Former Ambassador Pamela Hyde Smith Speeches

A Farewell Message to Moldova from Ambassador Pamela Hyde Smith
Moldova State University

September 19, 2003

Introduction

Vice Rector Gaugas, professors, ladies and gentlemen, students, thank you so very much for coming, and for inviting me. I'm leaving Moldova in a few days, and I wanted to have the chance to give Moldova a farewell message. There is no audience I would rather address than students, for it is you who can and will determine the future. Nor is there any institution here where I feel more at home than Moldova State University, which has always been so welcoming to me and my colleagues and predecessors.

Many Ambassadors use the occasion of their departures to speak frankly about their experiences in and observations of the country where they have served. It is in that tradition that I want to share some personal perspectives on Moldova's politics, economy, character and future, along with some recommendations and a vision of hope. I appreciate your forbearance in advance.

In my two years here as Ambassador, I have come to love Moldova. I have traveled widely, from the very northernmost point to the farthest south, from Transnistria to the Prut. I've attended operas and village festivals and have met with the most senior officials and the simplest farmers. I have tried to show the people of Moldova that the United States is providing significant assistance to their country's democratic and economic reforms and that the United States wants nothing more than to see Moldova succeed as a stable, prosperous European democracy. From all of this, I have come to love the talented, hospitable people of Moldova, its beautiful countryside, and its unique history and culture. My warm friendships here, including in the government, do not diminish the need to speak out -- I speak, therefore, from the heart, and as a friend.

Moldova's European Choice

First, a word about foreign relations, the realm where the United States and Moldova agree most closely. The United States is grateful to Moldova for the fruitful relationship we enjoy and for Moldova's support in the war against terror. We applaud Moldova's decision to make European integration its top foreign policy priority. I believe it is the present government's most significant positive decision, and demonstrates impressive leadership on the part of President Voronin.

Solving Transnistria

Another place where U.S. and Moldovan government policy coincide is Transnistria. I know that many Chisinau intellectuals disagree with the proposed federal structure for an integrated Moldova and question why the United States, the EU, the Council of Europe and others support it, so I would like to explain. We believe a federal solution is the only workable plan put forward in the last ten years; it would allow power to be shared between the central authorities and the regions; it recognizes that the different parts of Moldova have different traditions; and it would bring democracy and economic transparency into Transnistria. Moldova is very unlikely to get into the EU until the country is reunited, I heard in Brussels. Meanwhile, the youth of the two banks of the Nistru are growing up with scant experience of each other. I do not believe Moldova has the luxury of delaying action until the time is right, as some people are advising you. Don't be tricked into waiting passively for the perfect moment, or you may find that your frozen conflict has turned to concrete.

I've been accused of being naпve about Russian intentions, and I know some people say the federalism plan will turn Moldova into a Russian protectorate. I've also heard people imagine that the United States and Russia have cynically carved up spheres of influence to Moldova's disadvantage - or will when Presidents Bush and Putin meet in a few days. These accusations simply do not bear scrutiny. The United States is the single largest donor to Moldova. Would the U.S. spend millions of dollars on aid here every year if we were planning to turn our backs on Moldova? No. We are motivated by a belief that an untenable situation is better fixed than endured, particularly when the consequences of passivity are as disastrous as they are in Moldova's case. Sometimes, the United States is criticized for trying to engineer desirable outcomes too readily; but, I assure you, action DOES often work. President Voronin has realized this and spurred the process forward on several occasions. Clearly, one of the main reasons for Moldova's isolation and poverty is the open wound on its eastern border.

People tell me that before re-integration, Transnistria should have a real democracy and free elections. Others tell me the West should forcibly eject Mr. Smirnov and his team from the left bank. We certainly agree on the desirability of democracy and a freely elected government in Transnistria. But the people calling for them now and rejecting federalism do not have a single suggestion on how to achieve these goals. We cannot snap our fingers and get what we want. We all have to work with the facts on the ground, whether we like them or not. I urge critics of federalism to take off their blinders, shed their unrealistic idealism, and help find a solution.

To the people of Transnistria, I have another message. I know you have few independent sources of information, and I hope you don't believe the controlled news you are fed. The truth is that your economy is getting much worse and, absent re-integration, will continue declining. Not a single country has recognized or will recognize your separate existence. It is time to make your lives better by becoming part of a united Moldova - and help make it part of a prosperous and secure Europe. Right now you're being offered a fair deal: don't lose this chance. You may not get another. You could be cast off in order to accelerate right-bank Moldova's European integration. Then you would be left alone with your deteriorating industries, the crippling debt your authorities have run up -- which is 400 times higher per capita than in right-bank Moldova -- and a worthless, inconvertible currency.

Good Trends and Bad in Domestic Politics

In the arena of domestic politics, I see as the most positive development the beginning of a coalition of parties in the political center. The absence, until now, of a viable political center has contributed to the surprising strength of the far left and far right. I hope this center holds -- and coalesces into at most two large centrist parties. Only with a genuine competition for the voters' approval can democracy truly take root. All politicians must understand that their mission is to serve the interests of the voters, if they are to succeed. I would add that countries governed from the center historically are more successful than those dominated by the extremes. Please recognize, however, that the United States Government will work with whatever government the people of Moldova freely elect. It is the responsibility of Moldova's voters to decide which government will do the best job for Moldova.

Moldova earned a very beneficial early reputation as a leader in democratic reform in the CIS. But now, several troubling developments on the domestic political scene bear all Moldovans' attention. The local elections in May were marred by irregularities during the campaign, when certain authorities interfered with opposition candidates and when publicly funded media supported government candidates rather than providing equal, unbiased coverage. Further, in my view, the recent territorial reform weakened opportunities for good governance by removing budget control from the mayors. Power to evaluate and solve local problems is best exercised at the local level. Also, from my vantage point, the Moldovan Parliament needs to provide real opportunities for debate and compromise on the important issues of the day. These issues all provide opportunities for civil society, intellectuals, the press and voters to participate, independently and with their representatives, to help find solutions. Moldova can't be a real democracy without a vigorous opposition, accountable officials, and an outspoken, watchdog press.

That is my advice on political issues to Moldova's right and left banks. I would add another piece of advice: don't be lulled into thinking that because the United States and other donors assist Moldova with its transition, we can solve all your problems. You must involve yourselves, participate in the political process, take initiative, and push actively for the results you want. Don't wait like the shepherd in the Miorita ballad for a sad destiny to reveal itself and victimize you. Also, don't give up on Moldova and leave! And please try to praise and emulate people who have made an effort and succeeded, rather than criticizing and tearing each other down. Success begets success, and failure, failure. As I said when I was encouraging you all to vote in the May elections, "This is your country and your future."

Urgent Action Needed on the Economy

Now, on the economy. I am very concerned about your current economic position. I'm not talking about poverty in the villages, although that's a factor. And I do recognize the gains the government has achieved by paying pensions and salaries, promoting a respectable rate of economic growth, and holding down inflation. But present policies and the improvements seen so far will take too long to eradicate Moldova's poverty. To jump-start the economy Moldova MUST get back on track with the IMF and the World Bank, MUST attract foreign direct investment, MUST reduce corruption at all levels, and MUST foreswear forever the idea that a centrally planned or a mixed, quasi-collectivized economy can work.

I'll start with the international financial institutions, the IMF and the World Bank. Unfortunately, for more than a year, Moldova has been unable to fulfill its commitments to these institutions and thus has lost their financial support for many months to come. The IMF, World Bank and donors are frustrated and concerned because regressive forces have prevented the Moldovan Government from embracing economic reform and market principles fully. IMF and World Bank requirements are not easy, but they're part of a package that has been shown to work in many other countries. Moldova is in no position to "go it alone" or negotiate preferential terms with the IMF and World Bank, but instead needs urgently to regain their trust and get these programs back. Without this, Moldova will face serious trouble with debt relief, international assistance, and joining Europe. Further, Moldova's reputation among investors - domestic and international - will be tarnished and Moldova will lose the best guarantee of higher rates of economic growth and prosperity - private investment. The alternative: Moldova faces default and an economic spiral downward into much greater poverty.

Foreign investment declined dramatically in 2002 and will remain low this year. The attacks against Union Fenosa, Farmaco, Air Moldova International and others have signaled to the world outside that Moldova is an unfriendly place to invest, a place where you are never sure if a contract is a contract, if the rule of law will prevail, or if private ownership of businesses is really preferred over state control. At the same time, inside Moldova, I hear innuendoes that certain foreign business people and international representatives are personally to blame for Moldova's financial difficulties. This is false, an attempt to scapegoat individuals who bring Western standards and expectations to Moldova. In fact, the problem here is that the personal interests of too many local figures have prevailed over the long-term interests of the Moldovan people, who can only benefit by having a welcoming business environment and international financial institution programs. Look at the transition economies that have succeeded during these last twelve years: each of them worked hard to attract, not repel, the IMF, World Bank and foreign investment. Moldova needs to change its economic policies if it wants to be among the successes and not the failures of the post-Soviet era.

Next, I must speak about corruption, which is getting worse, despite being the target of a laudable Moldovan Government campaign. Corruption is strangling Moldova's economy and its prevalence is the main reason the country remains so poor. Of course, some mistakes and questionable deals were made in the early days of privatizing companies; unfortunately, the attempts to redress those problems have only made the business climate worse. Moldova has never managed to secure more than a handful of foreign investors, and most of these have now been scared away by its anti-business policies and actions. Properly re-integrating Transnistria and closing its unguarded border will eliminate one source of corruption. But right now, more should be done in right-bank Moldova. Government officials manage to build expensive houses, despite very modest salaries. Companies here shortchange business and the state by not paying their electric and water bills. I understand that some officials win their positions not by merit but by paying bribes, and then use their new positions to win bribes from people seeking government services. Businesses keep two sets of books so profits can be skimmed off and taxes avoided. People allegedly associated with organized crime operate too freely in the economy. Farm prices are manipulated, to the advantage of certain exporters and the disadvantage of small farmers. Certain politicians are able to control whole industries as personal monopolies and to restrict imports and exports by others. This greed-based corruption among the powerful distorts and impoverishes the economy, forcing need-based corruption on the poor.

I know a Moldovan who is trying to start a small enterprise and alter an apartment to offer services to the public; my acquaintance has had to obtain eighteen separate permissions so far, each requiring numerous documents, repeat visits, and negotiations with unwilling officials. In every single case, my acquaintance has been asked for a bribe to get a normal transaction completed. Months have been wasted, initiative stifled, pockets lined. Is this helping Moldova grow prosperous and strong? I must answer, "no."

I am also very concerned that some people seem to want to shift the Moldovan Government back toward central planning. This has taken the form of recent government interference with setting energy prices and energy sector regulation, and includes draft laws that favor government control in the agricultural sector. These draft farm laws, if implemented, would attack the private agribusinesses that are beginning to show profits, and attempt to lure the small farmer into joining production cooperatives that are collective farms by another name. I am told that central control is not the true intent of the government, that regressive policies are being withdrawn, and that private ownership and business are valued. If so, very good. But the recent decisions and draft laws demonstrated that the government still contains some people who yearn for the past. This should worry you and anyone who owns land. The people promoting these steps backward may be nostalgic for the more familiar life of the Soviet era. Perhaps they have forgotten the tragedies of forced collectivization, or that the kolkhozes were deeply in debt twelve years ago and depended on heavily subsidized energy and other inputs that will never be available again. Collective farms and central planning don't work. They haven't worked anywhere, and they won't work now. Only North Korea and Cuba are still trying, and the result is famine and staggering poverty. Everyone else is opting to go private, which is where I strongly urge Moldova to stay. Moldova was a trailblazer in this field and earned praise and respect from other countries that are now following in this direction.

One last word on the economy. In the modern, globalized world, of which Moldova is part whether it wants to be or not, the rules are different from those of the past. It used to be that size and power were advantages, but no longer. Now in today's knowledge economy it's speed, agility, and creativity that matter. As my favorite New York Times editorial writer says, "it's now the fast who eat the slow, not the big who eat the small." Small Moldova, if you play it right, if you foreswear corruption and retrograde economics, if you welcome back the international financial institutions and foreign investment, you can exploit your rich land and talented population and fulfill your dreams of prosperity. You can achieve, as you wisely aspire to, joining the countries of South-East Europe and acceding to the EU while the door is still open. But only if you play it right - and, I might add, if your leaders and top diplomats lobby for it persuasively, skillfully, and persistently, and make Moldova attractive for the EU to invite in.

"Who are Moldovans?"

Now I'm going to turn to the subject everyone has an opinion about: who is a Moldovan? Unfortunately, there are too many answers. Too many people here tell me that they're "Romanian," or "Russian," or "Ukrainian," when they're really Moldovan citizens of Romanian, Russian or Ukrainian heritage. I don't even hear people agreeing on the meaning of the term "Moldovan," which to some means "ethnically Romanian," to others conjures up Soviet-era attempts to construct a distinct ethnicity here, and to only a few means a citizen of Moldova. As you know if you've heard or read me on this subject, I think the absence of a sense of identity as citizens is a serious problem for Moldova. I relate to it because the U.S. is made up of lots of people of different ethnic heritages, yet we all feel "American." People often ask me how the U.S. has built up such a sense of patriotism in our polyglot population. My answer is that it took us awhile to see this, but everyone has to give a little, compromise a little, and stop trying to achieve results that redress all the wrongs of the past. There are plenty of wrongs to go around, but obsessing about them achieves nothing. As Winston Churchill said, "If we open a quarrel between the past and the present, we shall find that we have lost the future." In an overwhelmingly multi-ethnic society like yours or mine, the best route to a future that lifts everyone is for all groups to respect, celebrate and gain advantage from their diversity and multilingualism. Otherwise, you descend into ethnic separatism and hatred; the wars in the Balkans showed us how poisonous that is. I believe all Moldovan citizens should make an effort to see themselves as "Moldovans" first and foremost, and to recognize that "being Moldovan" is a good and noble thing.

Some practical steps would clear the air a bit, I believe. For example, it's perfectly natural for Moldova to have its own history, and books should be written so that all levels of students can study the long, complex history of this land and the forbearers of all its people -- heroes and villains alike. Every citizen should grasp the history of events that happened on the territory of his or her state; politicizing this need one way or the other only hurts everyone. Secondly, I not understand why some want to call the majority language "Moldovan" when everyone knows it's Romanian. Of course there are some differences between usage in Bucharest and Chisinau, but so are there between London and New York and Sydney, and yet we all speak "English." Another source of friction here is that while many native Romanian speakers in Moldova speak good Russian, there are too many native Russian speakers who do not speak Romanian, even though it's the state language and is spoken by the majority of people. I recommend that Moldovans solve this problem themselves at the "grass roots" level by forming informal, cost-free language-teaching groups, neighbor to neighbor. I'll bet some goodwill along with language learning will result.

I find the Moldovan people - and I mean Moldovan citizens - to be united by more than divides them. You are hard working, talented, musical, intelligent, sweet, well educated, kind, sincere, appreciative and hospitable. More of you are bilingual or trilingual -- or more -- than any place I've ever been. You have charming traditions, lovely music and dances, and a unique blend of cultures. I haven't found this particular combination of attractive attributes when I've crossed any of your borders - Be proud of Moldova!

Looking into the Future

Now, I've had a lot to say about foreign policy, domestic politics, Transnistria, corruption, the international financial institutions, investment, planned versus market economies, and a sense of Moldovan identity and citizenship. I don't want my suggestions about language and history to be the only thing that makes headlines, so rather than summing up I'm going to leave you with my picture of Moldova about seven years from now. This picture is completely possible if you resolve Transnistria and restart your democratic and economic reforms with whole-hearted vigor.

I see a Moldova that looks like Slovenia looks today, or Latvia, Lithuania or Estonia. Or if you prefer to stay outside NATO, I see a Moldova on the way to being Finland of the south. This Moldova is reintegrated, whole. Good controls at the borders have stopped illegal trafficking of all kinds and improved Moldova's image and economy. Russian troops and the subsequent multinational stabilization force left Transnistria several years ago, and a small civilian advisory group remains. The federal region of Transnistria is run by a democratically elected, locally born person who respects the multiethnic character of a reintegrated Moldova.

I see a Moldova with an open, healthy political system fueled by debate and nurtured by compromise. I see a Moldova whose agricultural sector is thriving with value-added post-harvest technology, exporting organic and other high-value food products and wine to the EU and Russia at great profit. But I see a Moldova that doesn't rely on agriculture alone. This Moldova is an investment-rich banking, trading, telecommunications and IT center whose multilingual people capitalize on their ability to export to EU and CIS markets, acting like a hinge between these two large regional economies. This Moldova is gaining prosperity rapidly; its debts have been rescheduled and it is moving ever closer to EU accession. I see a Moldova whose citizens abroad are bringing their talents and skills back home. I see Moldovans who know who they are and are proud of it.

Thank you for listening to this very long message. I will never forget Moldova, and I certainly hope to come back to visit. Thank you, all my Moldovan friends, for making my stay here so gratifying and so wonderful. Remember: Moldova's future is in your hands.