e-SEE Task Force

Speech by Special Co-ordinator of the SP Bodo Hombach
Conference on Advancing the Digital Agenda in SEE

Ladies and Gentlemen,

Allow me to first express my thanks to the organisers of this conference at Wilton Park today. This is a timely moment to analyse the questions on our agenda.

The issue we are here to discuss is of great importance for all the countries of south eastern Europe. Information and communication technology (ICT) has had a revolutionary impact across the world. There is no doubt that ICT today affects the way we live, learn and work and the way government interacts with civil society. Indeed, ICT stands to be one of the most potent forces to shape the twenty-first century.

However, much of south eastern Europe has yet to truly experience the benefits presented by this revolution. Today, billions are being poured by international donors into "Second Wave" infrastructure (such as for example roads and bridges) across the region. But comparatively little is being put into "Third Wave" infrastructure (such as for example electronic networks and accompanying reforms to modernise government and business procedures).

In light of this reality, the countries of the Stability Pact last week, at the economic Working Table in Istanbul, discussed the "e-Balkans" initiative to put e-issues firmly on the agenda as essential to development and reconstruction in the region.

The initiative is intended focus on IT education within the region and on furthering ICT use within government, business and civil society. The potential benefits presented by this new technology will, however, only be realised if ICT is broadly accessible and if the necessary groundwork for its use and development are in place. Promoting the adoption of necessary ICT legislation within the countries of the region should therefore form another important focus of the e-Balkans initiative.

Ladies and gentlemen,

The e-Balkans idea fits into a wider picture.

My task, as Special Co-ordinator of the Stability Pact for South Eastern Europe, is to promote stability in the region through generating economic growth and reform, strengthening young democracies and enhancing security.

To be successful, however, we must produce a basic change in how the people of the region view each other, and get the countries of the region into the habit of working together.

We also need to ensure that the international donors deliver their assistance in a co-ordinated and efficient manner. And, because public sector resources can only be of limited impact, it is vital that we find ways to encourage and protect private investment to the region. The engagement of the private sector will be a critical factor in the economic development of south eastern Europe.

There can be no peace and stability in the region without sustainable economic development. But conversely, there cannot be economic prosperity without peace and stability.

My immediate responsibility upon becoming Special Co-ordinator was to establish a framework and mechanism that could turn the hope that we created into reality. I have travelled extensively throughout the region, meeting with government and private sector leaders, trying to promote a new approach toward the region, from within and without.

Private sector activity in south eastern Europe is now on the upswing. The European Bank for Reconstruction and Development estimates that the annual rate of outside private investment in the region will nearly double this year, compared to last, to almost $4 billion. In Macedonia, alone, investment today is ten times greater than in 1996. Encouraging? Yes. Adequate? No.

Ladies and gentlemen,

Five key areas need to be addressed in building an improved future for south eastern Europe.

First : Regional Stability. A hallmark for this corner of Europe and most visibly on display last year was chronic regional instability. Ethnic tensions, limited economic prospects, uncertain boundaries all contributed.

I believe, however, that we have seen great progress in the past year – the governments of the region are communicating and working with each other as never before to pursue tangible goals. Albania, Macedonia and Montenegro, for example, are looking for ways to build up their combined capacities to share and trade electrical power.

This type of dialogue is an essential first step for viable regional progress, and is already making a difference. For example, we resolved long standing differences between Bulgaria and Romania over the construction of a second Danube bridge.

Second : Consolidation of democratic institutions. A principal aim of the Stability Pact is to create deep roots for democracy and the creation of civic societies throughout the region. This will lead to greater transparency and accountability in doing business and help ensure that problems get resolved on a fair and timely basis.

Our initiatives, aimed at promoting democracy and human rights, are geared towards concrete commitments for reform, democratic and economic institution building, free media and respect for minority rights. A very positive development includes the successful elections in Croatia that signalled voters’ desire to move closer toward greater integration with the rest of Europe. And of course, unforgettably, the dramatic changes in Yugoslavia, which I will come to in a moment.

Third : Anti-Corruption. Investment is always severely hampered by the suspicion that the returns could easily be siphoned off by dishonest officials. Clearly, sustained and visible improvement in this area is required for any long-term progress on foreign investment.

Here, too, progress has been made. In the spirit of the Stability Pact’s Anti-corruption initiative, governments in the region have committed themselves to implement international standards of transparency and accountability and to ensure the rule of law. We have established monitoring groups for each individual country, along with the energetic participation of the OECD, European institutions, the World Bank and others.

Fourth : Improved Investment Climate. A significant achievement in the first year of the Stability Pact has been the Investment Compact. This compact is aimed at improving the business climate through realistic and concrete administrative, regulatory and legislative actions tailored to the most urgent priorities in each country. It contains benchmarks and timelines.

This process is being guided at the national level by the Country Economic Teams, which were established in all SEE countries and which are composed of key national decision makers in the field of economic reform.

We have set up the Business Advisory Council (BAC), consisting of around twenty high-level business representatives from the region and from major donor countries. It is to provide advice to the Stability Pact on business- and investment-related matters at an international level. The BAC, which has met twice since it was established early this year, will seek out additional ways in which the spirit and the letter of the Investment Compact can be implemented.

Fifth : Improved Infrastructure. One of the crucial levers for sustainable economic growth and development in south eastern Europe is building up the region’s infrastructure. Not surprisingly, investors do not want to go where they are not sure of reliable transportation, power, or communications.

At our funding conference last spring, we succeeded in obtaining 2.4 billion Euro of support for "quick start" activity. For me this was a clear demonstration by the international community of its willingness to provide significant additional resources for the transformation of the region.

Much of this money is for infrastructure. But all 35 infrastructure projects developed through the Stability Pact Working Table for economic development are covered by the funds raised. So are specific initiatives for promoting the private sector and enhancing environmental protection.

We have worked hard over the past year to lay the groundwork for consistent and coherent international attention on helping south eastern Europe. I believe much has been accomplished; more remains to be done.

Ladies and gentlemen,

The recent changes in Yugoslavia are a chance for us all.

I agree with all those who have said that we must take the outstretched hand of the Serbian people, without delay. To wait would be wrong. I see a number of challenges facing us:

• We must not create any imbalances. Regional co-operation in south eastern Europe has developed very well in the past year. I am pleased that the Macedonian President, who I am delighted is with us today – and the Prime Minister – accepted my recent proposal to them that Yugoslavia should be taken back into the South East Europe Co-operation Process (SEECP). The informal SEECP Summit in Skopje on Wednesday 25 October will address this. The concept of peaceful and balanced co-existence with ones neighbours should now also incorporate Yugoslavia.

• The mobilisation of the necessary resources for a Quick Start Package for Yugoslavia which deserves the name.

• The co-ordination of this aid in the existing programmes within the framework of the Stability Pact must be assured among the G8 countries, the other European partners and the international financial institutions.

• Normalisation of relations and the rapprochement of Yugoslavia to the European and international institutions.

The Stability Pact is a tried and tested instrument. It is now in a position to send a rapid signal of the reintegration of the Federal Republic of Yugoslavia into the European family. The former opposition - and current holders of office - have been in our working structures for the past year. Some of those with whom we have worked closely together now have positions of great responsibility in Yugoslavia.

The goals and values of the Stability Pact must of course be respected. Above all, we should insist on a peaceful and consensual solution to all constitutional questions. At the same time, accession to the Stability Pact poses less of an obstacle than is the case with other institutions, such as the UN, OSCE or the IFIs, where difficult questions of State succession and debt await.

We should not forget that circumstances in various other countries of the region were not ideal a year ago when we integrated them into the Stability Pact. The example of Croatia shows how co-operation can be used to exercise a positive influence. I hope that the special meeting of the Regional Table called for the end of this week in Bucharest will result in the full participation of the Federal Republic of Yugoslavia in the Stability Pact.

The Stability Pact can and must fully carry out its task, both as regards the short-term aid measures for the FRY, as well as the medium and long term measures for the democratisation, and the economic reconstruction and development of the country, as well as the development of a co-operative security structure in south eastern Europe, including the new Yugoslavia. It has its mandate for this from the Sarajevo Summit.

Among other things, we need to consider humanitarian aid, including energy supplies, medicines and medical equipment, etc. I have suggested to Commissioner Patten and High Representative Solana that we should distribute a joint analysis of needs. Further, I would like to integrate the FRY rapidly and concretely into existing Stability Pact activities. I have discussed all this with Mr Kostunica, who agrees with the approach.

One thing must always be clear: south eastern Europe does not just consist of Yugoslavia. We must not give the neighbours the feeling that we are now only concentrating on the reconstruction of the FRY or that the cake from the last financing conference now has to be divided up with another guest at the table.

No, we must deal with the region as a whole. We must create new resources for the FRY. And if the time comes for a donors conference for Yugoslavia it should be integrated into a financing conference for the whole region.

After a year of stability Pact experience, I would like to add something else important: the speed of our aid. Promises not matched by prompt action damage more than they help. Let us make realistic announcements so that we avoid disappointments.

Ladies and gentlemen,

The background against which the e-Balkans initiative is being launched is therefore an exciting one. The initiative should enable us to build upon existing progress in the region by providing individuals, entrepreneurs, governments and civil society with the opportunity to address social and economic issues in a more efficient, effective and innovative manner. It will pave the path for the region to catch up and enter a period of increased and sustained economic development.

Within the next few weeks, I hope that we will see the e-Balkans initiative bring together the big IT and telecom firms, south eastern European governments, new regional e-business personalities and international donors to develop an e-strategy for south eastern Europe, developed on the basis of country-specific studies in the areas of access, learning, society, economy and policy. It is important that we bring together community stakeholders from business, education and community groups, as well as government, to identify the community's needs and priorities in each country in order to increase the likelihood of developing a successful strategy.

The e-strategy should work to identify the opportunities for development and obstacles to rapid progress. It should also focus on creating an environment that is conducive to competition, innovation and education, which is essential if communities throughout south eastern Europe are to reap the benefits of the new economy. Policies will also need to be worked upon to foster the development of e-business and increase the level of IT education.

The e-Balkans initiative is based on the principle of inclusion. Everyone throughout the south eastern European region should be able to participate in, and no-one should be excluded from, the benefits that are offered by the new technologies of the information society. The Stability Pact will therefore need the full participation of governments, international organisations, civil society and the private sector alike to ensure that the initiative succeeds.

South eastern Europe has great potentials and numerous assets. For south eastern Europe, the Networked World provides a great opportunity and a great challenge. And we will work together ensure that that challenge is met.

This conference provides an excellent opportunity to kick start the process. Thank you for that, and for your kind attention.