Proposed RBEC Strategy - UNDP Black Sea Trade and Investment ...

United Nations Development Programme
Regional Bureau for Europe and CIS
PROPOSED RBEC STRATEGY FOR I�CREASI�G
U�DP REGIO�AL COOPERATIO�
I� THE BLACK SEA AREA
Draft Working Document
March 2009
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TABLE of Context:
A. Description of the region ................................................................................................................... 3
B. U�DP’s role for Regional Cooperation in the Black Sea ............................................................... 4
i) Private Sector Development .................................................................................................................. 5
ii) Environment ......................................................................................................................................... 6
iii) Governance.......................................................................................................................................... 7
iv) Trade integration ................................................................................................................................. 8
v) Cultural heritage ................................................................................................................................... 9
vi) Disaster management and prevention ................................................................................................ 11
C. Forging Partnerships……………….……………………………………………………………...12
A��EXES ................................................................................................................................................. 13
A1. Economic Indicators ........................................................................................................................ 14
A2. Regional Organizations and Initiatives covering the Black Sea ...................................................... 16
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A. Description of the region
1. The countries of the region are confronted with different levels of development. While steadfast
reforms and the clear prospect of EU accession have led some countries, such as Bulgaria, Romania and
Turkey, to sustained economic progress, in the CIS countries from the region, determined implementation
of reform programs have yielded limited results, because of civil conflicts, weak institutions and lack of
resources. Despite this, the Black Sea region is emerging as a decisive crossroads for the future of Europe.
Given the prominent list of regional players, the Black Sea area has high geo-strategic significance. In this
area converge, Turkey, Russia, Greece, Ukraine, the Eastern Balkans, and the Caucasus. ‘The region
brings together some of the most important challenges that shape the security of today and tomorrow’s
Europe: from illegal immigration to environmental degradation; from the security of energy supplies to
frozen conflicts’. 1
2. Conflicts and ethnic tensions among some countries of the region have opened rifts that will not be
easily healed. Even countries, which have not been directly involved in civil and ethnic conflicts, have
suffered economic, social and political consequences of the regional instability. It will take time to
achieve the intra-regional cooperation and trust necessary for peace and stability. As a result of European
integration, a new trade block is emerging in the Black Sea region, comprising the EU member countries,
Turkey and the South-eastern European countries.
3. Regional cooperation has emerged but not thrived to date. Nevertheless, the incentives for regional
cooperation are clear. The sea itself is a naturally fragile ecosystem that has been ravaged by decades of
overfishing and urban as well as rural pollution. Cleaning up the Black Sea can only be accomplished in
concert. Trade is also crucial, especially for those Black Sea countries that have problems of
competitiveness for their products in the EU market and taking into account the huge untapped intraregional
trade and investment potential. The development of regional infrastructure projects; from
improving port facilities to building road and rail links, is a clear interest that all countries share. Bringing
tourism to the area and marketing its natural beauty can become a target for regional cooperation.
4. Many different players and actors, countries, regional organisations and donors, have launched and
promoted activities. There is much overlapping and duplication in these areas. Often competing are the
efforts of the ENPI, the Black Sea Synergy, the Black Sea Forum, GUAM and others. As a result, the
limited pan-Black Sea cooperation has focused mainly on “soft” activities. This is exemplified by the
Black Sea Economic Cooperation Organization (BSEC) established in 1992. Over the years BSEC has
proved to be a confidence-building forum for discussion of common interests. The recent decision
adopted at the BSEC Istanbul Summit in 2007 to turn the organization in a project-oriented entity could
pave the way to overcome the bureaucratisation which has prevented BSEC from playing an important
role.
1 Fabrizio Tassinari: a synergy for Black Sea Regional Cooperation, 2006
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5. The prospect of closer economic integration between the CIS and the non-CIS Black Sea countries,
potentially involves challenges of an even greater dimension. Bulgaria, Greece and Romania are EU
members. Therefore, any integration steps with these countries would necessarily require deeper
integration with the EU as a whole. Besides, Turkey is also a long-standing member of a customs union
with EU and accessing country which means that the Turkish integration process is strongly anchored to
the EU. In other words, regional cooperation in the Black Sea area can generally proceed only to the
extent to which is compatible with the format of these countries’ relations with the EU. This format
differs widely between individual countries of the region. EU relations with these countries can be
grouped into three broad types:
1) EU Membership (Bulgaria, Greece and Romania) and EU accession (Turkey)
2) European Neighborhood Policy (all other Black Sea countries, except Russia) and,
3) Four common spaces and Strategic Partnership (Russia)
Furthermore, the multilateral cooperation of the Black Sea countries with the EU is largely confined to
sectoral initiatives such as the Interstate Oil and Gas Transport to Europe (INOGATE), the Transport
Corridor Europe-Caucasus –Asia (TRACECA), and the Danube-Black Sea Environmental Task force
(DANBLAS). With the introduction of the Black Sea synergy it is expected that the EU might have a
more substantial role in promoting deeper regional integration for the Black Sea region as a whole.
Another recent initiative led by Poland and Sweden “the Eastern Dimension” seems to address the Black
Sea area too.
6. Other important regional organisations include the Black Sea Commission, tasked with the
implementation of the Bucharest Convention, aimed at the environmental protection of the Black Sea.
B. U�DP’s role for Regional Cooperation in the Black Sea
7. This document attempts to define broad parameters of a comprehensive UNDP strategy in support of
the regional integration process for the Black Sea area, which in this document refers to: Armenia,
Azerbaijan, Bulgaria, FYROM, Georgia, Greece, Kosovo, Moldova, Romania, Russia, Serbia, Turkey
and Ukraine. Albania is also included due to its membership to the BSEC. All these countries, apart from
Greece, have their own Country Cooperation Frameworks (CCF). Therefore this strategy should be seen
in conjunction with these country-specific documents. To avoid unnecessary duplications, this regional
strategy only covers specific cross-cutting regional issues in the areas identified below. It is not a
blueprint for specific programmes or projects or financing requirements. The fundamental objective of
this strategy is to increase prosperity and a reduction of poverty for all people living in the Black Sea area,
which can only be achieved if peace, cooperation and stability are established throughout the region.
8. Performance in the past decade clearly indicates that reform efforts in most of the Black Sea countries
have been hesitant and attempts at intra-regional cooperation that can contribute to, sustainable growth
and stability, have been limited. This inadequate performance stems from country-specific difficulties,
insufficient government commitment and low levels of investments-as well as regional instability. The
situation has improved in recent years, but progress needs to be consolidated and sustained to change the
fundamental prospects for peace and prosperity.
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9. Moreover, it is unlikely that sustainable growth will materialize and a virtuous circle of increased
prosperity and security can be established solely on the basis of national reform programs. The fact that
most of the countries are small economies means they do not have sufficient demand to sustain growth.
The strategy articulated in this document therefore underscores the critical areas in which only a regional
concerted effort can contribute to sustain growth.
Regional integration in the Black Sea offers scope for many critical actions but U�DP should
prioritize those that allow it to maximize its comparative advantages. The following are the priority
areas for U�DP:
i) Private Sector Development
10. All countries in the region have adopted privatization and market-oriented reforms. These include
liberalizing prices and trade, simplifying commercial dispute resolution mechanisms, improving access to
finance, and streamlining regulatory frameworks. Foreign direct investment (FDI) and promotion of
small-medium-sized enterprises(SMEs) have been the most important modalities for private sector
development. FDI has been promoted by giving foreign investors tax breaks and special guarantees that
are generally negotiated on a case-by-case basis. Many governments in the region are developing
microcredit schemes also. Steps are taken to minimize corruption as it has a strong negative impact on
private sector and SMEs development. With these ongoing efforts, the private sector’s share of GDP has
increased dramatically in the region. However, most of its progress is connected with privatization rather
than with private investments. Most significant private sector investments have been in natural resources,
communication and banking with few if any links to the rest of the economy. The poor level of FDI
outside the extractive sector points to fundamental impediments to private sector development especially
in the CIS countries of the Black Sea region.
11. Some core issues facing the private sector in the region are: i) low level of competitiveness, ii) poor
export-oriented policies, iii) inadequate quality public infrastructure that raises transaction costs and
discourages exports from the region.
12. The proximity of the region to the EU, the presence of three EU member states represents a major
challenge for the private sector in the non-EU countries from the region. Better access to the EU market
can offer an opportunity for sustainable economic development. Many countries also face the task of
adapting their regulatory environments, for example, to ensure approximation with EU standards. At the
same time, exporters face yet another common challenge in adapting their products to meet EU quality
standards, notable in the areas of food safety and environmental protection.
13. A more open and accessible market within the region would be attractive to foreign and major
domestic investors and would facilitate private sector development. This would require measures to
reduce the plethora of border controls, tax and financial regimes, and product standards that currently
raise transaction costs. An efficient, seamless transport and transit system within the region would greatly
facilitate the growth of private enterprises which is a necessary condition for sustained, diversified and
inclusive economic growth.
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U�DP Strategy
An effective UNDP strategy to promote SMEs in the region must simultaneously tackle three pillars:
� Meeting the EU requirements in terms of compliance with the Acquis Communautaire
The EU represents the most important trading partner for all the countries from the region. The highly
sophisticated EU market requires stringent compliance with the quality parameters and standards set
by the acquis communautaire. This constitutes a formidable obstacle for the SMEs from the region
affecting their level of competitiveness and their capacity to penetrate the EU market.
� Improving the SMEs business environment
The costs imposed on SMEs by a hostile business environment are generally more severe than those
suffered by larger firms. Thus, SMEs can also expect to greatly benefit from the establishment of an
efficient and non-discriminatory investment framework. Strong commitment by the Governments of
the region , on one hand, and technical support and assistance from the international community, on
the other hand will be crucial
� Support SMEs network
SMEs from the region are at a disadvantage, often because of limited linkages with other firms,
insufficient technical and financial resources, and lack of access to information, not only when
starting up but also when entering new markets, or expanding their activities. The UNDP has an
extensive experience in this area: supporting people-to-people contacts at SMEs level would facilitate
not only the establishment of business linkages but at the same time it will ensure the flow of knowhow
among SMEs by contributing to building managerial and technical skills and facilitating access
to knowledge and information.
ii) Environment
14. The countries of the region face a range of global, regional and trans-boundary environmental
challenges. Key issues include air and water quality, waste management (including radioactive waste),
nature protection, industrial pollution and pollution of the Black Sea. With regards to climate change, the
countries need to implement the UN Framework Convention on Climate Change and the Kyoto Protocol.
15. Experience has demonstrated that environmental protection is an area where regional work provides
clear added value and where cooperative relationships can be built despite political tensions. Over the past
decades, steps have been undertaken in the region to reform environmental institutions, policies and
legislation. Various strategies and action plans have been adopted, for example the Black Sea
Commission. However, implementation of environment legislation and multilateral environmental
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agreements, strategic planning and prioritization in light of scarce resources and competing needs,
continue to constitute challenges.
U�DP Strategy
� Environmental issues present several opportunities where a multi-country and regional approach
could bring more benefits than the execution of individual projects. Regional environmental
programmes have demonstrated that a regional focus leads to greater overall benefits and
sustainability. Against this background, regional environmental issues that could be tackled in
the UNDP strategy for the area are:
� Climate change
To have Regional and National Environmental Strategies for the Protection of the Black Sea that
takes into consideration of the impacts of Climate Change. Assist the countries from the region
in mainstreaming climate change in their development plans.
� �atural resource management
Due to its richness in the Black Sea region, forestry management and biodiversity conservation would
benefit significantly from regional cooperation among countries from the region, especially since
many natural resources span more than one country. Water resource management and cooperation are
also important, especially due to the special role the Danube plays in the region.
� Pollution
There have been several efforts in the region to address the issue of pollution in the Black Sea and in
the Danube; however more still needs to be done particularly in the area of industrial and solid waste.
There is scope for learning from “best practices” within the region regarding all these issues.
� Institutional and policy framework
As it is moving towards a closer integration with the EU, this region will require substantial
improvements in environmental management, institutions and regulations. There is a clear role for the
UNDP based on a path towards European structures and their regulatory regimes (acquis
communautaire), to provide technical and financial support.
iii) Governance
16. Much of economic development, social inclusion and regional stability in the Black Sea area, will
depend greatly on the strengthening of institutions. Gradual integration with the European Union will
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equire significantly more mature institutional structures, which are able to satisfy the economic political
framework conditions of the EU and to implement the acquis communautaire. Given the importance that
the prospect for European association will assume for peace and stability in the Black Sea region, the
emphasis that will need to be placed on institutional development necessary to gradually become a
sufficiently reliable partner in the EU integration process cannot be over-emphasized. Institutions also
play an essential role in poverty alleviation, by assuring that public services are delivered to all members
of the population including the poor. Furthermore, several CIS countries from the region have weaknesses
in those public sectors service functions, including credible and consistent regulation and infrastructure
necessary for private sector development. Civil Service reforms, decentralisation and strengthening local
government are critical elements of improved governance capacities. Taxes and regulations are viewed as
one of the most important barriers to SME development. Business licensing is particularly problematic
across the region as well as the quality of business support services from the public sector.
At a national level
U�DP Strategy
Given trade’s prominent role in the regional integration and liberalization processes, UNDP will assist
national institutions in assessing and proposing policies to manage the adverse impacts of freer-trade
integration on certain sectors or vulnerable populations. To improve integration’s prospects of reducing
poverty and inequality, UNDP should be prepared to assist countries in the region in developing and
implementing policies to manage the freer-trade integration which would equalize opportunities within
and between participating countries and help them in achieving the Millennium Development Goals
(MDGs).
At a regional level
As economies in the region become more intertwined, UNDP shall continue to support projects which
promote integrated development of border regions, by assisting local institutions and communities on
either side of a border in helping to remedy shared problems in areas such as the environment, migration
and cross-border trade to make these regions more competitive.
Furthermore, UNDP will promote a wider use of east-east cooperation by supporting the sharing of best
practices in all areas relevant for institutional strengthening and transfer of know-how among the
countries from the region.
iv)Trade integration
17. Trade integration must be important and, based on past experience in Europe and elsewhere, probably
the leading component of the broader, longer term integration of the countries of the Black Sea. Most of
the countries of the region have economies so small that their development depends critically on
international trade and access to the European market, which typically accounts for more than 50% of
their exports. Because of their relatively small size and the low level of trade and investment links with
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the rest of the world, these economies would also greatly benefit from increased external demand for their
products, and from the learning and innovation that are associated with higher levels of foreign
investments.
18. Trade plays a varied role in the economies of the region with trade/GDP ratios ranging from a high
91% in Bulgaria to a low 30% in Albania. There is little doubt that intra-regional trade can expand and be
a stimulus for growth. Currently, intra-regional trade is on average small, not exceeding 20% of the total.
Trade patterns in the countries from the region are a reflection of current capacities and trade policies as
well as other factors, such as continuing ethnic conflicts and uneven progress in introducing broader
market reforms. Trade policies vary considerably, but they are characterized by significant levels of
protection, differentiated tariff structures-resulting in high effective rates of protection, and differing
levels of access for different trading partners as a result of the various trading arrangements to which the
countries of the region belong. The region sees three countries, Bulgaria, Romania and Greece belonging
to the EU, Turkey as EU accessing country, Russia and Azerbaijan not members yet of the WTO and all
the other states which have very small economies making the issue of intra-regional trade a quite
challenging matter.
19. In addition to that, the EU plays an important role for these countries. The EU would be the main
source of increased external demand as well as foreign investment, as it is already, because of its
geographical proximity, size and openness.
U�DP Strategy
It is clear that any UNDP strategy in this area has to take into account all these parameters. A first step
has been the formulation and the current implementation by the UNDP of the Black Sea Trade and
Investment Promotion Programme (BSTIP), which aims specifically at promoting intra-regional trade and
investment using the private sector as a driving force. However, progress in this area, as necessary for its
direct benefits and its contribution to the wider objectives of trade integration in the area, is not enough.
Further steps are required in the immediate future to strengthen trade relations among the countries of the
region in the following areas:
� Supporting the elimination of non-tariff barriers to the movement of goods and services in
the region;
� Strengthening customs administration through technical assistance;
� Build capacity on the business implications for the private sector in these countries in
meeting the requirements of the Acquis communautaire and the WTO agreements hence
facilitating also their integration to the EU and global markets.
v) Cultural heritage
20. The Black Sea region is rich in its cultural diversity and heritage, with each country taking
understandable pride in the historical legacy left by previous generations. But another, more recent legacy
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- that of conflicts, the Cold War and political divisions – has left much of that rich heritage effectively
stranded in often remote and under-developed border areas.
21. Increasingly, cultural heritage is not only seen as a national historical or sentimental asset, but as a
potentially valuable economic asset that can be of particular importance to impoverished border regions.
22. The Black Sea region has perhaps the greatest density and diversity of cultural heritage assets of any
region in the world. Its border areas are particularly blessed in this regard, as they represent the key way
markers in the ebb and flow of various civilizations and peoples over the centuries. The need is not only
to preserve sympathetically this unique legacy in a coherent, coordinated way, but to do so in a way that
will bring direct economic and social benefits to current and future generations.
U�DP strategy
The aim is to increase cultural contacts between border regions as a stepping stone to greater economic
cooperation, not only in everyday business and commerce, but increasingly in “cooperative tourism.”
Cross-border “Heritage Trails” or “Heritage Clusters” are becoming important (and economically
lucrative) destinations for international travelers, and can act as a catalyst for broader economic
development.
� Realization of the need for a well-developed promotion plan develops the Black Sea as a global
destination for cultural tourism for both international and regional visitors. Sharing of case studies
and presentations to educate and stimulate discussions for cross-border cooperation around
cultural heritage, historical waterways, wine routes, living culture and festivals, ancient trading
routes and other cross-border themes.
� Raised awareness within the region of the economic potential for cultural heritage tourism, which
is one of the fastest-growing segments of the global travel industry, itself one of the highest
growth sectors internationally.
� Identified key strategies that have proven most successful for developing economically viable and
beneficial cross-border cultural heritage programs, and identified the main issues and
problems.
� Examined the roles of governments, inter-governmental organizations, multi-lateral institutions,
the private sector and NGOs, and identified potential international sources of funding for use in
economic-based, cross-border cultural heritage projects.
� A number of viable trans-national cross-border cultural heritage programs in the region including:
• Ancient Wine Routes
• Ancient Waterways
• Ancient Kingdoms
• Natural-Cultural Landscapes
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vi) Disaster Management and Prevention
Black Sea nations have history of devastating earthquakes, floods, landslides, drought, extreme
temperature, wild fires and wind storms that have caused economic and human losses across the region.
Often these disasters that transcend borders overwhelm the capacity of a single country to manage. Also
the level of preparedness and prevention varies from country to country and regional co-operation does
not exist to the extent necessary. Because of this high vulnerability, and the relative smallsize of the
countries in the Black Sea region as well as the historical links between them, it will be more efficient and
economically prudent for the region’s countries to cooperate in the area of civil protection and disaster
preparedness and prevention.
Enormous efforts have been carried out in the South-Eastern European countries (SEE) bordering the
Black Sea in cooperation with the EU, NATO and World Bank to formulate and prepare appropriate
disaster mitigation measures. Most of the countries in the region have gone through major political,
social, economic and administrative changes and this is also reflected in the institutional aspects of
disaster risk management. Presently most of these countries are with a rejuvenated energy towards:
� Regional activities covering cross-boundary issues and involving inter-country collaboration
through implementation in sub-regional clusters involving three to four countries as appropriate;
and
� Regional activities in support of national ones.
As such UNDP’s intervention should be articulated in the following components:
1) Establishment of a Black Sea Regional Disaster Management Framework
Unfortunately, a regional disaster management and prevention vision covering all the Black Sea
countries, especially involving the CIS countries of the Black Sea region is missing. Furthermore, there is
a need to incorporate disaster management into the development plan of the CIS countries from the region
giving ample scope for trans-boundary cooperation and activities for disaster risk management
2) Capacity building
Assisting especially the CIS countries from the region in building capacity at national level but also
integrating them in a regional cooperation framework. The training and awareness needs to be tailored to
accommodate trans-boundary issues and cooperation in case of emergency is an absolute priority.
Establishing or updating national disaster preparedness plans which incorporate linkages to international
systems of disaster response, and have clearly defined and agreed roles and responsibilities for the
national independent disaster response organizations. Disaster management plan should be pro active
giving emphasis to preparedness and mitigation.
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3) Sharing of information and resources
There are some premier academic institutions in different countries in the region, particularly working in
the field of seismology. The resources of these institutions, both data and human resources are not fully
utilized for disaster management and preparedness activities. Regional cooperation of national hydrometeorological
centres in individual countries needs to be strengthened for forecasting and early warning.
4) Promoting collaboration and strengthening partnership
Strengthening the availability of reliable sub-national level data that are crucial for vulnerability
assessment. A centralized database on variables required for vulnerability and risk assessment, risk
modeling and preparing management plans at country and regional level need to be generated. Some
countries already have data available in GIS format, which needs to bring into the common database. Data
design should be developed and store in a versatile format for easy retrieval, analysis and updating. Those
countries that require training in data development should include this in the data development program.
The data will help identification of vulnerable zones, formulate landuse planning strategies and develop
regional plans for disaster mitigation and preparedness.
5) Public education, awareness and advocacy
Awareness should also reach the general public and the efforts of organizations to impart training and
awareness in schools should be encouraged. The use of media for disseminating awareness programme
should be broadened and encouraged so that the message will reach larger population.
development and are conducive for integrating disaster management into the development process. In
some countries there is also a shift from military to civil administration in the disaster management
structures.
C) Forging partnerships
23. UNDP will actively coordinate and cooperate with other donors who operate in the region to
maximize co financing. Donor coordination will be further strengthened around specific thematic areas in
accordance with the UNDP focus areas for the region. As a leading role is going to be played soon by the
EU in the region through its “Black Sea synergy”, it would be essential for UNDP to develop joint
initiatives through which resources could be mobilized from the EU. The US and USAID is also an
important partner and donor that is present and active in the region.
24. The countries of the region, themselves, have shown key interest in collaborating with UNDP on
regional initiatives (Greece and Turkey especially). There are therefore good prospects for engaging the
new and emerging donors of the region in the development and implementation of joint projects and
programmes in the areas described above.
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A��EXES
A1. Economic Indicators
A2. Regional organizations and initiatives covering the Black Sea
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ECONOMIC PERFORMANCE
GDP (USD
billion) - 2005
PPP (USD
billion) - 2005
GDP per
capita
A��EX A1
Economic Indicators
Alb Arm Azer Bul Geo Gre Mol Rom Rus Ser i Tur Ukr
8.4 4.9 12.6 26.6 6.4 222.5 2.9 98.6 763.7 40.8 362.5 82.9
16.6 14.9 42.1 69.9 15.1 259.6 8.8 196.0 1552.0 69.31 605.9 322.4
USD - 2005 2678 1625 1498 3443 1429 20282 694 4556 5336 4550 5030 1761
PPP USD –
2005 ii
Annual growth
rate (%)
1990 – 2005
Average annual
change in
consumer price
index (%) 2004
- 05
STRUCTURE OF TRADE
Import of goods
and services
(% of GDP) -
2005
Export of goods
and services
(% of GDP) -
2005
5316 4945 5016 9032 3365 23381 2100 9060 10845 9320 8407 6848
5.2 4.4 - 1.5 0.2 2.5 3.5 1.6 -0.1 5.7 iii 1.7 -2.4
2.4 0.6 9.5 5.0 8.2 3.6 13.1 9.0 12.7 6.9 iv 8.2 13.5
46 40 54 77 54 28 91 43 22 47 34 53
22 27 57 61 42 21 53 33 35 27 27 54
FLOWS OF AID, PRIVTE CAPITAL AND DEBT
Official
ODA received
(net
disbursement)
– 2005
Total (USD
million)
318.7 193.3 223.4 309.8 191.8 464.0 409.6
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Per capita
(USD)
101.8 64.1 26.6 69.2 45.6 6.4
% of GDP 3.8 3.9 1.8 4.8 6.6 0.1 0.5
Net FDI
inflows (% of
GDP) – 2005
Total Debt
Service – 2005
3.1 5.3 13.4 9.8 7.0 0.3 6.8 6.7 2.0 4.5 2.7 9.4
% of GPP 1.0 2.8 1.9 21.7 2.9 8.6 7.0 5.5 11.6 7.1
% of export of
goods, services
and net
investment
from abroad
UNEMPLOYMENT – 2006
Unemployed
people (000)
Unemp. rate
(total - % of
labour force)
2.5 7.9 2.6 31.5 7.4 10.2 18.3 14.6 3.2 v 39.1 13.0
157 424 369 334 279 427.4 104 705 5775 2445 1601
14.4 36.4 8.5 10.1 13.8 8.9 7.3 7.2 7.8 20.9 9.9 7.2
Source: Human Development Report 2007 / 2008
i Source: Country Brief 2007, World Bank
ii Values expressed in 2005 constant prices
iii GDP Growth (annual %)
iv Inflation, consumer prices (annual %)
v Total debt service (% of exports of goods, services and income) - 2000
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1) U�DP Black Sea Trade and Investment Promotion Programme (BSTIP)
BSTIP is a joint initiative of the Government of the Hellenic Republic, of the Government of the
Republic of Turkey, the Organization of the Black Sea Economic Cooperation (BSEC) and the United
Nations development Programme (UNDP). It is managed from a Programme Management Office located
in Athens with an additional liaison unit hosted by the BSEC Headquarters in Istanbul.
BSTIP's main objectives
A) Developing networking arrangements
The present programme aims at the expansion of the intra-regional trade and investment links in the sub-
region by identifying the untapped investment and trade potential and putting into place the mechanisms
to exploit it. As such, BSITP is based on a unique three-fold strategy as follows:
a) Promote business-to-business (B2B) contacts in the sub-region through the organization of thematic
sector focused partnership fora in co-operation with the local business support organizations (BSI);
b) As a result of these events, key inputs in the identification of constraints affecting intra-regional
investment and trade expansion will be provided and addressed;
c) Intra-regional trade and investment activities will be mainstreamed in the working plans of the local
BSIs, which will be essential partners of the Programme, hence contributing to build their capacity.
B) Supporting the introduction of the Global Compact in the sub-region
Launched in 2000 by the UN Secretary General Kofi Annan, the UN Global Compact brings business
together with UN agencies, labor, civil society and governments to advance ten universal principles in the
areas of human rights, labor, environment and anti-corruption. Through the power of collective action, the
Global Compact seeks to mainstream these ten principles in business activities around the world and to
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catalyze actions in support of broader UN goals. With over 3,000 participating companies from more than
100 countries, it is the world's largest voluntary corporate citizenship initiative.
The BSTIP will support the introduction of the UN Global Compact in the countries of the sub-region. It
will be an important tool for promoting networking arrangements and create awareness on the broader
concept of responsible investment.
C) Building capacity on the EU and WTO legislation
The status of some of the states covered by the programme as EU and WTO candidate countries will have
a direct impact on the concerned business communities. It is expected that the Programme will develop
targeted initiatives to make those business communities aware of the implications for their enterprises
with regards to the EU and WTO accession process. A special emphasis will also be devoted to those
countries which are not yet in the EU Accession Process but they need to assist their private sector in
being fully aligned to the quality requirements of the EU market in order to strengthen their export
competitiveness.
2) CPMR - Balkan and Black Sea Regional Commission
(Conference of Peripheral Maritime Regions for Black Sea)
Regions of Greece and Romania took the initiative to set up geographical Commissions in the Balkans
and the Black Sea area under the umbrella of the Conference of Peripheral Maritime Regions of Europe
(CPMR). The two Commissions were set up in April 2000 and June 2001 respectively. In 2004, they
decided to join forces to encourage dialogue and cooperation with the aim of constituting a lasting
institutional framework to support the integration of these areas and improve their relations with the EU
in the context of enlargement. The CPMR Balkan and Black Sea Regional Commission (BBSRC)
currently brings together 30 Regions from Greece, Turkey, Romania, Bulgaria, Croatia, and Ukraine. It
has special partnerships with Serbian, Georgian and Moldovan Regions. The Secretariat is located in
Athens and it is assisted by the CPRM General Secretariat based in Rennes.
3) Black Sea Economic Cooperation (BSEC)
The Summit Declaration and the Bosphorus Statement signed on 25 June 1992 by the Heads of States and
Government of eleven countries: Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova,
Romania, Russia, Turkey and Ukraine, gave birth to the Black Sea Economic Cooperation (BSEC). Its
Headquarters - the Permanent International Secretariat of the Organization of the Black Sea Economic
Cooperation (BSEC PERMIS) - was established in March 1994 in Istanbul. With the entry into force of
its Charter on 1 May 1999, BSEC acquired international legal identity and was transformed into a fullfledged
regional economic organization: Organization of the Black Sea Economic Cooperation. With the
accession of Serbia in April 2004, the Organization’s Member States increased to twelve. It came into
existence as a unique and promising model of multilateral political and economic initiative aimed at
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fostering interaction and harmony among the Member States, as well as to ensure peace, stability and
prosperity encouraging friendly and good-neighbourly relations in the Black Sea region.
4) Black Sea Trade and Development Bank (BSTDB)
The Black Sea Trade and Development Bank (BSTDB) is an international financial institution,
established on 24 January 1997 by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova,
Romania, Russia, Turkey, and Ukraine. The Headquarters is situated in Thessaloniki (Greece). With an
authorized capital of SDR 3 billion, the Bank supports economic development and regional cooperation
by providing trade and project financing, guarantees, and equity for development projects supporting both
public and private enterprises in its member countries.
5) BSEC Business Council(BC)
The BSEC BC, situated in Istanbul, was established in 1992 by representatives of the business
communities of 11 countries to contribute to the efforts of their Governments to secure the greater
integration of the Black Sea region into the world economy. The new vision of the BSEC Business
Council calls for creating maximum value for the business communities and for becoming a strong agent
of change in the Black Sea Region. The Business Council is an international, non-governmental, nonprofit
organization consisting of representatives of the business communities of the BSEC Member
States: Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Serbia,
Turkey, and Ukraine.
6) Black Sea Business Information �etwork
Black Sea Business Information Network (BSBIN) is the Business Information Exchange System of the
12 BSEC member countries and was developed in order to gather and disseminate business information
world-wide and to promote the interests of businesses from the 12 BSEC countries, mainly of the Small
and Medium Sized Enterprises (SMEs). The system is administrated and hosted by the Chamber of
Commerce and Industry of Romania and its aim is to provide up-to-date reliable economic, commercial
and general information regarding the member countries of BSEC and to support the development of the
business communities in these countries by means of a modern information system.
7) International Centre for Black Sea Studies (ICBSS)
The International Centre for Black Sea Studies (ICBSS), situated in Athens, was founded in 1998 as a
non-profit organization. It has since fulfilled a dual function. On the one hand, it is an independent
research and training institution focusing on the wider Black Sea region. On the other hand, it is a related
body of the Organization of the Black Sea Economic Cooperation (BSEC) and serves as its acknowledged
think-tank. The ICBSS aims to foster multilateral cooperation among the BSEC member states as well as
with their international partners.
8) The Parliamentary Assembly of the Black Sea Economic Cooperation (PABSEC)
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Established on 26 th February 1993 as a parliamentary dimension of the Black Sea Economic Cooperation
(BSEC), the PABSEC has proved to be an effective forum for inter-parliamentary dialogue in the Black
Sea region. Situated in Istanbul, with a membership of 76 parliamentarians representing the national
parliaments of the twelve BSEC Member States, the PABSEC facilitates the mobilization of efforts by the
national parliaments aimed at promoting democratic values, the rule of law, pluralistic society and market
economy. Its main objective is to provide assistance to the national parliaments in enacting the laws that
are necessary for the implementation of the projects elaborated within the framework of the Organization
of the BSEC and to establish the legislative foundation for successful multilateral economic, political and
cultural cooperation in the region.
9) The Commission on the Protection of the Black Sea Against Pollution (the Black Sea Commission
or BSC)
The Commission on the Protection of the Black Sea against Pollution (the Black Sea Commission or
BSC), is permanently based in Istanbul. The BSC is an intergovernmental body established to implement
the Convention on the Protection of the Black Sea against Pollution signed in Bucharest in April 1992.
Acting on the mandate of the Black Sea countries (Bulgaria, Georgia, Romania, Russian Federation,
Turkey and Ukraine) which on the 21-04-1992, signed and shortly thereafter ratified the Convention on
the Protection of the Black Sea Against Pollution, the BSC implements the provisions of the Convention
and the Black Sea Strategic Action Plan which include combating pollution from land-based sources and
maritime transport, achieving sustainable management of marine living resources and the conservation of
biological diversity whilst at the same time promoting responsible fisheries so as to not affect local
livelihoods.
10) Black Sea Forum
On the 5th of June 2006, the first Summit of the Black Sea Forum for Dialogue and Partnership took
place in Bucharest with the leaders of Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Republic of
Moldova, Romania, Russian Federation, Turkey and Ukraine. The Black Sea Forum is an evolving
process nourished and driven by active involvement and interaction between stakeholders interested in the
present, but most importantly in the future of the Black Sea region. Therefore it can help them to share
their expertise, projects and practical solutions for a wide range of issues. The Black Sea Forum for
Dialogue and Partnership will be based on active and open dialogue between institutions and civil society
within the Black Sea region, as well as with European and Euro-Atlantic partners.
11) Black Sea University Foundation (BSUF)
In 1992 a Romanian academic group took the initiative to set up the Black Sea University Foundation, a
non-political and non-profit organization that received special Consultative Status with the Economic and
Social Council of the United Nations in 1999. The BSUF is located in Bucharest and its objectives are to
strengthen civil society and the academic community through teaching and to support the efforts of all
Black Sea and South-East Europe countries to solve the most pressing problems, which may include
peace strengthening, conflict prevention and early warning, institutions and governance improvement,
economy restructuring (joining the regional and global economic circuit), mentality change regarding
modernization and regional partnership.
12) Black Sea Regional Energy Centre (BSREC)
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The Black Sea Regional Energy Centre (BSREC) was established following the Khalkidhiki Ministerial
Meeting in May 1994. Currently, the BSREC has 13 member-countries: Albania, Armenia, Azerbaijan,
Bulgaria, Georgia, Greece, Moldova, Romania, Russian Federation, Turkey, Ukraine, the Former
Yugoslav Republic of Macedonia and Serbia. The BSREC was officially registered in 1995 in Sofia,
Bulgaria and it acts according to Bulgarian legislation. The BSREC activities are aimed at the
implementation of the EU acquis and harmonization of the energy policy in the Black Sea region with the
EU. The Centre co-operates closely with all the Black Sea countries in order to be well informed about
the national trends and developments in the energy field.
13) Union of Black Sea and Caspian Confederation of Enterprises (UBCCE)
UBCCE, with its headquarters based in Istanbul, maintains close contacts with BSEC as well as with
other European, international regional and sectoral organizations to pursue its objectives. UBCCE
maintains its objectives are to establish institutionalized cooperation between central, voluntary, private,
non-governmental, horizontal business organizations from member countries with a view to assisting the
economic and social development of the region and to permit concerted action by these central, voluntary,
private, non-governmental, horizontal business organizations vis-à-vis governments and the business
community, favoring the adoption, of policies conducive to the better functioning of a market economy
under optimal conditions for member countries.
14) Black Sea Security Program
The Black Sea Security Program, funded by a grant from the Carnegie Corporation of New York, with
additional support from the US Department of Defense, began in 2001 with the goal of encouraging a
regional security system based on cooperation and integration. It is unique in its mission to bring together
leading policy makers in the Black Sea region in order to gain a deeper understanding of issues affecting
the region and to encourage problem solving in areas of common interest. The program involves senior
military representatives and civilian security specialists from the United States and ten regional countries:
Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and Ukraine.
15) Black Sea Association of �ational �ews Agencies (BSA��A)
The Black Sea Association of National News Agencies (BSANNA) was established in Kyiv, Ukraine on
May 29 – 31 of 2006. It is an international non-governmental organization, which unites the efforts of
national news agencies in the Black Sea region in a bid to allow informational resources to be accessed
easily and efficiently. The Association is aimed, as provided by its Statute, at promoting friendship and
good neighbourly relations, strengthening mutual respect and trust among the agencies, freely and equally
exchanging information and is rapidly spreading in the countries that are represented by the news
agencies.
16) Black Sea �GO �etwork (BS��)
The Black Sea NGO Network (BSNN), established in 1998 and registered in 1999, is a regional
association of NGOs from all Black Sea countries. BSNN is an independent, non-politically aligned, nongovernmental,
non-profit voluntary association of NGOs from the six immediate Black Sea countries;
Bulgaria, Georgia, Romania, Russia, Turkey and Ukraine, the goal of which is the facilitation of the free
flow and exchange of information, resources and experience for the accomplishment of its mission, which
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states the BSNN’ aim is to contribute to the protection and rehabilitation of the Black Sea and to the
sustainable development of the Black Sea countries through increased participation of NGOs,
governments, businesses and other institutions, as well as the general public.
17) Black Sea Cross Border Cooperation / Black Sea Basin Joint Operational Programme
The Black Sea Basin Joint Operational Programme 2007-2013 is one of the EU operational programmes
financed under the European Neighborhood & Partnership Instrument (ENPI). It aims at a stronger and
sustainable economic and social development of the Black Sea Basin regions. Through the Black Sea
Basin Joint Operational Programme 2007-2013, communities in the areas concerned will be encouraged
to further develop their local economy, confront environmental challenges and promote greater
interaction amongst its indigenous peoples. Its joint management authority is based in Bucharest.
18) Black Sea Scene Project
The Black Sea Scene project started 1 December 2005 with the aim to establish a Black Sea Scientific
Network of leading environmental and socio-economic research institutes, universities and NGO’s from
the countries surrounding the Black Sea and to develop a virtual data and information infrastructure that
will be populated and maintained by these organizations to improve the identification, access, exchange,
quality indication and use of their data and information about the Black Sea.
19) Black Sea Trust for Regional Cooperation (BST)
The Black Sea Trust for Regional Cooperation (BST) is a $20million public-private partnership created in
2007 by the German Marshall Fund of the United States and operates in Armenia, Azerbaijan, Bulgaria,
Georgia, Moldova, Romania, Russia, Turkey and Ukraine. BST has four main goals: to rebuild trust in
public institutions, to affirm the value of citizen participation in the democratic process, to strengthen a
critical set of institutions that lie at the nexus state and society, and to foster regional, cross-border ties in
the public, private, and nonprofit sectors.
20) Black Sea Synergy
In April 2007, the EU developed the “Black Sea Synergy” programme. The programme has a number of
concrete initiatives looking at areas like transport, energy, the environment, maritime management,
fisheries, migration, and the fight against organized crime. The programme is also geared towards the
information society and general cultural cooperation, in order to increase ‘synergy’ among the countries
surrounding the Black Sea. The programme involves the following countries: Armenia, Azerbaijan,
Bulgaria, Georgia, Moldova, Russia, Turkey and Ukraine.
21) Blackseafor
The Black Sea Naval Cooperation Task Group was established in 1998 by Bulgaria, Georgia, Romania,
Russia, Turkey and Ukraine with the aim of coordinating the naval forces of its member countries in the
areas of humanitarian assistance, demining, search and rescue operations and environmental protection.
The BLACKSEAFOR conducts exercises, in order to increase its efficiency and interoperability in the
execution of the above mentioned tasks.
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