Geneva, 5 May 1999 

ECONOMIC COMMISSION FOR EUROPE DISCUSSES ITS CONTRIBUTION TO RECOVERY IN SOUTHEAST EUROPE AFTER A SETTLEMENT OF THE CONFLICT IN YUGOSLAVIA

This morning the United Nations Economic Commission for Europe (UN/ECE) reconverted into formal session. After adopting the agenda, the Commission started a general debate on the agenda item on strengthening cooperation within the ECE region. During the general debate upon this subject, delegates commented upon the issue of the Kosovo crisis.

The Chairman of the Commission, Miroslav Somol (Czech Republic) opened the session with introductory remarks upon the reform and simplification of the work of the Commission. Simplification of the work of the formal meetings was underway, and was proving effective and insightful. Seminars would continue to be an important part of the work of the session, and would prove to be of a consistent high standard.

The Executive Secretary, Yves Berthelot, also in introductory remarks, said it was very difficult to talk about enhancing cooperation in the region of the ECE without speaking of the numerous tragedies in the South-Eastern region of Europe. The ECE could help in setting up a comprehensive recovery programme aimed at restoring growth and the confidence in investors; rebuilding the infrastructures and speeding up institutional and structural reforms; re-establishing good neighbouring relations in Southeast Europe. The ECE should participate to any machinery set up by the international community jointly with any other regional or national programmes in areas where the ECE had competence, for example in the areas of transport, environment, energy, statistics, and habitat.

Delegates agreed that the Commission had a role to play in the re-structuring of countries in transition. Once the Kosovo crisis was over, the ECE had a considerable amount of expertise in vital areas that would be called upon by all those engaged in the re-building of the region. There was also considerable worry from many of the participants for the lack of funding available for the implementation of operational activities, including in the Mediterranean region.

The Commission then moved on to agenda item related to operational activities and cooperation with regional/subregional groupings, initiatives and organizations.

The meeting was then adjourned, until 3.00 p.m.

Introductory remarks

The Chairman, Miroslav Somol, in his address to the Commission, said that he had tried to remain in close working contact with all working bodies of the Commission, so as to understand fully the work of the Commission. He had had specific meetings with different bodies, and had enjoyed the meetings with the representatives of the different groups within the secretariat. Reform of the ECE was on the right track: improvement of the work was apparent, and there was commitment to go forward in this direction. It was a task for future Chairmen to encourage delegations into more active involvement, and to make the work of the Commission more attractive to these. Privatisation was an important task of the work of the Principal Subsidiary Bodies (PSBs). Simplification of the work of the formal meetings was underway, and was proving effective and insightful. Seminars would continue to be an important part of the work of the session, and would prove to be of a consistent high standard.

The Executive Secretary of the Commission, Yves Berthelot, stated that one general lesson was drawn from the substance of the two days work, and that was that there were no simple solutions to the problems faced, therefore it was dangerous to act on the basis of ideology. Ideology was often involved, but the reasonable approach needed to be fine-tuned. Liberalisation and privatisation did not necessarily lead to the right behaviour and the right reform without institution building. There were no simple solutions, and this emphasised the need for a political approach to reform. The weight of history and of culture was important. There was a need for programmes, and the ECE was constructed to help to fuel these programmes.

The ECE operated like a well-oiled motor, Mr. Berthelot went on pointing out that reforms had been applied, and these seemed to stand up to practice and experience. It was very difficult to talk about enhancing cooperation in the region of the ECE without speaking of the numerous tragedies in the South-Eastern region of Europe. All neighbouring countries were being affected. Consultations had been held with a number of countries, including all those neighbouring Yugoslavia.

A paper entitled *Recovery in Southeast Europe after a settlement of the conflict in Yugoslavia+ had been circulated, stressing three points which were important for the future: the need to set up a programme for reconstruction or economic recovery for the entire south-east area, which should take into account the situation that existed before the conflict; the need to rebuild infrastructures in the area, and to speed up institutional and structural reforms; the need to re-establish normal economic relations between the countries of the region and to integrate them economically into Europe as a whole.

The ECE should contribute to any machinery set up by the international community conjointly with any other regional or national programmes in areas where the ECE had expertise, for example in the areas of transport, energy, statistics, and habitat. There were conventions, standards and norms in all these areas, and the ECE could therefore help countries to implement these, thereby speeding up the reform process. These standards facilitated good relations and economic integration, since they encouraged cooperation and common standards. Regardless of the machinery set up, the ECE would have to contribute. It was not premature to raise this question, since there was a need to be ready in order to be useful, there was an immediate problem, and many other institutions and organizations were examining problems and solutions, and the machinery of the ECE needed to be recognised, in its capacity for being useful in its areas of competence.

Discussion on Strengthening cooperation within the ECE region

Murat SUNGAR, Permanent Representative of the Republic of Turkey, said that Turkey attached great importance to the strengthening of security and stability as well as introduction of deeper political and economic reforms in South East Europe. The framework of the proposed process comprised political cooperation in security and stability; cooperation in economy and environment; promotion of humanitarian, social and cultural cooperation; cooperation in the fields of justice, organised crime, elimination of terrorism, illicit drugs, arms and human trafficking. The most appropriate organizations should be mandated to carry out the necessary tasks with a view to avoiding overlap, to ensuring greater impact, and to using the available resources in the most rational manner. Post-conflict aid efforts could bring together all creative forces and mobilise the resources of the parties involved in assuring peace and welfare in the region, and the ECE could contribute in these areas.

Goce PETRESKI, Permanent Representative of the former Yugoslav Republic of Macedonia said that the issue of recovery in the area was most important, and welcomed all actions to remedy the situation, and all programmes for stability after the conflict ended. The danger of the conflict spreading to neighbouring countries was still present. The Republic of Macedonia faced a humanitarian catastrophe due to the refugee situation. The commitment to resolving the crisis was clear, but response was lagging. The international community had failed in its response. The question was who would bear responsibility for the situation. Sequencing should go through the ending of the conflict, the prevention of its spreading to other countries, and re-building. This would be in the expertise of the ECE. The future of the region lay in integration, and in finding a lasting solution to the crisis.

Ambassador LEWALTER, Representative of Germany, on behalf of the European Union, said that the situation in South-East Europe was grave. The impact of the crisis on the whole region was important, and the ECE could play a role in the facilitation of the process of economic recovery. The suggestions of the Executive Secretary could provide a format for efforts to restore security, stability and democracy. The regional approach of the EU, together with the proposed security pact proposed a viable solution to ensure political and social stability for the region as a whole.

The Representative of the United States of America said that the USA agreed that the ECE was eminently qualified to play an important role in the process of reconstruction, which should start as soon as the conflict ended, in all countries of the region that had been influenced negatively by the conflict and its consequences. There should be a partnership, increased cooperation between the nations of the region. The ECE had an important potential role to play in this common effort.

The Representative of the Russian Federation said that the ECE should not stand aside from issues concerning the whole international community, and had great contributions to make within its terms of reference and resource limits to the post-conflict reconstruction. The ECE could also help in limiting the consequences of environmental pollution due to the conflict, and should develop specific action to take in this area. The involvement of all of European countries, without exception, would be the best way to build confidence and stability in Europe and its sub-regions.

The Representative of Romania said that the ECE could make an effective contribution to the post-conflict development of integration and re-building. The Commission should go beyond putting its expertise at the disposal of Governments, and should be more active in the obtention of funding for implementing programmes contributing to the stability of the region. Partnership could stimulate participating states to work for the consolidation of stability. The objectives of any partnership would be to resolve the most dramatic effects of the crisis, securing the necessary conditions for the return of the refugees, and the re-establishment of the economy.

The Representative of Bulgaria said that it was of vital importance that the ECE consider this issue, without waiting for the end of the conflict. The burden of the crisis on the countries around the conflict zone should not be forgotten, and the ECE should examine stabilisation programmes for the region as a whole. There was a need to clarify where the suggested contribution would find its practical implementation. An alleviation of the financial burden of the countries concerned should be envisaged, since this would enhance their chances of full transition. The various initiatives should form a coordinated effort, given the enormity of the problem.

The Representative of Norway said that it was important to begin the process of discussion regarding the reconstruction of the South-East region when the conflict was over. There were interesting and important roles for the Commission, and it should continue to develop the outlined suggestions. The importance of coordination between all organizations in the reconstruction effort could not be stressed enough.

The Representative of Canada said that the issue of recovery in South-Eastern Europe after the conflict was of high priority, and needed to be addressed in an effective manner. It was important to properly coordinate the actions of the various organizations that would be involved in the reconstruction effort.

The Representative of Albania said that the ECE could play a major role in the reconstruction effort. Those countries suffering due to the conflict and the economic and political de-stabilisation needed to have these issues addressed urgently. There was a need for funding, so that reconstruction could begin as soon as the time was ripe. The economic, social and political situation needed to be stabilised. Each day of the conflict led to losses of millions of dollars, which was an exacerbating factor in weak transition economies. The ECE could make a contribution by contributing itself to carrying out an evaluation of the impact of the conflict on the economies of the neighbouring countries, and could programme activities for the rebuilding.

The Representative of Poland said that the views of Germany and the USA were appropriate. It was obvious that there was room for the ECE to be active in reconstructing the countries affected by the crisis. Poland would contribute in this effect, and would welcome seminars dealing with the specificity of problems of emerging economies in the Polish sub-region.

The Representative of Hungary said that Hungary welcomed the initiative of the ECE to actively participate and be involved in the economic reconstruction of the region. The conflict had had a certain impact on Hungary, and it was ready to cooperate to bring back peace, stability and democracy in the region. The ECE had a role to play in this.

The delegate from the Conference of European Statisticians said that the two-pronged approach would be most appropriate. The ECE could play a definite role in the re-building after the end of the conflict. A programme of institution building could be developed for each country of the region.

The Representative of Kazakhstan said that the operational activity of the ECE was of great practical interest. The ECE had contributed greatly to the Kazakh economy and political structure, by providing consultants, for example. This strengthened democratic reforms and the trade initiatives of the whole Kazakh region.

Mr. Berthelot, the Executive Secretary, concluded the discussion, thanking the delegations for welcoming the paper submitted, and acknowledging the potential contribution of the ECE. There were urgent immediate problems that needed to be addressed. He further stressed that the capacities of the ECE should be fully used and that dialogue, in terms of what could and should be done should be maintained with all partners, whether national or international.

The Chairman summarised the discussion by saying that all delegations had given high appreciation to the note prepared by the secretariat. The ECE could play an important role in the re-building process. Reconstruction process did not just concern those countries directly affected by the conflict, but also concerned neighbouring countries. All measures should be fully coordinated, and assistance should be provided. There was a need for good and effective cooperation with all other international organizations concerned in the process.

Discussion on Operational activities and cooperation with regional/subregional groupings, initiatives and organizations

Mr. Berthelot said that as to the operational activities of the ECE, a note had been submitted to the Commission (ECE/1368). There were four points: demand was growing, and the resources of the Commission were not; resources therefore needed to be increased; the structuring of the responses needed to be changed, cooperation programmes should be mutually reinforcing; PSBs should be fully involved. A more substantial report would be produced on operation activities and how they could be improved would be submitted if this was the desire of the Commission. Cooperation in the context of the Southeast European Cooperative Initiative (SECI) would continue and be reinforced. With respect to the Special Programme for the Economies of Central Asia (SPECA), the ECE would step up activities within it. SPECA was first of all the work of the five countries of the area, but was also a hope and inspiration for international cooperation.

The Representative of Romania said that the Commission had done a lot of work strengthening cooperation at regional level. The document under consideration was fully supported. Analyses would show the great need for substantial financial resources. Operational activities were most important for countries in transition. Additional resources for a special fund for countries in transition, as suggested by the Executive Secretary, were required. SECI projects corresponded to the norms and standards of the European Community. These had reached the stage where additional financial resources were required.

The Foreign Minister of Tajikistan said that SPECA was important for all countries of the region. Operational activities of the Commission in the interest of states in transition were extremely important for Tajikistan, which counted on the continuing and stepping up of the work. There was therefore a need for additional resources. Tajikistan had already subscribed to the various accords and agreements upon the programme, and supported its regional nature of this last. The process of agreeing on the conceptual basis should be concluded successfully, as should the development of work programmes. SPECA would create conditions in the region that would be attractive to foreign investors. A serious contribution would be made to enhancing the economic activities of the region.

The Representative of Turkey said that although the ECE had not been established as a main technical assistance agency, in order to give effect to its normative work it had to offer appropriate technical assistance, particularly to countries in transition. There had been decreases in the resources allocated to the ECE for this purpose. Therefore, it should constantly review, adapt and prioritise its technical assistance both in terms of methods of delivery and in terms of the selection of beneficiaries. Support provided to subregional groupings was a cost effective manner of providing technical assistance. The first year of SECI had been successful. Turkey also supported SPECA, and was ready to cooperate with the Central Asian countries as a supporting state. The cooperation between the Black Sea Economic Cooperation (BSEC) and the ECE was also welcomed. PSBs should be asked to review their operational activities and report back to the next session.

The Representative of Germany, on behalf of the EU, said that developments and progress made in operational activities should continue. Financing would remain difficult, and it was therefore important to use available resources as effectively and usefully as possible. Closer cooperation with the relevant financial institutions would be a positive step. The establishment of SECI was welcomed, as was SPECA. The geo-political implications and sensitivity of the Mediterranean region were increasing, and the ECE should cover Europe in a more balanced way, so that reports were more comprehensive. The proposals made in the document under consideration were supported.

The Representative of Malta said that the ECE/1368 document included positive and encouraging elements of cooperation within the ECE region. Paragraph 22, detailing lack of funding for activities in the Mediterranean region was noted, and the ECE should continue to mobilise efforts to obtain further resources, or should re-calibrate their budget to improve this situation.

The Representative of the United States of America said that in the post-Cold War period, the challenge was to integrate countries into the European region. Thus, SECI and SPECA were most welcome, in the context of that initiative. The multi-lateral success achieved so far could not have been done without the ECE, and this was appreciated.

The Representative of Ukraine said that it had a positive view of operational activity as reflected in the report. The substantial specific features of transition, regarding the adaptation to market conditions, implied that there should be an abstention from applying ready-made solutions to problems of these transitions. The needs of today were much more specialised than ever before. More detailed attention should be paid to the ways and methods of the carrying out of operational activities. There was a need for an overall analysis of the forms, directions and financial aspects of the operational activities of the PSBs. The programme of regional advisory services was an important element of the assistance provided to countries in transition, and the reduction of their activities for financial reasons should be repaired.

The Representative of the Russian Federation said that Russia welcomed the operational activities of the ECE, notably with regard to technical cooperation given to countries in transition. Regional advisers had played a great role on many levels. The resources for financing programmes should not be curtailed. The Commission should study the question of focusing regional activities on the needs of countries in transition, which needed technical assistance. The efforts of the Commission to ensure cooperation between regional organizations should be encouraged. Russia was ready to become a supporting state to SPECAs programmes.

The Delegate of the European Commission welcomed all regional initiatives. However, there was concern to ensure that SECI planned its projects in full knowledge of EU activities. SECI should strive for complete complementarity with EU actions. Joint projects were a possibility. SPECA also had contractual relations with the EU. The EU looked forward to continuing information being provided on the development of activities, to ensure full complementarity of efforts.

The Representative of Belarus said that Belarus supported the general approach, including that effective operational activities were effective in improving the situation in transition countries. The steps taken by the ECE secretariat to strengthen coordination were welcomed. There was interest in forming partnerships with all regional organizations. There should be consideration of a stage-by-stage reformation of the programme of operational activity, with the basic idea of creating a single Europe. The long-term objective was cooperation. The proposals by the secretariat were supported, regarding consultation during the next session.

The Representative of Israel said that Israel was in full agreement with the aims of the ECE, and was particularly supportive of principles of economic cooperation and integration, improvement of the quality of life, expansion of trade and promotion of investments. The potential contribution of the ECE to the development and welfare of Israel was very important. The ECE enhancement of the economic activity in the Mediterranean region, would represent a considerable contribution towards the efforts to bring about regional economic integration and development. Israel fully supported the aims of the ECE, and believed that it could serve as an instrument in the promotion of cooperation among the Mediterranean countries.

The Representative of the Slovak Republic said that the paper gave a good basis in the areas of technical initiatives and regional cooperation. Trade issues would play a growing role in the countries concerned. Trade facilitation was one of the most important issues for the ECE. Slovakia was making efforts in this area.

The Chairman of the Committee on Trade, Industry and Enterprise Development of the ECE said that the consensus was welcomed on the fact that the ECE would have a role in the settling of the conflict in Yugoslavia. As time moved on, the Commission would consider the ways and means of this. These may justify interruptions of regular programmes and of regional advisers work. The Committee would consider the reallocation of funds, in order to aid the resolution of the conflict.

Mrs. Danuta HÜBNER, Deputy Executive Secretary of the ECE, said that technical assistance and regional advisory activities contributed to the process of transition, and developed relationships between governments and regions. The reality of today was the reduction of resources, and this regarding operational activities. The possibilities of finding new financial possibilities should be explored. PSBs should be more involved in the whole exercise. Cooperation with financial institutions should and would be developed, but this was not an easy task. Mrs. Hübner further stressed that the basis for complementarity was communication.

The session was then adjourned, to reconvene at 3.00 p.m.

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