Evaluating the BSEC

By Leonidas Chrysanthopoulos [1]

"With reference to the article of Panagiota Manoli entitled "The BSEC as a Regional Organization: A Performance Audit", I would like to make the following observations: While the article points out correctly many shortcomings that BSEC may still have, I would like to make the list of shortcomings shorter than what is described in the article since BSEC has made significant progress in the last few years.

The article mentions about a lack of flagship projects within which the BSEC is identified. But BSEC is in the phase of implementing the Black Sea Ring Highway project, the completion of which will ameliorate the living standards of the BSEC people. It will facilitate intra-BSEC trade and it will link the European road network to that of Asia.

The same applies to the Motorways of the Sea in the BSEC region which is also in its implementation stage. Then we have the Black Sea Trade and Investment Program (BSTIP), a joint project financed by Greece, Turkey, the UNDP and BSEC that aims to increase intra-BSEC trade and investments. In the two years that this program has been implemented, intra-BSEC trade has significantly increased. BSEC we think has success stories. But it is not for BSEC to determine the success or not, it is for the BSEC people to do so.

Mention is also made of limited participation of the private sector that has not lobbied the Organization to acquire sectoral dialogue partnership. This is also not correct since we have recently received applications from UBCCE and other business oriented organizations.

The article also makes reference to a lack of visibility, coordination and cooperation with other regional initiatives, which is not correct. On the contrary, BSEC initiated the coordination of such activities by convening a meeting in March 2008 of Regional Organizations in which the Adriatic and Ionian Initiative, the Central European Initiative, the Danube Co-operation Process, the Regional Cooperation Council and the South East European Cooperation Process participated. Follow up meetings have been held since then in Sarajevo, Chisinau, Athens and Trieste with positive results. Furthermore close cooperation has been established between BSEC and the CEI and both Secretary Generals meet twice a year for consultations to avoid overlapping. The CEI has participated in many of our working groups and steering committees and has provided useful inputs.

Of course BSEC has organizational inefficiencies, but which regional organization does not have? However through a process of constant reform, BSEC has simplified its decision making process by adopting a system of silent procedure, similar to the “procedure ecrite” of the EU. This allows BSEC to adopt Resolutions and Decisions by written consultation between the Member States. This system has proved to be efficient as it simplifies the work of the CMFA by reducing its agenda items. I cannot of course agree to mention made of inefficiencies of the Permanent Secretariat that is due to the fact that the Secretariat is staffed purely by diplomats that lack executive or expert capacity.

While it is true that the Secretariat is staffed by a majority of diplomats, all of them possess excellent executive capacities and have acquired expert knowledge in their fields of competence. It should also be mentioned that some of the progress achieved within BSEC in the last few years is the result of initiatives undertaken by the Secretariat(for example the Black Sea Ring Highway Caravan, the issuing of BSEC transit permits, etc.)

I do hope that with these observations I have shortened the list of shortcomings mentioned in Panagiota Manoli’s paper. However I agree with her that there is still room for improvement of the BSEC Organization.

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[1] Ambassador Leonidas Chrysanthopoulos is the Secretary General of the Organisation of the Black Sea Economic Cooperation Permanent Secretariat (BSEC PERMIS), Istanbul.

The BSEC as a Regional Organisation: A Performance Audit

An Opinion by Panagiota Manoli [1]

On 5 June 1998, a Charter was signed in Yalta by the heads of the then eleven founding states of the Black Sea Economic Cooperation (BSEC) transforming this regional initiative into a regional economic organisation. The BSEC is an organisation that brings together a controversial group of states whose bilateral relations are marked by competition and rivalry rather than cooperation (i.e. four major protracted conflicts are harboured in the region). The difficult socio-economic conditions within which the Organisation is embedded do not provide a solid ground for regional interaction.

Some progress

Any performance assessment is conducted vis-à-vis aims and objectives. The main objective of the BSEC organisation has been to serve regional stability through economic development. We cannot however, easily assess the contribution of the BSEC to the political stability of the region as there have been no political or security agreements or initiatives reached within its framework. At the same time there is no solid ground to measure the impact of the BSEC in terms of the integration of the region’s markets as the Organisation has not devised any trade-related policy nor has it taken any decisions on trade facilitation issues.

The impact of the organisation on the region may be assessed only in an indirect way. The BSEC has been instrumental in two broad aspects:

- Enhancing the international actorness of the Black Sea as a region (regional actor), fostering a regional identity, institutions and collective action;

- Providing a forum for interaction, diffusion of ideas and exchange of information. The organs of the BSEC have in some respect performed according to the logic of confidence-building measures.

The list of successes would include, however, less than a handful of actual achievements:

- The establishment of the Black Sea Trade and Development Bank (BSTDB), a region-wide financial institution.

- Generating project development mechanisms (i.e. the BSEC Project Development Fund), though their resources are very limited.

- Concluding two multilateral agreements, one on Fighting Organized Crime and one on Emergency Situations; three Memoranda of Understanding on Facilitation of Road Transport of Goods in the BSEC region (2002), Development of the Motorways of the Sea at the BSEC region (2007) and Coordinated Development of the Black Sea Ring Highway (2007). The latter two MoU are of particular importance since they have provided the foundation for the first two BSEC-initiated projects of wide regional impact.

A longer list of shortcomings

However, there has been much frustration and many unmet expectations with regard to Black Sea regionalism and the functioning of the BSEC:

- Slowness in concluding agreements, identifying and implementing regional projects. Only two intergovernmental agreements have been reached so far (both in 1998). Almost ten years later (2007) the BSEC concluded two important MoU on the Black Sea Ring Highway and the Motorways of the Sea.

- Absence of inter-sectoral coordination. The ‘’vertical’ communication of the member states (i.e. all communication is conducted through the ministries of foreign affairs and then forwarded to sectoral ministries) has completely prevented the active engagement of other ministries (e.g. economy, transport, etc.) in the work of the BSEC. It has also obstructed any inter-sectoral collaboration among sectoral ministries of the member states.

- The lack of ‘flagship’ projects symbolising progress toward regional cooperation. There is not a single success story or a ‘flagship’ project with which the BSEC is identified (with the possible exception of the BSTDB, which actually confirms the rule).

- Research and information limitation, especially in support of decision-making.

- Insufficient resource mobilisation. Neither the BSEC nor any of its institutions (including the BSTDB) have successfully mobilised resources.

- Limited participation of the private sector and civil society. Despite the emergence of a number of civil society organisations in the Black Sea region, and the provision of the right to obtain sectoral dialogue partnership with the BSEC, civil society, particularly business interests, have not lobbied the Organisation.

- Lack of visibility, coordination and cooperation with other regional initiatives.

- Organisational inefficiency. The BSEC has developed an overly institutionalised bureaucratic structure (having approximately seventeen working groups and various groups of experts), consisting of a web of organs and a decision making process that delays actions and obstructs the performance of the Organisation. The Committee of Senior Officials has been the most problematic organ of all (especially in terms of its slow decision making process).

- Inefficient Permanent Secretariat. The organisation is based on a secretariat of no executive or expert capacity, being staffed purely by diplomats. The transformation of the organisation into a project oriented mechanism is not possible with the current human resources and technical capacities of the Permanent Secretariat.

The nature of the BSEC’s performance, whose flaws are due in part to its working methods, has led to a lack of interest in submitting regional projects from the relevant national and international actors dealing with economic issues. The absence of a policy or priorities of the member states towards the BSEC has produced a structure which is unable to generate regional projects of importance for the development and stability of the region (the projects that have been submitted to the Project Development Fund of the BSEC are of no regional impact ord visibility). It has also led to a complicated bureaucratic structure (and not one of technocrats-experts) that blocks any effort for change and has nothing to do with the original concept of a flexible, efficient structure.

Member states are aware of the increased demands for a more active and efficient BSEC, realising that it is now time for the BSEC to find its place in the European scene or it will be marginalised. Alert to the calls for renovation, the Organisation has recently embarked on a process of reform. However, it is once more heading in the wrong direction, focusing on minor issues such as the Coordination Meetings, the role of the observers, and the evaluation reports of the Working Groups.

Time to Renovate

The BSEC needs to renovate if it wants to become relevant to developments in the region and in Europe. There is no doubt that earning the political support of the member states will be the starting point for any progress.

For the renovation of the BSEC a few local anchors of cooperation need to be cast. If the local states do not become pro-actively involved in the BSEC then regionalism will find another way (as is already happening). Some proposals to be considered include to:

- Clarify its developmental mission;

- Focus, limit and prioritise the agenda on two-three issues;

- Change working methods;

- Dismantle or reform the Committee of Senior Officials (CSO) as it operates today and improve the role of the Council;

- Form a professional, efficient Secretariat;

- Attract funding and transform the Project Development Fund into a project generator muscle.

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[1] Panagiota Manoli is Lecturer at the Department of Mediterranean Studies, University of the Aegean; Director of Studies and Research at the International Centre for Black Sea Studies. The views expressed here are personal and do not reflect any institution with which the author is affiliated.