BETTER UNDER BREZHNEV

Moldova's free-market' economy is collapsing, but the old nomenklatura — the new mafia —

are living high on the hog, says Anthony Daniels Kishinev AFTER a decade of free-market reform, the death-rate from tuberculosis in Moldova, formerly the Moldavian Soviet Socialist Republic, has quadrupled, while the gross national product has contracted by 60 per cent. At least a quarter of the population has fled the country. A nurse receives a salary of $10 a month, paid five months or more in arrears. Pensions are a thing of the past. The country's principal export is prostitutes, while the trade in human kidneys is fast developing, as is the purchase of Moldovan children for adoption by credit card over the Internet. Moldova's most important — indeed, selfimportant — import is visiting consultants, the new lords of the earth.

In the circumstances, it is not altogether surprising that more than 50 per cent of Moldova's remaining population voted Communist in last week's elections. Anyone who regards the Brezhnev era as a golden age must have had a sad life indeed; but such is the condition of the country now that the past is infinitely attractive in comparison with the present. Needless to say, a restoration will not be possible, but most people need to dream of something.

Western diplomats have done very well out of the collapse. There is a strong market for visas to Western countries. Those to Spain or Italy cost $2,000, and those to Germany or the United States $5,000-8,000. They are bought through middle-men, and you wouldn't have to be Sherlock Holmes or Sigmund Freud to guess how they achieve their influence in Kishinev's diplomatic circles. What is regarded as a hardship posting in an unattractive backwater has its consolations, therefore, and in a year or two a minor functionary in the visa department can set himself up for life.

Perhaps the greatest irony of the reform is the presence next door of the breakaway Republic of Transnistria. A sliver of land on the left bank of the Dniester river, this predominantly Russian-speaking area broke away from Moldavia when the latter declared its independence, and achieved its own de facto independence with the

help of Russian troops in a short and nasty little war.

Transnistria has followed a very different path from that of Moldova. Its politicians do not speak, as do their Moldovan colleagues, of 'integration into the EuroAtlantic structures' (a phrase I heartily recommend to anyone troubled by insomnia). It has not disposed of all its stateowned enterprises, though it has clearly liberalised its trading laws. It is, in fact, the last vestige of the Soviet Union, somewhat reformed and cured of its utopian pretensions.

No one could call it highly prosperous, but it is at least functioning. Pensions, though low, are paid on time. Citizens of Moldova cross the Dniester daily to work in Transnistria, where at least they will receive wages for their work, but no citizens of Transnistria cross into Moldova in search of work. Could the whirligig of time bring in a greater revenge than a flow of labour from the free to the controlled market?

The contrast of Moldova with Transnistria is not the only one possible. Relatively unreformed Belorussia, the object of infinite scorn and calumny in the Western press, functions far better than Bulgaria; while to go from Milosevic's Serbia to Europe-orientated Romania is like crossing from the Dominican Republic into Haiti. Now that Serbia is undergoing reform, we can confidently expect a flood of Serbian refugees into Western Europe.

Of course, Moldova — like many other former republics of the Soviet Union and countries such as Romania and Bulgaria — is a free market of a very special kind. It did not develop, but was imposed to the recitation of a mantra and according to an unthinking blueprint. Moldova, indeed, is the finest example of an entire political genre.

First, public assets were placed in the hands of the former nomenklatura and mafia: those who now ride in Mercedes and BMWs with blacked-out windows, the waBenzi tribe of Eastern Europe, who patronise the country's sole outlet of the United Colors of Benetton and for whom public appearances without an accompanying warble from a mobile phone would be a terrible solecism, the equivalent of loss of face to the Japanese.

Second, all 'uneconomic' enterprises — that is to say, almost all of them, in which, unfortunately, the majority of people worked — were closed down.

Third, trade was liberalised, at least in one direction. By a mysterious coincidence, the products which an essentially agricultural country such as Moldova might export at an advantage are precisely the ones subjected to non-tariff barriers very difficult to overcome. For example, Moldovan wine — cheap and quite good — has been discovered not to be of the right grape varieties, or produced according to European regulations, and so forth. A free trader would think that if people wanted to buy it, and it were not actually poisonous, that would be sufficient; but he would have reckoned without the machinations to prevent people from drinking it. In Armenia, incidentally, a French company bought the brandy distillery and then refused to buy the local grapes. There are no prizes for guessing whose brandy will fill the gap on the Russian market created by the loss of Armenian production.

Likewise, Moldova has signed an agreement to allow the import of sugar made from European sugar beet that has been subsidised in both production and export. Needless to say, Moldova produces sugar from beet of its own; but not for long. European taxpayers will thus subsidise the destruction of Moldovan sugar production, as well as the incomes of Belgian farmers.

Of course, Moldova is free to export as many super-computers as it can make: that is to say, none.

Finally, to make up for the destruction of Moldovan industry and agriculture, Europe sends it aid, mainly in the form of consultants on large per diem allowances, whose reports are reliably not implemented, since implementation is quite beside the point; the point being to pretend to aid Moldova while keeping the money where it originated, and to subsidise the lumpen-consultocracy that otherwise would have nothing to do. Enough money seeps out, of course, to keep the political class — that is to say, the former nomenklatura and the mafia — quiet and happy. First, the consultants stay in their hotels, eat in their restaurants and buy in their shops; second, they themselves are able to cream off some of the money from the endless training sessions that constitute so large a part of our aid. The strategy document (June 2000) of our own dear Department of International Development talks of

continuing its work of 'conflict resolution', and of '[continuing] to nurture civil society'. I don't think anyone with experience of such nurture will have many illusions as to what it means in practice: endless platitudes punctuated by copious meals.

The strategy document states that no emergency aid has been supplied, but it isn't as though no emergencies exist. In one paediatric unit I visited, the babies were suffering from malnutrition. In another, 75 children had between them one toy and one book. Several slept two to a bed. A tenth of prisoners in Moldova suffer from tuberculosis, and live in conditions which — despite the Council of Europe's recent, utterly corrupt declaration that they conform to European norms — are little short of appalling (not, I hasten to add, the result of cruelty on the part of the prison authorities). There are no functioning windows, so that overcrowded cells, with 17 or 18 inmates, are both cold and damp, or fetid and freezing.

There are 2,400 new cases of TB diagnosed in Moldova per year, the equivalent of perhaps 50,000 in Britain. The best that the humanitarians have so far been able to come up with — while consultants on civil society and conflict resolution collect their fees — is the treatment of the 10 per cent of consumptives who are open cases: that is to say, those who cough up the germs that spread the disease to others. The other 90 per cent of cases will have to take their chance. The ultimate cause of the Moldovan disaster is, of course, the Russian Revolution. It created a system that was fiendishly difficult to reform. Among other things, the Russian Revolution was also the greatest aesthetic disaster ever to befall mankind, as is clear from the horrible concrete mess that the system left behind over a sixth of the world's land surface.

But what has now replaced it is very far from satisfactory. Instead of considering the reality of a country like Moldova, Western policy-makers, captivated by ideology and self-interest, have behaved like the Irishman who, when asked how to go somewhere, replied that if he were going there, he wouldn't start from here. No one in his right mind would wish to start from where the Moldavian Soviet Socialist Republic was in 1990, but unfortunately it was where it was.

In Moldovan provincial towns, whose desolation it would take the pen of a Dante to describe, there are large billboards advertising a Monte Carlo style of life. In their own way, these are as offensive, and as untrue to reality, as the old Soviet propaganda. They tell the population how helpless they are in the face of superior forces; the billboards are a boot in the face of humanity, for ever.

Anthony Daniels went to Moldova on behalf of the British Helsinki Human Rights Group, www.bhhrg.org.