Historical archive

Commercial cooperation with the Western Balkans - a political perspective (Traavik)

Historical archive

Published under: Bondevik's 2nd Government

Publisher Ministry of Foreign Affairs

From the Norwegian perspective, increased trade and commercial interaction with the countries of the Western Balkans is both welcome and wanted, State Secretary Kim Traavik said when he opened the third conference on business opportunities - held in Norway. (10.12.03)

State Secretary Kim Traavik

Commercial cooperation with the Western Balkans - a political perspective

Oslo, 5 December 2003

(Basis for opening statement at Conference of Business Opportunities in Bosnia-Hercegovina, Croatia, and Serbia and Montenegro.)

Excellencies, Ladies and Gentlemen,

It is a great pleasure to be here this morning. And I am happy to see so many Norwegian companies as well as companies from the region represented here today.

This is the third conference on business opportunities in the Western Balkans to be held in Norway. I am particularly happy that we are co-sponsoring the conference with three countries of the Western Balkans. Their decision to join forces on this occasion is indicative of a new spirit. It sends a clear message, not only business-wise, but equally from a political point of view. The countries from the region have indeed come a long way, even though – to be sure – much also remain to be done.

From the Norwegian perspective, increased trade and commercial interaction with the countries of the Western Balkans is both welcome and wanted. Development of a viable trade and industry sector in the region is an indispensable foundation for economic development and hence indirectly also for consolidation of the rule of law and democracy, which in its turn is a basic condition for the future stability and prosperity of the countries of the region.

The most important driving force for transition and reform in the Western Balkans is clearly the region’s own aspiration for integration in Euro-Atlantic structures.

Indeed Croatia has already applied for membership in the EU and could reasonably hope to join in the second half of this decade. The other countries of the region have embarked upon the EU’s Stabilisation and Association process, which places them firmly on the road to Brussels.

The EU’s Thessaloniki declaration of June 2003 emphasises that the European integration project will not be completed until the countries of the Western Balkans too, have become members of the European Union. This is a historic political undertaking, the significance of which should not be lost on anyone. And the countries of the Western Balkans are getting closer to NATO as well.

These are significant achievements. Let us not forget that less than ten years ago the region was in the throes of bloody conflict. Despite the difficulties and the challenges, the countries of the region are moving forward. The differences in outlook and regulatory frameworks are gradually being erased. The countries of the region will increasingly have frameworks for business that are “EU-compatible”. In this vitally important process, they need and deserve the support of friends such as Norway.

And the International Community, including Norway, has provided generous financial and other assistance to the Western Balkans over the last decade. Norway will continue to support the countries of the region. But in the long term, financial assistance of the magnitude that has been flowing to the region in recent years is neither sustainable nor desirable.

Our assistance today is mainly to facilitate the sometimes painful transition from communism, command economies, and conflict, to modern, democratic, market economies. Other countries in Central and Eastern Europe have made this transition before. We are confident that so will the countries of the Western Balkans. But in order for this to happen, a revitalisation of the private sector is absolutely indispensable. To that end, not only aid but even more so trade, is needed.

Economical co-operation between countries can of course not be dictated by governments. We can only facilitate this by creating the right framework conditions. It is up to the business communities themselves to capitalise from the opportunities that are opened. But we in Norway feel very strongly that more co-operation is needed, and - to that end - a sense of partnership among equals is required. In other words, it has to be something in it for both sides if this sort of co-operation is to flourish.

The potential for increased trade and investment in the Western Balkans is considerable. In order to tap into this potential, a transparent and predictable business environment is a fundamental requirement. This includes a secure environment for business activities, as well as an environment free from corruption and cronyism. A stable and predictable investment climate is essential for sound business relations and healthy trade.

A second factor of fundamental importance is of course the legal framework for the financial sector. The basics must be in place both to attract international capital and to channel domestic resources to productive use. To our minds it is particularly important to promote small businesses and entrepreneurs. Small and medium-sized enterprises (SMEs) have the potential to become the driving force of economic prosperity in the region. For this to happen, they must be given the necessary framework conditions.

Third, legal and regulatory measures must be put in place for promoting and protecting investments. Such frameworks include proper contract enforcement and respect for property rights, and effective supervisory mechanisms. Providing an enabling environment for a sound investment climate is first and foremost the responsibility of national authorities. Political will and determination are of course a must. There is strong and growing awareness of this in the countries of the region.

Fourth, the private sector is by far the largest source of employment, income generation and investment. It is also a significant source of tax revenue. In addition to making tangible contributions, the private sector is an essential arena for the cultivation and expression of less tangible, but critically important human and societal values, such as creativity, innovation, empowerment, and openness. We are happy to note widespread and increasing recognition of this, too, in the countries of the Western Balkans.

And fifth, sustainable development depends on stability and security in societies where freedom of action is combined with a sense of responsibility. This applies to both the private and public sector. There must be transformation and there must be freedom: one is impossible without the other. There must be freedom to promote democracy, to create jobs and better living conditions for people, and to take better care of the environment. Again, there has been progress in these areas, too, in the countries of the Western Balkans.

Still, transformation sometimes also lead to corruption, organised crime, including trafficking in human beings, drugs and small arms as well as to environmental problems. There is no denying that we have seen these ugly phenomena in the Western Balkans as well. But there is equally an increasing awareness of these problems and a will to do something about them.

Ladies and gentlemen,

I am happy to note that Norwegian interests are working closely with local trade and industry in the promotion of social and economic development in the Western Balkans. We have done so for many years, we will continue to do so in the years ahead. The Norwegian Government attaches great importance to the participation of Norwegian companies when it comes to rebuilding local trade and industry in the region, and in this way contributing to the foundation of a new economic development.

In rebuilding the trade and industry sectors in the Western Balkans, agreements are essential to regulate and promote trade and develop industry. Within the European Free Trade Agreement, Norway has been a driving force for the negotiation of Free Trade Agreements with Croatia and Macedonia, and for the establishment of a EFTA co-operation agreement between EFTA and Serbia and Montenegro. We have furthermore advocated early talks on a free trade agreement with Serbia and Montenegro. And we are prodding EFTA to look into the possibility of establishing a Declaration of Co-operation with Bosnia-Herzegovina.

Let me conclude by stressing once more the fundamental point that commercial co-operation cannot be dictated by governments. Our role is confined to providing a framework conducive to expanded co-operation. A key factor in this respect is political stability. Bosnia-Herzegovina, Croatia and Serbia and Montenegro have come a long way in consolidating democracy and equally significant strands have been made on the road to a market economy. Still, a number of challenges remain We recognise that the necessary reforms are often painful. This is why we remain committed to supporting these countries in their endeavours to achieve integration with the Euro-Atlantic community. I strongly believe that commercial cooperation can make a crucial contribution to this process. And I am fully convinced that the benefits, both politically and commercially, will be mutually advantageous.

There are still many undiscovered business possibilities for Norwegian companies in the Western Balkans. This potential should be exploited. Today’s seminar provides a good opportunity. I urge you to make optimal use of it.

Thank you.