateral free trade agreements to further regional integration. As a result, Moldovan Ministry of Economy and Trade experts were able to conclude negotiations with the Stability Pact, signing bilateral and multilateral trade agreements, including joining the Central European Free Trade Agreement. Moldova’s exports to Stability Pact countries grew 40% in the first nine months of 2007, compared to the same period in 2006, providing much needed market diversification for Moldova’s products.

INVESTING IN PEOPLE

USG foreign assistance in the Investing in People objective is limited to a single program focused on preventing HIV/AIDS and hepatitis B and C. Growing demands for public services by an increasingly elderly and unhealthy population are further squeezing Moldova’s already overburdened health care system. This program also complements a larger effort involving the World Bank and the Global Fund, and is closely coordinated with the Moldovan Ministry of Health (MOH).

Health - USG efforts in FY 2007 focused primarily on developing new laws and guidelines that contribute directly to health-sector reform. As a result, the MOH established a legal framework for a new national network of 40 voluntary counseling and testing centers for HIV/AIDS and hepatitis B and C. The framework includes an MOH order and regulations on counseling, guidelines for training, a specialist’s manual, a monitoring and evaluation plan, and health-insurance funding. Results from this assistance are not yet evident.

USG-funded assistance also helped develop a new draft law revising national standards for blood transfusions that includes a groundbreaking quality-management program, a voluntary blood donation program, new comprehensive guidelines for reducing infections, and new guidelines for lab diagnostics of hepatitis B and C. The draft law, with its focus on quality management and standards, is the first of its kind in the Moldovan health sector. It provides an excellent framework for a sustainable, high-quality system that meets international standards. Efforts to help reduce infections acquired in hospitals are also leading to improvements in the quality of health services.

In connection with the MCC’s TCP, the USG worked with the MOH to host a roundtable on the MOH Draft Code of Ethics in September 2007. Participants included the State Medical University, the School of Public Health, NGOs, and health care providers. With USG assistance, the MOH has begun publishing completed guidelines and protocols on its website, including protocols developed under other donor programs that have never been widely available. Top-priority protocols for primary health care will be published as they are developed under the TCP.

HUMANITARIAN ASSISTANCE

The USG supports otherwise underserved, vulnerable populations, and fulfills its obligations to the global community by providing assistance to desperately needy people during the onset of a humanitarian crisis. Programs in Moldova focused on improving the daily lives of the most vulnerable, often institutionalized persons living in remote areas without the most basic necessities. The provision of medicines, clothing and adequate shelter remained the top priorities for the USG’s modest humanitarian efforts.

In FY 2007, the USG also provided humanitarian assistance in response to Moldova’s worst drought in 60 years. The impact of the drought was considerable. Most agricultural work in the fields simply stopped during the worst weeks of the crisis, and crops, especially early spring crops, were devastated. According to preliminary estimates, total losses for cereals were approximately 1.6 billion Moldovan lei ($141 million), with 84% (1.2 million hectares) of arable land affected.

Protection, Assistance and Solutions - In 2007 the USG distributed approximately $7 million of donated humanitarian assistance commodities such as food, clothing, medicines and medical supplies to vulnerable populations in Moldova. In addition, USG humanitarian assistance helped to renovate a residential-care institution, which improved the lives of the 116 children living there and allowed for better and more efficient use of donated humanitarian assistance. Small-scale assistance was also used to renovate a youth community center and to refurbish an artesian well.

In response to the drought, the USG provided short-term emergency humanitarian assistance and funds for seed distribution. While the actual dollar amount of humanitarian assistance for Moldova was comparatively modest, results and public awareness of the USG’s contribution were excellent. For example, USG assistance for the drought was the first tangible assistance to reach Moldovan farmers. Seeds arrived in time for fall planting, which made a tremendous difference to farmers who were in dire financial straits, as it allowed them to plant their crops and look forward to a profitable harvest.

FY 2007 Measures of Country Performance

The following data are based on the Monitoring Country Progress in Europe and Eurasia system developed by the United States Agency for International Development (USAID) to measure and track progress in the region. The system uses four different indices to monitor progress, drawing on readily available standardized country-level data on economic reform, economic structure and performance, democratic reform, and human capital. The primary data sources are the European Bank for Reconstruction and Development (EBRD), the World Bank, the United Nations Children’s Fund (UNICEF), and Freedom House. The data for each of the four indices are converted and standardized to a 1-to-5 scale, with a “5” representing the best performance of the Eastern Europe and Eurasia region, and a “1 the least advancement of the region.

Moldova’s Democratic Reform* Scores in 2006 compared to Romania and Bulgaria in 2002

Date: 01/01/2008 Description: The graph to the left shows Moldovas democratic reform scores in 2006* (the grey shaded area) as compared to the average of Romanias and Bulgarias democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows Moldova’s democratic reform scores in 2006* (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2007 scores not yet available


Moldova’s Democratic Reform Scores in 2006 compared to its Reform Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows Moldovas democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows Moldova’s democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

*Actual 2007 scores not yet available

*Democratic reforms include the electoral process (the extent to which elections are free, fair and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform) and the scope of corruption as well as anti-corruption income.

Moldova’s 1st Stage Economic Reform* 2007 Scores Compared to Bulgaria and Romania in 2002

Date: 01/01/2008 Description: The graph to the left shows Moldovas stage one economic reform scores in 2007* (the grey shaded area) as compared to the average of Romanias and Bulgarias economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows Moldova’s stage one economic reform scores in 2007* (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.


Moldova’s 1st Stage Economic Reform 2007 Scores Compared to its Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows Moldovas stage one economic reform scores in 2007* (the grey shaded area) as compared to its economic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows Moldova’s stage one economic reform scores in 2007* (the grey shaded area) as compared to its economic reform scores in 1999 (the bold line).


Moldova’s 2nd Stage Economic Reform 2007 Scores Compared to Bulgaria and Romania in 2002

Date: 01/01/2008 Description: The graph to the left shows Moldovas stage two economic reform scores in 2007* (the grey shaded area) as compared to the average of Romanias and Bulgarias economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows Moldova’s stage two economic reform scores in 2007* (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

Moldova’s 2nd Stage Economic Reform 2007 Scores Compared to its Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows Moldovas stage two economic reform scores in 2007* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows Moldova’s stage two economic reform scores in 2007* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

 
*Economic reforms include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and “second stage” reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

Moldova’s Progress on the USAID Country Progress Indices between 1998 and 2007

Date: 01/01/2008 Description: Moldovas Progress on the USAID Country Progress Indices between 1998 and 2007. State Dept Photo


(1) Economic reforms index include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and second stage reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

(2) The Economic structure and performance index tracks indicators such as the size of the private sector as % of GDP, export share of GDP, and the size of the small and medium enterprise sector as % of GDP, economic growth, inflation, debt, and foreign direct investment.

(3) The Democratic reforms indexinclude the electoral process (the extent to which elections are free, fair, and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform), and the scope of corruption as well as anti-corruption efforts.

(4) USAID tracks progress on the Human capital index by analyzing trends in health (life expectancy, under five mortality rates, and public expenditures on health), education (secondary school enrollment rates and public expenditures on education) and per capita income.



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