7^th Regional Meeting
of the
Initiative for Social Cohesion

Mrs. Chairperson, Ladies and Gentlemen,

Dr. Erhard Busek, the Special Coordinator of the Stability Pact for South Eastern Europe, who unfortunately could not be with us today, asked me to represent him at the opening of this important, 7^th Regional Meeting of the Initiative for Social Cohesion (ISC).  On his behalf, I would like first express my thanks to the Belgian Government, and specifically to the Federal Public Service, Employment, Labour & Social Dialogue, for hosting this meeting.  I also take this opportunity to thank Mr. François Vandamme, who worked tirelessly, together with our friends from the Council of Europe, to prepare the recent Employment Conference in Bucharest and to arrange for its first follow-up meeting, which will take place tomorrow and Wednesday here in Brussels.  

I’m pleased moreover to greet Ms. Miet Smet, Member of the European Parliament, Belgian Minister of State and former Belgian Minister of Employment & Labour, who chairs for the first time our Regional ISC meeting.  In kindly accepting the Chairmanship of this Initiative, she is allowing South Eastern Europe to benefit from her remarkable political experience.  I am also pleased to see Ms. Jela Bacovic, who, by continued involvement as Co-Chair, ensures that we remain close to the realities and concerns of the region.

I would like to thank all the Partners in Social Cohesion here today:  

•   the representatives of the countries of the region, who by their presence demonstrate regional ownership of this Initiative along with the vitality of regional co-operation; and

• the multilateral institutions as well as the bilateral donors, who are assisting SEE in mitigating the social impact of a difficult transition process, demonstrating their concern for the more vulnerable groups in the region and the feasibility of concrete approaches to improve the living conditions of all.

The ISC meeting today is timely as it immediately follows the SP Working Table II and SP Regional Table meetings, which took place in Tirana last week.   The main message from the Tirana meetings was that overall the situation in SEE for human rights, democracy, security, policy reforms, capacity building and economic growth is improving.  Given the upturn in the global economy, SEE now has a window of opportunity to attract substantial inflows of capital as well as managerial and technical know-how that will secure its economic development and most importantly employment creation.   

However, these inflows are not guaranteed and in fact, this window of opportunity could be squandered, if the reform process in the region is not firmly pursued or does not turn out to be socially sustainable.   While we were pleased to hear that capital inflows in 2003 might have increased to EURO 5 billion, our enthusiasm was tempered by the very uneven distribution of these funds within the region.  So far, the bulk is concentrated mainly in Bulgaria, Croatia and Romania.  A number of delegates in Tirana drew attention to the difficult employment situation across the region and to the links between deep poverty, corruption, crime on the one hand and extremism on the other.   

Numerous references were made to the importance of the ISC and to the recent Bucharest Declaration on improving employment in SEE.   The EIB and the Council of Europe Development Bank outlined their important lending activities in the social sectors and expressed their readiness to do more.  Bilateral donors confirmed their continuing commitment to the initiative.  Complementarity was stressed between the ISC and WT I and III initiatives such as Education & Youth or MARRI.  

In his concluding remarks in Tirana, Dr. Busek highlighted the importance of social cohesion.   “To sustain the momentum”, he said, “the SP must make its various instruments converge even more than in the past.  More reliable energy supplies, better transport connections, the promotion of entrepreneurship and start ups, support for SMEs to enhance their competitiveness, the removal of the remaining obstacles to regional trade, improved regulatory governance, development of the information society, improved employment policies, better vocational training and capacity building of the national employment agencies are all crucial ingredients to secure sustainable economic growth and achieve the overarching objective of creating jobs.”  

Indeed, it is important to see how Social Cohesion and the other initiatives, particularly those of WT II, complement each other.  The overall objective of Working Table II is to promote economic reconstruction, development and co-operation in South Eastern Europe, as part of the Pact’s overall objective of contributing to the stabilisation of the countries in the region and to their progressive integration into European and Euro-Atlantic structures.  Important initiatives lie in the areas of reconstruction and modernisation of destroyed or inadequate infrastructures, creation of a regional energy market, trade liberalisation and facilitation, creating a favourable climate for attracting foreign direct investment and encouraging domestic private sector development.  All these initiatives have important social dimensions, since the lives of men and women in South Eastern Europe are affected by the quality of infrastructure – for instance in the areas of water supply and sanitation - by the reliability and the affordability of electricity and the impact of domestic and foreign investment on employment and the transfer of know-how.

However, we are all conscious that the economic objectives of Working Table II cannot not be realised and economic growth cannot be sustained, if the need for social cohesion is not specifically recognised and if complementary regional co-operation initiatives are not developed in areas where otherwise social cohesion would be undermined as a result of the huge transformation underway in the local economies.   This is why your initiative, which was launched in 2001 under the auspices of the Stability Pact, remains so essential.   

You have selected five areas in which to make a contribution.  The reform of systems for social protection, social dialogue, social housing, health policy and, last but not least, employment, require a pro-active approach, if we really want to fight poverty and improve the welfare of the populations.  I have reviewed with great interest the progress report you have issued by your Secretariat and the Director of WT II on the occasion of the Tirana meetings and of this meeting.  I looked at the way in which you are spelling out your objectives, at the achievements of 2003 and the planned activities in 2004.  Without entering into the specifics of the five sectors, let me give a few overall reactions and suggestions:

• No doubt, each of the five sectors is important for social cohesion.   The question is to determine, which of the various regional activities of the Pact under these sectors, brings the highest value-added compared to purely national reform efforts.  In other words, where is it that a regional network of national experts combined with the expertise and the financing of multilateral institutions and bilateral donors can achieve --through policy changes, capacity building and concrete projects, -- the greatest difference on the ground?  You can do it by critically assessing past achievements and planning realistically for the future.  

• You should make sure that your activities do not duplicate and are consistent with other efforts in the social sectors -- in particular with the Poverty Reduction Strategies being prepared by the SEE countries under the auspices of the Bretton Woods institutions.  Clearly, poverty reduction should be a fundamental (although not exclusive) objective of the activities you undertake in the areas of social protection and employment, health and housing policies.  Poverty reduction is an objective in itself, but it is also a condition for sustaining the transition process to functional democratic and market economic systems.

• At the same time, what you do should contribute to the integration of the countries of SEE into European and international structures.   This is why I welcome the increased involvement of the European Commission alongside other producers of modern standards such as the Council of Europe, the ILO and the WHO.  

• I should reiterate what Dr. Busek said many times about the pivotal role of trade unions in making workers a dynamic part of the reform process.   Reform of labour legislations and the establishment of arbitration and labour courts are fine accomplishments.  But we need more in terms of strengthening social dialogue -- involving the social partners in the reforms required to make social policies more efficient and financially sustainable as well as in the management of the social consequences of enterprise restructuring  

• Reform in the social sector -- particularly in employment, housing and social protection -- is a component of the global strategy to stabilise population movements, while ensuring adequate human mobility within SEE.   Co-ordination with MARRI is necessary.  

• Please fully involve UNMIK in your efforts, since we cannot allow Kosovo to be a blank spot on the map of SEE.

While social cohesion is now fully recognised as a key dimension of regional co-operation for the SP and WT II, we need to ensure that the Initiative, like the others under the Pact, produces quantitative and qualitative results in the medium and long-term.   Our members insist and we must comply, if we are to sustain our credibility and retain broad support for our efforts in SEE.  Donor fatigue and the emergence of other geographic and thematic priorities on the international scene are a reality.  They challenge all of us involved in the Pact to get the most added value out of each task force.  I am sure you can do it. 

Thank you and good luck