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The East: Black Sea States Expect Economic Boom

Crans-Montana, 30 June 1997 (RFE/RL) -- Political leaders from Romania, Bulgaria, Georgia, Ukraine, Moldova and Turkey have told an international business conference that they expect an economic boom with the development of new oil and gas resources in the Caucasus.

They told the conference in the Swiss mountain resort of Crans-Montana Sunday that much of the oil and gas is expected to be exported to western Europe through the Black Sea region, which would increase its prosperity.

The routes of the pipelines have not yet been announced. One is expected to pass through Georgia and a large oil terminal is being constructed at the Black Sea port of Poti. There are other suggestions for running a pipeline through Turkey or to carry the oil across the Black sea to Romania or Bulgaria for export to western Europe.

Georgia's state minister Niko Lekishvili told the Crans-Montana conference Sunday: "the Black Sea region should become a bridge connecting Europe with the inexhaustible natural resources of the Caspian Sea and Central Asia, the utilization of which will have a crucial impact on the future development of the world economy."

Lekishvili said the transport of Caspian and Kazakhstan oil "is becoming an urgent issue and a considerable quantity of it is expected to go through the Black Sea region."

Romania's Minister of Industry and Trade, Calin Popescu-Tariceanu, said regional leaders not only expected oil and gas to be exported through the region but also envisaged a considerable growth in the export of agricultural goods. He said he expected exports would come from the Caspian Sea and also from central Asia. He named Kazakhstan, Turkmenistan, Kyrgyzstan and Uzbekistan.

Strong support for the future of the Black Sea region as an important economic and political zone also came from Bulgarian prime minister Ivan Kostov, Ukraine's deputy foreign minister Borys Hudyma and Moldova's Minister of Trade and Industry Gheorghe Cucu.

All those participating in the seminar are involved with the Black Sea Economic Co-Operation region which was established in March 1992 by Bulgaria, Romania, Russia and Turkey. It now has eleven full members with another seven holding observer status.

The Romanian minister of industry and trade, Popescu-Tariceanu, acknowledged that at present the Black Sea Economic Co-Operation "involves a relatively low amount of trade and an insignificant level of economic co-operation." But he said the future looked bright "starting from the considerable amounts of natural resources available in the Caucasus area and from the emergence of the neighboring countries into the world economic system."

Popescu-Tariceanu noted that in this region "political freedom has created a remarkable effervescence in economic life, materialized in enormous projects involving some of the largest companies."

He said that for a number of reasons, including "political and geographical realities", Romania expected to have an important role to play in regional development and as a transit route for Caucasian oil.

One of the most important was Romania's central role in transport in the region. Its port of Constanta offered better facilities than those of other Black sea ports. They included an oil terminal and efficient Roll-On Roll-Off facilities.

Popescu-Tariceanu noted that Constanta was also the starting point for three main European transport corridors. Route Nine went through Ukraine, Poland, the Baltic States to Finland. Route Four went to Berlin through Budapest, Prague and Vienna. Finally there was Route Seven -- the river route to western Europe. He pointed out that river ships can travel from Constanta to the Danube river which connects to the Main-Rhine river system in Germany and thence to the North Sea.

The Romanian minister also stressed his country's long experience in the oil industry. "With a century of experience and with large oil-refining capacities (about 33 million tons) we are able to become the essential link for European imports of central Asian and Caucasus oil," he said.

He said Romania hoped to extend its facilities by connecting its pipeline system to the Hungarian and Yugoslav networks.

The Romanian minister said that other regional projects under consideration included an optical fiber communication system between Turkey (Istanbul), Bulgaria (Varna), Romania (Constanta) and Moldova (Chisinau). Discussions had also begun on a "Black Sea power ring", which would connect the electric energy power systems of the Black sea states. He said it had been agreed to run a feasibility study on this idea.

In his own report to the seminar, Georgia's state minister Niko Lekishvili also noted the importance of the transport routes in the Black Sea region. He particularly emphasized the Europe-Caucasus-Central Asia transport and communications project, which has sometimes been described as reviving the historic "silk road". The idea is that central Asian countries will be able to export their natural resources and goods through the southern Caucasus --particularly Georgia --to western Europe.

Lekishvili said Turkmenistan, Uzbekistan, Azerbaijan and Kyrgyzstan are already involved in the project and Kazakhstan, Ukraine, Bulgaria and Romania are all showing interest.

As an illustration of the importance of new transport links in the region, he noted the development of trade between Georgia and Ukraine. He said the construction of only one railway-ferry line in 1996 has increased nine-fold the cargo turnover between Ukraine and Georgia. The opening of borders had also brought great changes. Until recently Turkey had practically no economic relations with southern Georgia --- now Turkey was the number one trade partner for independent Georgia.

But Lekishvili spent a considerable part of his address stressing the link between economic development and security and stability.

"I am convinced that the security of the Black sea area depends on equal access to the profits of the area under the conditions of fair economic competition, barring the possibility of the monopolization by any one state," he said.

He said that in order to achieve this it was necessary to ease existing tensions. As a first example he said Georgia attached great importance to the development of good-neighborly relations between Turkey and Greece.

He welcomed the new relationship between NATO and Russia following the signing of the Founding Act in Paris last month. Lekishvili described this as a "significant event for black Sea regional security, which may contribute to the creation of an entirely new pan-Eurasian security structure in the future."

He also welcomed the initialing of a charter between NATO and the Ukraine and said this was "undoubtedly an important step towards their rapprochement." Lekishvili said that eventually a specific, comprehensive security structure would have to be developed for the region.

Bulgaria's new prime minister, Ivan Kostov, also discussed the importance of developing transport routes if the Black Sea region was to achieve its full potential and become a corridor for central Asian exports to the west.

Kostov revived the possibility of a highway and other transport links between Bulgaria and the port of Durres in Albania, which have been under discussion for some years. He said it would pass through Macedonia and a number of economically-poor areas and could help the economic recovery of that part of Europe.

Kostov emphasized that although his Government has been in power for only 28 days it has already developed a program of economic development, known as Bulgaria 2001. He said his government wanted Bulgaria to play a role in making the Black Sea region a dynamic part of the new Europe.

Ukraine is the current chairman of the Black Sea Economic Co-Operation group. Its deputy foreign minister Borys Hudyma told today's seminar that the Black Sea region was striving to become integrated in the all-European system. He said a number of significant steps had already been taken and more would be developed at a meeting in Kiev in September.