FOURTH SUMMIT OF HEADS OF STATE AND GOVERNMENT OF SEECP PARTICIPATING COUNTRIES ACTION PLAN FOR REGIONAL ECONOMIC COOPERATION Skopje, 22-23 February 2001 Starting with the commitments to promoting good neighborly relations, security, stability and achievement of economic prosperity in the region of Southeast Europe, Recalling the SEECP Summit and Ministerial declarations, as well as the Charter of Good Neighborly Relations, Stability, Security and Cooperation in Southeast Europe, Taking into consideration the level of developed cooperation in the framework of the SEECP as a comprehensive framework directly established by the countries of the region, Reaffirming the European and Euro-Atlantic orientation of the SEECP countries, Stressing the commitment to make more effective use of the SEECP as an important resource that will complement and not substitute the individual efforts of the countries towards their rapprochement with the EU, Convinced that promotion of the regional economic cooperation will contribute the SEECP countries to develop faster and to accelerate their integration processes into the EU, Having in mind the activities undertaken by the Stability Pact, SECI, BSEC, CEI and other relevant regional initiatives, Emphasizing the lasting commitment to reforms and cooperation as a necessary condition for the overall development of the SEECP countries and the Region as a whole, Striving to focus international action for the benefit of Southeastern Europe the Heads of State and Government of the SEECP countries adopted the following: Action Plan for Regional Economic Cooperation The Action Plan focuses on those sectors where considerable synergy could be achieved through coordinated efforts in the framework of the SEECP and aims at: Directing the SEECP activities towards the main objectives in the economic field of the regional cooperation; Focusing the cooperation on concrete programs, projects and activities that will be initiated, developed and implemented in the short and medium run; Identifying concrete priority projects and programs of regional interest and examining the ways and means for their implementation; Facilitating the coordination of the SEECP activities with the relevant programs of the European Union, International Financial Institutions and of other regional initiatives. I. Economic and Social Development and Progress of the Reforms in Southeast Europe The Heads of State and Government consider that while considerable progress has been made in liberalization and in privatization, progress in structural reforms should be enhanced. They agreed that high priority should be given to the following areas: private sector development, improvement of businesses competitiveness, in particular through liberalization of trade, improvement of regulatory environment and strengthening of the financial sector; Institutional development and capacity building, through enhancing the public administration efficiency, improving central financial mechanisms, and harmonization of legal and judiciary systems with European standards; Transparency and good governance, are crucial for all dimensions of society having a highly relevant impact on economy and contributing to growth, macroeconomic stability and fair competition within the market economy; Environmental protection policy, protecting the regionıs natural resources, especially through the implementation of the sustainable development principle and financing environmental protection projects; Social development and social cohesion as an integral part of sound economic development and growth, which contribute to the reduction of poverty and social exclusion and will facilitate the integration of SEECP countries into the political and economic mainstream of Europe. II. Trade Development The Heads of State and Government reaffirm their conviction that further liberalization of trade, undertaken also by the countries of the region, will better serve their national economies. They welcome the decision of the EU for the unilateral preferential measures offered to the SAP countries. Stressing the importance of intensive trade development as a significant factor for accelerated economic growth of the region, the SEECP countries will continue: to undertake structural reforms needed to support the overall trade liberalization; to strengthen the process of trade liberalization among the SEECP countries and with the EU; to undertake concrete coordinated initiatives and steps directed at creating the necessary conditions for: Improvement and facilitation of the movement of persons, goods and services across the borders in the SEECP region; Improved personnel management of border crossings, harmonization of border procedures, according to the international standards and especially those of the EU and the WTO, optimizing the use of existing and developing new facilities. Further approximation of legislation will be carried out where needed; Reduction of the costs for trade and transport; Strengthening regional partnerships aiming at promoting regional trade; Prevention of smuggling and corruption in the field of trade; Conclusion of Free Trade Agreements among the countries in the region in compliance with WTO rules and in accordance with the processes relevant to each country's individual relationship with the EU; Decrease of non-tariff measures that hinder trade in commodities; Adoption of rules of origin according to the WTO provisions; Closer cooperation in the banking sector and harmonization with the international banking system; Support of the accession process of all SEECP countries to the WTO. In this context, they suggested the Ministers of Trade to hold regular meetings and to work jointly towards achieving these goals. At the same time, intensive cooperation within the framework of the Balkan Regional Center for Trade Promotion in Ankara should be enhanced to further develop the economic and commercial cooperation among the SEECP countries. Contributions from the Association of Balkan Chambers, Unions of Chambers of Commerce, as well as business associations, which have a longstanding experience in promoting trade in the region, are highly appreciated. III. Promotion of Foreign Direct Investment The Heads of State and Government consider that sustained economic development can be achieved only with a stable and safe environment for the private sector. In this context, they emphasize the need for creation of a secure and transparent legal investment framework in the SEECP region, including adequate protection of property rights, fair and non-discriminating taxation, market based competition and transparent administrative practices. In addition, they stressed the importance that the SEECP countries attach to the implementation of the Stability Pact Investment Compact. The Heads of State and Government underlined the need for SME development based on the improved business environment, that represents a key objective for all SEECP countries. Furthermore, there is a need for effective strategies to promote SME in the region that will tackle the areas of finance, improvement of the business environment and the strengthening of SME support network. At the same time, they gave their support to the Coordination Group of the OECD within the framework of the Stability Pact Working Table II and its efforts for the finalization of the road map with the active participation of public, private and civil society institutions, and encourage the activities carried out at the OECD Private Sector Development Center in Istanbul. They called upon the Ministers in charge of the investment and SME issues of the SEECP countries to hold regular meetings in order to coordinate their joint efforts for accomplishing these objectives. The financial contribution from the international community will be also necessary to that end. IV. Infrastructure Development The Heads of State and Government are convinced that the overall economic growth and prosperity in the SEECP region is impossible without comprehensive activities for rehabilitation, construction and interconnection of the regional infrastructure. A developed transport, energy, telecommunication and water infrastructure is essential to the free movement of persons and trade, as well as to the enhancement of social cohesion and integration. In light of the Second Regional Funding Conference under the Stability Pact, planned for later this year, they stressed the SEECP readiness to work with donor agencies and the international financial institutions to implement regional strategies that address our most pressing infrastructure requirements. They underlined their commitment to formulating project proposals that are part of overall strategic approaches dedicated to developing infrastructure networks of regional impact and importance. 1. Transport The Heads of State and Government consider that the SEECP countries should take full advantage of the conclusions drawn by the European Agencies and Programs, International Organizations and IFI's, in order to attract the necessary funding to existing transport sector projects in particular to those related to the development of the Pan -European Transport Corridors. Aiming at developing regional transport infrastructure as an integral and inseparable part of the Pan-European Transport Network, they also consider the construction of lacking elements of national transport networks and the establishment of transport interconnections with neighbouring countries, to be a task of prior significance. The Heads of State and Government consider that within this framework the SEECP is capable to give its contribution to bringing more benefit from the multi-country approaches in the Transport Sector, in particular through: Identification and harmonization of regional investment and development programs; Identifying investment needs and establishment of their utilization dynamics; Preparation of commercially footed investment projects which take into account both national and regional interests. Exploring the means of providing investment funds through public-private sector cooperation With reference to different modes of transport, the Heads of States and Government made the following considerations: Roads - Having in mind that the road network in the region is mostly in poor condition, priority should be given to rehabilitation of the existing highways and to construction of new highway lanes. Railways - The restructuring and opening to the private sector of these technical-technological systems could provide for efficient management and cost-effective operations, what on its part is to contribute to and facilitate the provision of larger funds aimed at improvement of the quality of services. The modernization of railway lines, as well as the establishment of interconnections between the rail networks of SEECP countries is a matter of basic importance. For this purpose they should coordinate their strategies for national development and applications for funding from IFI's. Maritime and transport by inland waterways. Being aware of the state of river and maritime ports in the region, the Heads of State and Government asserted that efforts should be directed towards portsı rehabilitation, construction of new terminals and introduction of modern information and telecommunication technologies. The rapid implementation of the project concerning the clearance of the Danube river - an issue of paramount importance for some of the countries in the region - is in line with the enhanced regional cooperation the SEECP countries are striving for. 2. Telecommunications SEECP gives high priority to the establishment of a legal and regulatory framework, including with reference to the Information Technology, that encourages and provides long-term support for investments. These instruments of reform policy include the progressive opening of different segments of the telecom market, facilitating private investment, including in the area presently controlled by the state monopoly operators. The Heads of State and Government suggested to cooperate with the other regional initiatives working on similar matters to prevent time consuming duplications and convening of regular meetings of the Ministers of Transport and Communications in order that concrete projects of wider regional interest are defined. 3. Energy The Heads of State and Government consider that the availability of reliable and low cost sources of energy is essential for the rapid and sustainable economic development of the overall SEECP region. A coordinated approach to energy supply offers significant advantages in terms of improved utilization of existing production capacities, as well as in optimizing future investment and stimulating use of alternative energy sources. This approach provides significant benefits from increased consistency and quality of supply, reduced environmental damage and electricity trade opportunities. It could enable optimized investment decisions to be made for gas as well as for pipeline networks. Taking into account the difficulties to raise adequate funding from traditional sources, the Heads of State and Government stressed that it will be important to make progress in the commercialization of utilities and also in private investment in funding infrastructure development. Having in mind the cooperation so far within the Process, as well as work done by the other regional fora, they took note for the forthcoming meeting of the Ministers in charge for energy issues, to be held in Athens. Taking into consideration the present situation and urgent needs of some countries of the region, they underlined the necessity of re-establishment of the interconnection of high voltage electrical transmission lines within the region and with UCTE. V. Combating Organized Crime and Corruption The Heads of State and Government are committed to comprehensive and decisive measures to combat corruption. Furthermore, they are committed to promoting the cooperation in the fields of justice, combat against organized crime, elimination of terrorism, illicit drugs, arms and human trafficking. In this context, it is suggested that the competent Ministers of the SEECP countries hold regular annual meetings with the aim of discussing problems arising from the illicit activities and to take concrete actions for their prevention. To this end, the SEECP countries are fully committed to work towards fulfilling the Stability Pact Organized Crime Initiative and Stability Pact Anti-Corruption Initiative. They fully support the SECI Bucharest Regional Center for Combating Transborder Crime and they agreed on the importance of the full involvement of the EU institutions in order to achieve full compatibility of the Center's activities with the EU acquis. VI. Environment The Heads of State and Government are committed to coordinate the efforts to protect the environment. The need for this in the future will become evermore increasing, having in mind the increasing needs for clean drinking water, provision of healthy food and qualitative living conditions for the population. Further qualitative development of environmental protection, based on the sustainability principle, will be stimulated through foreign investments, in the form of donations, direct or joint investments, and by stimulating the domestic financial potential. In this context, it is suggested to organize regular meetings of Ministers of Environment, in order to have prompt information exchange, coordinate joint efforts in prevention policy, conclusion of bilateral and regional agreements and concrete realization of cross border projects in this field. Furthermore, for purposes of realization of projects on promotion of cooperation in the field of environment, it is suggested to consider the necessity of establishing an information exchange system for environmental monitoring in the regional context. After a decade of conflicts, the issue of environmental rehabilitation is of paramount importance. There is an urgent need to address the most affected parts of the area. Public concern further underline this necessity. An integrated assessment is needed involving the opinion of various international agencies, including a specific roles for the European Agency for the Environment, UNEP and WHO. The Heads of State and Government took note with interest of the Greek proposal for establishing of a joint EU-SEECP-UN working group charged with environmental monitoring. They stressed the importance of international financial support for environmental rehabilitation. Accordingly, they mandated the MFA's to further pursue the issue. VII. Transfrontier Cooperation The Heads of State and Government encouraged the creation of Euroregions in South East Europe, in cooperation with the Council of Europe and the Stability Pact. They considered that cooperation between regions situated on either side of a border is important for the economic, cultural and social development of the regions concerned, as well as for the protection of the cultural heritage and the environment. The creation of Prespa Park illustrated the benefits of such cooperation for all countries of the region. The Heads of State and Government called upon the Ministers of Foreign Affairs to further examine the possibility to deepen the cooperation in this field. VIII. Implementation and Monitoring The Heads of State and Government tasked the Ministers of Foreign Affairs to formulate proposals for monitoring the implementation of the activities foreseen in the Action Plan.