Moldovan Democracy II: The Amazing Story of the Christmas Tree

Once upon a time, Chisinau Mayor issued a decision to have a beautiful Christmas tree installed in the central square of the city. The city agency in charge of such activities purchased the tree and installed it in the square. The municipal police was charged to guard and protect the Tree. However, in the morning, the Mayor and other city residents witnessed a miracle: the Christmas tree has moved across the street.

Although I wish this were a miracle, it is not the case. It is an example of the municipal police in action. In the middle of the night, the police assisted in the relocation of the Christmas tree. When asked by the Mayor for an explanation, the head of the police blamed everything on the agency that installed the tree. (More here )

One might wonder how this can be possible. According to Moldovan legislation, although it is funded from the city budget, the wonderful municipal police is subject to double subordination: to the Mayor and the City Council, on one hand, and to the Minister of Interior (who is subordinate to the Prime Minister and the President) on the other hand.

There is an ongoing conflict between the central and municipal governments, and this story is yet another manifestation and outburst. The City government intended to install a Christmas Tree early enough for all Chisinau residents to enjoy a longer holiday season and provide the opportunity to celebrate Christmas Day, including on December 25. The central government insisted that the Christmas Tree be mounted not earlier than December 30 presumably because the majority of city dwellers are Christian Orthodox who celebrate Christmas by the old calendar (January 6). In this conflictual situation, the municipal police preferred to display their loyalty not to city residents (who elected their Mayor last summer), but to the central government. Indeed, Moldovan democracy is amazing!

Chisinau City Has a Non-Communist Mayor

The results of the runoff elections for the mayor of Chisinau City are as follows:
For Dorin Chirtoaca (pictured), the Liberal Party candidate, voted 61,17% of the electorate(130,181), and for the Communist candidate - 38,83 % (82,653 people). It is indeed a stunning result, Chirtoaca winning with over 22%!

Given that my biggest concern was that the participation in the runoff elections would be too low for validation, I am happy to learn that the participation rate was as high as 35% in Chisinau City. Therefore, it is almost certain that Chisinau will have a young, charismatic and reform-orientated mayor.

Congratulations to Dorin and all Chisinau residents!

Local Elections in Moldova Create Opportunities for Change

The general local elections in Moldova held on Sunday, June 3, brought about the following developments:

1.Overall participation in the elections was low in comparison with previous years, and represented 48%. In Chisinau City participation was even lower (30%)
2.Although still the top-choice of Moldovan electorate, the popularity of the ruling Communist party is declining. (From 40% of mayoral mandates in 2003 to 31% in 2007)
3.The next most popular opposition party is the “Our Moldova” Alliance with 17% of the mayoral mandates.
4.Chisinau City has a very real opportunity of bringing about change by electing a liberal mayor in the runoff elections on June 17. The communist candidate, Veaceslav Iordan, scored 28% while the liberal candidate, Dorin Chirtoaca, came in second with 24% of the total votes.
5.Chisinau witnessed a suprising emergence of a new Liberal Party.
6.Chisinau City council will be multi-partisan, the communists losing the comfortable majority. Out of 51 seats, the communists will have 16 (31%), the liberals – 11 (22%), and Our Moldova Alliance – 7 (14%). (Source)

Dreaming of Chisinau City

Now that Moldova is living the frenzy of local elections, it is in vogue to talk about how Chisinau City can be transformed into a more beautiful, developed, comfortable, friendly European capital city. As many as 19 candidates to Chisinau Mayor’s Office are sharing their visions about Chisinau, so I thought the City’s residents and visitors could share their visions as well. I invite the readers of this blog who live and/or visited Chisinau to contribute with their own thoughts and ideas. Your contributions will be used by a Czech student studying Architecture in Italy who is preparing for his master thesis a project derived from a recently approved Chisinau Masterplan (or the General Urban Plan) which can be accessed here in Romanian.

I’ll go first. After traveling extensively in many cities, I think that Chisinau as a whole and its districts in particular lack an identity. It is a little bit of everything scattered everywhere. Therefore, some deal of organization will help. From commercial redevelopment perspective, it would be good to have clearly established functional areas where various industries (entertainment/showbusiness, cultural, fashion, mass-media, restaurants, public administration, international and non-profit organizations) can develop fast, and benefit from agglomeration effects. I’d like to see thematic locations, such as Newspapers’ Square, TV Center or Music Street, each with own unique identities. I’d like to be able to go clothes shopping in a beautiful pedestrian area with plenty of vegetation, fountains and street cafés.

Chisinau is a prisoner of cars, therefore I’d love to see Chisinau become a bicycle-friendly city. For the initial stage, it would be great to have specially-marked roads leading to the major parks and recreation areas. The Bic River is severely underdeveloped. As I live in its proximity, I wish it would be transformed into a modern well-lit riverside recreation area, or a romantic riverwalk with boats, cafes and nice little shops.

This is, briefly, Chisinau City of my dreams. Who's next?

How to Tax Real Estate Property in Moldova?

Until recently, revenues from property taxes throughout Moldovan cities and villages were merely symbolical and represented an extremely small share of already meager local budget revenues. A property tax reform, initiated in 2003, intended to change this situation.

Firstly, all residential properties (so far, in cities only) were re-assessed so as to reflect their market value, considering a multitude of factors like location, condition of apartment building and availability of residential infrastructure. Owners of apartments and houses were informed about the re-assessed value of their property and given the opportunity to petition the decision. Only in Chisinau Municipality, about 190,000 apartments and 28,000 single-family houses were re-assessed.

Secondly, Section VI on Real Estate Property of the Fiscal Code was recently modified. For Chisinau, the tax rate was set at 0.02% of the re-assessed value of taxable property. All other municipalities should set their own rates (0.02% being the minimum allowed), so as to achieve an average increase of 10% in revenues from this particular tax compared to the previous year. For large properties (with surfaces comprised between 100 and 200 square meters), the tax rate is 3 times bigger, and for very large real estate (more than 200 square meters), it is 28 times bigger.

What will be the real outcomes of these policy measures? According to a rather good article in Economic Overview, the impact of these changes, particularly on municipal governments, the ultimate beneficiaries of this reform, has not been calculated. Judging by the extremely small number of transactions on the real estate market, (543 sales, 483 donations, and 346 inheritances in Chisinau in 2006), and a large number of social categories that are exempt from this tax, the municipal budget will fail to incur the much-needed revenues. Theoretically, the tax revenues that could accrue from 9,000 very large residential houses located in Chisinau could make a real difference in the municipal budget. However, experts are rather skeptical because it is obvious that these well-off owners might prefer to experiment with various tax avoidance loops.

Is Chisinau City Really Ready for an Earthquake?

I try to make time and patience for the daily news program on TV Moldova 1, the only channel operated by the national public broadcaster TeleRadio-Moldova . Time because there are many other things I would rather do after a long workday, and patience because it is so different from CNN – my favorite news channel. However, TV Moldova 1 is the only source of current information about public policies, debates, activities and events in Moldova for a great segment of Moldovans. Sometimes, I find out interesting facts as well. For example, yesterday the municipal authorities conducted a simulation of earthquake-related drill and evacuation in one of the most crowded places in Chisinau City, the Central Market. It was good to learn that local authorities still conduct such activities, as they are extremely important, particularly given the increasing vulnerability of Chisinau City to natural disasters such as an earthquake. In reply to "Do you feel prepared in case of an earthquake?" one vendor gave a confident affirmative answer.

But is Chisinau really ready for an earhquake? Chisinau is an earthquake-prone area. The last strong earthquake (7 degrees Richter) took place in 1977, and a couple of weaker earthquakes occured in Chisinau since then. What I’m worried most of all is the physical condition of the housing stock in Chisinau. Very poor maintenance and continuous unauthorized interventions in the engineering networks and buildings structure of apartment blocks are making urban dwelling extremely vulnerable to a potential earthquake. The fact that people are eagerly tearing down apartment walls, and municipal authorities are doing nothing to prohibit such practices indicates that the level of awareness of Chisinau residents regarding the potential damage they might be gradually inflicting on their livelihoods is insufficient. Although the evacuation drill in Central Market is a good thing, there is much more that Chisinau authorities should do to reduce the vulnerability and prepare residents for a potential disaster. Otherwise, it is pretty obvious that the damage brought about by a potential earthquake in Chisinau is likely to be enormous, including high costs in terms of human life and livelihood.

Is Chisinau Ready for the Capital Market?

The development needs of Chisinau City are enormous. According to some estimates, total capital investment needs amount to about $3 billion for the next 13 years. This is a huge amount for the capital city of one of the poorest countries in Europe where the average hourly wage is 70 times lower than in Denmark. Some people prefer to label this estimate as “impossible” or “unreal,” and accept the status-quo. I prefer to approach this figure as a price tag for a better life in Chisinau. Then, the question is: can we afford a better life, and if yes, how?

This happens to be the central issue of a study I’m currently doing for Chisinau City. How can the City finance its development needs? According to the principles of fiscal theory, capital investments with a life cycle that spans across several generations of users should be financed equitably by taxpayers of each generation. It is not equitable for the current taxpayers to pay fully for the schools, roads, bridges that will be also used by future generations. This is the main idea behind municipal bonds: first, the City issues bonds to collect debt to build capital public goods, and then it repays the interest and principle of this debt over a longer period of time. As a result, users from subsequent generations share the cost of the public good from which they benefit.

Is Chisinau ready for this new practice? Not really. It has never issued municipal bonds. It lacks institutional capacity in this area. The current management of municipal finance (mainly budgetary revenues and expenditures) has many shortcomings. Fiscal policies are developed and lobbied at the national level. Nevertheless, Chisinau must start building these capacities and getting ready for entering the capital market. Hopes of becoming a modern European city cannot be supported by the revenues of the present generation alone.

What Is the Future of Transportation in Chisinau?

Public transportation is one of the most serious problems in Chisinau. National experts agree with the problem, and apparently they agree with the solution. Recently, the City Council discussed the Roads & Transport Infrastructure Strategy. The document proposes approaching the current problem by unloading the most concentrated roads intersections, for example Stefan cel Mare Boulevard and its intersection with Ismail street. The Strategy proposes to achieve this by building bi-level intersections. New construction is to be heavily regulated around these areas. The main idea is to avoid construction of new roads in the central part of Chisinau, as such works are deemed very expensive. New roads are to be built between various districts of the city, which will significantly decrease the transit time, and will clear out the downtown. Regarding public transportation, trolleybuses and buses are given priority in the Strategy, while the marshrutkas will remain private means of transportation subject the supply/demand fluctuations. The cost of the Strategy is 3.47 billion MDL (over 250 million USD), of which 44.8% are expected from the municipal budget, 43.2% - national budget, 11.8% - grants, and 0.2% from private sources. The City Council accepted the Strategy as a basis for Chisinau transportation development but delayed the approval of the implementation plan until the City General Urban Plan is developed and approved. Main source: Economic Overview/Logos Press http://logos.press.md/Weekly/Main.asp?IssueNum=664&IssueDate=23.06.2006&YearNum=24&Theme=109&Topic=0….

According to several experts’ opinions expressed in various issues of Moldova Urbana (a publication of Habitat Moldova Center http://www.habitatmoldova.org/), overall, this Strategy is not a bad one, and is most likely to find support in various circles. There were ideas about introducing a tramway (Alexandr Boldesco, Anatolii Gordeev). The future of the central part (both the historical and administrative) is the most debated topic among urban development specialists, architects and city management.

What Can Chisinau Learn from New York?

I'm doing some research on Business Improvement Districts (BIDs) in New York City. I was told that public officials from all over the world come to New York to learn about them, and whether they can work in other cities of the world as well. So, I thought about my native city, Chisinau in Moldova and what there is to take home from the experience of the Big Apple.

The following is the article I wrote for Moldova Urbana publication.

http://www.habitatmoldova.org/moldova.htm?lang=ro&idc=9&PHPSESSID=bc4ab1f4fa186f56ff0f572eb5a6371b

CE POATE ÎNVĂŢA CHIŞINĂUL DE LA ORAŞUL NEW YORK?

Subiectul acestui articol sunt Business Improvement Districts sau BID-urile din oraşul New York, SUA. BID-urile reprezintă zone delimitate geografic, care activează cartierele New York-ului, în special în zonele cu un înalt nivel de activitate comercială. De regulă, oraşele au cartier central comercial (central business district), dar New York-ul, şi mai ales Manhattan-ul, are cîteva cartiere de acest tip.

Conceptul de BID a fost inventat în Canada în anii 80. Următoarele sunt trăsăturile caracteristice ale unui BID.

Ø Sunt formate voluntar de către proprietarii comerciali şi sunt limitate geografic.
Ø Toţi proprietarii comerciali plătesc un impozit suplimentar pe proprietate.
Ø Veniturile astfel colectate sunt utilizate pentru prestarea unei game largi de servicii pe teritoriul BID-ului.

Motivele care au determinat apariţia BID-urile in Canada şi SUA au fost deteriorarea calităţii serviciilor publice prestate de autorităţile locale, scăderea valorii imobilului, diminuarea activităţii economice şi comerciale în oraşe şi migrarea clasei mijlocii în suburbii. Situaţia în oraşele americane în anii 80 era deplorabilă. New Yorkul suferea de un nivel de criminalitate foarte înalt. Nimeni nu dorea să locuiască în oraş, iar cei care ramâneau în oraş eram prea sărăci si nu aveau alte opţiuni. Autorităţile locale erau incapabile să rezolve aceste probleme din cauza deficitul bugetar enorm şi bazei fiscale compromise.

Această situaţie nu putea fi ignorată de oamenii de afaceri care au optat să rămână în oraş. Proprietarii şi oamenii de afaceri din centrele comerciale ale New Yorkului, interesele cărora erau direct afectate, s-au unit, şi-au adunat forţele şi au decis să se auto-impoziteze pentru a aduna mijloace financiare cu care să finanţeze schimbările dorite. Aceşti indivizi au înţeles că unica speranţă de a ieşi din criză rezidă în forţele proprii. Ei au creat o organizaţie non-profit – management association – formată dintr-un consiliu director şi o echipă executivă. Scopul acestei asociaţii era să gestioneze resursele astfel colectate, să presteze servicii, să negocieze cu autorităţile publice locale şi să mobilizeze resurse suplimentare.

La început, serviciile prestate în interiorul BID-ului erau curăţirea străzilor, eliminarea înscripţiilor pe clădiri (graffitti), mărirea securităţii pe străzi, amenajarea estetică a cartierului, asigurarea turiştilor cu informaţie utilă, asistenţă acordată vagabonzilor şi altele. Numai după câteva luni, rezultatele au devenit vizibile. Cartierele arătau mai bine şi păreau mai puţin periculoase, oamenii au început să petreacă mai mult timp prin magazine, baruri şi restaurante, iar cifra de afaceri a început să crească. Toţi au avut de câştigat, iar mijloacele financiare suplimentare s-au dovedit a fi investiţii profitabile în afacerile membrilor BID-ului.

Aceste eforturi au continuat, numărul BID-urile s-a mărit şi situaţia s-a îmbunătăţit considerabil. Astfel, azi în New York există 53 BID-uri, cu cea mai mare concentraţie în Manhattan. Azi, oraşul New York este cu mult mai curat decît acum 20 de ani. De-asemenea, este oraşul cu cel mai scăzut nivel de criminalitate şi cu o activitate economică de invidiat. Dar BID-urile continuă să funcţioneze, să-şi diversifice şi înnoiască serviciile. În plus, BID-urile din New York beneficiază de toată susţinerea şi încurajarea autorităţilor publice locale.

E relevantă oare această istorie de succes pentru oraşele Moldovei? Probabil e puţin prematur să vorbim despre crearea BID-urilor în Chişinău (acesta este unul dintre visurile mele), dar principiul care stă la baza activităţii BID-urilor e aplicabil, cel puţin teoretic, condiţiilor Moldovei. Mă refer la principiul colaborării oamenilor de afaceri şi proprietarilor cu interese individuale în realizarea unui scop comun. Ar fi bine ca aceste categorii de cetăţeni să manifeste iniţiativă în vederea soluţionării problemelor comune, de interes public, iar autorităţile locale să încurajeze în mod deschis şi transparent astfel de eforturi. Scopuri comune sunt multe în Chişinău şi în întreaga Moldova. Important este să găsim modalitatea cea mai adecvată de unificare a forţelor şi resurselor, inclusiv financiare, în vederea realizării un scop/bun comun.

BID-urile sunt parteneriate public-private răspîndite în Occident. Parteneriatele public-private reprezintă direcţia de viitor în domeniul prestării serviciilor publice. E timpul ca şi oraşele din Moldova să încurajeze crearea unor astfel de parteriate şi să beneficieze de enegia pozitivă degajată în urma mobilizării eforturilor individuale spre realizarea unui bun comun.