Mr. Minister, Your Excellencies, Honored Guests, thank you for inviting me to be with you today. I must confess that I am somewhat intimidated by the very lengthy title of the theme that you have asked me to address. I also fear that this title does not become shorter or less complicated in Croatian.

Allow me to note that I am a career diplomat, not a security theoretician and that the Stability Pact is an operational initiative and not a think tank. I therefore do not wish to test your patience by attempting a theoretical presentation. Rather I would like to use this opportunity to briefly outline the role that we feel the Stability Pact has played in generating international support for South Eastern Europe, and in building ties and trust between the countries of the countries of the region.

When I left the Sarajevo Stability Pact Summit in July of 1999, I recall the enormous expectations of the region. There was the hope that the international community would be able to generate immediate, massive transfers of assistance that would transform SE Europe overnight. This of course, did not occur and there was a broad sentiment throughout the region that we had failed to produce. However, if we now look back at the developments of the past 2 1/2 years, a much more positive picture emerges.
First of all, donor support has been increased and, despite many other demands for assistance elsewhere in the world, it is being maintained.
This was demonstrated clearly at the Second Regional Conference in Bucharest in October 2001 where about 3 billion Euro in support for the next phases of Stability Pact related project activity was announced. In all, donors indicated their intention to provide approximately 6 billion Euro of assistance to the region in 2002.

Our original intention of moving the countries of the region closer to Euro and Euro-Atlantic institutions and structures is being realized. All countries in the region have been given the perspective of someday become EU members through the SAA process. Most countries are now members of the NATO's Partnership for Peace and the Council of Europe. And of course, with the dramatic changes in Yugoslavia, all countries of the region are now active members of the OSCE. Reforms are being carried out to fight crime and corruption, to create a more attractive environment for trade and investment and to encourage small and medium sized business. While there is still much too little foreign direct investment in the region, such investment is increasing.

Perhaps most importantly, the contacts between the countries of the region have been intensified and regularized and the probability of renewed armed conflict between them is now remote. A network of initiatives and contacts has been established throughout the SE Europe to deal with what are recognized as common problems and, of course, Yugoslavia is now a full partner in this process. Attitudes have also begun to change. There is a growing appreciation that regional cooperation is not a substitute for EU membership, but rather a prerequisite. Commissioner Verheugen has underscored this point noting that "if countries want to join the European Union, they have to demonstrate that they can develop regional cooperation and solve their problems in cooperation with their neighbors."

As we move to the second phase of the Stability Pact's existence under our new Special Coordinator, Erhard Busek, it becomes increasingly clear that stimulating regional cooperation on issues of common concern will be our top priority. We want to build upon regional actions such as the Network of Bilateral Free Trade Agreements, the Action Plan for Refugees of Displaced Persons, the Asylum and Migration initiative, the Initiative on Disaster Preparedness, the Action Plan to combat Human Trafficking and the Agreement on the use of the Sava River. We also wish to enhance self-confidence of the countries of SE Europe and empower them to lead these initiatives. To be successful the Stability Pact must be seen as an initiative that is owned by the region.

The Stability Pact and future Security Strategies for SE Europe

Since the Stability Pact began its operations, we have always stressed that we do not wish to re-invent the wheel or try to do what others might do better. This principle is particularly critical in the area of defense and security where there are already a large number of actors. To be effective here we must look at our potential for being a catalyst, to bring countries and institutions together who might not otherwise be in contact, to build coalitions of donors around good ideas and to encourage the benefactors to gradually take over the leadership of the initiative. We have looked carefully for actions and initiatives that contribute to our overall goal of conflict prevention by raising levels of confidence and trust and creating new patterns of cooperation.

We believe that our track record in the area of defense and security thus far has been a good one as we have been able to move quickly to generate activities that would not necessarily been taken on by others.
Examples of these actions include our effort to reintegrate military officers affected by the downsizing of their countries' military establishments into civilian labor markets. The Stability Pact played a critical role in starting this initiative due to our ties with both NATO and the World Bank, organizations that had not previously dealt with one another. The program for officers that the World Bank financed in Romania has now been expanded into programs in Bulgaria, Bosnia-Herzegovina, with programs in Croatia and Albania now being considered. We have proceeded on the principle that military personnel who have had careers of patriotic service to their countries are assets that must be used effectively in the development of new democratic societies throughout the region. We want then to become to become building blocks of these societies and certainly not be the forgotten men of yesterday.

The Stability Pact has also been successful in placing security sector reform on the agenda of all multi-lateral institutions and fora including NATO, the OSCE, the European Union, the International Monetary Fund, the relevant Development Banks and appropriate UN organizations. We have also been active in promoting work in the area of de-mining and strongly endorse the efforts of the Reay Group to achieve a stockpile free region. We are very pleased that a Croatian has agreed to assume the Chairmanship of this group. This as a clear example of our wish to promote regional ownership of initiatives. I should note that this decision will be taken officially tomorrow, January 30, at a Reay Group meeting in Geneva.

In November 2001 the Pact's Security Working Table III endorsed a comprehensive regional implementation plan to combat the proliferation of Small Arms and Light Weapons (SALW). We are very pleased that RACVIAC will be holding a seminar on this topic later this year.
One of our early projects has already resulted in the destruction of 40,000 weapons in Albania and the Albanian government is committed to the destruction of 130,000 weapons.

We are particularly pleased to have the active support of Yugoslavia in the effort to reduce the level of small arms in the region. With the help of the US government, Yugoslavia committed itself to destroy more than 50,000 weapons by the end of 2001. The coordinating center that we have promoted in Belgrade to assist with these efforts will play a key role in the next phase of our activities. This institution, which will be managed directly by UNDP, will begin operations in the coming months. The clearinghouse will operate in cooperation with national focal points established by each country in the region, which we expect to be identified by March of this year.


At the June 2001 Regional Table Working Table III was tasked to increasingly direct its attention to the area of Security Sector Reform avoiding duplication of already existing efforts undertaken by the EU, NATO, OSCE and the UN. To follow up this request we are developing an international Security Sector Reform database that will provide a departure point for gaps and needs analysis. At the same time based on a pilot paper prepared by the SEEGROUP, work will begin on a comparative study of the national security strategies in South East Europe. This work will be ready by the next meeting of Working Table III.

While the gaps we should fill will be clearer after this work has been finished, the report of the ad hoc working group established to consider the nature of our work in the security sector reform area has suggested that four particular themes may be of primary concern to the Stability Pact. The first is the professionalisation and development of civil servant and civil society expertise to help insure democratic oversight and control of defense and security institutions. The second area is the continuation and expansion of ongoing country specific programs particularly the retraining and alternative employment of demobilized military personnel and work on base conversion.

We are also encouraged to further develop the Transparency in Military Budgeting and Planning Initiative, making full use of the Sofia Center of Excellence and this initiative's steering group. We also are considering the development of a South East Europe Defense College and a Regional Police Training Center. Finally, it was suggested that we consider how we can contribute to the professionalisation and enhanced training of key judiciary considering the critical importance of judiciary reform including the courts, public prosecution and penal systems.

The RACVIAC center will be a central element and key partner in our work as we proceed. It is already one of our major success stories since it provides a superb and cost effective forum within the region for dialogue, cooperation and confidence building in South Eastern Europe. The fact that now military personnel from all the countries of the region, including Yugoslavia, now regularly participate in RACVIAC's programs is a clear demonstration of how far we have come.

In addition to RACVIAC's primary mission of enabling the countries of the region to fulfill their international arms control commitments, we hope that the center will play an increasing role in promoting the full integration of the military into democratic societies and reinforcing the democratic oversight and control of military establishments. We will continue to support fully the enhancement of this institution's capabilities, particularly in the areas of Dayton Accord implementation assistance, mine action and small arms and light weapons. Allow me to particularly thank the German government for its generous financial and technical support of this institution and the outstanding efforts of Croatia in both hosting this center and turning it into a regional institution.

Before closing, permit me to make a number of basic points that define our overall approach. We must accept the principle that democracy is the cornerstone of good governance. If security sector reform is to succeed, we must have effective democratic institutions and capable civilian leadership. Transparency in planning management and budgeting must be promoted. The lack of transparency will almost certainly undermine a country's economic and political stability more than transparency will threaten its security.

We must create environments where civil society is able to monitor the security sectors. Such activity is not only legitimate but also critical. We need to strengthen the capabilities on non-government organizations to carry out this activity. And, of course, we need to continue to give top priority to actions that promote regional and sub-regional activities. It is hard to think of an area where regional cooperation is more essential than the security field.

Finally, we must not lose more time. Far too much precious time has already been lost over the last decade as a result of the terrible conflicts in this region. This created an ever-widening gap between the countries of this region and the rest of Europe. We have begun to reverse this process but have a very long way to go. The military establishments of the region must play a key role in this process if we are to be successful.

We look forward to working with all of you as partners in the coming months of this New Year.