« "Trade Facilitation in the Caucasus" | Main | Single Economic Space Mtg. 20 August 2004 »

BSEC Analysis

Analysis of the importance of BSEC as a regional organization, appeared in the 10 August 2004 issue of theRFE/RL Newsline

RFE/RL NEWSLINE Vol. 8, No. 151, Part I, 10 August 2004



By Ulrich Buechsenschuetz

The leaders of 11 countries bordering or neighboring the Black Sea region gathered in Istanbul in June 1992 to found the Black Sea Economic Cooperation (BSEC) organization. If one is to believe Turkish sources, it was late Turkish President Turgut Ozal who initiated the process of uniting such widely disparate states as Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine in one organization. The ambitious project covered a vast area reaching from the Adriatic Sea
in the west to Vladivostok in the east, and from the Greek and Turkish shores of the Mediterranean to Russia's Baltic Sea and Barents Sea coasts -- in other words, an area of roughly 20 million
square kilometers, according to the BSEC's official website (http://www.bsec.gov.tr). The 11 countries provided "an unsaturated market of 330 million people with supply well behind demand in the
three principal economic sectors of agriculture, industry, services" and "a foreign-trade capacity of over $300 billion annually," according to the website.

Moreover, the BSEC united countries that account for the world's second-largest reserves of oil and gas, huge resources of minerals and metals, and enormous human resources, both highly trained and unskilled. However, it was also hampered by a "broad manufacturing basis in need of restructuring, overhauling, modernization, and commercialization."

On paper, this new organization could have developed into a major economic and -- to a much lesser xtent -- political player. However, the BSEC's impact was weakened from its outset by two major factors: open rivalries and even hostilities among some of its members, and its organizational structure.

On closer inspection, it becomes clear that these two factors are intertwined. Although the BSEC was ounded as an organization focusing on economic cooperation, its founding members emphasized the need for peaceful settlement of disputes and conflicts, as stated in the 1992 Bosporus Declaration, because "the region is already faced by serious conflicts and...there is the danger of new tensions arising."

At the time of its foundation, some BSEC members were actively engaged in armed conflicts, such as rmenia and Azerbaijan in Nagorno-Karabakh; Turkey and Greece stood at the brink of war on several ccasions in the Aegean Sea; and Russia was involved in conflicts in Georgia and Moldova. Therefore, it was certainly a great achievement to unite them under a common roof. Even more so if one keeps in mind that the two biggest countries in the BSEC -- Russia and Turkey -- were struggling for political and economic influence throughout the region. Stressing the economic aspect of regional cooperation was therefore a way to avoid addressing the existing conflicts and rivalries.

Despite efforts to strengthen the BSEC by turning it into an international legal body in 1998 and by founding institutions such as the Thessaloniki-based Black Sea Development Bank, hopes that the BSEC would evolve into a politically integrated entity similar to the EU appear to have been utopian. Even on an conomic level, cooperation did not develop as was expected. This was (and is) first and foremost ecause "the members have refrained from committing themselves to specific and detailed obligations in rder to bring about an ever-deepening economic integration involving a multiplicity of actors, besides overnments, of the type established by the EU," as Berdal Aral of the international-relations department at Istanbul's Fatih University pointed out in an analysis for "Alternatives: the Turkish Journal of International Relations" (see http://www.alternativesjournal.net/volume1/number4/aral.htm).

"Instead, [the BSEC members] have acted in an unusually cautious fashion to sketch out general ommitments, while opting for framework agreements marked by a hesitant language that offers ample leeway for avoiding strict obligations," Aral continued. "Similarly, the infrastructure projects [such as gas and oil pipelines] are scheduled to be planned and implemented only at the intergovernmental level. The parties have even shied away from establishing partnership on the basis of a treaty or convention, and instead opting for nonbinding declarations."

Another reason the BSEC has acquired little influence is that some of its members were either already EU embers (in the case of Greece) or anticipated EU membership in the near future (Bulgaria, Romania, and possibly Turkey). In some member countries that previously belonged to the Soviet bloc, the fear that the BSEC might turn out to be an updated version of COMECON might also have served as a deterrent. After all, apart from Albania, Turkey, and, more recently, Serbia and Montenegro (which joined the BSEC in 2004), all BSEC countries were part of the former Soviet-dominated COMECON.

Some observers have noted that the inclusion of countries such as Albania that do not have direct access to the Black Sea region has undermined the chance to build greater economic cohesion among the BSEC members. And, given their persistent rivalry, BSEC members Russia and Turkey are unlikely to play a coordinated role similar to the French-German axis within the EU. "Unless both of them come to see the Black Sea as the realm of common economic interests, Russian-Turkish rivalry will no doubt prejudice the opportunities offered by the BSEC," Aral wrote.

Will the members of the BSEC be able to overcome their disputes and embark on a long-term process of reforming (and strengthening) the organization? Only then would the BSEC gain importance and its summits become more than a platform for fine phrases and meetings on the sidelines.

As things stand, it is unlikely that the BSEC will ever develop into a political organization similar to the EU, mainly because some of its members do not want this to happen -- at least at present. In an interview with the independent Armenian daily "Azg" on 7 July, Armenian BSEC representative Arsen Avagian said, "Armenia makes efforts not to let the BSEC turn into a political organization, and the member states well understand this." As an example of how BSEC member states seek to avoid addressing contentious issues, Avagian recalled that during recent discussions leading to the adoption of a declaration on Black Sea regional security, other member states, including Turkey, voted down a proposal by Azerbaijan to insert into that declaration a phrase condemning "aggressive separatism" -- a clear allusion to the Karabakh conflict.

Copyright (c) 2004 RFE/RL, Inc.
All rights reserved.

August 18, 2004 in BSEC (RTG) | Permalink