Банкеръ Weekly

Briefs

PRESIDENT PARVANOV LAUNCHES A PLAN FOR THE BALKANS

Bulgaria's President Georgi Parvanov reminded the almost forgotten idea for creating a joint free-trade zone in the Balkans. In his address to the participants in the South East Europe Investment Forum held in Sofia last week, Mr. Parvanov presented a package of five measures for economic recovery of the region. Apart from establishing a joint Balkans market, Mr. Parvanov's plan also stipulates fast building of large-scale infrastructural projects, liberalization of the energy market, increased collaboration in the high-tech field, as well as creation of an institutional framework for coordination of the numerous Balkans initiatives.By making these proposals, the Bulgarian President practically brought back to light the purposes of the Stability Pact for South East Europe which was launched in June 1999. Soon afterwards, however, the Balkan states realized that the strongly-advertised financial support from international donators within the pact was a mirage rather than reality.The measures proposed by Georgi Parvanov do not copy those stipulated by the Stability Pact, but provide a solution to some serious weak points. The idea for establishing a joint trading zone was first mentioned by the American philantropist George Soros in 2000. Later, Bodo Hombach, former special coordinator of the Stability Pact, shared his idea. Initially, Bulgaria accepted the plan with jealosy, because it was considered an alternative to the negotiations for EU accession. Placing Sofia and Bucharest in the same group with the so called Western Balkans countries was alarming, too. Still, in June 2001 the ministers of economy of Bulgaria, Romania, Albania, Bosnia and Herzegovina, Macedonia, former Yugoslavia, and Turkey signed a memorandum of understanding in Brussels. The document stipulated that the seven countries sign by the end of 2002 a network of bilateral agreements for trade liberalization of the region.Almost one year after the deadline, this hasn't been done yet. For example, Bulgaria has not yet signed an agreement with Serbia and Montenegro, even though its text was recently approved by the Bulgarian Council of Ministers. Bosnia and Herzegovina is the other Balkan state with which Sofia has no free trading agreement. As President Parvanov put it, the establishment of a joint regional market may follow the model of CEFTA. By an irony of fate, Parvanov made his statement just three days before the prime-ministers of the member countries of the Central European agreement met in Bled, Slovenia. During the meeting they discussed how the association would be transformed after Poland, the Czech Republic, Hungary, Slovakia, and Slovenia join the European Union in May 2004. Even if the Balkans governments accept Georgi Parvanov's advice, it's dubious whether the formal creation of a zone will lead to increased amount of trading. According to the Ministry of Economy, trade with the Balkan countries accounts for just 6.4% of Bulgaria's total commercial turnover.The construction of transeuropean transport corridors and respective infrastructure has been discussed for a long time, too. Currently, though, Bulgaria's priority projects are still a good will rather than a real achievement. As the BANKER weekly already informed, the construction of the second bridge on the Danube river (between Vidin and Kalafat) is about to begin in the near future. The reconstruction of the Sofia air port regularly provokes corruption scandals. Inspite of the declared political willingness of both Bulgarian and Serbian authorities to speed up the Sofia-Nis project, it has not made much progress from the preliminary technical research stage. Also, it's still unclear what Bulgaria will gain by possibly becoming a regional electricity distribution centre.Certainly, Georgi Parvanov's proposal for creating a permanent mechanism for expert and political cooperation sounds logical. Whether it is also realistic is another issue. It is easy to notice, however, that the numerous regional initiatives in which Bulgaria is taking active part have no significant economic effect.

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