Moldova and Its Economy Trapped in Eastern European Deep-Freeze

Somebody stole the electricity meter in Tatiana Nesterov’s apartment. But she’s not complaining. Now she doesn’t have to pay for the power she consumes. Otherwise, her children might freeze.

Capitolina Clinenco, a 74-year-old retired seamstress, has found another way to cope with life in a country where there’s virtually no heat and where, on a good day, temperatures approach freezing. She turns on her stove and sets a brick on the burner. That radiates a bit more heat.

“At night, I fill plastic bottles with warm water to warm up the bed so that I can sleep,” she adds.

Life is a struggle for the 4.5 million people in this landlocked, Maryland-size country in southeastern Europe that declared independence from the Soviet Union in 1991.

Currency Collapse Destroyed Markets

Things weren’t so bad at first. After independence, 70% of Moldova’s exports--mostly wine, tobacco and other agricultural products--still went to Russia, Ukraine and other former Soviet republics.

Then came the Russian currency collapse of 1998. Markets vanished, and Moldova’s economy shrank by 8.6%. It has never recovered.

“The Russian currency crisis destroyed our banking system, our markets, and created a budget crisis,” former Prime Minister Ion Sturza says. “Statistically, this country cannot exist.”

Without its own raw materials, the government cannot pay for natural gas from its sole supplier, Russia’s Gazprom, or for the electricity it imports from neighboring Ukraine and Romania.

On Dec. 15, Gazprom shut off the gas because Moldovans owed $600 million. Supplies were switched back on the next day after Moldova promised to pay.

The two sides, however, still have not agreed on a payment schedule. Moldova already owes $1.2 billion to overseas lenders-- an amount equal to about 10% of the value of its economy.

So the government’s only option is to conserve energy--even if it means turning off the heat in the dead of winter. “It is very important to limit consumption to the level we can pay,” says Sturza, who is expected to run for president this year.

At Chisinau’s airport, customs guards and clerks at the check-in counters bundle up in overcoats, fur hats and gloves just like people who work outdoors. Authorities shut off the citywide hot water in December but promised to turn it on again--in the spring.

Teachers Unpaid for Up to a Year

Even at reduced consumption, many Moldovans can’t pay their utility bills. With the economy in the deep-freeze, the typical worker’s monthly pay averages only 260 lei, or about $21, while a normal utility bill runs about 300 lei a month for a family of four.

“I wouldn’t be able to survive if it weren’t for my four children who help me regularly,” says Ianuaria Scufinschi, 73, a retired schoolteacher who receives a monthly pension equivalent to $6.50--that is, when the state pays her at all.

Aurica Gonta, a 17-year-old French-language student, visits her parents 15 miles from Chisinau every week to pick up food her father grows. The money she saves on food helps to pay the rent and utilities.

Nesterov is able to afford an electric space heater for the room where her children, ages 5 and 8, sleep, but that’s only “because the meter was stolen.” The power company bills her for less than she consumes.

She’s not alone. As a legacy of communism, many Chisinau residents live in large, Soviet-style complexes with only one meter for the entire building. So the power company can’t cut off service to non-payers without shutting off electricity to everybody.

With heat in such short supply, parents bundle up their children in fur coats, hats and gloves as if they were going skiing instead of to school. That is, if there are any classes.

Christmas vacation at more than 300 public schools was extended to the end of January because of the lack of heat. Many teachers wouldn’t have shown up anyway. They were on strike because they hadn’t been paid for up to a year.

In order to survive, many Moldovans take on second jobs--often without notifying tax authorities. For some, the transition requires shucking old values in favor of the new and the pragmatic.

Natalia Coropat, 29, quit her job as a Russian-language teacher, a profession that accorded a degree of respect, and began selling stationery and secondhand clothes in the market.

When she was a teacher, she and her husband, a policeman, earned a combined $32 a month. As a vendor, she makes about $170 a month.

Even that requires economizing.

“We can’t afford to eat meat more than once a week,” Coropat says. “And I can’t afford to give my child dairy products every day.”