Organization of the Black Sea Economic Cooperation-20 Years of a Successful Regional Cooperation

By Engin Sabanci

The BSEC, a relatively young organization, is the one that has covered the most ground and the most remarkable one due to its dynamic structure. This feature derives from the importance of the region in terms of security and stability and the ambitious tasks assumed by the Organization in a region stretching from the South East Europe and East Europe including the BSEC basin to Caucasus and even to the Central Asia.
The Black Sea Economic Cooperation - established in 1992 under the leadership of Turkey - is a multi-lateral regional economic cooperation organization. The main objective behind the organization is to contribute to the economic development, prosperity and regional political stability by improving commercial and economic relations among the countries in the Black Sea basin.
The countries of the region leagued together around a possibility to direct and accelerate economic processes among themselves. The reasons behind regional cooperation are, in essence, of economic nature. A political process could not be this effective considering certain disagreements among certain member countries. The organization was born as a regional organization reflecting the common economic interests of the countries in the region at its core and their search for common interest at the least.
BSEC continued to exist as a cooperation scheme between 1992 and 1998 based on 1992 Istanbul, 1995 Bucharest Summit and 1996 Moscow Summit Declarations; and later became an Organization with international legal identity with the adoption of the BSEC Charter in 1998 Yalta Summit.
The Organization agreed upon and implemented various cooperation schemes primarily on economy, trade, transportation, environment, and fight against organized crimes. The organization set out certain measures to strengthen its structure and increase integration among member states.
The BSEC states established the BSEC Parliamentary Assembly, Black Sea Trade and Development Bank and International Center for Black Sea Studies to form the parliament, finance and academic pillars of the cooperation.
BSEC acted as an Organization fulfilling its international obligations and sought to develop cooperation with other international and regional organizations. The Organization formed cooperation notably with international organizations such as the United Nations and its affiliated organizations, OECD and World Bank and regional organizations such as the CEI. It maintained continuous contact with the EU and its institutions but failed to form a cooperation mechanism at the desired level.
The Organization supported the efforts of other initiatives working towards deepening integration among the countries in the Black Sea basin.
There are numerous international organizations and states with observer status following the works of the Organization. Additionally, the Organization carries out cooperation through Sect oral Dialogue Partnership and Dialogue Partnership mechanisms with most of them.
The first chapter of the book provides information on the significant developments since the establishment of the BSEC. The second chapter details the bodies and the functioning of the Organization. The third chapter explains the parliamentary assembly, trade and development bank and think-tanks - other important elements of the cooperation among member states. The fourth chapter touches upon the relations of the Organization with the European Union, United Nations, OECD, World Bank and Central European Initiative and various other developments in the Black Sea basin. The last chapter addresses the need for reform in the Organization and steps towards this end.

• Language: English
• Publisher: Engin Sabanci
• Release date: May 2, 2013
• ISBN: 9781301864065

Engin Sabanci

He was born in Malatya province of Turkey in 1979. He was graduated from Marmara University (Istanbul) with bachelor degree of BA in 2001. He had graduate degree of MIA from Columbia University School of International and Public Affairs in 2011. He has worked as an expert at the Office of the Prime Minister R. Tayyip Erdogan since 2004. His published article: A New Account on BSEC After 20 Years, MoFA, The Journal of International Economic Problems, XLIV, 2012

Book preview

ORGANIZATION

OF

THE BLACK SEA ECONOMIC COOPERATION

20 YEARS

OF

A SUCCESSFUL REGIONAL COOPERATION

By

Engin SABANCI

SMASHWORDS EDITION

PUBLISHED BY

Engin SABANCI on Smashwords

Copyright 2013 by Engin SABANCI

***

TABLE OF CONTENTS

PREAMBLE

INTRODUCTION

CHAPTER I-History of the BSEC

Ozal’s Perspective

Political Conjuncture

Foundation of the BSEC

Yalta Summit and Signing of the BSEC Charter

Agreement on the Administrative Center

Institutionalization Efforts following the Yalta Summit

First Enlargement

Efforts towards Deepening the Cooperation

CHAPTER II- Structure and Functioning of the BSEC

Principal and Subsidiary Bodies

Summit Meetings of Heads of State and Government

Council of Ministers of Foreign Affairs

Chairman-in-Office

Troika or Tripartite Meetings

Committee of Senior Government Officials

Permanent International Secretariat

Meeting of Ministers Responsible for Public Services in Cooperation

Subsidiary Organs

Fields of Cooperation and Working Groups

Official Languages

Membership Status

Observer Status

Non-Governmental Organizations (NGOs)

Staff of the Permanent International Secretariat (PERMIS)

Budget and Fiscal Rules of the BSEC

Project Development Fund (PDF)

Black Sea Trade and Investment Promotion Programme

CHAPTER III-BSEC Related Bodies and Affiliated Centers

Parliamentary Assembly of the Black Sea Economic Cooperation (PABSEC)

Black Sea Trade and Development Bank - (BSTD BANK)

BSEC Business Council

International Center for Black Sea Studies (ICBSS)

CHAPTER IV-Relations with International Organizations

BSEC-European Union Relations

BSEC-United Nations Relations

BSEC-OECD Relations

Relations with the World Bank

BSEC-Central European Initiative (CEI) Cooperation

CHAPTER V-Various Initiative in the Black Sea

CHAPTER VI-Is Reform Necessary? How?

CHAPTER VII-Various Documents of the BSEC

PREAMBLE

According to the Yearbook of International Associations - published annually by the Union of International Associations, based in Brussels – there is a total of 65,398 bodies such as regional organizations, cooperation programs, forums, initiatives, etc. organizing states and non-governmental organizations as of the end of 2011. Organization of the Black Sea Economic Cooperation (BSEC) which was initiated as a cooperation scheme and acquired the organization status with an international legal identity in 1999 in the Black Sea basin - one of the most strategically important regions of the world thanks to its geographical position, energy and water resources and cultural and ethnic diversity - is counted among them. BSEC member states include 6 Black Sea littoral states including Bulgaria, Moldova, Ukraine, Russia, Georgia, Turkey plus Greece, Albania, Serbia, Armenia and Azerbaijan. The Organization, which set out to develop economic cooperation in a wide geography of some 350 dynamic and young populations, has exerted significant efforts towards this objective and covered a lot of ground.

BSEC represents the turning point in the Turkish foreign policy and more particularly the foreign policy perspective of the late Turgut Ozal, 8th President of the Republic of Turkey. Ozal adopted an international relations approach centered on the economy, and thus the private sector, benefiting all related parties and which is multi-dimensional, proactive, popular and presenting alternatives to each other. BSEC, as a product of this perception, formed the general frame of Ozal’s policy towards the states in the Black Sea basin. As detailed in the 1st Chapter of the book, Ozal aimed to address the common problems and objectives of the countries in the region and thus creating an alternative corridor to the western dependence of the Turkish foreign policy and diversifying the foreign policy through the establishment of the BSEC.

The book unveils the diplomacy and cooperation experience in the BSEC process pioneered by Ozal, Ozal’s perception of and expectations from the regional cooperation specific to the BSEC. Moreover, another objective of the book is to present the acquisitions to date as a whole and hand them down the next generations in order to further improve the cooperation within the scope of the Organization.

The objective is to provide information on the Organization of the Black Sea Economic Cooperation for both the cooperating countries and the third parties with an interest in the region. The book provides information under specific chapter titles such as the history, bodies and functioning of the BSEC, fields of cooperation, affiliated organizations, relations with third parties and the need for reform. Not only does the book provide information on the Organization for the public sector, business, non-governmental organizations conducting region-related works but it also includes diplomacy issues that may attract the attention of an international relations student or graduate. Hereby, I would like to thank my wife and my colleagues in Office of the Prime Ministry.

INTRODUCTION

Evaluation of the integration processes in the Black Sea and former USSR region leads to the conclusion that more than 10 regional organizations have been established with the aim of accelerating the pace of cooperation and integration and re-shaping the region following the fall of the former Soviet bloc. These came in different shapes and compositions; the interests of the members aligned at various planes, with different driving forces, at different paces and at different development levels.

The BSEC, a relatively young organization, is the one that has covered the most ground and the most remarkable one due to its dynamic structure. This feature derives from the importance of the region in terms of security and stability and the ambitious tasks assumed by the Organization in a region stretching from the South East Europe and East Europe including the BSEC basin to Caucasus and even to the Central Asia.(1)

The countries in the region tormented by the developments in the first years of 1990s (fall of the Eastern Block and collapse of the USSR) came face to face with common problems such as transition to market economy, political and economic integration with the World and sought solutions to such problems. The idea towards cooperation put forth by the Republic of Turkey during such developments led the countries that border the Black Sea and the neighboring countries to seek a region-wide solution to their problems due to the sense of political and economic belonging to the Black Sea to some extent. This idea was soon well received by the countries of the region.

The Black Sea Economic Cooperation - established in 1992 under the leadership of Turkey - is a multi-lateral regional economic cooperation organization. The main objective behind the organization is to contribute to the economic development, prosperity and regional political stability by improving commercial and economic relations among the countries in the Black Sea basin.

The countries of the region leagued together around a possibility to direct and accelerate economic processes among themselves. The reasons behind regional cooperation are, in essence, of economic nature. A political process could not be this effective considering certain disagreements among certain member countries. The organization was born as a regional organization reflecting the common economic interests of the countries in the region at its core and their search for common interest at the least.

BSEC continued to exist as a cooperation scheme between 1992 and 1998 based on 1992 Istanbul, 1995 Bucharest Summit and 1996 Moscow Summit Declarations; and later became an Organization with international legal identity with the adoption of the BSEC Charter in 1998 Yalta Summit.

Following the adoption of the Charter of the Organization, four countries (Macedonia, Serbia-Montenegro, Uzbekistan, and Iran) applied for full membership. Serbia-Montenegro and Macedonia were invited to adopt the BSEC Charter for membership following the negotiation process. Serbia-Montenegro became the 12th member of the Organization upon adoption of the BSEC Charter. After the membership of these two countries, only Serbia continued with the candidate status.

The Organization agreed upon and implemented various cooperation schemes primarily on economy, trade, transportation, environment, and fight against organized crimes. The organization set out certain measures to strengthen its structure and increase integration among member states.

The BSEC states established the BSEC Parliamentary Assembly, Black Sea Trade and Development Bank and International Center for Black Sea Studies to form the parliament, finance and academic pillars of the cooperation.

BSEC acted as an Organization fulfilling its international obligations and sought to develop cooperation with other international and regional organizations. The Organization formed cooperation notably with international organizations such as the United Nations and its affiliated organizations, OECD and World Bank and regional organizations such as the CEI. It maintained continuous contact with the EU and its institutions but failed to form a cooperation mechanism at the desired level.

The Organization supported the efforts of other initiatives working towards deepening integration among the countries in the Black Sea basin.

There are numerous international organizations and states with observer status following the works of the Organization. Additionally, the Organization carries out cooperation through Sectoral Dialogue Partnership and Dialogue Partnership mechanisms with most of them.

The openness of the BSEC to establish cooperation with the third parties can be better understood considering some of the private regional initiatives that do not allow access to ministerial meetings as observers. The Organization that can improve regional cooperation without ignoring the global priorities managed to catch the zeitgeist. It provides rich and multi-dimensional cooperation possibilities not just for its members but all the related parties, continues to evolve in line with the developments around the World and always seeks new structural expansions. Therefore, the international interest to the BSEC increases day by day.

When we look back, we can see that the BSEC, today, establishes a dialogue opportunity at the level of foreign affairs ministers and less infrequently at the level of heads of state and government. There is no such cooperation mechanism participated at this level by the countries in the region. At the lower levels, the member states took part in the cooperation activities of their interest through principal and subsidiary bodies.

In addition, main problems such as the lack of a tangible roadmap in line with the objective to establish a free trade area which inspired the establishment of the Organization, insufficient use of private sector’s dynamism in the Organizational activities, excluding the relatively superior domains (environment, transportation, etc.) of the Organization out of the scope, halts in the cooperation mechanisms due to the disagreements among member states and insufficient administrative center capacity unveil the need for reform in the Organization.

The first chapter of the book provides information on the significant developments since the establishment of the BSEC. The second chapter details the bodies and the functioning of the Organization. The third chapter explains the parliamentary assembly, trade and development bank and think-tanks - other important elements of the cooperation among member states. The fourth chapter touches upon the relations of the Organization with the European Union, United Nations, OECD, World Bank and Central European Initiative. The fifth chapter briefly gives information on various other developments in the Black Sea basin. The last chapter addresses the need for reform in the Organization and steps towards this end.

CHAPTER I-History of the BSEC

Developments Leading to the Establishment of the BSEC

The Republic of Turkey is the first country to suggest the establishment of an economic cooperation among the countries that border the Black Sea. The idea towards establishing a cooperation organization began to develop through the end of 1980s and came to the fore of the Turkish foreign policy at the beginning of 1990s. Certain circles state that late Turgut Ozal, Prime Minister of the Turkish Republic between 1983 and 1989 was the one to suggest the establishment of a cooperation scheme. Representatives of the member states talk of Turgut Ozal, who lost his life of a heart attack during his term as the President following his term as the Prime Minister, as a visionary leader and express their admiration for pioneering the establishment of the Black Sea Economic Cooperation through his personal initiative on numerous occasions. In addition, the idea is believed to root in the diplomacy of the Ministry of Foreign Affairs and Retired Ambassador Sukru Elekdag was the first to put the subject into words.(2)

The developments leading to the establishment of the BSEC began with the winds of rapid change blowing from the east of Europe at the end of 1980s and affecting the Balkans, the Black Sea basin and the Caucasus. These winds of change emerged as the Glasnost (Openness) allowing the freedom of thought and expression put into effect to end the deep-rooted economic problems of the communism system and with the Perestroika (reform) movements aspiring to reshape the economic and political system. With the Glasnost and Perestroika period, the discussions with Turkey and Soviet Union to ensure the economic integration of the Black Sea region commenced. The Soviet Union had not collapsed yet and Warsaw Pact was still in effect; however the softening in the Eastern Europe as a result of the policies of Gorbachev, the President of the Soviet Union, cleared the way for Turkey’s initiatives towards the region.(3) These meetings forming the basis of the establishment of the Black Sea Economic Cooperation focused around detailing a cooperation method meeting Soviet Union’s need for food and consumer products and Turkey’s need for energy during the 1980s. This idea began to develop on a regional cooperation background.(4) The alliance perception of the Cold War era based on unilateral dependency was replaced by the need to establish regional networks increasing multi-lateral dependency thus originating the establishment of a multi-dimensional alliance network in the Black Sea basin.

The retired Ambassador Sukru Elekdag mentioned, in an article published in a national journal in 1990, the possible benefits of a newly established economic cooperation model among the Black Sea littoral countries which were then reluctant to cooperate.(5) Sukru Elekdag is said to express his views on this subject in other platforms as well. The political will had to step up to develop such a cooperation model. The retired Ambassador’s statements drew the attention of the Prime Minister Turgut Ozal, who had shaped his foreign policy around establishing alliance networks, and before long led to a comprehensive effort in the Foreign Affairs bureaucracy.

Ozal’s Perspective

As a result of his multi-dimensional foreign policy perception, Ozal managed to develop close cooperation with the USA; Europe, Turk-Islam Geography, the Balkans and the Black Sea basin simultaneously. Each of these cooperation models acted as leverages balancing the effect of the other. A bid towards cooperation particularly in the Black Sea basin can be regarded as a search for an alternative in the foreign policy considering the fact that it was one year after the EU’s decision to halt Turkey’s application for a duration of one year.

During the 1980s and at the beginning of the 1990s, the driving force of the BSEC was the personality and leadership of Ozal as was the case in all developments in the Turkish foreign policy.(6) As is the case in most issues, he took the first step in the BSEC and waited for others to react.(7) While the preparations for the cooperation continued in the bureaucratic level, he met with the leaders of Russia, Bulgaria and Romania at first hand and ensured that the preparation process progressed rapidly and smoothly.

Ozal considered a strong economy as the pre-requisite of an active and independent foreign policy. As a result of this perception that puts the economy at the center of foreign policy, in other words, that puts the economy before political relations and security concerns, Turkey strived to develop economic cooperation rather than political and security oriented blocs. Ozal’s idea to increase inter-dependency of countries through developing economic cooperation and as a result to decrease the risk of regional conflict constitutes the main philosophy behind the cooperation model in the Black Sea basin.(8) In this context, with the adoption of a growth model based on export instead of import substitution, the BSEC, particularly, became one of the main dynamics of his foreign policy. Opening up economic borders among the BSEC states was on the forefront of Ozal’s objectives.

Compared to the previous leaders reluctant to certain alternatives due to ideological reasons from the start, Ozal who did not discriminate among countries had a wide room for maneuver in the foreign policy. Ozal, who set forth the least possible prerequisites in bilateral relations, wanted to ensure the participation of Greece and Armenia - countries that were previously thought to be impossible - and develop cooperation in every field particularly in economic relations.(9)

Believing that Turkey should be acting as a bridge between East and West, Ozal adopted broad criteria for the BSEC membership and expressed his desire to establish cooperation with countries that border the Black Sea and the neighboring countries and instructed the Ministry of Foreign Affairs to set the model. He specifically expressed that the role of the states should be limited to establishing a zone enabling the free movement of persons, goods and services within the newly established cooperation scheme. He wanted the private sector to run all the cooperation projects in the model and limited the role of the states to supporting the initiatives of the private sector and assuming infrastructure projects that were too complicated for the private sector.

Ozal was strictly against the institutionalization of the cooperation process. As the readers may notice in the following chapters, he did not want the establishment of the BSEC Permanent Secretariat, Council of Ministers of Foreign Affairs and similar bodies of the organization. He suggested that Turkey should drive the cooperation process in the first years as the country pioneering the establishment of the union and foresaw an alternating presidency system to keep the participating countries’ attention. He stated that the Chairmanship-in-Office should plan the meetings and carry out the secretariat services.(10)

The late Ozal intended to contribute to the development of the economies in the region by establishing a