BSEC weathers a sea of troubles

BSEC weathers a sea of troubles
In light of continuing tension (Ukraine-Russia, Turkey-Russia), BSEC has its work cut out.
By Carmen Valache September 6, 2016

The Ancient Greeks initially called it the Inhospitable Sea because it was difficult to navigate and its shores were populated by savage tribes. They changed their minds after colonising its southern coast, dubbing it the Hospitable Sea instead. Two and a half millennia on, the Black Sea continues to live up to both ancient sobriquets, as frequent conflicts among the countries along its shores have continued to rock the region in recent years despite growing trade and human links.

Since 1992 the Istanbul-based Black Sea Economic Cooperation (BSEC) organisation has been working hard to bring out the ’hospitable’ in the region, and to keep the ’inhospitable’ at bay. In light of the continuing tension between various states (Ukraine-Russia, Turkey-Russia), it has its work cut out for it.

A brainchild of Turkey’s eighth president, Turgut Ozal (1989-1993), BSEC came into existence in the wake of the Soviet Union’s disintegration as a way to make the Black Sea region relevant in the global economy by increasing commercial interdependence among its member states and between them and other countries. Coincidentally, it also served Turkey’s foreign policy goals at the time of making new friends in the neighbourhood that would purchase its manufactured goods.

Comprising 12 countries – the six states on the Black Sea shoreline, plus six others that have historically had close ties with the region (Serbia, Armenia, Azerbaijan, Albania, Greece, and Moldova) – BSEC has acted as a forum for discussing issues that can then be taken on in bilateral talks, and for agreeing regulations to improve regional trade. It has engaged regional governments on issues ranging from energy policy and regional transport routes to education and crime, seeking to placate tensions through soft power and the promise of joint development and synergies.

On energy, for example, discussions about an integrated energy market were proving fruitless, so BSEC decided to delegate the discussion to ”a higher level”. Most of the regional energy agreements were then reached at a governmental level, but BSEC set the stage for the discussions. BSEC has instead concentrated on promoting green energies and energy efficiency.

However, the organisation’s effectiveness has been eroded by tensions between its members, and by its decision-making process, which is based on unanimity. Ambassador Michael Christides, BSEC’s Greek secretary general, concedes that, at times, politics has interfered with BSECs activity. “Some of the latest developments in the region have not been very helpful. BSEC does not deal with political issues, but when tensions exist, they cast a shadow over the functioning of the organisation,” Christides tells bne IntelliNews in an interview, adding that Ukraine had boycotted the BSEC meetings held in Russia during the latter’s chairmanship of the organisation.

Poised and erudite, Christides is the quintessential diplomat. “If BSEC didn’t exist, it should be invented,” he says. “BSEC has established a basis for dialogue for 12 countries in a region that has not been the most calm, and that is a feat and an accomplishment in itself.”

Christides is visibly proud of the multitude of projects that BSEC is working on, many of which obviously have to do with maritime issues – trade, transport, environmental protection, fisheries and tourism.

Short on details

The organisation is mulling two important infrastructure projects at the moment: the motorways of the sea and the Black Sea ring highway. The former aims to revive ports along the Black and Aegean Seas, while the latter will upgrade existing roads in member countries to European standards to create a corridor connecting all 12 capitals to the Trans-European road network in the west and the Silk Road in the east.

In the short term, the organisation is seeking to streamline the movement of trucks in the region by pushing for solutions like unifying permits, facilitating visas for drivers, and easing customs clearance. BSEC has also begun to promote multi-country cultural and gastronomic routes at international tourism fairs, in an attempt to market the Black Sea region as a multi-destination tour for foreign visitors.

But when pressed for details, such as the estimated cost for the ring highway, Christides admits that the organisation needs to work on concrete plans and hopes that it will do so by the end of the year in order to accelerate the process of finding investors in the project. “The route has already been established... We are upgrading these roads in a collective way, and seeking investors in the network as a whole,” he says, adding that China and Japan are among the investors the organisation is eyeing. 

The same goes for the other projects: they are all great ideas that undoubtedly have required a great deal of mediation on behalf of BSEC, but there has been no quantifiable results to speak of so far. Christides admits that, “the biggest room of all is the room for improvement” and that his organisation “has decided to enhance efficiency and reduce bureaucracy”.

It would be easy to dismiss BSEC as yet another inter-governmental talking shop. But there is more to BSEC than meets the eye. For instance, the organisation provided a forum for Turkey and Russia to work through their differences in early 2016, paving the way for their reconciliation in late June, which was announced at the same time as BSEC foreign ministers, including Turkey’s Mevlut Cavusoglu, were meeting in Sochi in Russia.

Furthermore, BSEC has spurred the development of other regional bodies, including the Black Sea Trade and Development Bank (BSTDB), a multilateral lender founded in 1999, the BSEC Business Council, and a regional think-tank, the International Centre for Black Sea Studies, which is the sole organisation of its type that does research on the region.

While it remains small by the standards of international financial organisations, BSTDB has been instrumental in promoting regional development, and is recognised as an important sponsor of small and medium-sized enterprises (SMEs) in the region, having devoted almost half of its funding so far to regional lenders to facilitate the growth of SMEs and trade financing. BSTDB, in which Russia, Turkey, Ukraine are the largest shareholders with about 16% each, has financed some €2.6bn worth of projects so far, and helped attract funding from other sources for regional projects in industry, energy and utilities, among others.

Looking ahead, Christides is hopeful for closer ties between BSEC and BSTDB, the expertise of which is necessary to make regional projects more bankable in order to attract investors. And he remains unflinchingly optimistic about the future of multinational organisations such as BSEC and the EU. “Believing that Brexit will be the end of the EU is a narrow perspective that obviates the long-term benefits that the EU has brought for the continent since World War II. The EU can definitely be improved – many say it should be smaller – but as an experiment in cooperation among states, it is a unique accomplishment,” he says.

As BSEC prepares to celebrate its 25th anniversary next year, the diplomat anticipates a greater focus on efficiency and concrete projects for the organisation. “And, why not, a possible monetary union in the distant future,” he muses.