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Economic Developments and Reforms in Cooperation Partner Countries: the Link Between Economics, Security and Stability

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Economic Developments and Reforms in Cooperation Partner Countries: the Link Between Economics, Security and Stability ECONOMIC DEVELOPMENTS AND REFORMS IN COOPERATION PARTNER COUNTRIES: THE LINK BETWEEN ECONOMICS, SECURITY AND STABILITY L’EVOLUTION ET LES REFORMES ECONOMIQUES DANS LES PAYS PARTENAIRES DE LA COOPERATION: LE LIEN ENTRE L’ECONOMIE, LA SECURITE ET LA STABILITE Reiner Weichhardt Editor Deputy Director Economics Directorate, NATO ECONOMIC DEVELOPMENTS AND REFORMS IN COOPERATION PARTNER COUNTRIES: THE LINK BETWEEN ECONOMICS, SECURITY AND STABILITY Colloquium 3-5 November 1999 Brussels L’EVOLUTION ET LES REFORMES ECONOMIQUES DANS LES PAYS PARTENAIRES DE LA COOPERATION: LE LIEN ENTRE L’ECONOMIE, LA SECURITE ET LA STABILITE Colloque 3-5 novembre 1999 Bruxelles Copyright © 2000 NATO All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic, magnetic tape, mechanical, pho- tocopying, recording or otherwise, without permission in writing from the copyright holders. First edition 2000 ISBN: 92-845-0137-7 This is the latest in a series bringing together papers presented at the NATO colloquia organised by the NATO Economics Directorate and Office of Information and Press on economic issues in the former USSR and Central and East European countries. For further information please write to the Director, Office of Information and Press, 1110 Brussels, Belgium. The articles contained in this volume represent the views of the authors and do not necessarily reflect the official opinion or policy of member governments or NATO Contents Preface Reiner Weichhardt Deputy Director, Economics Directorate, NATO 13 Opening Remarks Ambassador Sergio Balanzino Deputy Secretary General, NATO 15 Commemorative Speech Philip Joseph, OBE Former Deputy Director, Economics Directorate, NATO 18 Keynote Speech Evhen Bercheda Premier vice-ministre des Affaires étrangères de l’Ukraine 23 Chairman’s Summary Daniel George Director, Economics Directorate, NATO 31 PANEL I: SOUTH-EASTERN EUROPE THE LINK BETWEEN ECONOMICS, SECURITY AND STABILITY: THE CASE OF SOUTH-EASTERN EUROPE Ambassador Lazar Comanescu Head of Mission of Romania to NATO 36 RULE OF LAW AND ECONOMIC GROWTH - HOW STRONG IS THEIR INTERACTION? Genc Ruli Director of the Albanian Institute for Contemporary Studies, Tirana 43 BULGARIA - THE NEW STABILITY George Prohasky Director, Centre for Economic Development, Sofia 48 7 THE ROLE OF INTERNATIONAL ORGANIZATIONS IN CONTRIBUTING TO ECONOMIC SECURITY: RECONSTRUCTION OF THE BALKANS Spiros Voyadzis Manager of the Brussels Office, The World Bank 61 DEVELOPING THE ECONOMIES OF SOUTH-EASTERN EUROPE Harry Cohen NATO Parliamentary Assembly, Sub-Committee on East-West Economic Cooperation and Convergence, Chairman (United Kingdom) 66 MAKING A DIFFERENCE IN THE BALKANS: THE EAST-WEST INSTITUTE ACTION NETWORK FOR SOUTH EASTERN EUROPE Vera Budway Director, Action Network for South Eastern Europe, Prague 87 PANEL II: RUSSIA ECONOMIE, SECURITE ET STABILITE EN RUSSIE: DES ENCHAINEMENTS FATALS? Gérard Wild Centre d’Etudes Prospectives et d’Informations Internationales (CEPII), Paris 92 RUSSIAN ECONOMY: ON THE VERGE OF GROWTH OR STAGNATION? Andrej Klepach Senior Researcher, Institute of Economic Forecasting, Russian Academy of Sciences, Moscow 104 RUSSIA’S LABOUR MARKET: ADJUSTMENT WITHOUT RESTRUCTURING. Rostislav Kapeliouchnikov Senior Researcher, Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow 120 8 COMMENTS ON THE PAPERS OF GERARD WILD, ANDREJ KLEPACH AND ROSTISLAV KAPELIOUCHNIKOV Silvana Malle Head of Division, Economics Directorate, OECD, Paris 126 THE RUSSIAN ECONOMY IN MARCH 2000 Keith Bush Director, Russian and Eurasian Program, Center for Strategic and International Studies, Washington, DC 133 PANEL III: UKRAINE PROSPECTS FOR ECONOMIC SECURITY AND GROWTH IN UKRAINE David Snelbecker Policy Advisor, Harvard University, Ukraine Macroeconomic Reform Project, Kyiv 159 THE IMPACT OF THE SOVIET LEGACY ON REFORMS IN UKRAINE Vira Nanivska Director of the International Centre for Policy Studies, Kyiv 170 LE CAS DE L’UKRAINE: L’INDEPENDENCE ET APRES? Olivier de Laroussilhe Commission Européenne - Direction Générale des Relations Extérieures 177 COMMENTS ON THE PAPERS SUBMITTED BY DAVID SNELBECKER, VIRA NANIVSKA AND OLIVIER DE LAROUSSILHE Alexander Kennaway Conflict Studies Research Centre, Royal Military Academy, Sandhurst, UK 184 TRENDS IN UKRAINIAN ECONOMIC RESTRUCTURING Natalia V. Berezniak Head, Euro-Atlantic Cooperation Department, Directorate of the European Union and International Technical Aid, Ministry of Economy, Kyiv 198 9 UKRAINE: THE ECONOMY AS A SOURCE OF INSECURITY Todor Dimitrov Head of the Centre for Strategic Development, Institute for Advanced Studies, Vienna 202 PANEL IV: SOUTHERN CAUCASUS WITH PARTICULAR FOCUS ON ENERGY ISSUES TRANSCAUCASUS AND THE CASPIAN REGION WITH PARTICULAR FOCUS ON ENERGY ISSUES Friedemann Müller Senior Researcher, Stiftung Wissenschaft und Politik, Ebenhausen, Germany 207 TRANSCAUCASUS AND THE CASPIAN REGION WITH PARTICULAR FOCUS ON ENERGY ISSUES Neil MacFarlane Director, Centre for International Studies, St. Anne’s College, University of Oxford, UK 219 TRANSCAUCASUS AND THE CASPIAN REGION WITH PARTICULAR FOCUS ON ENERGY ISSUES Matljuba Fazilova Institute of Strategic Research of Uzbekistan, Tashkent 226 SOUTHERN CAUCASUS WITH PARTICULAR FOCUS ON ENERGY ISSUES David Aptsiauri Director of International Economic Relations, Ministry of Foreign Affairs of Georgia 228 THE CASPIAN/CAUCASUS REGION WITH PARTICULAR FOCUS ON ENERGY AND WATER ISSUES Kairat Abuseitov Director of the Multilateral Cooperation Department, Ministry of Foreign Affairs, Republic of Kazakhstan 231 10 THE LINK BETWEEN ECONOMICS, SECURITY AND STABILITY IN THE SOUTHERN CAUCASUS Fikret M. Pashayev Head of Division, Department of International Economic Organizations, Ministry of Foreign Affairs, Republic of Azerbaijan 235 ECONOMIC AND STRATEGIC STAKES IN THE CASPIAN ENERGY MARKETS Mariano Alierta NATO Parliamentary Assembly, Sub-Committee on East-West Economic Cooperation and Convergence, Rapporteur (Spain) 240 PANEL V: CONCLUDING ASSESSMENT OF THE LINK BETWEEN ECONOMICS, STABILITY AND SECURITY THE FUNDAMENTALS OF ECONOMIC STABILITY AND SECURITY IN CENTRAL AND EASTERN EUROPE Todor Dimitrov Head of the Centre for Strategic Development, Institute for Advanced Studies, Vienna 257 ECONOMICS AND SECURITY: COMMENTS AND A SUGGESTED FRAMEWORK Martin C. Spechler Professor of Economics, Indiana University, Indianapolis, Indiana, USA 264 THE LINK BETWEEN ECONOMICS, STABILITY AND SECURITY. IN A TRANSFORMING ECONOMY Katarzyna Zukrowska Institute of Development and Strategic Studies, Warsaw 269 DYNAMICS OF THE “ECONOMY-SECURITY” NEXUS IN TRANSITION STATES Daniel Daianu Professor of Economics, Academy of Economic Studies, Bucharest and former Finance Minister of Romania 284 11 A GEOPOLITICAL ANALYSIS OF ECONOMIC TRANSITION AND ITS IMPACT UPON SECURITY IN EUROPE Peter Sutcliffe NATO Economics Directorate 291 ADDITIONAL PAPERS SUBMITTED BIELORUSSIE: ECLAIRAGES SUR LE PAYS ET EVOLUTION ECONOMIQUE RECENTE Jérôme Garcia Ingénieur de l’armement, Direction des Relations Internationales, Délégation Générale pour l’Armement, Paris 307 INVESTMENT AND TRADE POLICY OF THE REPUBLIC OF BELARUS Igor Ugorich Head of Department, Foreign Trade Administration, Ministry of Foreign Affairs, Belarus 321 ANNEX THE CONTRIBUTION OF THE ECONOMICS COLLOQUIUM TO NATO’S ECONOMIC AGENDA: AN EVOLUTION OVER 30 YEARS Philip Joseph, OBE Former Deputy Director, Economics Directorate, NATO 332 12 PREFACE Reiner Weichhardt Deputy Director, Economics Directorate, NATO The 1999 NATO Economics Colloquium - one of the main events under the Action Plan 1998-2000 of the Euro-Atlantic Partnership Council - dealt with the link between economic developments, security and stability in Cooperation Partner countries. This thematic approach - demonstrating NATO’s awareness of economic factors in its endeavour of projecting security and stability to Central and Eastern Europe - raised great interest among some 150 experts from academia, business, government and international organisations. A particularly strong contribution was made by members of the Economic Committee of the NATO Parliamentary Assembly. The conference, chaired by Mr. Daniel George, NATO’s Director of Economic Affairs, was opened by Deputy Secretary General, Ambassador Sergio Balanzino. The Keynote Speech was delivered by First Deputy Foreign Minister of Ukraine, Dr. Evhen Bersheda. In an introductory session special tribute was paid to NATO’s 50 th anniversary in 1999, commemorating the development and the rôle of the Economics Colloquium over many years. The conference subject was broken down into a series of concrete case studies highlighting the link between economy and security. Particular attention was paid to developments in South-Eastern Europe, Russia, Ukraine, Belarus and the Southern Caucasus. These are regions where economic development on the one hand and political and social stability on the other hand are particularly intimately linked. Various pertinent issues were discussed such as economic performance and reforms in a broader political and social context, crucial sectoral developments, economic risk factors, regional cooperation and short- and medium- term economic outlook on the eve of the 21st century. In a concluding Panel, an overall assessment on the economic dimension of a comprehensive security concept was made. A concise overview of the presentations and discussions can be found in the Chairman’s
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