Achievements of the Stability Pact for Southeast Europe

November, 1999

States participating in the Stability Pact launched by President Clinton and European leaders at the Sarajevo Summit last July met today to assess progress made towards building a more stable and prosperous Southeast Europe. Initiated by the EU with strong U.S. support and placed under the auspices of the Organization for Security and Cooperation in Europe (OSCE), the Pact aims to strengthen democracy, economic development and security throughout the region. Efforts to translate the principles endorsed at Sarajevo into substantive work began in September with a successful Regional Trade meeting. It was followed by Working Table meetings to develop specific initiatives on democratization, economic revitalization and security.

At the invitation of the OSCE Chairman-in-Office, Norwegian Foreign Minister Vollebaek, and in preparation for the Summit, Ministers endorsed the accomplishments of the Stability Pact thus far and discussed priorities for the next six months. Key achievements include:

Advancing Economic Development

Improving the Investment Climate
- Recognizing that trade and investment, even more than donor assistance, will fuel long-term economic growth in Southeast Europe, Stability Pact participants developed an "Investment Compact" to assist countries in the region in promoting private sector development and attracting foreign investment. Under the Compact, countries in the region pledge to intensify efforts to create a predictable and fair business environment, fight corruption and crime and implement market-oriented reforms. In exchange, countries outside the region commit to work with international financial institutions (IFIs) to mobilize private finance. Stability Pact participants, the Organization for Economic Cooperation and Development (OECD) and other international institutions, in conjunction with Economic Task Forces in each country comprised of donors and host country officials, will analyze existing policies on investment and formulate recommendations for reform. The United States plans to contribute $100,000 to the OECD to jumpstart the implementation process; other OECD members are also contributing.

Strengthening Regional Infrastructure and Private Sector Development
- Donor nations and IFIs have launched a process to review, prioritize and mobilize financing for viable regional projects aimed at strengthening the infrastructure and economies of southeastern Europe. Sectoral experts will review the projects and report their recommendations by the end of the year to the High Level Steering Group
of donors and international financial institutions. A Regional Donors' Conference will be held in February/March 2000.

Tapping Private Sector Expertise
- A Business Advisory Council (BAC) to the Stability Pact is being established to advise the Economic Working Table on a variety of issues, including steps to improve the investment climate and eliminate corruption. The Council will be composed of leading executives from U.S., European and Southeast European countries. The inaugural meeting of the Council will take place before the end of the year.

Reducing Regional Trade Barriers
- The countries of Southeast Europe, led by Bulgaria and Macedonia, have launched an initiative aimed at reducing trade barriers in the region. Work is under way and an action plan will be announced at the next meeting of the Economic Working Table.

Fighting Crime and Corruption

Combating Corruption
- Stability Pact countries have developed the Southeastern Europe Anti-Corruption Initiative. Governments in the region have agreed to pursue a wide range of anti-corruption objectives, including bringing domestic government procurement laws in line with WTO standards, taking specific measures to promote public service integrity and establishing review bodies to monitor integrity in the administration of foreign aid programs and national anti-corruption efforts. Governments outside the region have agreed to coordinate their technical assistance programs to help implement these anti-corruption programs.

Cooperating Regionally to Fight Organized Crime
- The countries participating in the Southeast European Cooperative Initiative (SECI), which signed an agreement in May to cooperate with each other in combating cross-border crime, have established a center in Bucharest to facilitate the sharing of relevant information. Stability Pact participants have agreed to use this Center as the central regional clearinghouse on cross-border crime. Construction of the Center has been completed, and it is expected to be operational by March 2000.

Promoting Democratization and Human Rights

Examining the Teaching of History
- Southeast European and other countries have agreed to form a Regional Coordinating Committee on History and the Teaching of History. The Committee will be comprised of distinguished historians and other notable personalities from the region, other parts of Europe and the United States. It will facilitate cooperative efforts among the countries of the region to examine their history materials and teaching materials. The first meeting of the group will take place next month.

Developing an NGO Partnership
- Efforts are being made to develop a strong partnership between the Stability Pact and non-governmental organizations (NGOs), in recognition of the contributions they are making to the goals of the Stability Pact. Such cooperation can lead, for example, to the development of a network of NGOs throughout Southeast Europe committed to the promotion of democracy, human rights, tolerance and other foundations of civil
society.

Encouraging and Protecting a Free Media
- Regional and international media representatives have worked with the Stability Pact Task Force on Media Issues to draft a charter on the protection of free media in the region. The Charter commits the countries of the region to: (a) defend freedom of expression and information; (b) encourage the development, both in the public and
private sector, of media that is independent of governments and operates according to high standards of professional journalism and impartial and objective rules; and(c) provide a legal environment that is compatible with the needs of free and independent media. The draft will be finalized before the end of the year, after further consultation with media associations.

Promoting Democracy in Southeast Europe
- An October Stability Pact conference in Szeged, Hungary, with opposition mayors from the Federal Republic of Yugoslavia (FRY) launched an effort to promote "Sister City" relationships with Serb cities governed by the democratic opposition. Hungary has earmarked $1.5 million for this effort. A follow-up meeting is planned for the first half of 2000.

Promoting Cooperative Security

Reducing Small Arms and Light Weapons
- Countries of the region agreed to intensify efforts to seize illicit transfers of small arms and light weapons, destroy weapons seized by interdiction or that exceed legitimate defense needs, and take all necessary measures to secure small arms and light weapons stockpiles necessary to their defense. They invited the OSCE to monitor destruction of these weapons and agreed to work together to identify assistance requirements for destruction and storage.

Implementing CWC Commitments
- Countries of the region agreed to identify chemical weapons as a security concern in the region, to implement fully their commitments as states party to the Chemical Weapons Convention, and to urge the FRY to accede to that Convention.

Supporting Humanitarian Demining
- The Stability Pact endorsed the Slovenian Humanitarian Demining Trust Fund, and donors have committed to fulfill approximately $14 million in pledges to the fund. Over $10.7 million of these pledges have already been received by the Trust Fund. The United States will match the first $14 million of donations received by December 9, dollar for dollar. The same amount of matching U.S. funds will be available next year, not to exceed the total amount matched in 1999.

Regulating Arms Sales

- The Stability Pact endorsed a Regional Conference on Arms Transfer Issues, which will be hosted by the United States and Bulgaria in December 1999, to identify methods of strengthening and implementing responsible arms transfer policies. The Conference will work towards producing a regional declaration establishing standards of restraint on arms sales and development of a common end-user certificate.

The Way Forward

Today's meeting of Stability Pact participants reaffirmed their strong support for the goals of the Pact and set the stage for intensified work during the next few months. With evaluation of regional infrastructure, energy and environmental projects under way and the development of a comprehensive regional development strategy begun by the World Bank and the EU, adequate preparation for the Regional Donors' Conference in February/March 2000 is now essential. Successful development of these projects, as well as initiatives in the democratization and security area, can make a visible difference in the daily lives of people in the region. The growing availability of financing and insurance for the region from the IFIs, the European Union, United States and others, combined with implementation of the Investment Compact and the Anti-Corruption Initiative, including the political and economic reforms they entail, can attract the private investment needed for long-term economic growth. Faster trade liberalization, both in terms of reducing barriers within the region and with Europe and the United States, can also spur such growth. Perhaps most important, Southeast Europe's own efforts in these areas will forge the kind of regional cooperation that is essential to lasting stability and prosperity.