Igor-nomics brings Moldova to the brink of disaster

This article was first published by BNE Intellinews on October 6th 2019. NR Investments Ltd, via Avia Invest, has since been forced to abandon its investments in the Republic of Moldova, following concerted pressure from President Igor N. Dodon.

Moldovan President Igor Dodon has sought to rebrand himself as neutral between east and west and an economic liberal, but his current actions — and past online musings — tell a different story. 

A couple of months after Dodon linked up with his new, young, pro-Western partners in government, the Moldovan president was playing to both sides in September. On September 26, Dodon addressed the 74th Session of the General Assembly of the United Nations (UN) in New York. Emphasising his desire for “the de-facto recognition and observance of Moldova’s neutrality,” Dodon told delegates that “the geopolitical preferences of Moldova’s population were divided almost equally between East and West”. Before flying to the US to address the UN, Dodon hosted Moldova’s Russian Economic Forum in Chisinau, with his brother’s business partner, Igor Chaika, the son of the Russian Federation’s prosecutor general, Yuriy Chaika. Meanwhile at home, a legal battle was brewing with a major new investor in Moldova. 

After Dodon went “cuddly” on prospects for neutrality in business and fraternity at the UN, he departed Chisinau on September 30 to attend the Supreme Eurasian Economic Council Summit in Yerevan, Armenia, with the formidably democratic leaders of Iran and Belarus. 

If he appeared befuddled in Brussels, where he also visited the Nato headquarters in September, and disingenuous at the UN, in Yerevan Dodon was at home. Other international despots took notice of his arrival, which is not something that Dodon has often known. If a picture speaks a thousand words, then the portrait of the European Economic Union (EEU) leaders posted at the end of the summit provides a faithful depiction of a president whose vision for Moldova is at best puzzling. At worst, it is egomaniacal, self-serving and absurd. Styled, sartorially, in navy blue lounge suits, President Hassan Rouhani of Iran fist-bumps Armenian Prime Minister Nikol Pashinian, while Russian President Vladimir Putin stands in the foreground. Putin smiles bashfully at Dodon, who stands in the background, smirking like the trio’s plump uncle. Putin, and Dodon, seem to be the only two privy to the same joke. That joke, which the West steadfastly ignores, is Dodon’s real position on Europe, and specifically on governance and the rule of law — which he has steadfastly erased from his WordPress blog. 

Since approximately 2010, when Dodon lost his ministerial position, the now president has been blogging. While dodon.md is now a thoroughly banal politician’s manifesto page, this has not always been so. From its first creation (by someone called “Oleg”) on February 5, 2010, Dodon used the blog to vent his anger at the EU, and over many other matters. Excerpts of Dodon’s blogs may be found at the following links, but to understand just what Moldova’s president believes, this blog has to be seen. Select excerpts include “My denunciation of the Association Agreement with the European Union” and “Aren’t Moldovans in Russia also human beings?”, and other strands that Dodon dropped in later blogs. One was “Igor goes offline with bloggers” where Dodon met citizen journalists and students. While he considered this useful, fellow bloggers felt differently (one noted that the president offered him an iPad to write favourably of their meeting but he never received it).

Igor’s secret diary

In order to understand Dodon the Europhile, economic liberal … and cheerleader for ousted Ukrainian dictator Viktor Yanukovych, I refer specifically to a post written by Dodon on February 19, 2014, outraged at the enormous crowds who descended on neighbouring Ukraine’s capital Kyiv, in protests that had been peaceful until students were attacked by riot police. Yanukovych — who now resides happily in Russia — had refused to sign an Association Agreement with the European Union, choosing in the final hour to agree a deal with Putin instead. Dodon, who had served a term as minister of the economy and trade from 2006-2009, evidently had time on his hands, and was opposed to Association Agreements. In fact, his next blog post decried Moldova’s decision to sign one, and termed its then leaders “Euro-Bolsheviks” — a term which implies that he understands as little of democracy as he does of communism. Yet he had never forgotten, nor lost respect for, the centralised authoritarian politics of the Soviet Union, and, operating on the fringe of Moldovan politics as an independent parliamentarian after failing to win his run for mayor of the capital Chisinau in 2011, likely presumed that the observations which followed would be forgotten by Moldovans. Dodon’s words predict the president he would become:    

“The West is using all its propaganda resources to transform the Euromaidan’s senseless mob into revolutionary heroes. The West is doing its best to break Ukraine into pieces. If power [is used] to oppose the disintegration, it is declared undemocratic and criminal, [yet] the legitimate application of force to restore order is harshly criticised by Western propaganda.” 

Describing Western democracy as “hypocritical, totalitarian and fundamentalist” (which is peculiar, as Dodon recently decorated EU Foreign Policy Chief Federica Mogherini with the highest decoration from the Moldovan state to foreign diplomats), Dodon ended his rant with the following thought: “better a healthy autocracy, correct with the citizens and progressive [for] I prefer the autocracy in Minsk, which ensures order and prosperity”.

Dodon signed off by offering his words of advice to Ukraine’s embattled president. “Yanukovych must demonstrate strength, resist [and] show the wisdom of a statesman”. Yanukovych did just this. Riot police were sent to disperse the protesters, leaving thousands injured — before in his final moments of desperation, Yanukoyvch ordered snipers to open fire. In scenes which will never be forgotten, more than 60 people were shot dead.

From opponents to partners

Moldova’s new Prime Minister Maia Sandu has shown incredible humility — or naivety — in her coalition with Dodon. Independent observers state that had exiled media tycoon Vladimir Plahotniuc not intervened in 2016 to help Dodon’s presidential campaign against Sandu, she would likely be president herself now. Plahotniuc intervened in the final hour to swing the result for Dodon. Fake news reports declared that Sandu had signed a secret deal with German Chancellor Angela Merkel to grant 30,000 Syrian migrants refuge in Moldova. Plahotniuc finished Sandu’s candidacy by declaring that Sandu identified as a member of Moldova’s persecuted LGBTQ community – among whose main persecutors is Dodon. With 47.89% of votes cast, to Dodon’s 52.11%, Sandu lost the presidency, but went on to negotiate in good faith to create a coalition this summer. Yet Plahotniuc’s involvement in Dodon’s win must now seem more prescient than ever to Sandu, as Dodon makes fewer attempts than ever before to hide his view of Moldova as a family business, where the office of president is tantamount to running a family office.

Dodon told Al Jazeera in March: “Vladimir Plahotniuc controls all the institutions of power in Moldova except for the institution of the president … since they can’t control it, they have limited the president’s authority as much as possible. They say openly that it’s necessary to eliminate the institution of the president as they can’t control it.” 

Dodon neglected to mention video footage in which he is seen discussing the cost of financing his party with Plahotniuc himself, accompanied by one of Russia’s most senior diplomats – a costly endeavour that Dodon estimates “to be $600,000 per month”. Dodon also neglected to mention his use of Plahotniuc’s service jet on oligarch financed diplomacy trips to Moscow (and the Cote d’Azur). 

Dodon made four flights aboard the oligarch’s Bombardier Learjet 60 (on routes from Odesa to Moscow, Odesa to Nice, and also to Geneva). The most controversial detail of Dodon’s travel by private jet has just emerged, a trip funded directly by a Russian airline. Dodon flew from Odesa to Moscow aboard a private plane owned by Russian airline Transaero, on October 28, 2014. The next day, Dodon held a meeting with Konstantin Romodanovski, head of Russia’s Federal Migration Service. As Rise Moldova reported, “Igor Dodon asked the Russian official to simplify the procedure for registration and obtaining documents that would allow Moldovans to enter the field of work on the territory of the Russian Federation”. This trip occurred one month before the 2014 parliamentary election, and one day after Dodon had called for Moldovan migrants to be allowed to vote at 70 polling stations operated in Russia. 

Investors undermined 

“Dodonisation” was a term initially coined to describe a fiscal policy that Dodon championed, where he played swing-ball against both the European Union and the Eurasian Customs Union — enticing each to up the other’s offer of budgetary support or lending, while benefitting from both. “Igor-nomics” (to this writer) is more similar to the centralised theft and organised kleptocracy we’ve seen across the Commonwealth of Independent States (CIS), and particularly in Putin’s Russia. 

While Dodon was meeting with international leaders last month, his use of coercive, aggressive and cynical tactics to bully foreign investors were leading up to a legal battle with one of the largest investors to enter the Moldovan market. On October 4 NR Investments threatened legal action against the Republic of Moldova to protect its legal ownership of Chisinau International Airport.

In the latter part of September raids on the offices of NR Investments intensified. The company, incorporated in Guernsey, acquired the concession to operate Chisinau International Airport on July 30. A foreign investor ready to commit more than €70mn in the fourth quarter of 2019 alone toward the development of the country’s infrastructure has now given Dodon’s government its final warning. 

NR Investments, incorporated in Guernsey, acquired the concession to operate Chisinau International Airport through the purchase of Komaksavia, which owns 95% of the equity in the concessionaire, Avia Invest S.R.I. Sandu endorsed the purchase, as did the economy minister, but her position has since changed for reasons unknown, and she has called for a review of the original concession agreement. 

The agreement drew President Dodon’s anger within seven days. Parliamentary groups were formed to review the concession, while the Supreme Court advised that there were no legal grounds to overturn the concession’s validity. The president pursued alternative methods to invalidate the deal, via allies in the legislature. Two committees are attempting to prove the concession’s illegality, while a third review group is seeking to ban ownership of concessions via offshore jurisdictions. 

Four lawmakers who corresponded with the writer for the benefit of this analysis on condition of anonymity described varying degrees of coercion upon them, and upon the judiciary. An MP who spoke under condition of anonymity stated that “as the Moldovan judiciary have been criticised for legitimate reasons by Venice Commission, the EU, others … it is easy to justify pressure [upon them] as reforming measures [however] the raids, attacks on their privacy, have the same purpose as [those methods] other [governments] used. I believe that a powerful individual was promised  ownership of that [airport] when [the former owners’ representative Ilan] Shor fled. Now the president does not only face pressure from that other buyer [said in paraphrase], but loses himself”. Another MP stated that “corruption is certainly a powerful force here. I do not believe [that the president] has understood, due to his long time in politics, that fighting corruption is no longer “a tactic” for the Europeans. If the president [is proved] involved in this matter, and he acted to advantage himself, he [will be] impeached. The number of votes necessary [about two-thirds on constitutional review] would be gathered by Sandu.”

NRI, which operates the concession via ownership of Avia Invest SRL, said in an emailed statement on October 4 that unless politically motivated attacks on the company cease it will enforce its treaty rights, as defined in the bilateral investment treaty (BIT) ratified between Cyprus (where Avia Invest is incorporated) and Moldova. This treaty agrees “reciprocal promotion and protection of investments by entities incorporated in either jurisdiction” by its signatories. Given the scope of so-called BITs it seem probable that Moldova’s people, and not its politicians, would pay substantial recompense. Similar arbitrage followed Dodon’s past wrangling with duty free concessionaire LeBridge — which cost the Moldovan tax-payer millions of dollars in legal fees and recompense. 

NRI is an investor with strong foreign management and success stories in other developing economies that expected to profit from the Chisinau airport concession — but also expected to commit more than a quarter of a billion dollars long term. While NRI attempted discussions, the government didn’t only resist but escalated their attempts to nationalise what NRI had legally acquired. As Dodon chaired a committee supporting Russian investment, at least four raids occurred against all members of the 2013 concession committee. Both NRI’s premises and their offices at the airport were raided, according to numerous accounts in national media. Further committees were created to determine legal infractions by the investor, with the predictable effect of finding these infractions true. 

In addition to this, a special commission was established to rule ownership of concessions via offshore companies illegal. This seemed remarkably hypocritical, as incorporating in Moldova under Dodon’s tenure is not safe, given the enormous number of non-performing loans reported by every institution, and the disappearance of $1bn from the financial system. Besides this, Dodon himself lost a court case proving his Socialist Party received millions of Moldovan leu via companies incorporated in the Bahamas, as is detailed forensically by the Organisation for Crime and Corruption Reporting in Europe

Dodon had previously posited that though the airport should be nationalised, it may one day also be privatised again — and, in comments to TASS, he said a Russian investor would be a very attractive candidate for that privatisation. Whether Dodon had discussed this with delegates of Moldova’s Russian Economic Forum the week prior is academic, but the fact that he chose to make the announcement as they departed by air felt like a teaser. Russian companies lucky enough to leave Moldova with sizeable infrastructure contracts were departing from an airport that they might one day wish to own. 

At the same time as the critical investment dispute with NR Investments  escalates, cracks are showing in the ruling coalition. If Sandu once felt Dodon might be reined in, the dispute, coupled with Dodon’s brazen pursuit of business as usual, had led her to make the most unsparing statement on Dodon to date — angled straight at Dodon’s aggressive masculinity. 

Less than one hour after the president’s musings on neutrality at the UN, Sandu summoned media to make a statement. Explaining that Dodon’s words were little more than a personal opinion, and said nothing of Moldova’s national position, she didn’t pull punches. 

“Dodon did not have the manhood to ask the UN what other leaders of the country demanded, namely the withdrawal of Russian troops [from the Moldovan separatist republic of Transnistria],” Sandu told reporters.

The joke I referred to above demonstrates Dodon’s belief that he can fraternise with dictators, woo European leaders, and attack foreign investors who give something to Moldova with impunity. At last count, ten separate directives or decisions steered by Dodon were used to attack the Guernsey company that owns Moldova’s only international airport. It is my belief that Dodon’s presidency will end in this scandal, should parliament vote to impeach the president — for so long as Dodon remains president of Moldova, this country may never become the country it aspires to become.

Published by Christina Petru Ph. D

I'm an economist & financial journalist, who believes compassionate commerce kills corruption. I've consulted for banks, lenders, third sector organizations and NGOs in the Russian Federation, the CIS & the so-called "CEECs" (and have the horror stories to prove it). I now report on what matters for business in Europe's last frontier (and what obstructs progress), with typical attention on regional titles like Emerging Europe, BNE Intellinews, Eurasia Review and The Geopolitical Reporter.

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