Styopa Safaryan, Elkhan Nuriyev, Marin Lessenski, Joseph Chakhvashvili, Panagiota Manoli, Igor Munteanu, Nicolae Micu, Nadia Alexandrova Arbatova, Aleksandar Fatic, Mustafa Aydin, Omer Fazlioglu, Grigoriy Perepelytsia Editor Panagiota Manoli no 2 XENOPHON PAPER UNFOLDING THE BLACK SEA ECONOMIC COOPERATION VIEWS FROM THE REGION Styopa Safaryan, Elkhan Nuriyev, Marin Lessenski, Joseph Chakhvashvili, Panagiota Manoli, Igor Munteanu, Nicolae Micu, Nadia Alexandrova Arbatova, Aleksandar Fatic, Mustafa Aydin, Omer Fazlioglu, Grigoriy Perepelytsia Editor Panagiota Manoli no 2 XENOPHON PAPER UNFOLDING THE BLACK SEA ECONOMIC COOPERATION VIEWS FROM THE REGION JULY 2007 International Centre for Black Sea Studies (ICBSS) 4 Xenophontos Str. 10557 Athens Greece Tel: +30 210 324 2321 Fax: +30 210 324 2244 Email: [email protected] Website: www.icbss.org Director General: Dimitrios Triantaphyllou © International Centre for Black Sea Studies 2007. 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, mechanical, photocopying, recording or otherwise without the prior permission of the International Centre for Black Sea Studies. The views expressed exclusively represent the authors and do not necessarily reflect those of the ICBSS. ISSN 1790-8396 ISBN 978-960-89227-8-5 Published by the International Centre for Black Sea Studies and printed in Athens (Greece) by Ktimes 2 design & advertising. 2 UNFOLDING THE BLACK SEA ECONOMIC COOPERATION VIEWS FROM THE REGION CONTENTS Preface . .5 Dimitrios Triantaphyllou Introduction . .7 Panagiota Manoli Armenia in the Black Sea Region: 16 Year-Old Variable Geometry with Remaining Local Constants . .11 Styopa Safaryan Azerbaijan and the Wider Black Sea Area: New Prospects and Future Challenges . .27 Elkhan Nuriyev The Black Sea Cooperation: An Outlook from Bulgaria . .37 Marin Lessenski Black Sea Economic Cooperation: A Georgian Perspective . .53 Joseph Chakhvashvili Greece’s Engagement with the Black Sea Economic Cooperation . .67 Panagiota Manoli The Policy of Moldova towards the Black Sea Region and the BSEC . .85 Igor Munteanu The Policy of Romania towards the BSEC and the Black Sea Region . .101 Nicolae Micu Unfolding the Black Sea Economic Cooperation: A View from Russia . .111 Nadia Alexandrova-Arbatova The Policy of Serbia towards the BSEC and the Black Sea Region . .119 Aleksandar Fatic The Turkish Policy towards the Wider Black Sea Region and its Chairmanship of the BSEC (May – October 2007) . .129 Mustafa Aydin and Omer Fazlioglu X E N O P H O N P A P E R no 2 3 The Policy of Ukraine towards the BSEC and the Black Sea Region . .141 Grigoriy Perepelytsia Conclusions: Balancing National Interests . .157 Panagiota Manoli ANNEXES . .161 About the authors . .161 Abbreviations . .165 4 UNFOLDING THE BLACK SEA ECONOMIC COOPERATION VIEWS FROM THE REGION PREFACE What have been the main policy concerns of the countries of the Black Sea region when joining a regional structure such as the Black Sea Economic Cooperation (BSEC)? This is the main question that this edited volume of the Xenophon Paper series deals with. As the Organisation of the BSEC has reached its fifteenth Anniversary it is of value to identify common stands along with diversified views on the priorities of Black Sea cooperation as seen by experts coming from within the region. In devising a future strategy for the BSEC, in particular, but also in assessing the prospects of regional cooperation in any area of the world it is imperative to identify the main concerns of the local players and stakeholders. The International Centre for Black Sea Studies (ICBSS), being the think tank of the Organisation of the BSEC, launched a series of publications with a view to celebrate the occasion of the 15th Anniversary of the BSEC and more important to open a window to the needs, priorities and concerns of the regional states. The publication at hand is the third one on the occasion of BSEC at Fifteen following the Black Sea Economic Cooperation: Fifteen Years of Regional Activity, 1992-2007 Views by Foreign Ministers and Heads of BSEC Institutions (2007) and The BSEC At Fifteen: Key Documents, 1992- 2007 (2007). The views expressed herein by experts in their personal capacity disclose both the variety of angles from which the regional countries approach multilateral cooperation in the area and the common denominator upon which the Black Sea regionalism is taking shape. We hope that this publication is to be proven useful not only to the research community but also to the policy-makers both in the Black Sea region and beyond. Dimitrios Triantaphyllou Athens, July 2007 X E N O P H O N P A P E R no 2 5 INTRODUCTION Panagiota Manoli This Xenophon Paper titled “Unfolding the Black Sea Economic Cooperation: Views from the Region” is the product of collective work and reflection by researchers from the Black Sea region. The Black Sea is often cited as the cradle of civilisations, a bridge between East and West, a land rich in cultural diversity. Most literature focuses on the historical and cultural elements of the Black Sea countries while current international relations writings mostly refer to the ‘frozen’ conflicts that represent the greatest challenge to the future development of the region. This publication looks towards another direction by focusing on the possibilities of ‘cooperation’ and region building. It thus represents an effort to cast some light on the efforts to enhance intra-regional links and forge a new regional structure: the Black Sea Economic Cooperation (BSEC). The BSEC’s mission according to its Charter is ‘to promote a lasting and closer cooperation among the states of the BSEC region’.1 Though a post Cold War structure, the BSEC has roots in the early 1990s, i.e. prior to the disintegration of the Soviet Union. The idea belonged originally to the Turkish ambassador to the United States Sukru Elekdag, who announced this project for the first time during a panel discussion organised in Istanbul in January 1990.2 The convergence of the ideology between the Turkish and Russian leadership in 1991 set the grounds for the emergence of the BSEC as an initiative. The creation of a tool to facilitate economic interaction around the Black Sea along the lines of economic and political liberalism was advocated by both sides. The idea was soon embraced by all littoral states and states beyond the Black Sea that shared economic and political interests (Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania and Ukraine). Especially in the 1990s the high degree of diversity – in terms of the level of economic development, market size, population, etc. – of the then eleven member states (Serbia joined later in 2004) of the BSEC undermined the common identity of the new structure. 1 BSEC (1998), Charter of the Organisation of the Black Sea Economic Cooperation, preamble, para. 6, Yalta, 5 June. Text available on http://www.bsec-organization.org. 2 On the conceptualisation of the BSEC see Manoli, Panagiota (2004), The formation of the Black Sea Economic Cooperation: A Case Study of Subregionalism, PhD dissertation, University of Warwick. X E N O P H O N P A P E R no 2 7 Nevertheless, its members shared the common vision of regional cooperation as ‘a part of the integration process in Europe, based on human rights and fundamental freedoms, prosperity through economic liberty, social justice, and equal security and stability, which is open for interaction with other countries, regional initiatives and international organisations and financial institutions’.3 As broad as that common vision might seem, its power to inspire should not be underestimated. For almost half of the participating states (i.e. for the Newly Independent States and for the, until then, self-isolated Albania) it was above all a historic first in their appearance on the international scene. For all newly emerged states in the eastern part of Europe - and their neighbours alike - application of the CSCE principles and norms in their interstate affairs and adherence to economic and political liberty was a priority. Regional cooperation might have served partly declaratory purposes especially in the 1990s but it soon came to address real needs related to opening links of interaction and solving problems of economic development and transition. The BSEC is officially defined as a ‘regional economic organisation’ placing trade and economy – related activities as the priority issues on its agenda hence, its Working Groups have focused on fields like trade, finance, SMEs, agriculture, transport, etc. However, the BSEC has not developed into a trade bloc, or a Free Trade Agreement (despite initial efforts) nor have its members taken trade related commitments. The BSEC agreement does not provide for any trade related preference for countries within the Group. Despite the rhetoric on the economic character of regionalism – which might be partly attributed to the early influence of Ozal’s ideas on liberal foreign policy – the BSEC developed primarily as a foreign policy tool to serve the strategic priority of the political elites in the newly independent states; their ‘return to Europe’. A powerful force driving regionalism in all parts of Europe has been the European Union. EU integration acted as a powerful force, a dominant model in intraregional affairs. The BSEC represented an effort to transplant the functional approach of building political stability through economic cooperation. This is reflected not only in the nature of the main working groups of the organisation but even more in its official documents. The founding members stressed thus in the preamble of the Charter ‘…the desire of their countries and peoples for constructive and fruitful collaboration in wide ranging fields of economic activity with the aim of turning the BSEC Region into one of peace, stability and prosperity’ (para. 11). After the first formative years of the BSEC there was a strong request by the participating states that the agenda of the organisation moved beyond the level of ‘discussion’ and 3 BSEC (1998), Charter of the Organisation of the Black Sea Economic Cooperation, preamble para.