Jun 30, 2010 | 16:37 GMT

3 mins read

Russia: Targeting Moldova's Wine Industry?

Russia's chief medical officer and head of the Federal Consumer Protection Service Gennady Onishchenko said June 30 that Russia will tighten control of Moldovan wine exports to Russia after several batches of wine failed to meet Russian safety standards. Russia will monitor imports of Moldovan wine more closely, and the process of opening new points of entry for Moldovan wine in places like St. Petersburg could be suspended, though Russia does not plan to ban Moldovan wine altogether, Onishchenko said. This move could be a pressure tactic, as relations between Russia and Moldova soured after acting Moldovan President Mihai Ghimpu issued a decree establishing June 28 as "Soviet Occupation Day" and called for Russia to remove all its troops from the breakaway region of Transdniestria. Moscow has proven that it is willing to target specific industries in countries that have been unfriendly toward Russia; it placed a temporary ban on Georgian wine in 2006 and on Belarusian dairy products in 2009. Now, Moscow could be targeting Moldova's wine industry, a significant part of the country's economy. Moldova is one of the poorest countries in Europe, with a gross domestic product (GDP) of around $5.4 billion. The former Soviet country's economy is heavily dependent on Russia, with remittances from Moldovan workers (most of whom work in Russia) totaling around 30 percent of GDP in 2008. The wine industry is an important part of Moldova's economy; in 2005, wine exports accounted for nearly 10 percent of Moldova's GDP and wine exports to Russia made up nearly 20 percent of Moldova's total exports. These figures have declined since Russia began cutting some of these exports after a temporary ban in 2006. Still, Russia remains the largest single market for Moldova's wine exports; in 2009, wine exports to Russia made up more than 3.1 percent of Moldova's total exports, and the wine industry equaled nearly 2.4 percent of Moldova's GDP. In short, a cut in Moldova's wine exports to Russia would surely affect the tiny country's economy. In addition to having a weak and Russia-dependent economy, Moldova has been mired in political issues. The country is split between a coalition of pro-European parties geared toward integration with the European Union and the pro-Russian Communist Party. This split has created a political deadlock, with neither group able to muster enough support for a presidential candidate (the president is elected directly by the parliament). This led to two failed elections in 2009 and has left the country in a state of flux under Ghimpu. Ghimpu, with support from Moldova's primary European backer, Romania, has been particularly bellicose recently in calling for the expunging of Russian influence, even though Moldova and the Transdniestria issue is one on which Russia and Germany have pledged to cooperate under the EU-Russia Security Council proposal. By targeting Moldova's wine industry, Russia might be displaying its own levers against the country. Moscow likely will not hesitate to take further action if Moldova's pro-European elements grow too bold.

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