Policy Report I: The Current State of Economic Development in the Black Sea Region by Panayotis Gavras
In economic terms, the Black Sea region has witnessed significant changes over the past two decades. One of the frontlines in the Cold War, it was a place where market economies encountered centrally planned ones. The fall of the Iron Curtain altered this state of affairs in a radical way. After a tumultuous early 1990s, the Black Sea region as a whole stabilized. The post-2000 period saw sustained high levels of growth that transformed economic and social structures. But the 2008 financial crisis stopped short the period of high growth. National economies have been hobbled by the frozen financial markets, the decline of international demand and slumping commodity prices.
Panayiotis Gavras, co-Head of the Policy and Strategy Department of the Black Sea Trade and Development Bank (BSTDB) in Thessaloniki, is the author of the first of four policy reports presented by the Commission on the Black Sea. Gavras examines within his paper the transformation of the economies of the Black Sea countries, specifies the implications of the global crisis for the Black Sea region and formulates policy recommendations against the background of the challenges economies in the Black Sea region are facing today.
Generally, the Black Sea region has cause for optimism. Its financial systems have so far weathered the crisis and it possesses a number of competitive advantages. However, much depends on the world’s ongoing crisis response. “It remains unclear whether regional growth rates can be restored to previously high levels, or whether growth will normalise at a lower level” writes Panayotis Gavras.
The region’s economies are diverse, and all would be well-served by strengthening financial and banking regulations, improving fiscal credibility and deepening regional cooperation. “Since intra-Black Sea region trade, investment, and finance flows are still relatively low, considerable potential exists to achieve mutual gains among the region‘s economies,” suggests Gavras. The European Union should support regional cooperation initiatives, especially where local ownership exists, and it should systematize the existing policy dialogue in key cooperation sectors with Black Sea countries. Apart from that, the European Union should clarify the institutional confusion between the Black Sea Synergy initiative and the multilateral components of the Eastern Partnership.
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Policy Report II: Security in the Black Sea Region by Mitat Çelikpala
Regional tensions, natural resources and geopolitical rivalries make the Black Sea region a strategic but sensitive area. In the absence of cooperative structures able to contain conflict, security threats ranging from interstate conflicts to illegal trafficking have emerged.
Mitat Çelikpala, Associate Professor of International Relations at TOBB Economy and Technology University in Ankara, is the author of the second of a series of four policy reports presented by the Commission on the Black Sea. Following Çelikpala, the region is politically, historically and geographically divided.
Threats to regional security are diverse, including ongoing and potential military conflicts between states, frozen conflicts, displaced populations and terrorism. Some weaker states are at risk of failing. Military expenditures are rising, and issues of energy dependency and supply diversity are vital. The lack of cooperation has created a “security vacuum” exacerbating global and regional rivalries.
Çelikpala show how three principal actors influence security policy options in the region. Russia seeks to maintain its role as the key regional actor, and to block externally driven energy projects or military alliances. US policymakers have focused on promoting democracy and market economy, and have prioritised energy issues and free trade expansion. Local states’ bilateral US ties and the prospect of NATO expansion have aggravated tensions with Russia. However, the Russia-Georgia war severely damaged US credibility in the region. Eastern enlargement has increased EU interest and activity in the region. The EU has sought various policy and economic reforms, and has served a conflict mediation role, but its regional security impact is limited.
Black Sea countries themselves have diverse approaches to security. The tension driven by non-regional actors is a serious concern, and produces a variety of responses. For instance, Turkey has pushed for a region-wide security initiative, possibly setting the stage for normalisation of Russia’s role.
This environment demands a dramatically more cooperative approach. Policies and institutions emphasizing competition should be discarded, while international organisations should promote regional trust. Conflict resolution processes must include all involved parties, and monitoring of military expenditures and conflict zones should be intensified.
Energy should be treated as a cooperative rather than competitive venture. EU programs should be more inclusive, and Russia in particular should be drawn into a broader network of security cooperation says Mitat Çelikpala.
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Policy Report III: Regional Cooperation in the Black Sea Region by Panagiota Manoli
Black Sea regional identity is difficult to define with precision, and is a relatively new concept says Panagiota Manoli. Manoli who is lecturer at the Department of Mediterranean Studies of the University of the Aegean (Rhodes) and Senior Research Fellow at the International Centre for Black Sea Studies (ICBSS) is the author of the third Policy Report of the Commission on the Black Sea.
Relationships between states are fragile and sometimes conflict-prone, and external relationships vary widely states Manoli. A first wave of regionalist activity in the early 1990s focused on asserting the area’s post-Cold War international standing, while a second wave early in this decade has been driven more by sectoral issues and external engagement. As regional identity coalesces, tension between EU and Russian influence is difficult to avoid, but the EU’s eastern expansion and growing role as trade partner has given it increasing gravitational pull.
Black Sea regional cooperation has been expressed in numerous locally conceived organizations, as well as by multilateral, often sectoral projects driven by the EU or other international groups. Regional rivalries and weak institutional capacities have undermined local organizations’ success. Among other criticisms, tangible projects have been slow to manifest, and societal participation has proved shallow; however, the groups have served as useful forums for foreign-policy dialogue, and signs of progress have recently emerged. Informal networks implying regional interdependencies also exist, but are not well understood.
Challenges to regional cooperation efforts include the persistence of unresolved conflicts, the need to generate trust and political commitment among leaders, a lack of financial and institutional resources, the need to engage the private sector and civil society, and the currently fragmented nature of regional organizations. Policies need to be focused on clear developmental goals with realistic financing assessments, and would best be constructed along sectoral lines.
Recommendations to policymakers fall into several categories. Regional cooperation should be treated as a realistic, beneficial set of specific policies, rather than as an abstract goal. Existing regional institutions should be rationalized or replaced, and their work supported by additional technical and financial resources. Areas of cooperation should be chosen carefully, with a sectorallevel focus on regional public goods and network-building.
Local stakeholders should make clear commitments to regional projects with demonstrable impact, and avoid identifying cooperation as an objective if political will and policy support is lacking. The EU and other multilateral actors should similarly focus on projects with tangible, measurable interim objectives, should stress regional issues within bilateral relationships, and ensure that local actors retain substantial ownership of policy processes.
A wider use of feasibility studies, cost/benefit analyses and best practices would help spur interest in policy proposals, and make regional institutions’ activity more efficient.
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Policy Report IV: Democracy and Good Governance in the Black Sea Region by Franz-Lothar Altmann, Johanna Deimel and Armando García Schmidt
For decades the existence of the east-west conflict meant that the Black Sea was a systemic watershed. It was perfectly clear which of the riparian states took its bearings from which political philosophy and thus from which socio-economic and socio-political model. As a result the region was divided into two distinct parts. This did not apply only to security policy, but to the political and societal character of the states involved in the conflict. The tectonic shifts which occurred after the demise of the Iron Curtain created new opportunities and the possibility of democratic reform in the region, but also new dangers and a multiplicity of developments which were more confusing than anything that had been seen for decades.
In contrast to central Europe, where the countries dealt with the transition to democracy and a market economy in a fast and historically unique manner, the Black Sea Region (BSR) is still diverse and heterogeneous in political terms and dependent on the legacies of the past.
This is the background of the fourth report which has been written for the Commission on the Black Sea. The authors are Franz-Lothar Altmann from the Bucharest State University, Johanna Deimel who is Deputy Director of the German Southeast Europe Association and Armando García Schmidt from the Bertelsmann Stiftung.
The policy report assesses the quality of the existing democratic institutions and identifies common structures in the political and societal development of the Black Sea region by comparing ten countries: Bulgaria, Romania, Turkey, Greece (the consolidated west and south of the region); Armenia, Azerbaijan, Georgia and Moldova (the conflict-ridden states); and Russia and Ukraine. This cross-national comparison shows that in recent years persistent weaknesses in the legal system and popular distrust of democratic institutions in most of the countries have been accompanied by an increase in executive authority. By and large successfully managed (though as yet incomplete) democratization processes in Bulgaria and Romania contrast with authoritarian tendencies in Russia and other countries in the region. In many parts of the region there is still a very real threat of internal and cross-border conflicts. Sizeable and growing socio-economic inequalities not only limit the capacity of societies to cope with the economic crisis, but may also weaken support for liberal, pro-Western political groups.
In seeking to enhance democratic transformation, civil society groups should be given broad practical support. Aid to states should be linked to democratic reforms, and combined with substantial assistance for institutional and administrative capacity building. Judicial reforms and a stronger rule of law will be critical in stabilising the region’s political and economic systems. The EU in particular needs to develop a coherent regional policy, which must include cooperation with Russia and Turkey.
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