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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