President Yevgeny Shevchuk holds an enlarged meeting of the Security Council and the State Council of the PMR


President Yevgeny Shevchuk held an enlarged meeting of the Security Council and the State Council of the PMR. In the agenda there were issues of economic security of the country as a whole, as well as the functioning of the international transport communication and the SUE “Pridnestrovian Railway”, the current situation on the currency market. The meeting was attended by the heads of the executive, legislative and judicial branches of government, the Presidential Administration.

The first part of the extended meeting of the Security Council and the Council of State participants expanded on the consequences of the unilateral actions taken by Ukraine and Moldova. We remind that in early December 2015 railway representatives of these countries decided to abolish the existing mechanism for imports by rail into Pridnrestrovie. In particular, since January 1, 2016 the possibility to move goods into Pridnestrovie through the border point of junction “Slobodka-export” and “Kuchurgan-export” was blocked.

As informed by Director of the SUE “Pridnestrovian Railway” Oleg Kulbikov at the meeting, Pridnestrovian goods can be delivered by rail since January 1, 2016, but only on the “Moldavian transit” technology, providing for the need for the non-stop transportation of goods from the border to joint customs control zones and then to empty points, as well as for the payment for services to the Moldovan railway and customs. Due to changes in the conditions of freight transportation, the load on Pridnestrovian economic agents have increased, their costs are estimated at US $ 3.5 million.

While maintaining the map of international transit corridors and the level of carriage charges rates at the level of 2012, there is a steady decline in freight flow on the Pridnestrovian segment of the main railway line. So, as illustrated by the example of the freight flow data there is a decline in the share of the Romanian transit by 17%, the Moldovan one - by 26%, export-import operations - by 69% for the first four months of 2016 compared with the data of the same period in 2014.

 “The losses of the Pridnestrovian Railway amounted to 5 million rubles on results of the first quarter of 2016, we predict that on results of the year while maintaining the fall in freight flow the losses will amount to 14 million rubles,” emphasized Oleg Kulbikov.

 “If we compare to the 2014 year, our own turnover on the Pridnestrovian railway fell by 69%. This decline caused by the closure of stations “Slobodka-export”, “Kuchurgan-export” leads to further losses of our Railway and economic actors. According to financial indicators, the Pridnestrovian Railway becomes unprofitable with this level of income, not capable to ensure compliance with its obligations,” said President Yevgeny Shevchuk.

 In turn, acting Foreign Minister Vitaly Ignatiev drew attention to another aspect of the problem under consideration. “In addition to the fact that the Moldovan side violated its contractual and legal obligations, the mechanism that de facto existed, there is a humanitarian component of the issue. The Pridnestrovian Raiway incurs losses in terms of the obligation to pay wages for the staff of the enterprise,” he said.

The meeting noted that the fall in freight transportation volume reflects the state of economy as a whole. The blocking unilateral actions of Moldova and Ukraine are also added with the unstable situation in the world, regional economies, it also affects the fall in the volume of freight transportation by rail and the revenues of the Pridnestrovian Railway. However, it should take into account the fact that the Pridnestrovian Railway due to the international non-recognition cannot directly enter the market as an independent operator.

Acting Foreign Minister noted that the railway communication issues were on the agenda of expert (working) groups meetings repeatedly. In addition, the Pridnestrovian side prepared a draft additional protocol and a technological scheme, which reflects the functioning of the Pridnestrovian imports in the fair regime that existed prior to January 1 of the current year. However, the Moldovan side refused of meaningful discussion on that matter. “Our task is to use transit capacity of Pridnestrovie in a mutually beneficial, first of all a fair way, to attract our participants to adequate dialogue, because the work of the railway mechanism is beneficial to the Moldovan and Ukrainian sides, other partners,” stressed Vitaly Ignatiev.

Participants of the Security Council and the State Council considered the situation on the currency market, the exchange rate formation mechanism as a separate set of issues. They also talked about the risks and threats that entail imbalance between the monetary and currency supply and a part of the businesses moving actually to a grey zone.

The extended meeting noted that such a situation predetermines the fall in tax payments due to the lack of opportunities for economic agents to buy the currency in the necessary volume. The availability of an unofficial rate along with the official one raises president’s concern too.

The president noted that he stands for maintaining the macroeconomic stability. So, in Pridnestrovie it was possible to maintain a stable exchange rate of the national currency for 4 years, while in other countries such as the CIS there were devaluation. But, as said Yevgeny Shevchuk, the possibility of further maintaining the exchange rate must be justified.

The president emphasized that, unfortunately, the bodies of state authorities cannot come to a common denominator in the situation. “There is need for a consolidated decision, whatever it may be - popular or unpopular, but it should solve the problem, and not to delay its solution. To avoid insinuations, all heads of authorities should develop a consolidated decision and announce it by maintaining a single information policy regarding the decision in order to move to the stabilization elements, noted Yevgeny Shevchuk.

The head of state urged to depoliticize the issue, to be based on the real economic criteria and risks faced by the republic now. “The bodies of state authorities should look at the problem not in the light of the election, but in the light of the actual economic situation and the dynamics of its possible development,” said the President.

Following the discussion, the president gave instructions by the beginning of next week to submit proposals to stabilize the situation in the domestic exchange market.

Source: the website of the Pridnestrovian president