“The Moldovan state should help all the business entities sell their apples and other products everywhere in the world, including in the Russian Federation, but the state intuitions and the senior government officials of the Republic of Moldova are also obliged to protect us from such risks and dangers where there is no place for exceptions. More than ever, we should make sure we know where neutrality ends and where complicity starts…”
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On March 5, on the tenth day of the Russian-Ukrainian war, the Federal Service for Veterinary and Phytosanitary Supervision of the Russian Federation announced that it allows the import of fruit from all over the Republic of Moldova, alongside deliveries of similar products from another five states. Two days earlier, the same Rosselkhoznadzor said vegetal products from Moldova to Russia can be delivered through the frontier posts located on the external part of the Belarusian border.

Amid the multiple crises that overlapped each other, this is good news for a large part of the producers and exporters of agricultural products from the Republic of Moldova. At the same time, this is worrisome news for the given business entities and also for the Republic of Moldova.

Benefits for business entities and the state

The benefits for business entities are related to the possibility of resuming exports of fruit, in general, and of apples, in particular. According to specialized sources, the apple stores in Moldova now come to 100,000-120,000 tonnes  and these cannot be all consumed inside the country and cannot be swiftly redirected to other markets as the Russian market is a traditional one for the Moldovan apples. The March 5 news is good for all the producers and exporters as, after the bans imposed in 2014, apple exports were unsafe and depended mostly on subjective economic, sanitary and political factors. During the next years after 2014, not all the exporters that were interested and could display their capacities were able to export to the Russian Federation, but only particular companies whose lists were periodically compiled not always according to clear criteria and by subjects that were not always transparent.

The direct benefits for business entities include the possibility of selling their products, of covering their costs and of reinvesting in the next agricultural cycle.

The benefits for the state are also evident: the taxes and duties from the economic activity of the companies, including from foreign trade, will supplement the national public budget; the jobs will be kept and the state’s capacity to pay salaries, pensions and allowances, which should be raised now more than ever, will also be maintained.

Risks for business entities

I started the article by mentioning that Rosselkhoznadzor’s announcement was made public “on the tenth day of the Russian-Ukrainian war” and this means that the transportation of Moldovan goods straight via Ukraine is no longer possible.  For the Moldovan apples to reach “the frontier posts located on the external part of the Belarusian border”, the deliveries will have to cover a much longer road and this can significantly increase the cost price of the merchandise. According to a press release of the Moldova-Russia Business Union, which ”offered to help business entities from Moldova and Russia to organize new routes so as to continue the cooperation relations”, this route can be as follows: Republic of Moldova – Romania – Hungary – Slovakia - Poland - Belarus – Russian Federation. In such conditions, the Moldovan exporters will have to sell their apples in Russia at lower prices than the incurred costs and earn incomes that are not worth the effort or to sell them at a much higher price than the prices on the Russian market. This way, the “golden apples” of the Republic of Moldova can become noncompetitive compared with the apples from other countries, including those that were put on the same list of March 5, but together with apples from Russia’s Krasnodar, for example, while the Moldovan exporters will have to carry the goods back along the same long road by doubling the costs or to leave them in Russia to go rotten. This is a rather real perspective foreseen by experts in the field: “Now, given the sanctions imposed on Russia for the invasion of Ukraine, the purchasing power of Russia is expected to decline. The situation can be similar to the one caused by the ban imposed in 2014 or even worse. This will affect the Moldovan exports of vegetables, fruit and walnuts. The apples will be affected the worst as they are the largest export article and are almost fully sold in Russia.”

It’s true that the same press release of the Moldova-Russia Business Union says an alternative route can go through the Giurgiulești Port (Moldova) to the Novorossiysk Commercial Sea Port in the same Krasnodar region of the Russian Federation. On the one hand, the costs and risks in this case should also be determined. On the other hand, this itinerary does not respect Rosselkhoznadzor’s suggestion or indication of March 3, which couldn’t have been accidental.

Another, more “theoretical” risk that should be yet taken into account is the fact that in times of war, no one guarantees the integrity of goods. It’s true that no military operations are now performed in Belarus, but the current situation, including as regards the status of Belarus in the context of the Russian-Ukrainian war, is so unpredictable… I hope it won’t be necessary to develop this issue further. In fact, I think it won’t be easy to find insurance companies ready to invest in guaranteeing the conveyance of such goods in such conditions.

Another risk for exporters, which is also “theoretical”, is the possible less friendly attitude on the part of different players from the countries through which the Moldovan apples will go and this can prevent or considerably delay the deliveries to the Russian Federation. I will detail below:

Risks for Republic of Moldova and its citizens

The permission or, possibly, invitation to supply Moldovan apples came for a list that includes five more countries. These are: Bosnia and Herzegovina, China, Bangladesh, Serbia, and Azerbaijan. In a customary way for it, Russia did this favor to the counties that didn’t join the sanctions imposed by the Western states and the U.S. It should be noted that the Republic of Moldova didn’t subscribe to the sanctions given its neutrality status that obliges it to have an equal attitude to any of the belligerent parties of an armed conflict. This is its right, but the countries through which the Moldovan appeals will go to Belarus and the Russian Federation also have the right to have a reserved, if not hostile attitude to this “privilege” offered to Moldova and the Moldovans. The risk faced by the exporters was mentioned above.

But the Moldovan state can be exposed to even bigger risks. All the countries throng which the deliveries will go imposed sanctions on Russia and on Belarus, sustaining considerable economic losses themselves, or endorsed the sanctions imposed by the whole West. Rosselkhoznadzor refers to a part of these when it says that “the deliveries can go through the frontier posts located on the external part of the Belarusian border”, without naming them. Why should this facilitate the indirect violation of the regime of sanctions by the Republic of Moldova? By the way, Russia could have made this invitation namely with the intention of creating the impression of reduced efficiency of the Western sanctions. What reaction can these states have, in general, to the Republic of Moldova and wheat reaction can the European Union, of which they all form part, have?  Is there a risk of a non-friendly attitude to Moldova in a broader way too?.
 
An even more “theoretical” risk follows, but we should take the learned lesson into account after we so often faced different schemes that were destructive for the Republic of Moldova and its image. An example of such a risk is the possible reediting, in another form, of the “Russian Laundromat” when billions of dollars were siphoned from Russia in complicity with state institutions of the Republic of Moldova. We should wander if there are no hidden and again destructive interests for the Republic of Moldova and its citizens behind non-profitable, uncompetitive and risky exports? For example, can this type of export be used to break the regime of sanctions imposed on Russia? A box or by a box of matches with chips that cannot be supplied from the West to the Russian Federation could be hidden in a wagon or several wagons or in TIR trucks with apples? Or why is this abnormal export necessary then? By the way, the commercial circuit has two ways. Theoretically, this could be used to unofficially take out of Russia what cannot be taken out. Eventually, shall we use again the notion of “Russian Laundromat”?

We should remember that in 2014, the Russian Federation imposed a comprehensive ban on the export of apples and not only on Moldovan apples, arguing that these exports could camouflage the re-export of agricultural products to the West. If such a possibly was admitted then, why cannot it be accepted or scheduled now too?

It would be enough to have only one discovered case of the kind for the whole Western world to turn its back to Moldova. And then, goodbye to the massive support and assistance amid the multiple crises and poverty!; goodbye to the European integration!; goodbye to the free movement of Moldovans in the world!”. And, “welcome to the “Russian World”, Moldova”. Given such logic, such a case can be specially organized. And only some banal Moldovan apples will remain at the surface...

In conclusion…

In conclusion, the Moldovan state should help all the business entities sell their apples and other products everywhere in the world, including in the Russian Federation, but the state intuitions and the senior government officials of the Republic of Moldova are also obliged to protect us from such risks and dangers where there is no place for exceptions. More than ever, we should make sure we know where neutrality ends and where complicity starts…