[Intl-tobacco] Moldova, caving to IMF pressure, to privatize tobacco industry

[Robert Weissman]

Moldova Agrees To Privatize Wine and Tobacco Enterprises
16 - 22 October 2000
by Maria Diaour-Antonenko

MOLDAVA;
Source: Transitions Online, Sunday, 10/22/00


PRAGUE--The Moldovan parliament on 19 October passed legislation
privatizing
wineries and tobacco enterprises by a vote of 55 to 36, with only the
Communist
Party voting against.

The bills' previous delay caused the International Monetary Fund (IMF)
and the
World Bank to suspend financial and other assistance programs to the
country in
1999. With the Moldovan economy largely dependent on these two
industries "the
decision of the parliament is one that has no other alternative,"
INTERLIC news
agency quoted President Petru Lucinschi as saying.

Carlos Elbirt, resident representative of the World Bank in Moldova,
remarked
that the legislature's action is "a good step toward the recovery of the

Moldovan national economy." The passage of the bills should free up more
than
$50 million in aid that had been on hold--$35 million from the second
tranche
of World Bank structural adjustment funding and $15 million from the
Dutch
government, according to the news agency. The IMF and World Bank had
insisted
on the privatization of these two largest sectors of the Moldovan
economy as
the only way to economic reform.

Given corruption in past privatizations, the majority of the Moldovan
population is believed to hold negative views of the process. With this
in
mind, the president advised government that "The privatization of these
enterprises should be transparent and serious investors should be
attracted to
it. The government should proceed from the priority interests of the
country,
its economic recovery, creating new job opportunities and raising the
population['s] living standard."

Communist Party leader, Vladimir Voronin, however, is far from
optimistic:
"Only the blind do not see that from the outset of the so-called
reforms, which
made Moldova one of the poorest countries in Europe and the CIS, it has
been
this predatory privatization that has served as a well-thought-out and
well-adjusted mechanism for the monstrous, unsurpassable plunder of the
people
for the fabulous enrichment of a narrow group of swindlers and rogues.
...
Today you have hammered the last nail in the coffin of the national
economy,
but your joy at this privatization is premature." The following day, the

leaders of the Communist Party voted to suspend participation in the
parliament's plenary sittings.