Tuesday, March 30, 2010

The Message to Moscow

My thoughts are with the families of those who lost their lives in the Moscow metro station bombings. Normal people, going about their daily routine, who had their lives cut short by somebody who thought that such a sacrifice was justified by the cause (whatever that cause may be).

Monday, March 29, 2010

Ghimpu @ PCRM

I just thought I would take this opportunity to remind the 43 communist members of Parliament that Mihai Ghimpu doesn't need to give them anything in return for their participation in sessions of Parliament.  In fact, they should count themselves lucky that he hasn't docked their pay.  The speaker should bear the following parliamentary regulations in mind when he takes up Voronin's invitation to meet with the Communist deputies:

The Moldovan Project

At a meeting on Saturday, the Communist Party unveiled its 'Moldovan Project'.  According to the party, it will work with 'civil society' and 'other left and centre-left political parties' to promote 'social justice, democracy, human rights and the rule of law'.

Saturday, March 27, 2010

Down, but not out

Moldova's Liberal Party has been having a bit of a hard time of things lately.

Mihai Ghimpu has ended up on the receiving end of criticism from the EU, the Venice Commission,  the Communists, political commentators and even his own AIE partners for his championing of the constitutional referendum idea.  Much of this criticism is patently unfair.  The man wanted to overcome a political stalemate that needs to be overcome.  He wanted to fix things in the existing constitution that need to be fixed.  And he wanted it done by those with the authority to do it - the people of Moldova.

Friday, March 26, 2010

In defence of truth

Dear Timpul, Jurnal, Unimedia, Ziarul de Garda,

I am really fed up with the way in which the Ruso-communists and their press outlets (Omega, Noutati Moldova, Moldova Suverana, Nezavisimaya Moldova, Communistul etc) time and again distort the truth or tell outright lies.

Thursday, March 25, 2010

Zimbrucare

Healthcare in the US


This week started out with the signing into law of healthcare reform in the United States. Somehow over time, the richest country on Earth managed to build one of the world's most expensive healthcare systems (as a % of GDP), and still not manage to achieve universal coverage of its citizens.

Tuesday, March 23, 2010

Pull yourselves together!

I don't think the Moldovan centre-right really realises just what a threat is posed to the country's future by the 'fifth column'.  It is evident that Russia has put into play most of its political weaponry in an attempt to scupper Moldova's plans to strengthen its democracy and join the European Union

Monday, March 22, 2010

On a rugby field

On a rugby field, each side has the same number of players (regardless of how important the country).  Each side gets to choose its own captain (the other team doesn't get a say) & teams change ends at half time to give each team fair use of the prevailing conditions.

On a rugby field, referees and linesmen are strictly neutral and take swift action to ensure that the rules of the game are observed (e.g. penalizing players who are off-side); minor misdemeanours are penalized & deliberate acts of violence result in the sending off and possibly suspension of the guilty party.

On a rugby field last week, Georgia beat Russia 38 - 8 to win the European Nations' Cup.

Friday, March 19, 2010

Limited Liability

Limited liability is so much a part of the furniture these days that we risk forgetting how radical an idea it is.

Before limited liability, owners of companies were directly and fully responsible for damage caused by the company to customers or the general public.   Even if you only had a few bob invested in a company, your legal exposure was far greater;  a small shareholder in a collapsed coal-mine could find themselves bankrupted by claims from the bereaved, for example.  Enterprise was being held back due to the fear of litigation.

And so, in the mid-19th century, the British government introduced the concept of limited liability and gradually extended it to cover most industries with one or two notable exceptions (e.g. the legal profession).  The Americans picked up the idea and it gradually spread to other jurisdictions as well.  From that point on, the maximum amount that plaintiffs could seek from a shareholder in respect of the actions of a company was the value of their shareholding.  Personal assets were, for the most part, off limits.

So why am I rattling on about arcane points of commercial law?  Because the balance between responsibility and liability is out of kilter.  I can set up a discount airline, rent all my assets rather than own them and as a result maintain a tiny balance sheet and hardly any capital.  I can sell lots of tickets in advance to customers who assume that my airline's finances are sound (and who wouldn't be able to figure out if they weren't).  I forget to hedge my fuel costs; the price of aviation fuel rises suddenly.  Within a month, I'm out of business and my customers are using their tickets to wallpaper their houses.

For me it's no big deal.  I hardly invested any money in the company and while it was running I was able to extract some nice dividends.  For my customers and suppliers, however, its a disaster.  Families have had their holidays ruined and a catering company collapsed because I failed to pay them for the packaged meals they were loading on my planes.

The fact is, under limited liability in its current form, management and (if they are in control) shareholders get the rewards but bear a disproportionately small amount of risk.  Most of the enterprise risk is borne by customers and suppliers.

I don't think the answer is to dump limited liability altogether.  Some degree of risk-sharing is appropriate considering that the economy and its health is in a sense a common good.  The field does, however need to be levelled a bit.

What I propose is that companies of all forms should maintain a minimum capital level which is a percentage of assets / exposures or a percentage of revenues, whichever is greater.  Furthermore, part of this capital should be held in trust at a bank and invested in safe and liquid assets.  A regulator should step in and take firms into administration when capital levels are breached.  Shareholders could regain control by pumping in more capital within an agreed period, otherwise the administrator would wind up the company in the best interests of creditors.

This 'shared liability' approach would have three beneficial effects:
  1. Shareholders would have more skin in the game and hence a higher degree of interest in risk management and in the long-term health of their business.
  2. Problems with the business model would be flagged earlier (i.e. when the minimum capitalisation level is breached, rather than when shareholders' funds are already negative and nothing can be done).
  3. There will be more money available to pay out creditors, meaning that suppliers and customers are treated more fairly and systemic effects are limited.
The downside is that business plans will need to be a bit more cautious and that shareholders will have more capital tied up in the business.  But those aren't necessarily bad things.

You can't legislate away risk.  You can, however, ensure that it is borne by the right people, understood and managed well.

Thursday, March 18, 2010

The Spirit & the Letter

It's not yet the right time for elections.  More needs to by done to overcome the communist legacy first.  The commissions set up to investigate 7/4/09 and the period of Soviet communism need to complete their work.  The prosecutor general needs to lock up a large number of criminals.  The judicial authorities need to be renewed.  Europe needs to come to the party with some goodies such as facilitated visas.  Investment needs to flow and be seen to be flowing.  A more pluralistic media sector needs time to overcome the eight years of brainwashing at the hands of the Communist-controlled TRM and NIT.

And yet, we find ourselves careening towards anticipated elections because of noisy complaints from the communists and misguided / uninformed advice from Europe.  The problem is that most people are failing to appreciate the difference between the letter of the constitution and its spirit.

Under the letter of the constitution, there is no problem with bringing in a new constitution by referendum and as a result having the AIE government see out a four year term.  The will of the people is supreme, and if that's what they want, that's what they should get.

The issue with that approach is not with the letter of the constitution but with the spirit.  The current document says that if Parliament fails to elect the president, then new elections should be held.  An opposing view is that voters went to the polls on July 29th not expecting to be called back for another vote until 2013.  Given the extremely aggressive approach of the communists, the opoosing view would be hard to maintain, however.

The solution is to do what I set out in a previous post.  Fix the constitution, thoroughly, legally, then go back to the people within a reasonable time frame.  More or less that would mean new elections in about a year from now.  Most importantly, it would be seen to comply with both the letter and the spirit of the existing constitution and take the steam out of the issue.

Just one further point.  Until the end of December the AIE should focus on running the country.  If they want to bicker, this should happen behind closed doors.  What we should see publicly is a united front and a common vision for the country.  Ideally this should be achieved by fusion among the centre-right parties, at least into recognisable electoral blocks, e.g. PLDM-AMN and PL-MAE

Wednesday, March 17, 2010

The 'get out of jail free' card

One typical component of constitutions is the immunity afforded to public officials.  Its purpose is to ensure stability in the act of government by removing the potential distraction of legal proceedings.

Such immunity varies widely from one country to another in terms of its coverage.  In some jurisdictions it applies very widely, for example to all Members of Parliament and Ministers in the Government.  In others it can be more limited, in the extreme applying just to the President.

Immunity can also vary in its scope.  In it's most limited form the public official is still legally responsible for acts committed during his/her term in office, but any court cases are delayed to the end of the term.  In the most expansive form officials are excused from responsibility for criminal acts committed while in office and from prosecution for previously committed acts.  In many jurisdictions there are provisions for immunity to be lifted by Parliament, however this usually requires a super-majority and is rarely applied.

Systems of immunity in Eastern Europe are usually broad in their scope and expansive in their coverage.  Such systems encourage those (allegedly!) guilty of serious crimes, such as Russia's Andrei Lugovoi, to seek refuge in Parliament rather than openly face accusations at trial.

Under a new constitution, Moldova has a chance to get immunity right.  My view is that it only needs to be afforded to a select group of people (basically the three highest office holders - President, Prime Minister & Speaker).  If a minister or a deputy goes to trial, it does not seriously undermine the act of government, and these officials need to be subject to the same laws as anyone else.  Furthermore, the immunity offered should just be in the nature of a deferral of the judicial process until the function is no longer occupied.  Crimes committed must be answered for at some stage, even if committed before or during a period of immunity.

This is important.  Communist deputies and ministers who committed crimes during their 2000 - 2008 rule must answer for them, and the current AIE authorities must be held to the same standards during their term in office.

Worse, if the immunity provisions are left as in the current constitution, then we'll end up with a parliament of crooks and a government of mafiosos, all seeking to avoid justice and waving their 'get out of jail free' cards at the long-suffering citizen.

Dodon on Unimedia

Many non-communist Moldovans have been horrified in recent days by the appearance of communist Igor Dodon's blog on the Unimedia web-site.  It seems plain wrong, that Unimedia, one of the stalwarts of the anti-communist journalism of 2009 should now give column inches to one of the leading lights of that undemocratic party.

I guess this decision by Unimedia is an attempt to define itself not as 'anti-communist' but as 'pluralist and democratic', which is perfectly reasonable.  Free speech means giving a platform to all sorts of nasties who may be incredibly manipulative and with which one may not agree, but that is part and parcel of democratic discourse.

I guess that the PCRM have allowed Dodon to write this blog in an attempt to sew doubt in the minds of liberal-democratic voters and hence weaken support for the AIE.  It's not surprising that they chose Dodon for this assignment - the pseudo-liberal, educated and seemingly intelligent economist has a chance of succeeding where hardline Russian nationalists like Petrenko & Misin would fail.

On the plus side, Unimedia's comments facility will give the rest of us a chance to directly attack the nonsense which will inevitably run from Dodon's pen, a chance denied to us by the still-totalitarian pro-communist portals omg.md & newsmoldova.md.

Monday, March 15, 2010

Europa по-русски

Make Russian an official language of the European Union!

Yes, I know that EU official languages are supposed to be official in at least one member state.  I know that the existing 23 original languages create a cacophony in Brussels which is befitting of biblical Babylon.  I know that adding another language will require the employment of legions of 'eurobabblers' to translate the existing acquis communitaire into Russian, not to mention the ongoing translation work.

But think of this:
  1. Russian is a major European language and has around 280m native or near native speakers.
  2. Even though it is not the state language in any EU country, it is spoken by significant minorities in the Baltics, Bulgaria and in aspirant countries such as Serbia, Moldova, Ukraine and Georgia.  Making Russian an official language of the Union will make those minorities feel more at home, without unduly threatening the position of the national language.
  3. Having the aquis in Russian will facilitate its adoption (in part or in whole) by former Soviet States, improving the quality of their law, their ability to trade with the EU and their chances of later accession.
  4. Having ongoing EU discussions translated into Russian will improve the quality of EU - Russia dialogue and the understanding between the two parties.
  5. Making Russian official within the EU will make Russians feel good about themselves (without having to do something stupid like invading a small neighbouring country for no good reason.)
Я жду ответа от Брюсселя!

Conditional Neutrality

One of the points of discussion in the new constitution is whether the document should continue to require Moldova's neutrality.

In general terms, military neutrality is a valid option.  If a country is surrounded by peaceful neighbours and there are no immediate threats, the arguments for being part of a military alliance are nullified.  Another situation is where a country is jammed between opposing blocks and doesn't want to get caught in the crossfire (e.g. Austria & Finland during the Cold War).

In Moldova's case, neutrality has just made the country weak and defenceless in the face of very real aggressors who control a large chunk of the country's territory (the Russians and Transnistrians), so it would actually seem reasonable for Moldova to seek to enter a military alliance (NATO being the obvious one) for its own self-defence.

The problem is that, were the AIE to drop the neutrality provision from the constitution, the Communists would kick up such a fuss and misinform the electorate to the extent that the new constitution may not pass.  Indeed, Serafim Urechean indicated earlier today that the neutrality provision would not change.

Maybe we can be a bit cleverer, and use this issue to Moldova's benefit?  What if the neutrality clause were to read like this:

"Moldova will maintain its neutrality until the 31st of December 2010.  If, as at that date, military or paramilitary forces not under the control of the Moldovan state are operating on the territory of the Republic of Moldova, then Moldova will cease to be a neutral state and can enter into military alliances.  If, on the 31st of December 2010, the only military force operating on the territory of the Republic of Moldova is the Moldovan Army and the constitutional authorities have control over all of Moldova's territory, then Moldova will continue to be a neutral state, such status to be revoked immediately upon the unauthorised insertion of military force onto Moldova's territory."

Basically it would be a less-than-subtle message to Russians:  If you want Moldova to be neutral, take your soldiers home and withdraw your support from Transnistria.  Otherwise Moldova will introduce NATO forces to balance yours.

Furthermore, the Communists would find themselves arguing with an idea that is genuinely popular, i.e. the withdrawal of Russian forces.

One for the road

Minister of Transport, Anatol Salaru estimates that rehabilitating Moldova's road network would cost EUR 4bn, money which Moldova simply doesn't have.

Moldova's roads, with one or two notable exceptions (e.g. the Chisinau - Leuseni road) were in an appalling state even before the ravages of the recently ended winter.  Moreover, the cost of repairing even a two-lane highway is quite terrifying - the rehabilitation of the Sarateni - Soroca road (82.4km) is expected to cost $133m.  That's about $1.61m (EUR 1.17m) per kilometre.

So what can Salaru do?  Where can he start, given his tiny budget of 100m lei?  Here's some ideas:

1.  Call in the private sector.  Legislate / regulate to allow the construction and operation of tolled highways by private sector companies.  This should be sufficient to promote the development of new highways along arterial routes radiating out from Chisinau.

2.  Empower local authorities to collect taxes and use them to repair local roads.  All other things being equal, decisions taken at a local level on which roads to build / repair and how should be of a higher quality than those taken centrally.  Locals have a vested interest in good roads.

3.  Use some of your budget to aggressively 'splodge' pot-holes in national roads.  It's neither a perfect nor a permanent solution, but it does save lives and axles.  Use the rest of the budget on fluorescent paint to mark out road boundaries and make roads navigable at night.

Friday, March 12, 2010

Will the real capitalists please stand up?

It's obvious from the events of the last few years that something is wrong with our economic model. That said, it's a model has lifted millions out of poverty in recent decades, so we need to be careful when playing with it.

The left is of course claiming that the financial crisis and the recession which followed are to be blamed on the Reagan-Thatcher economic liberalism that has reigned supreme for quarter of a century.  They want more regulation, especially of the financial markets and the financial services sector.  They want a more 'social' approach to economics, with money being shared around (i.e. taken from one group of people and given to another).  They want governments to keep bailing out industry and make economic problems go away by borrowing more, taxing more and spending freely.

Those are great solutions if you like living in places like 1970s slowly-going-down-the-gurgler Britain or 2010 slowly-going-down-the-gurgler Greece.  If, on the other hand, you prefer living in a country with a bright economic future and plenty of opportunity, you will need to come up with some other ideas.  The bad news for my blog readers is that I have a few such ideas and I'm going to share them.

My basic view is that we need more and better capitalism accompanied by different forms of regulation.  I've already talked about one idea - moving the base of taxation from income to resource use.  Today I'm going to talk about another - empowering shareholders.

***

When you hear the word 'capitalist', what comes to mind?  Someone with a lot of money?  The manager of a Wall Street investment bank?  Donald Trump?  Those are all possible answers, but they are in fact only a small subset.

Actually most of the non-government capital investment around the world is performed by banks, pension funds, mutual funds, hedge funds and life insurers.  These organisations are all financial intermediaries, accepting deposits, contributions and premiums on a retail basis and then providing that money wholesale to consumers of capital (i.e. businesses)in the form of debt or equity.

Decisions of businesses are taken at a tactical level by management and at a strategic level by the board, whose duty is to represent the shareholders.  At the board meeting you will typically find representatives of the financial intermediaries listed above.  They appoint and sack management, set remuneration, determine risk appetite and set strategy for the business.  All well and good.

If things are so wonderful, however, why do I need to ask the following questions?
  1. How come it is common practice for bosses to get big golden parachutes even when they fail?
  2. How come top management is so grossly overpaid?
  3. How come nobody spotted the risks that hit us all in the face in late 2008?
  4. Why are most businesses run on a short-term perspective?
The answer comes from looking at the people sitting around the board table and understanding their interests. They are not the shareholders.  The real shareholders (or capitalists) are the people who entrusted small amounts of capital to their institutions - depositors, unit-holders, fund members and policyholders.  The bulk of a life insurance company's voting power on the board of another business comes not from its own shareholders, but from the assets built up by its policyholders.  Similarly the voting power of a mutual fund administrator come not from its own assets but from the contributions that other people have invested in the funds managed by the administrator.

The bottom line is that the representatives of financial intermediaries who sit on company boards are there as representatives of their companies' clients (or should be).  What happens in practice, however, is that the views of the real shareholders are largely overlooked.  Because the depositor base of a bank is so diffuse, and because the legal structure of the bank vests power in the bank's shareholders rather than its depositors, the bank can easily ignore the views of its customers about how their money should be invested.  Customers just have to trust the bank not to do anything too stupid with their money.

Even where financial intermediaries aren't involved, the views of small or minority shareholders in a business represent  little more than an embarrassing five minutes of question time at the annual general meeting.

What we have ended up with is a form of capitalism in which shareholders aren't able to execute their rightful authority over the businesses they own.  This is instead the preserve of a self-perpetuating top management elite.  They give themselves big bonuses, reward themselves for failure, appoint their sons, daughters and colleagues to key roles and run companies generally for short-term gain.

That is fundamentally why we got ourselves in such a mess in 2008 - the elite didn't care about risk management or the long-term health of the businesses they presided over.  That was the shareholder's problem, not management's.  Incredibly, we have a system in which management are handsomely rewarded if they succeed and a little less handsomely rewarded if they fail.  The worse that can happen to the management elite is that they could lose their jobs (in which case they just move on).  Shareholders, on the other hand, get to share some of the upside with managers but wear all of the downside by themselves.  Strangely enough, Marx appears to have partially achieved his dream;  Labour (admittedly of the highly paid variety) has triumphed over Capital.

***

Having mentioned Marx I now need to quote Lenin:  What is to be done?

Put simply, shareholders need to be given back control over the businesses they own.

One way of doing this would be to enhance the power of minority shareholders.  In a national democracy the majority is given the right to rule provided that they commit to respecting certain well-defined minority rights.  The economic democracy of corporate governance should be no different.  Minority shareholders should be able to veto certain decisions of the majority shareholders where these would be to the long-term detriment of the company.  Where majorities take decisions that benefit them but are to the detriment of minorities, them some compensation should be provided. Minorities, no matter how small, should have board representation.

Another idea would be to look through the balance sheets of financial intermediaries to the real capitalists (depositors, unit-holders, policyholders etc).  Financial intermediary management should exercise voting rights on the boards of other companies in line with the wishes of their customers and in proportion to the amount of capital furnished by each.

Let me give a simple example.  Suppose mutual fund A has shares in company B of 80, and that company C (which administers fund A) has shares in B of 20.  Suppose further that fund A only has two unitholders, D & E. and that D owns 75% of the units in A while E owns 25%.

Under our current form of capitalism, C gets to vote all 100 of the capital, even though 80 actually belongs to someone else.  What's worse, they don't have to consult the people who actually own the 80.

What should happen is that C's position on any particular issue where it is voting on behalf of the mutual fund should be an appropriate mix of its views and those of the unit holders.  In the example above, D's views would have a weight of 60 (75% * 80), while the views of C and E would both have a weighting of 20.

Obviously in practice company C can't go running off to seek the advice of unit-holders every time it needs to vote the shares held by the fund, however it could ask unit-holders to submit a detailed annual survey containing their views on executive remuneration, risk management, strategy etc..  These views would then be merged into a policy statement which the administration company C would be compulsorily guided by when voting the shares.  For example, using such a mechanism, the underlying shareholders could impose maximum limits on derivate investments, or insist that the bulk of top executive remuneration is earned out over the medium to long term.

Why is this all so important?  Because I believe that empowered shareholders would have curbed some of the excesses (in remuneration, risk appetite) that we saw in the lead-up to September 2008, and will in the future improve the quality of company management.  At the very least, if something goes wrong, they will have the 'satisfaction' of knowing that it was due to their decision making, not that of the (largely unelected) management elite.

Thursday, March 11, 2010

Filat should sue

At a press conference this morning, Communist Party leader Vladimir Voronin made the following accusations:

  1. That the PLDM's 2009 election campaigns were funded by Romanian 'petro-liberal' Dinu Patriciu
  2. That Filat has been involved in cigarette-smuggling in the past
  3. That Filat has recently arranged the smuggling of ten truckloads of cigarettes to pay back the money borrowed from Patriciu
Not a shred of evidence was offered by the former President.  Indeed, in respect of the second allegation, Filat was in the 1990s acquitted at trial on cigarette-smuggling charges.  The case was investigated and he was found to be innocent.

Voronin needs to produce evidence.  If not, it is high time that Vlad Filat shut him up permanently via a defamation suit seeking moral damages.

Wednesday, March 10, 2010

The democratic 'usurpation' of power

Well, I got my referendum!  Actually I got two of them, but we'll come to that later.

The AIE party leaders announced yesterday that a referendum on a new constitution will be held by June 16.  The fact that a new document is being proposed, rather than the existing one amended, apparently takes the Constitutional Court out of the picture - their approval is only required for amendments.  Given that 5 out of the six judges are still wearing the gold watches Voronin gave them, that's probably not a bad thing.

The leaders also announced that the new constitution would be framed in such a way as to remove the necessity to hold anticipated elections following December's failure to elect a president.  The other three leaders appear to have accepted Ghimpu's view that this is the best way to proceed.

I'm not so sure.  The absence of anticipated elections opens up the AIE to charges from the Communists and their hangers-on that the AIE is usurping power and is breaching the provisions of the (current) constitution.  I think I would have preferred a situation in which a new constitution was introduced and then elections were held fairly promptly once it had been bedded down, say in spring 2011.  This approach would largely disarm the communists, as well as producing a parliament in which that benighted party had a much smaller role to play.

Communist leaders and other left wing / pro-Russia groups have been quite hysterical all day long, calling the AIE a 'junta' that has 'usurped power' and undertaken an 'anti-constitutional coup d'etat'.  They are also quoting a long list of the AIE's supposed sins, ranging from 'destroying the principle of the separation of powers' (the sacking of Muruianu as CSM president) to 'handing over territory to another state' (the Palanca debacle that was initiated by the Communists themselves).  The Party plans to initiate a referendum of its own - a vote of no-confidence in the AIE.

The bottom line for me, however, is that the current constitution (introduced by parliament) has very little democratic credibility.  It has never been voted for by the people, so who cares if it is replaced?  The new constitution will, for the first time in Moldova's history, be 'of the people', and as such it should be far more credible.

Finally, the argument that holding a referendum is undemocratic or unconstitutional is absurd.  Referenda are the highest form of democracy and should be used more often for issues of the highest importance.  The current constitution actually says that the will of the people, expressed through a referendum carries supreme legal power in the state, i.e. a referendum decision has the power to override regulations, laws, judicial rulings and even the constitution itself.

The Fear of God

Yesterday afternoon, Prime Minister Vlad Filat hosted a meeting with Moldova's two orthodox archbishops, their eminences Vladmir (of the Russian Church) and Petru (of the Romanian Church).  The purpose of the meeting, as it turns out, was to discuss the teaching of religion in schools, an idea that Filat has mentioned on a number of previous occasions.

Politically it's a smart move.  Most of Moldova's population is orthodox and is uncomfortable with the split of the church into pro-Moscow and pro-Bucharest sections.  They will applaud the sight of the two metropolitans meeting together in a common cause and this will reflect well on Filat.

Also, Filat is probably trying to ease Vladimir out of the influence of Russia and the communist party.  Working together on a religious education project may be a way to temper the (Russian) church's rather obvious links to the PCRM and the Russian government.

Constitutionally I don't see an issue with religious education (RE) so long as

  1. Atheist or agnostic parents are allowed to opt their children out into other courses (e.g. Philosophy) that would be run at the same time as the RE, and
  2. The RE progamme doesn't unfairly favour a particular faith or confession.  Filat should work hard to ensure that Protestants, Catholics & Muslims etc are included, notwithstanding their relatively small numbers in Moldova.
  3. The education focuses more on those things that various religions and confessions have in common than on their differences.
Morally, it's a good thing to do.  One of the consequences of the decline of religious faith in the West is that people have lost their fear of God.  Maybe they don't believe that he exists.  Maybe they believe that he exists, but not in the Abrahamic sense, complete with concepts of sin and judgement.  The bottom line is that most folks these days don't think they will be hit by a lightening bolt if they steal, defraud, have an affair etc.  A century ago, they did.


I'm not about to make a judgement on the rights or wrongs of religious faith, however I will make one observation:  the fear of God was a control that kept some people honest when all else failed.  This is especially so in the case of invisible, white collar, 'victimless' crimes such as corruption, fraud and embezzlement where other controls (e.g. peer pressure) were powerless.  People would refrain from committing these crimes due to the fear of an all-seeing God.

Now that fear is gone, and we're worse off for it.  Think of the massive frauds have we seen over the last decade - Barings, Enron, Worldcom, SocGen, Madoff to name just the biggest ones.  Think also of the increases in corruption levels worldwide recorded by Transparency International.

Religious education in Moldova will at the very least re-instill the fear of God into a section of Moldova's children.  It will also, one hopes, give them a basic sense of right and wrong, and of duty to their country and their neighbours.

PS:  One amusing aside from yesterday's meeting was Unimedia's publication of photos showing the cars driven by the two clerics.  Both drove BMWs.  Petru's was a bit of a banger and had standard Chisinau registration plates.  Vladimir's was a shiny new model bearing official Moldovan government plates (a clear breach of the constitutional separation of church and state).  An apt visual characterisation of the relative positions of the Romanian and Russian churches in Moldova.

Tuesday, March 9, 2010

Muruianu sentenced to a tickle under the armpits

Days after meting out 'justice' to the seven-minute-wonder-judge, Dorin Popovici, our beloved Superior Magistrates Council (CSM) has just given a 'severe reprimand' to its former president, Ion Muruianu.  this was in relation to his comments that some journalists are rabid dogs and a danger to society.

As with Popovici, the disciplinary action in Muruianu's case is bordering on laughable (although it's not funny at all).  Muruianu's comments about rabid journalists display a fundamental misunderstanding of the nature of a democracy.

Furthermore, Muruianu also fails to understand the need to protect human rights, blaming the media for the losses of cases at the ECHR rather than the corrupted and incompetent Moldovan judiciary.  Muruianu himself is personally responsible for the loss of eight cases at the ECHR, i.e. on eight separate occasions the European Court has ruled that Ion Muruianu has breached the human rights of defendants through his judicial rulings.

It is absolutely astonishing that the CSM thinks that Muruianu and Popovici are fit to serve as judges.  Through these decisions the CSM has shown that it is failing as the body responsible for governance of the judicial system.  It is incapable of cleaning up Moldovan justice.

The problem is, if the CSM will not do it, someone has to.  This is tricky - if the Government or Parliament sticks their beaks in, there will be howls from the left that the constitutional separation of powers is being undermined.

One possible solution, however, would be a constitutional amendment temporarily placing the judiciary under European supervision.  After the garbage is removed and the judiciary has rebuilt its values system and adherence to the law and the constitution, the supervision could be removed.

It's not ideal, but probably the best option in the circumstances.

Friday, March 5, 2010

Try Again, CSM

Dorin Popovici, the 'judge from hell', has just been given a 'severe reprimand' by the disciplinary committee of the Superior Council of Magistrates.

For those of you who don't know the case, this is the judge who handed out summary justice to the young people rounded up by the security services in the aftermath of April 7th 2009.  What Popovici and his fellow judges did that day in the service of the Communist party was really awful:

  1. In a single afternoon, Popovici examined 32 administrative files and 10 applications for disciplinary measures.  If we assume he worked five hours; then he spent an average of seven minutes on each case.
  2. The 'trials' were carried out in the Police headquarters, not in the court.
  3. Defendants were represented by a court-appointed lawyer, who they had never met prior to the 'trial', who made no effort to defend them and who subsequently disappeared.
  4. Defendants were denied the right to appeal their sentences, being forced to sign acceptances late into the night after the trial.
  5. Some of the defendants were minors
  6. Some of the defendants weren't even participants in the protests
  7. Mothers of dependent children were locked up, against the prevailing law
Such kangaroo courts which deny basic legal rights to the accused are a disgrace in the 21st century.  If the Moldovan courts are to clean up their act and be fit for a country planning to join the EU, then the CSM needs to do far more that slap Mr Popovici on the back of the hand with a wet bus ticket.  Not only should he and his accomplices be summarily dismissed from their profession, their cases should also be referred to the Prosecutor for trial.

Genocide?

I woke this morning to the news that Turkey was recalling it's ambassador to the United States in protest against a congressional committee's classification of the 1915 killings of Armenians as 'genocide'.  'Genocide' is an emotionally charged word that lacks a precise definition, and as a result different states view historic events in different ways.  Armenian expatriates claim that Turkey massacred 1.5m of their compatriots in a deliberate campaign of extermination.  Turks counterclaim that the figure was far lower and that the Armenians were simple casualties of war.

My gut tells me that there is a common-sense definition of genocide that would go something like this:  "The systematic and intentional extermination of more than 100,000 members of a group sharing a certain characteristic".  The characteristic in question could be race, sexual preference, ethnicity, political views etc.

On the definition above, the key to deciding the Turkish / Armenian question is whether there was intent to kill Armenians simply because they were Armenians.  I would argue that the mass killing of Armenian civilians for no military reason shows that the intent existed.  Genocide being established, it is now time for Turkey to face up to its past so it can move on into its future.

On a related theme, an opinion piece published today by Timpul's Constantin Tanase highlights deaths in Basarabia caused by the Soviet occupation after the second world war.  The commission appointed by interim president Ghimpu to study the Soviet Communist era has now established the following as fact, based on recently declassified KGB archives:

  1. 173,684 basarabians died due to the post war famine induced by the communist authorities
  2. 74,515 died as a result of deportation to Siberia
  3. 54,618 died fighting on the Soviet side, having been press-ganged into service by their 'liberators', in breach of the Geneva conventions.
This is a total of over 300,000 people.  Remember that the population of Basarabia at the date of occupation was of the order of 2 - 2.5 million people, so we could be talking about as much as 15% of the population.  If it can be established that persons of a particular ethnicity were singled out, or perhaps those holding certain political beliefs, then we may be talking about a Basarabean genocide at the hands of the Soviet Union.

Grimm stuff.

Thursday, March 4, 2010

The Joy of Declassification

Since coming to power, the government of Vlad Filat has made a strong commitment to open government.  Cabinet meetings are televised live and every minister has been required to spend a few hours each month hearing petitions from citizens.

Perhaps the most interesting process, however, is the declassification of documents categorised as 'secret' by the previous Communist administration.  The documents being released provide a priceless window of access into Voronin's mind; many of them are quite routine and shouldn't have been secret at all, while others were evidently withheld from public view for very real reasons.

In any case, the documents have provided hours of amusement for journos and bloggers alike.  Today's tasty morsel can be found here.  It's a note written by Communist counsellor Oleg Reidman to then President Voronin on the 4th of July, i.e. before the July 29th election.

In the note, Reidman sets out two forecasts for the Government's budget.  The first forecast is for two months, and shows how, with local borrowing and a ban on capital spending, the Government could have met its obligations through to the end of August.  This presumably was the 'handover of power' scenario which would kick in in the event the Communists lost power on July 29th - keep the wheels on for a couple of months, then hand over to the AIE and hope for the worst.

The second scenario is more long-term (and presumably designed to cover the outcome of a Communist victory on July 29th);   It covers the period up to about the current time (February - March 2010).  It is truly frightening and contains elements that would have revolted the Communist electorate:

  1.  Reduction of public service salaries to 2008 levels (ie minus the increases handed out by the Communists prior to the April 5th election)
  2. The elimination of public sector bonuses
  3. Public servants being forced to take leave without pay
  4. The elimination of 'nominal benefits' paid to invalids, pensioners, children, war veterans etc.
  5. The dismissal of 5,000 teachers
  6. The cessation of preferential lending
  7. The cessation of a first home buyer's programme
  8. Cessation of the indexing of Banca de Economie deposits held during the hyperinflation of the early 1990s.
Even with all of the measures, the budget would have been short to the tune of 2.2bn lei, an amount which Reidman envisaged being provided in large part by the IMF, with whom the Communists had failed to reach an agreement two weeks' earlier.

What makes these revelations really embarrassing for the Communists was their comportment during the election campaigns, when they were giving away pension & salary increases as election bribes and claiming that the economic crisis wouldn't impact on Moldova; when they were scaring voters with stories about how their incomes would be cut if the opposition were to come to power.

As it turns out, the new Filat government was able to negotiate a much more sizeable agreement with the IMF and to secure substantial additional funding from the US, EU and Poland.  These funds enabled the public service to continue functioning without any of the draconian anti-social measures planned by Reidman and communicated to Voronin.

It seems that Moldova's voters made the right choice on July 29th 2009, just in case anyone was still wondering.

Wednesday, March 3, 2010

France sells Mistrals to Somalia

PARIS, MARCH 2 2010

The head of the Somali Maritime Government (SMG), Abdi Garad, was received at the Elysee Palace this morning by French President Nicholas Sarkozy in what was seen by many as the start of a new strategic relationship between France and the rapidly developing Indian Ocean power.  According to Sarkozy, it is time to draw a line under the 'unfortunate incidents in our past' and to 'develop a strong commercial and political relationship between our two great peoples'.  Garad concurred, commending Sarkozy for breaking free from the 'piracy' paradigm which had coloured relations between his government and the West for so long.

The centrepiece of the new relationship is 'exclusive negotiations' over the sale of four state-of-the-art Mistral class warships.  The deal has raised eyebrows in other western capitals which still view the SMG with a great deal of suspicion.  Prime Minister Fillon was quick to justify the sale however, mentioning that it will save thousands of jobs at the St. Nazaire shipyards, and that France will not be installing sensitive military equipment on the vessels (although it will supply the email addresses of people who can). Fillon also commented that the SMG needs to be engaged rather than confronted, and that the vessels would be used as hospital ships for civil defence purposes only.

Notably, the latter claim has never been confirmed by the SMG.  Garad is on record as saying that the ships would be used for whatever purpose required, and a senior SMG commander is reputed to have said that, had the Mistrals been in place since summer 2008, the SMG would have been many more times as effective in its 'anti-smuggling' activities.

France is understood to be anxious to complete the deal by the end of April, so as to focus its attention on the proposed transfer of nuclear material to Iran and North Korea for medicinal research purposes.

Tuesday, March 2, 2010

Judge not

More miserable news from Moldova's awful judiciary:

  1. Dumitru Pulbere, the judge who fiddled while the Communists wantonly abused the constitution, has been re-elected as the President of the Constitutional Court.  The judges appointed to the court voted 5-1 to renew his mandate.  My guess is that the "1" was Victor Puscas, the only CC judge who emerged from communist rule with his reputation for integrity intact.
  2. Ion Muriuianu still won't go and is standing his ground on the facile argument of the separation of powers. What Mr Muruianu doesn't realise is that this dispute is not about the niceties of constitutional law.  It's about him, his abysmal performance as a judge and his lack of integrity.  If he had an ounce of the latter he would have resigned weeks ago.
European Union officials have made it abundantly clear that Moldova will not accede until it has cleaned up its courts.  While Mr Pulbere and Mr Muruianu hold the two highest judicial positions in the land, there isn't a hope in Hades of that happening.

It seems that the only way to remove them would be a completely new constitution, voted by the people, with new judicial institutions.  Gianni Buquicchio, please take note.