VALERIU PROKHNITSKY, IPP economic expert
1.3. The Relations between Economic Security and Other Aspects of National Security
Due to the new threats that emerged at the end of the Cold War and the collapse of the Soviet Union, national security concepts have undergone impor- tant qualitative changes in Eastern European countries, especially in some small countries from the European part of the former Soviet Union (the Baltic states and, until recently when the political power was overtaken by the Communists
the Republic of Moldova). An expanded vision on this phenomenon is marked, first of all, by the distinction made between hard threats and soft threats to national security.
Hard security is the ability of the state to face direct military threats, to retain territorial integrity and the political independence of the country in the case of armed attacks or long-term wars. The Republic of Moldova does not face any hard security threats, as long as the Transdnistrian dispute does not regain its military dimension. In all other respects, the relations with Romania and Ukraine are very good, and the relations with Russia are good enough, and we cannot think of any serious military threats to the national security of the Republic of Moldova.
Soft security is the product of several security components, one of them being economic security. At the interstate and international level, soft security implies trade, political, and cultural relations with neighbouring countries, the monitoring of world economic and ecological environment, etc. In this respect, the threats faced by the Republic of Moldova are much graver.
Stability and economic security are intrinsically linked to the other forms of security. It is rather difficult to identify the cause-effect relationship between the national security components. However, depending on the internal situation and the regional geopolitical condition within national security the following may prevail: military security (Taiwan), political security (Estonia), environmental secu- rity (Kuwait), or informational security (Israel, although it seems that the country sets its priority on the military security, it has won the wars it held based on its information and counter-information services). In the Republic of Moldova the economic crisis has reached an unheard-of scale at the level of the European continent. This led to the situation when economic threats prevailed over all other threats, both at the level of public perception and at the level of political course4. Any action undermining economic security also undermines the other dimensions of national security. The instability of economic security is a primary symptom for other forms of insecurity (starting with social riots and ending with political disintegration), and these threats, in their turn, increase military risks. On
4 Once the Communists came to power, the issue of economic security is complementary to the threat regarding political security; the idea of settling the Transdnistrian dispute by turning Moldova into a federal state is an initiative that will be supported, undoubtedly, by Gagauz-Yeri as well.
the other hand, an open market economy cannot be lucrative without an appro- priate legal system without developed capital markets and without a secure bank- ing system. Given that internal political security is one of the fundamental require- ments for the appropriate monitoring of economic exchanges and for survival in the world economy, in states that even one of these requirements is not met the national economic security decreases.
The economy is a component of the physical basis of the state that ensures the provision of the needed resources, including those needed to ensure military security, as well as political, environmental, and social security. If we disengage ourselves from philosophical discussions, the level of meeting material needs rather than the ideological beliefs eventually determine the trust of the civil society in state bodies. Paradoxically, it is true even if ultra-liberal policies are adopted, when the state disengages itself from the economy and only oversees that all private economic agents comply with the rules of the game. As polls carried out lately in the Republic of Moldova show, most citizens say that they would be loyal to the state and the political elite if their expectations are met, and they do not mean a European-style economic prosperity, but some basic survival conditions and a guaranteed better future for their children. This trend is common for most Balkan countries and countries located between the Baltic Sea and the Black Sea. In the opinion of most experts, the gravest situations are witnessed in Moldova, Georgia, and Ukraine. In all three states one of the factors that have encouraged internal separatism was instability and economic insecurity.
During a recent international conference,  the participants from these three countries have shared the common opinion that their countrys security priority is an economic one. A Ukrainian delegate mentioned in his report that for the moment, economic security is more important than military security. Thus, all efforts, including the efforts made in the military industry, should be focused on facing economic challenges. At the same conference, the Czech Minister of Defence mentioned that the security aspirations of most European countries may be divided in two categories: those related to economic security (the access to raw materials, energy, markets, standards of living) and those conditioned by cultural, religious, historical, national, and political causes.
The relationship between social stability and economic security can be seen especially when it comes to threats against consumer economic security. In the Republic of Moldova this situation was repeatedly shown by the ardent political discussions and the open protests of the vulnerable social categories regarding payment for communal services. In the consumers opinion, the power and heat tariff rates, as well as gas tariffs are overpriced. Given the penury of the majority of the population, it is natural that the tariff issue led to social instability. More- over, the people blame the state only, even if in this difficult situation also involved private companies. This situation that has been preserved in the Repub- lic of Moldova already for several years can become a reference example showing how the economic insolvency of the population is reflected in a lower political
trust of the state both by the citizens of the country and foreign suppliers, which explains the tense relations of the Moldovan government with the Russian State Company Gazprom a monopoly that supplies Moldovan power stations with natural gas.
Regarding the issue of communal service payments there is one more ex- tremely sensitive aspect on which the countrys ability to defend itself depends indirectly. As it is known, alongside with pensioners and the unemployed, families of the lower and middle-level military officers are included in the category of the most vulnerable social categories, and the security of the country depends on their loyalty. The meagre payment they get is not enough even for providing their families with food and clothes, let alone paying for communal services.
The level gained during the last couple of decades by the phenomena of environmental degradation has led to the establishing of much stronger relation- ships between economic security and environmental security. The utility of military forces in ensuring ecological security can be significant, and most basically, it is necessary to ensure the security and health of the population and of the military.
Secondly, environmental security impacts positively and directly the national eco- nomic security. Thus, environmental security is an integral part of national security, especially in the case of a small country from the geographical viewpoint, when the condition of the environment is conditioned to a great extent by trans-border factors. Therefore, in many countries the possibilities to use the military to ensure the environmental security and prevent natural calamities, including those caused by the degraded environment, are examined. The threats against national security caused by the environment have made many large powers (USA, Canada, France, and Germany) assign new tasks to the military that were not specific for it before, namely:
To ensure a minimal environmental impact of military actions, manoeuvres, and exercises;
To ensure appropriate access to ecological resources (land, air, water) in order to fulfil the mission of protecting the country;
To protect human potential, equipment and the arsenal of the defence ministries in fighting environmental calamities.
These tasks and the monitoring of the potential centres of regional instability under poor environmental conditions require significant funding. One of the major problems for the Republic of Moldova is that, in the future, the tensions in the Black Sea region may increase significantly due to the worsening of the environ- ment condition that will impact the security of countries bordering it. The Black Sea coast, inhabited by tens of millions of people, has become one of the most populated regions in the world. The natural resources of the Black Sea region are running out due to overuse and the lack of any sustained development policies.
The sea is used as a refuse dump for the industrial waste carried away into the Dniester, the Dnieper, the Danube, and the Don. The risk and the scale of an environmental catastrophe is so big that one of the experts consider that by the
end of the century the Black Sea might retreat significantly and the original coastline would never be restored. In the long term, it is not excluded that the northwest coastline (where the Republic of Moldova is located) will turn into a semi-desert, which is being confirmed by the long droughts that have impacted agriculture in this region during recent years. For this reason, the improvement or, at least, the conservation of the ecological situation in the Black Sea region should be, alongside economic co-operation, the joint top priority of the coun- tries of the Black Sea region, including the members of the Organisation of Black Sea Economic Co-operation (OCEMN), the Danubian Countries Commission, GUUAM, and others.
As we have mentioned above, the economic security of a nation does not depend only on internal factors, but also on external factors, as they are inevi- tably included in a regional economic and geopolitical framework that impacts it either positively or negatively. The collapse of the Soviet Union has rekindled several latent political and national conflicts that have led to the worsening of economic situation in the Black Sea region, and that acted as one more factor that has contributed to regional instability. An aggravating historical circumstance was that almost all of the Black Sea regional countries, except for Turkey, were affected at the same time by an economic crisis, as when they started the transition to an open economy they were dependent on the former Soviet mar- kets and production factors. Inflation is rather high compared to other European regions, and a quasi-general economic growth was registered only in 2000. Cur- rently, the GDPs of all Black Sea regional countries undergoing transition are on average two times lower than at the beginning of the economic reforms, and the restoring of the potential production volume may take several more years, or even decades. Modest economic success was not registered until lately. In 1997, for instance, the GDP of the Republic of Moldova increased by 1% in real terms, of Armenia by 2.7%, and of Azerbaijan 5.8% (especially due to the foreign investors that are very interested in the Caspian oil reserves controlled by Baku). A slightly higher growth rate was registered in 2000. On the other hand, the austere pro- grammes imposed by the IMF resulted in rather grave social and even political crises in this region, and this led to the worsening of the relationships of some riparian countries (Ukraine, Russia) with the IMF, as well as to the worsening of social relationships in some of these countries. The difficulties are both economic and structural. Besides, the first signs of the negative impact of the unequal economic growth that reduce regional security can be noticed already. As an example, Azerbaijan can be quoted, a country which economic and financial power is increasing due to oil extraction, and will be able to get more weapons for its armed forces in the nearest future. It is natural that this leads to uncer- tainty regarding the security in the region, especially that of Armenia, given the simmering but yet unsolved conflicts in Nagorno-Karabakh and Nakhichevan.
Naturally, different economic potentials determine, as the table below shows, different military potentials in the Black Sea region. By the insignificant position
it holds, the Republic of Moldova cannot compete with other countries in the region.
Table 1. Defence Expenses of Black Sea Regional Countries, 1999 Russia Turkey Ukraine Bulgaria Armenia Moldova Greece Defence Expenses,
million USD, 1999 69.537 6856 500 379 75 6.1 4040 Defence Expenses,
% of GDP, 1999 8.7 4.3 1.4 2.7 4 1 4.0 Source:  and calculations made by the author.
The economic condition of most countries included in this table has im- proved to some extent since 1997, while Moldovas has worsened significantly. For this reason, in 1998 the funding of the armed forces of the Republic of Moldova was sufficient to cover only up to 37% of the needed expenses! Only 10% of the military budget is used to preserve the defence potential as such at an acceptable level. Over 60% of state budget funds are used to pay personnel and to provide food and food compensations. For the acquisition of weapons only about 1% of the budget was allocated for that purpose, which is totally insufficient to equip the armed forces that have been created only several years ago. If the armed forces will be under-funded for any longer, experts forecast that in ten years at most they will be absolutely unusable for fighting. Given that the Transdnistrian conflict has not fully settled yet and the military potential of the Transdnistrian paramilitary forces, together with the Limited Contingent of the Russian Armed Forces in Transdnistria is about three times the size of the national army, we may conclude that it is not at all improbable that the central government may become politically dependant on the Transdnistrian government rather than vice versa, as it would be natural for a unitary state.