Documents

Informal meeting in the framework of the Working Table on Economic Reconstruction, Development and Co-operation Rome, Dec 17, 1999

On December 17, Fabrizio Saccomanni, Chairman of Working Table II, chaired an informal meeting in Rome in order to update the countries of the region on the developments since the Bari meeting in October and to discuss briefly the preparations for the next Working Table in Skopje, 10-11 February 2000.

From the other participants, therefore, only the countries and organisations who undertook in Bari to play a lead role on one of the issues retained for further work were present. In addition thereto the UN/ECE and the European Training Foundation (ETF) attended in view of possible new agenda-items for the Working Table, i.e. environment and vocational education and training. The following lead countries/agencies gave briefings: EU Presidency/European Commission on EU input into the Stability Pact, the World Bank on the Regional Development Report, the EIB on infrastructure, EBRD on private sector development, UK/OECD/US on the Investment Compact, Saccomanni/Germany/SECI on the Business Advisory Council. Other agenda items were the preparation of the next meeting of Working Table II in Skopje and the Regional Funding Conference. The following countries and organizations were invited: Albania, Bosnia & Herzegovina, Bulgaria, Croatia, European Commission, European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), EU Presidency, European Training Foundation, Former Yugoslav Republic of Macedonia, Germany, Hungary, Montenegro, Organization for Economic Cooperation and Development (OECD), Romania, Southeast Europe Cooperation Initiative (SECI), Slovenia, United Nations (UNMIK, UN/ECE), United States, United Kingdom, and the World Bank.

Results EU Council Helsinki - EU Presidency

The EU's strategy is to draw the countries of the region closer to the prospect of European integration. The key areas of EU support in the economic field, as outlined in the Helsinki paper on the Stability Pact, will be trade liberalization, private sector development, regional infrastructure and legislative reforms. Success of the Pact will, however, largely depend on the countries of the region assuming ownership of the process.

EU input into Stability Pact - European Commission

The Stabilization and Association process is the EU's main contribution in support of the Stability Pact. To contribute to the objectives of this process, the EC has presented a new legal basis and a single set of procedures for assistance to the region: the CARA Programme. Assistance will focus on 3 areas: developing public institutions/administrations, reconstruction and regional development. On trade the EU will play leading role in Stability Pact activities. At the same time it is important to promote regional trade and economic cooperation. The heterogeneous character of existing bilateral trade agreements needs to be streamlined. In the discussion strong interest was shown in accelerating the Stabilization and Association process. On trade a number of delegations from the region stressed that regional trade promotion alone is not enough. Simultaneous progress was needed as far as the enhancement of trade relations with the EU and others is concerned.

Regional Development Report - World Bank

The group heard a report of the work underway to design a comprehensive approach to regional development. A first draft will be available by mid January, followed by a general discussion at the meeting of the Working Table in Skopje in February. A formal presentation of the report will be given at the Funding Conference in March.

Four success factors can be identified for the stabilization of SEE:

• implementation of consistent macroeconomic policies and structural reforms by the SEE countries
• opening of political perspectives to European and global structures
• association by the EU of the SEE countries to its markets and structures
• full integration of FRY into the SEE region, once political conditions allow

Another major condition for success is that the countries of the region strengthen cooperation among themselves. The Stability Pact partners on the other hand must provide both a clear and credible commitment to eventual integration and financial and technical support to magnify the effects of domestic reform programs.

In the discussion some delegations underlined the necessity to show quick results. It was suggested that a short-term package be added to the report. Furthermore, it was argued that more specificity was required as to which exact measures need to be taken for rapid progress. Some delegations from the region felt that they should be consulted more intensively.

Regional Infrastructure - European Investment Bank

The EIB provided a comprehensive update on the status of its assessment of regional infrastructure projects in Southeast Europe, and presented its report of 9 December, "Basic infrastructure investments in South-Eastern Europe." The report (available on the website in early January), which outlines the criteria applied by the EIB in its assessments, lists the projects that the EIB will assess further. The EIB representative strongly underlined the provisional character of its assessment to date. No conclusions can be drawn at this stage. The projects are in the key sectors of transportation, energy, and the environment. The EIB plans to complete its project review by mid-January, when it will transmit its final recommendations and project list to the Stability Pact and High Level Steering Group (HLSG) for consideration.

In the discussion following the presentation, many delegates reiterated the point that the Stability Pact urgently needs to demonstrate results in order to sustain momentum and domestic political support for its implementers. In fact, several feasibility studies are already underway, and these will hopefully develop soon into full project implementation. The EIB pledged to work to identify projects that can be implemented quickly, but underscored that it needs input from everyone in the Stability Pact to do so.

Regional Funding Conference - World Bank/EC

The Regional Funding Conference will be held in Brussels in late March 2000 (exact dates to be announced), and is being organized jointly by the European Commission and the World Bank. Romania's invitation to host the conference in Bucharest was noted. The conference is intended to be the first of a regular series, at which future regional project proposals will be considered and funded. The conference will highlight the concept of the Stability Pact as a partnership between the countries of the region and other participants. As a Stability Pact event, the conference will include input from all three working tables so that the Pact's overall goals (i.e. democratization, human rights, security, and economic reconstruction/development) can be advanced. Funding commitments will have to be matched by the countries of the region with demonstrated progress in addressing priority issues such as corruption, economic liberalization, the Investment Compact, media openness, etc.

Private Sector Development - EBRD

The EBRD, as lead agency for private sector development, is concentrating on 5 areas: Guarantee facility for trade finance, SME and micro-finance and support programs, Equity funds, Risk guarantee funds, Financial support facility for local contractors. The aim of all the mentioned initiatives is to identify common obstacles faced by private investors (both local and foreign) and disseminate solutions representing best practice. A workshop will be held on 21 January to discuss all 5 areas. (The document presented by the EBRD will be available on the website in early January).

Investment Compact - OECD/UK/US

Chairman Saccomanni thanked the delegates from the United Kingdom and the OECD for their work in developing the framework and language of the Investment Compact, including the Road Map and Country Specific Programs, which will be adopted at the next meeting of Working Table II in Skopje. It was noted that while approval of the Compact is important, a firm commitment to its implementation will also be crucial. In the early stages of implementation, the countries of the region should establish a central contact point for the Investment Compact at as high a level of thev government as possible. The United States noted the importance of having close coordination and communication mechanisms between individual governments and representatives of the international financial institutions (IFIs) in the capitals concerned.

Business Advisory Council - Saccomanni/Germany/SECI

An overview and status report were provided on the Stability Pact Business Advisory Council (BAC). Letters of invitation to members were sent from Brussels during the week of December 13. The Council will hold its inaugural meeting on January 19 in Berlin, at which time it will develop its work plan and procedural mechanisms. The BAC is envisaged as an independent body, able to expand or modify its membership as it sees fit. Any further request for membership should be considered by the BAC itself, taking into account the need for a balanced representation and the required expertise. In addition to providing advice to the Stability Pact on questions that have been referred to it for consideration, the BAC will be free to give advice on unsolicited issues. Possible issues/themes for the BAC's work include the Investment Compact, the regional investment climate and framework in SEE, trade preferences, regional cooperation, projects, and financing mechanisms/special credit facilities.

February Working Table Meeting / Regional Cooperation Initiative - fYR Macedonia

As announced by Mr. Gligor Bishev of the Former Yugoslav Republic of Macedonia, the incoming Co-Chair of Working Table II, the Table's second plenary meeting will be held in Skopje on February 10-11, 2000. Invitations and a preliminary agenda for the meeting will be issued by the Chair in January. The following new issues could be discussed in Skopje: the European Training Foundation proposed discussion of human resources development (entrepreneurship, vocational education/training, business development skills), while the UN/ECE proposed discussion of the environment. Co-Chairman Bishev also discussed the initiative, which his country is leading within the Stability Pact process, to promote greater intra-regional cooperation on trade and economic matters. Under Secretary Dimitriovski from the Ministry of Trade will chair this initiative, which will be discussed at a January 13 regional conference in Skopje. Possible issues for study and future cooperation include (but are not limited to): establishing a mechanism for direct payments between banks in the region, creation of a so-called "legal clearinghouse" for coordination among legal institutions both within the region and with the EU, and joint efforts to promote investment and combat corruption and smuggling.

Conclusion of Meeting - Saccomanni

Chairman Saccomanni closed the meeting by thanking the outgoing Co-Chair, the Hon. Umberto Ranieri, for his service in support of Working Table II, and introduced the new Co-Chair, Mr. Gligor Bishev from Macedonia. He then informed all participants that this summary of proceedings would be circulated to all Stability Pact participants, along with the documents that were distributed at the meeting. In addition to the periodic newsletter published by the Stability Pact secretariat in Brussels, information on future activities and events will soon be available at the Stability Pact website http://www.stabilitypact.org