The Pact that changed the face of Southeastern Europe

11/06/2007

The Stability Pact for South Eastern Europe will end its mandate in February 2008, and the Regional Co-operation Council will take its place. For eight years, the Pact has helped the region get on tract to stabilise and grow.

By Natasa Radic for Southeast European Times in Zagreb – 11/06/07

The Stability Pact was signed in 1999 by representatives from Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Moldova, Romania, Serbia and Macedonia. [Stability Pact for South Eastern Europe]

The Stability Pact for South Eastern Europe originated as a comprehensive conflict prevention strategy that was launched by the international community in the late 1990s. The main goals of the initiative -- which was introduced in Sarajevo in the summer of 1999 -- were not much different from previous conflict prevention ideas for the region, but the Stability Pact offered a promising new dimension -- economic development and regional co-operation.

The Pact's premise was simple. The countries of Southeast Europe proposed projects they viewed as vital both domestically and for the region. They submitted the project documentation and a provisional budget to the Stability Pact Administration. The administration then found donors -- individual countries, funds or international organisations -- willing to finance the specific project.

After eight years of close regional co-operation, Southeast Europe is ready for a new "mediator" between its countries and the international community. The new initiative -- the Regional Co-operation Council (RCC) -- will take over Pact duties, and will be fully autonomous in making decisions. The Council will co-operate with European institutions as an equal. The Stability Pact handover is scheduled for February 2008.

Free trade in the region

Over the years, the Pact faced criticism from its regional participants, which sparked the move towards change. Some felt the Stability Pact was more interested in the priorities put forth by its Brussels headquarters than in fulfilling regional needs. Under the RCC, specific regional interests should be more decisively represented.

One of the Pact's main initiatives was to encourage every country to sign bilateral free trade agreements with each other, facilitating economic co-operation. However, the Southeastern Free Trade Zone was met with resistance by many countries.

In Croatia, political opponents of the initiative claimed that with these agreements, Western Europe was seeking to rebuild the economic ties that once existed in the former Yugoslavia -- making sure that after economic integration, political merging would follow. The Pact administration dismissed these arguments, saying that the projects supported by the Pact were designed to foster co-operation, not to force unwanted integration.

Despite some opposition, under the auspices of the Stability Pact Trade Working Group, the countries have finalised 27 bilateral free trade agreements, the majority of which are in force. This creates a regional market of 55 million consumers, stimulates trade, and substantially improves the prospects for attracting investment and thus overall economic growth. Southeast European governments have also agreed to create a regional energy market that would be integrated in time with the internal energy market of the EU.

At the same time, the Stability Pact was supporting, through its network of donor organisations, a large number of specific, targeted projects that were designed for improving infrastructure, health and social care, transport and education. Many political analysts consider this to be the Pact's biggest achievement.

Acceptance, country by country

Many regional countries were given funding for road construction projects. [File]

"The countries of the South Eastern Europe have started to co-operate. Such a high degree of co-operation was unthinkable just a few years ago," Stability Pact Co-ordinator Erhard Busek said at a regional meeting in May, where the Pact's new future was mapped.

Macedonia has, from the beginning, considered the Stability Pact as the only process through which co-operation in Southeast Europe can be built. The country implemented the concrete benefits that the Pact was offering. Project funding to construct roads, increase environmental protection, establish local self-governments and modernise the water supply network were provided to Macedonia. A new Law on Broadcasting has been adopted with the assistance of the Stability Pact National Media Group. However, the two largest projects, the completion of Corridor 10 -- part of the motorway between Demir Kapija and Gevgelija -- and Corridor 8, have yet to take place.

The newest independent member of the Pact, Montenegro, also has benefited from the regional co-operation programme. "Through various Stability Pact projects, Montenegro has received significant support, [including] technical and know-how support in the fields of investments, human rights, judiciary and internal affairs," former Montenegrin Stability Pact representative Vesko Sukovic said. Co-operation with the Pact was always compatible with the country's EU integration processes, he added. Montenegro plans to undertake similar proactive steps in the RCC, especially action tied to combating regional and cross-border crimes.

In Serbia, Prime Minister Vojislav Kostunica's previous cabinet did not welcome the Pact with open arms. But with the country's Euro-Atlantic aspirations regaining momentum, the new government has decided that regional co-operation is an important step in the EU association process. Belgrade authorities were a bit disappointed that their candidate for RCC secretary-general did not get the necessary support.

In Bosnia and Herzegovina (BiH), there has been scepticism of the organisation, though the Pact was launched from Sarajevo in 1999, and the organisation's Disaster Preparedness and Prevention Initiative (DPPI) Secretariat is based in Sarajevo. Its aim is to pull together ongoing activities and identifies unmet needs to boost the efficiency of national disaster management systems and to endorse a framework for regional co-operation. Regardless, many in BiH do not feel they have benefited from the initiative.

Over the years, the Stability Pact has lost political significance. The participating countries -- Albania, BiH, Bulgaria, Croatia, Moldova, Montenegro, Romania, Serbia and Macedonia -- have received significant financial help for their projects, thus changing the Pact from a political presence to an economical initiative. In the past eight years, the Pact has succeeded in providing the countries of the region with almost 20 billion euros.

A new initiative -- regional responsibility

Croatian Deputy Foreign Minister Hido Biscevic will head the RCC next year. [Getty Images]

From its origins eight years ago, the Stability Pact has been a balance between the international community and countries of the region. Now, the regional dimension will take priority. This time, it is a revolutionary twist -- as Busek puts it -- because until now, "the regional activities were mainly designed, proposed and pushed by the Stability Pact under the leadership of the international community. The new set-up implies a change of paradigm in regional co-operation and will change the way that the Southeastern European countries interact with each other."

The RCC headquarters will be established in Sarajevo, a move that excites BiH authorities. They expect much larger diplomatic activities there, as result of the RCC, and intend to call Sarajevo the "small Brussels" of the region.

The first secretary-general of the new initiative is Croatian diplomat Hido Biscevic, who was elected at the May conference in Zagreb by the regional foreign ministers. The formal handover of authority will consist of two parts -- the establishment of the regional headquarters and its infrastructure and streamlining of all the task forces and initiatives that currently operate under the Stability Pact to the new regional framework.

"It is up to you now to make the best out of this new tool. International support will still be available, but it is up to your countries to fill this RCC with life, to make it a success story and thereby show that Southeastern Europe is a different region today than it was in the 1990s. The RCC will only be effective if it will enjoy the support of all its members, and if all the members will work together to achieve the common goal of a strong and sustainable regional co-operation in support of EU and Euro-Atlantic integration," Busek said in May.

"By establishing the RCC -- which, like its predecessor, will be funded in part from the region as well as by the European Commission -- members now must show that they are ready and willing to co-operate together, without international community involvement."The Council will operate as a connector between countries of the region and the wider international donor community.

Until February, Biscevic and Busek will work together to ensure that the Stability Pact's achievements are preserved and that the transition to the new framework is as smooth as possible.

The Stability Pact was designed as a framework that would speed up the stabilisation process in the region and the participant countries' full integration into European structures. Although the Pact's tenure is coming to a close, the assistance and mentoring it provided in helping the region grow and prosper is an undeniable success.

SE Times correspondents Antonio Prlenda in Sarajevo, Marina Stojanovska in Skopje, Nedjeljko Rudovic in Podgorica and Georgi Mitev-Shantek in Belgrade contributed to this article.