After the annexation of Crimea to Russia, Transnistria was in a difficult economic situation. Ukraine, the main market for the unrecognized republic, has surrounded the border with the military, local entrepreneurs told H&F. The unstable transport connection immediately frightened consumers: they markedly limited themselves in costs, which the whole business already felt. Meanwhile, Transnistria is at the center of political intrigue: the EU has canceled visas for Moldova today, and Vladimir Putin is going to visit Moldova and Transnistria in early May.
Hopes & Fears asked Transnistrian entrepreneurs how they manage to conduct business in such conditions.
Founder of the agricultural company "Agrostil" and furniture factory "Eurostyle"
And before that it was hard, and after the events on the Maidan a real disaster began. We have cut off sales markets, and now we must sell all our products inside Transnistria. We suffer big losses. In my furniture company Eurostyle, sales in the first months of the year almost halved. Purchasing power has declined: people try not to spend money. They almost never export goods here, it makes no sense: they still won’t buy it.
Our onions, which we traditionally sold to Ukrainians, are now rotting. Although he could help them, he is cheaper than anywhere else. And there, since the revolution, prices have doubled. We are trying to transport something to Moldova, but this is not enough.
For security reasons, we do not travel outside Transnistria by local cars: unpleasant events constantly occur on the border with Ukraine
Now is spring and time to sow: 6,000 hectares, on which potatoes, carrots, onions should grow. But I need a loan. The banking system of Transnistria is weak: even if they give loans, they cost several times more than in Moldova. But they refuse me. It makes no sense to contact Moldovan banks, they just spit in my face. In foreign countries, no one will take such risks.
For security reasons, we do not travel outside Transnistria in local cars: unpleasant events constantly occur on the border with Ukraine. Someone was beaten, someone was taken away from the goods. Our driver with a Russian passport had a lot of problems at the border near Odessa, he was detained for several hours, but, fortunately, they later let him through.
The most positive scenario for us is the development of events - if Russia joins the eastern regions of Ukraine, well, and we are at the same time. Then investments from Russia will flow to us. Now we have no investments at all, everyone understands that Transnistria is too much risk.
Founder of the transport and customs operator "Business terminal"
So far, our customers have not felt significant changes. We do not encounter any obstacles to the movement of goods through Ukraine. I don’t feel a decrease in purchasing activity yet, but retail entrepreneurs already say that people have started to buy less.
There are also difficulties for those who export goods from Transnistria. These companies are most exposed to economic risks. Any products that come from the republic for export are subject to mandatory certification in Moldova. Other countries do not accept goods without the consent of the Moldovan side. All imports should also go through the customs authorities of Moldova. Thus, local entrepreneurs live in double customs clearance.
Moldova regularly introduces economic sanctions for Transnistria. At the beginning of this year, the new Tax Code of Moldova entered into force. The old edition suggested that excise taxes are not levied on goods that go to Transnistria. The new removed this relief.
Russian investments would significantly affect
on the economic situation in the republic. we have
what to offer: cheap labor and no VAT
Fortunately, in March our governments agreed, and excise taxes on imports to Transnistria were again canceled. In fact, nothing new - since our republic has been living for more than 20 years and there is no doubt that Moldova will still introduce similar restrictions for Transnistria.
I also represent the interests of Russian investors in one of the production projects in Transnistria. The plans of investors are to enter the active phase of the construction of the enterprise. Perhaps, due to external factors, the start of the project will be postponed.
Of course, Russian investments would significantly affect the economic situation in the republic. And we have something to offer: cheap labor, which is interesting for outsourcing in various fields, lack of VAT. Russia's assistance to the region is seriously visible in social projects - Russia is transferring budget funds to Transnistria as part of the Eurasian Integration project for the construction of social facilities. But this is for the most part a policy, investors should also see the economic prospects of Transnistria.
Founder of Kras Trading (suspended ceilings)
People do not understand what is happening in Ukraine and what consequences this may lead to. As a result, now everyone has gone into a "dead savings" mode. The consumer market of Transnistria is 50-60% composed of Ukrainian goods. The fall of the hryvnia greatly complicates the external economic activity for manufacturers and importers. Many manufacturing enterprises simply stopped export deliveries "before stabilization."
As far as I know, at the moment the transport connection works without interruptions, but the cost of transportation has increased due to risks. Manufacturers of agricultural products (in particular, grain), oriented to far abroad, feel quite well.
I want peace, stability and economic development of the region. I do not have illusions about the entry of Transnistria into Russia
Our company has been working in the negative for the second month. Projects that were planned for February - March were frozen.
I want peace, stability and economic development of the region. Unlike most of the people living here, I have no illusions about the inclusion of Transnistria in Russia. The federalization of Moldova, joining the Customs Union and the introduction of two state languages (Romanian and Russian) would suit me perfectly.
Founder of web design studio ilogik.com
Despite the fact that everyone felt the drop in demand for goods and services, the economic situation had no effect on us. We do not work in the domestic market. Basically, our projects are focused on Russia, and the fact that we are physically located in Transnistria does not play a special role.
This is not to say that IT is the flagship of the Transnistrian economy. Much rests on the lack of personnel: there are few local schools that train them, and a lot of people leave. But there is one positive point - it’s quite pleasant to live here. A small country, mild climate, near the sea (to Odessa - 100 km, to Antalya - a little more than an hour of flight), to the other side - Chisinau (76 km).
we will be imprisoned between the two states if we join Russia and close our borders -
it's time to spit
Europe is close if the sea does not want to. In this case, the Russian-speaking population, in a provincial friendly and gentle people. The time difference with Moscow is an hour, it is important for comfortable work in B2B. Getting a normal IT salary, you can live here very comfortably.
Ordinary people dream of joining Russia for a long time. But many in business circles are afraid of such a development of events: everyone understands that we will find ourselves in prison between the two — not the fact that we are friendly — states, but closing our borders is just a spit. Transnistria is a very small country, and there are almost no businesses here that do not depend on deliveries or sales abroad. Unless people like us, if only we hadn’t been disconnected from the Internet.
Founder of Family RestoGroup
First of all, the events in Ukraine affected entrepreneurs buying goods there. Cases of robberies in Ukraine are known, and Russian citizens cannot cross the border without hindrance.
In our company, the forwarder has Russian citizenship, and now he can not purchase products from Ukraine. While we manage stocks or put some positions in the stop list. Our cook, also with a Russian passport, refused to go on an internship to Ukraine because of the instability there.
Our forwarder has Russian citizenship, and now he cannot purchase products from Ukraine. While we're running out of stocks
According to the results of March, the total decrease in commodity circulation compared to the same period of 2013 amounted to 10%.
The people have already advocated joining Russia. And I am a child of the Soviet Union: I was born in Estonia, studied in Lithuania, lived in the Far East, then in the Kaliningrad region and for more than 20 years in Transnistria. I am for the lack of boundaries as such!
Cover photo: dpsu.gov.ua