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Traian Chebeleu

I would begin by expressing our gratitude to the organisers for having invited our organisation to attend this important conference.

Today’s conference is dedicated to a topic that has deeply preoccupied the governments, the banking sector and the business communities alike in wider Europe, and in the Black Sea area in particular. I will try to address these issues from the perspective of a regional organisation, serving a region that is getting increased attention from the international community – the Black Sea Economic Cooperation Organisation (BSEC).

In various ways, the global economic and financial crisis affected all BSEC countries. Despite the fact that each country faces its own particular set of challenges, there are many commonalities. Consequently, it is only natural to endeavour to identify ways and means for mitigating the negative effects of the crisis, including its security challenges and implications, through international dialogue.

In general, a crisis is a “decisive moment” or a “turning point”. Indeed, we are now at an extremely critical stage both in terms of world economy and of international security. It is a moment that also offers interesting opportunities.

Around the turn of the 21st Century, most politicians and political scientists assumed that the world was about to enter a golden era of world peace, prosperity and great power harmony. Ten years later, the same people are foreseeing a very different future in which a mix of terrorist threats, shifting power balances, states’ collapse, weapons proliferation, and, currently, deep economic crisis are creating a very different environment for international politics. Why such a change of vision?

Globalisation is reducing the role of national governments, but it is not yet clear what will follow the current world order. The world order has been based on nation-states. The process of globalisation, which is presently the most important factor in world politics, tends to erode the nation-state as the basic unit of world politics. Are we converging to a new mix? What are the factors shaping the new world order? Perhaps we should reflect in more depth on what a distinguished sociologist had to say. While catching the essence of globalisation, he said, “that positive and negative sides are interconnected, that the institutions of the open society unlock the possibilities of destruction and violence as well as those of democracy, free trade, and cultural and social exchange” (Douglas Kellner, Theorising Globalisation, in “Sociological Theory”, Vol. 20, No. 3, Nov., 2002, p.291).

World politics has experienced several decades of bipolarism and then several years of unipolarism. Both decades proved to have limited results in ensuring a generally acceptable and accepted global order. The initial G7, transformed to G8 in the second half of the nineties, endeavoured to identify guidelines for major issues confronting the international community. However, the search for adequate frameworks to tackle these issues has been ongoing. The global financial and economic crisis prompted a new forum for economic cooperation – G20, representing 85% of the world’s output, which met in April this year in London and will meet again next year. It also prompted a new forum of “emerging economies” – G4, bringing together the leaders of Brazil, China, India and Russia.

These fora paralleled the existing multilateral system of the United Nations and its specialised institutions, including the World Bank and the IMF, built out of the painfully acquired awareness of the need for an international rules-based framework. This system has made important contributions to the unprecedented progress and economic growth that many countries have experienced since the end of the Second World War. Yet, the challenges of globalisation today cannot adequately be handled by a system that was designed largely for the world of the 20th century.

Building global consensus for global order requires a rules-based approach and complementary action by an existing system of international organisations with universal vocation, by the more or less ad-hoc fora like G20 and G4 and other G formats, and by regional economic cooperation organisations. They all contribute to a global system of economic governance. The challenges of globalisation create opportunities for a multilateral response, using trade, political, social and cultural links to build wider cooperation. The idea is to build upon the existing institutional mechanisms and make them interact and operate more flexibly, rather then inventing a completely new system of world economic governance. 

Within BSEC we already had extremely useful discussions on the effects of the financial crisis on BSEC Members States in the fora of our organisation. We have benefited in our debates from contributions from the UN, World Bank, EU and other major international organisations – observers to our activities. I would mention the workshop organised jointly with the World Bank in Istanbul on 8 October. It highlighted that adverse effects caused by the global financial crisis included a rise in unemployment and inflation, as well as a decrease in the following: foreign exchange reserves, exports, capital inflows from abroad, foreign direct investments, bank deposits, and confidence in the banking institutions.  These adverse affects also created greater difficulty for SMEs as they access operating capital and loans.

Our organisation aims at strengthening economic cooperation in a region that is at the cross-roads of energy transportation routes and has a major role to play in ensuring the energy security, not only of its members states but of many other states in Europe and other neighbouring areas. The wider Black Sea region is becoming increasingly important as a key transit route for future energy supplies.

We have witnessed crises and dysfunctions in previous years, but in particular in the first part of this year, which seriously affected industry and citizens in consumer countries. Not denying their technical, commercial or financial aspects, these crises and dysfunctions were preponderantly political. We continue to witness more or less open, or covert, fights over creating energy transportation corridors involving billions of euros. Here, too, the core of these fights is political. Therefore, they should be addressed through political means, with a view to establishing a clear and fair framework for governments and business to act, according to generally agreed upon rules. Development of intra-regional trade and promoting intra-regional investments; strengthening the legal framework with a view to encouraging investments, including foreign direct investments; getting support from outside the region, particularly from the EU, for BSEC Member States’ efforts to modernize and diversify their economies – these are also possible policy responses to the current crisis where the BSEC organisation could be of assistance.

We need to explore opportunities for policy coordination and cooperation at regional levels, based on the experience of member states in their bilateral and multilateral cooperation. There are many vehicles for this cooperation, be it in other international organisations or in other fora such as G8, G4 or G20.

I would conclude by emphasising that the regional organisations create a network and a platform for cooperation and dialogue and could play a role in alleviating the consequences of the crisis for their respective member states. They should be encouraged to play this role with great benefits for enhancing security in the post crisis world.

I wish us all a fruitful exchange and a productive conference.

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