© Friedrich-Ebert-Stiftung, June 2009. Published by Friedrich-Ebert-Stiftung Contents Introduction 5 Michael Weichert Part 1 New Regionalism and the Western Balkans – Mapping Foreign Policies to Assess Capacity for Regional Ownership A Decade of Regional Cooperation in South Eastern Europe – Sharing Guidance, Leadership and Ownership 13 Jelica Minić Foreign Policy, Elites and Regional Identity 31 Eno Trimçev Part 2 Development of Regional; Cooperation in the Western Balkans and EU Integration – Evaluating Regional Cooperation Initiatives Development of Regional Cooperation in the Western Balkans and EU Integration – Evaluation of Regional Cooperation Initiatives 47 Mirza Kušljugić Regional Cooperation in the Balkans 1996-2008 – from Imposed to Intrinsic 53 Malinka Ristevska Jordanova The New Initiative – a New Paradigm? Prospect of a New Balkan Regionalism. The New Initiative for an Old Problem 79 Amer Kapetanović & Zoran Kulundžić Development of Regional Co-operation in the Western Balkans and EU Integration Lessons Learned: Conclusions and Recommendations 93 Mirza Kušljugić Part 3 Sectoral Case Studies – Trade, Energy, Social Cohesion and Human Resources The three case studies – Introduction 99 CEFTA 2006 – Limits and Opportunities 101 Vojislav Bajić & Miroslav Zdravković Traditional Solutions in the Traditional Sector – (Un)expected Outcomes? 117 Energy Sector in the SEE Ana-Maria Boromisa A Missed Opportunity? Social and Labour Market Policies in the Western Balkans 131 Paul Stubbs The Three Case Studies – Conclusions 151 Introduction Michael Weichert Friedrich-Ebert-Stiftung Berlin At the end of 2008, the then EU-Commissioner for Enlargement, Olli Rehn, declared 2009 as „the Critical Year of the Balkans“. It remains to be seen if this prediction will come true, whether it is meant to be a warning or an offer, and to whom it has been directed. The “To-Do- List” for both the countries in the Balkans, as well as for the European Union´s enlargement policy is long. The apparently endless period of transition and preparation for the accession into the EU has resulted in an increasing impatience and frustration on the side of the Balkans, whereas on the side of the European Union the question is asked more frequently these days why the political elites in the Balkans apparently lack the will and the capacity to overcome the legacies of the past and get their act together. The “Year of the Balkans 2009” shall probably be understood as an encouragement to both sides. The enormous challenges for each of the countries of the Balkans and the unresolved tensions that exist between them are further overshadowed by the impact of international financial crisis, which is hitting the region as well. The already difficult economic conditions will be further aggravated, and reduce the perspectives for development and stability. As it seems today, countries of the region will only be able to face the challenges ahead as an integral part of a wider socio-economic and political framework. Or, in other words, the Balkans will only be in the position to achieve the conditions for EU membership once they have become an integral part of the European Union. This obvious contradiction can only be overcome if the inclusion of the Balkans in the European Union can be accelerated and if it re-gains momentum. For a number of reasons, regional cooperation has been put high on the international agenda for the region. The “Stability Pact for South Eastern Europe” was established in 1999, and was expected to strengthen cooperation and - through cooperation - stability and development of each of the participating countries. In 2008, this internationally driven framework of the Stability Pact was handed over to the South East European countries, and transformed into the “Regional Cooperation Council” (RCC), coordinated by the SEE-governments through the South-East European Cooperation Process (SEECP). This transformation from an externally driven to an internally driven approach was celebrated – first of all, by the international community - as an important step in the region’s assuming ownership over its own affairs. The message of this publication is: yes, regional cooperation is in the very interest of these countries since it offers opportunities and is to the benefit of its members. Regional cooperation, based on common interests, is possible and it already happens, and it is a necessary pre-requisite for development of each of the countries involved. Constructing the region is a process, which has to be based on initiatives and actors from within the region, though it requires support of the outside factors like the European Union and other international players. It is against this background that a group of experts completed a process of collective reflection on regional cooperation and the complex relation between intervention and ownership in the South Eastern Europe, aimed at advocating a new concept of region-building and regional cooperation. We consider regionalism as networking – as the interplay between different layers of networks, of which some are more and some are less institutionalised, some are more 5 and some are less formal. In this context, “region” is understood not as a territory, but as a flexible concept of common interests. “Ownership” means assuming responsibility, the sense of responsibility. A measure of ownership is, therefore, the presence and implementation of initiatives from within the region. Different experiences and initiatives of regional cooperation represent the fora for partnership in pursuing and lobbying for common interests, and in doing so, contribute to building ownership. The theoretical and conceptual basis for our discussion was found, on the one hand, in debate about regionalism as a kind of reaction to Globalization. This approach focuses on the formalization of economic, political and social relations between a group of countries, and the creation of formal regional institutional structures and legally-binding agreements. Hettne (1999)1 distinguishes between old regionalism, dominated by a single issue and, often, steered by one of the global superpowers, and new regionalism, which is more multi- dimensional, fluid, based on shared interests and, sometimes, involves grassroots actors (the bottom-up regionalism). Conceptually, there is a real issue as to whether SEE constitutes a “regional block”, either in terms of protecting common interests or in terms of challenging the status quo, in the context of EU-membership aspirations of SEE states. The existence of regional free trade agreements and the influence of regional development banks with close links to the IMF and World Bank also limit the extent, to which some forms of regionalism are an alternative, rather than an accommodation and a variant of dominant forms of neo- liberal globalization. Another conceptual approach was found in the debate of the problems and possibilities of achieving genuine partnerships between external and internal development actors and of securing ownership, as the central feature of a post-conditionality development policy regime, extendable to the issues such as democratization and post-conflict peace-building and state-building. The rhetoric that suggests that external interventions can be tailored to the context, and that it can be locally-owned and based on stakeholder participation, flies in the face of the continued asymmetries of power (Gould, 2005).2 In SEE, ownership has tended to be a slogan associated with an exit strategy for international actors, resulting in new political opportunities for unaccountable domestic elites. The notion of regional ownership in an SEE context reinforces a kind of claim for a new regionalism. This would emphasize the importance of functional, accountable, transparent and inclusive cooperation between SEE states, their citizenries, businesses, and civil societies, in and for itself, rather than imposed as a condition within the EU accession process, much less to meet the EU’s need for security and development on its doorstep. The reality, of course, again, is that posing this in either/ or terms is probably too simplistic, although advocating the movement along a continuum towards a greater regional ownership would seem to be politically feasible and conceptually defensible. In an effort to understand “ownership”, we have distinguished three horizontal and three vertical dimensions: Horizontal • The transfer of responsibilities in the state-building and transformation business from international to national actors (exit-entry-strategy); • The variation, the interests and the constellation of different national actors and stakeholders, and the need for empowerment. Identity, social trust, leadership and 1 Hettne, Björn. Globalization and the New Regionalism: The Second Great Transformation. In Globalism and the New Regionalism, edited by Björn Hettne, Andras Sapir and Osvaldo Sunkel, New York: St. Martin´s Press, 1999. 2 Gould, Jeremy. Poverty, Politics and States of Partnership. In The New Conditionality: The Politics of Poverty Reduction Strategies, edited by Jeremy Gould, London: Zed Books, 2005 6 participation of society and its segments; • The regional dimension and its contribution towards common interests, or even a common identity. Inter-linkage of formal and informal regional networks. Networks of networks of different actors. Vertical • The process of capacity building regarding human, institutional and financial resources. • The actual model of development assistance