When Russian President Vladimir Putin annexed Crimea in 2014, a smattering of only six countries supported the move – a rather motley crew that included Syria, Venezuela, and North Korea. President Yevgeny Shevchuk, however, went one step further. The then-leader of the Pridnestrovian Moldavian Republic – known as Transnistria to the West – was alone among world leaders to call for Russia to annex his own country.
Transnistria is a pro-Russian breakaway republic in Eastern Moldova, and is not legally recognized by any UN member state. Isolated from the international community over the past two and a half decades, its has largely survived thanks to support from Russia. As the country’s demographic and economic challenges mount, its de facto independence faces increasing uncertainty. Below, we take a look at Transnistria’s past, its role in the international context and what the future holds for this embattled region.
Transnistria’s peculiar role within the international community stems from its unusual historical legacy. Its capital, Tiraspol, was founded by Marshall Alexander Suvorov during Russian Empire’s conquest of Bessarabia (now Moldova) in 1792. While the rest of Moldova was annexed by the USSR during the Second World War, Transnistria existed as an Autonomous Soviet Socialist Republic from as early as 1924. The two were merged in 1940 to create the Moldavian SSR.
Unlike the rest of the Moldavian SSR however, Transnistria developed a sizeable industrial economy. High numbers of skilled workers were drafted into its factories from other parts of the USSR.
The region experienced large-scale immigration both from Russia and Ukraine, which diversified its ethnic and linguistic composition. According to the Soviet census in 1989, over half the region’s 700,000 inhabitants were ethnic Russians or Ukrainians, compared to less than 10 per cent in the rest of the country.
In 1990, this ethno-cultural split reached a head, after Moldova’s newly independent government announced its formal secession from the USSR. Outraged by plans to reunify with Romania and abandon Russian as a second state language, representatives of Transnistria’s own regional parliament held a separate vote proclaiming their own secession from Moldova and reaffirming allegiance to Moscow. But in December 1990, Soviet leader Mikhail Gorbachev himself decreed Transnistria to be sovereign Moldovan territory, provoking widespread unrest in the region.
Mounting tensions between Transnistrian separatists and Moldovan authorities reached their zenith in a brief but bloody war from March-July 1992 that claimed several hundred lives. Backed by the 14th Russian Army as well as Russian and Ukrainian volunteers, Transnistrian troops forced the Moldovan government to agree a ceasefire and preserve the region’s de facto territorial sovereignty.
Subsequent attempts to normalize the situation diplomatically have all failed, and to this day Russia maintains a regional peace-keeping force of over 1,000 soldiers. Despite economic difficulties, Transnistria has retained its independence from Moldova for over 27 years.
Transnistria has its own government, police force, and most other things that a normal country has. It also has its own fiscal and monetary policy: it uses the Transnistrian Rouble, which features coins with Soviet-era hammer and sickle and notes with images of Russian military leaders.
The country’s economic outlook is stark. Until 2006, it derived sizeable revenues by importing goods to Transnistria through the Ukrainian port of Odessa, and then smuggling them into other countries to avoid local import duties. Smuggled goods have typically included arms, alcohol, tobacco, food, and human trafficking. Ukraine’s tougher customs regime since 2006 has made smuggling more difficult, straining Transnistria’s finances.
Energy, metallurgy and textiles make up 75% of the country’s legal export revenues, although each of these branches of industry is represented by a single industrial plant. Sheriff, one of the few substantial private business groups in the region, controls a sizeable swathe of the economy and also bankrolls Obnovlenie, Transnistria’s ruling political party.
Transnistria’s prohibitively high levels of taxation and lack of international recognition have stifled most opportunities for private investment, while state-level corruption and socialist-style spending on public services have blown a hole in the public finances. The government’s 2018 budget has a 51.8 percent deficit, and the imbalance looks set to continue in the coming years.
The country’s economy is also deeply constrained by demographic challenges. Poor economic opportunities in the region cause many young people to relocate to Moldova and Ukraine. For every 100 pensioners there are now only 101 working-age members of the population, which places further strain on public funds. In 2015, the government was only able to pay out 70 per cent of public-sector pensions and wages.
The Russia factor
It is unlikely that Transnistria could have survived this long were it not for the benevolent attitudes of Russian politicians. Transnistrian national identity is largely predicated on the country’s relationship with Russia: security services still retain the infamous KGB title, the parliament is known as the Supreme Soviet, Russian, and Transnistrian flags adorn the capital’s streets. Unlike in neighboring Ukraine, which has recently engaged in aggressive ‘decommunization’ policies, cities like Tiraspol are redolent with statues of Lenin (pictured, left) and allusions to the country’s Soviet history.
Russian is the sole language taught in nearly all schools, and is the language of public administration. In 2006, Transnistria held an unrecognized referendum on reunification with Russia, in which 98.07% of the country supposedly voted in favor. Even though only 11% of its exports go to Russia compared with 45% to the EU, the country’s leaders are regularly at pains to stress that their future is with the East.
Russia, in turn, has not assented to Transnistria’s demands for accession. It has however, supported the republic in other ways. Gazprom supplies the country with gas at one sixth of market prices, and the Russian-owned Kuchurgan Power Station, which supplies 77 per cent of Moldova electricity, provides Transnistria with rents that make up a large share of its national budget. Despite the subsidies it receives on gas, Transnistria’s debt to Gazprom was around $5.79 billion USD in 2017. Its GDP in 2012, by comparison, was $1 billion USD.
Russia also regularly provides the region with subsidies and direct aid for pensions, food supplies, its armed forces and currency stabilization. Some experts believe Moscow has traditionally provided over 70 per cent of Transnistria’s national budget, though it reduced its level of support during the Ukraine crisis amid belt-tightening at home.
Economically and militarily, Transnistria cannot survive without Russian support. In turn, it is not clear how long Russia will be inclined to support Transnistria, given the government’s reputation for economic incompetence and corruption. For now, having Russian military troops stationed in the region gives Moscow some leverage over Transnistria’s currently pro-Western neighbors – Moldova and Ukraine.
For a long time Russia also saw the region as a lever to prevent Moldova’s integration with the EU. But since Moldova signed an EU DCFTA in 2014 that also extended to Transnistria, speculation has been rife that Russia is now using the region as a base from which to sell sanctioned Russian products to EU countries.
A new government in Moldova could change the status of Transnistria. Pro-Russian politician Igor Dodon was elected to the Presidency in 2016, and has campaigned for greater Transnistrian integration with Moldova. While his role as President is a largely ceremonial one, the pro-European coalition that rules Moldova’s Parliament is set to lose to the pro-Russian Socialists in the 2018 parliamentary elections. A shift in Chisinau’s foreign policy could alter Russia’s risk-reward calculus in the region, and could signal reduced support for Transnistria in favor of greater Moldovan cooperation.
The days of this struggling breakaway state might well be numbered. Alternatively, Moscow may conclude that despite the costs, a continued presence in Transnistria is a worthwhile hedge against pro-European elements in the region. For now, the country remains a case-study in the complexities of post-Soviet identity, where nostalgic passions collide with the cold hard steel of post-industrial reality.