Stanford University
Institute for International Studies

DEVELOPING ECONOMIC RELATIONS WITHIN GUUAM – FROM A VIRTUAL CONCEPT TO A GEO-ECONOMICAL REALITY

H.E. Ceslav Ciobanu
Ambassador of Moldova

One of the most important areas of GUUAM cooperation is in developing economic ties. The willingness of our countries to strengthen and expand cooperation in the economic field has been stressed in numerous declarations of our Presidents, Prime-ministers and Ministers of Foreign Affairs. During first two years since GUUAM’s creation, our efforts were aimed particularly at increasing the visibility of our group, at changing the simplistic perception that treated all of the states successors to the Soviet Union only as former Soviet Republics, and nothing more. Not only we have managed to change these stereotypes, but we also hasve succeeded in overcoming the rather cautious reaction from some Western capitals, including Washington, toward our cooperation. Most importantly, we have transformed GUUAM from a virtual concept into a geopolitical reality.

At the same time, we have to “put some flesh” on our Statements and Memorandums of cooperation, supplementing declarations of intent with first pragmatic steps characteristic for an international organization. Otherwise we run the risk of repeating the mistakes of the CIS, when hundreds of declarations and decisions can not be implemented. In other words, we should work toward making from GUUAM not only geopolitical reality, but also a geo-economical reality.

From this standpoint, the past year witnessed several encouraging developments in our cooperation. I believe that we finally started capitalizing on the existing potential by advancing our cooperation to a new level. I would single out:

• The principial decision to establish a free trade zone within the GUUAM;
• The agreement to have annual meetings of heads of states and to upgrade the GUUAM cooperation into a fully fledged regional organization;
• The agreement on launching the first joint project – Silk Sat and beginning of the search for its funding;

At the level of our Embassies in Washington, one can clearly see that the contacts have intensified as well. Starting with the first public presentation of GUUAM in Senate in May, we had several successive meetings at Uzbekistan Embassy, in Saint Luis, hear at Stanford.

It is encouraging that official Washington’s attitude toward our cooperation has changed too, both at the level of Administration and Congress. Congress passed an important bill authorizing allocation of funds for strengthening border control and our territorial independence, it should be our Embassy’s goal for the next year to make sure this recommendation is reflected in the appropriation bill. At the same time, in 2000 we started a serious dialogue with the Administration – first, at New York’s meeting hosted by Ambassadors Fried and Halperin, then, the meeting at the Department of State, and now here at Stanford.

I view today’s meeting as a sign of our relationship’s maturity, as an understanding that at this phase it is crucial to sustain our cooperation by concrete projects. That is why, after several joint public appearances, I think we should take advantage of the today’s meeting to undertake a sincere exchange of opinions on what should be done to improve our cooperation in the economic field. And, on behalf of all my colleague’s, I want to welcome the U.S. Department of State’s willingness to join us in these consultations. It is of utmost importance that we together outline what role can and should United States play in supporting our economic cooperation, both within GUUAM as well as between GUUAM and the United States.

That fact that our group reunites five countries that are amongst the most advanced on the path of economic reforms in the region and that we are committed to further build solid market-democracies, facilitates finding common language in our dialogue.

It is also important that there is a strong political will to foster economic and trade relations and to create mechanisms of multilateral cooperation in the framework of GUUAM. Based on this political support we should start consultations and workshops at the level of experts and relevant decision makers (ex. Ministers or Vice ministers of Transportation for East-West Transcaucus transportation corridor, Ministers of Finance and Economy for coordination of tariffs policy in the framework of the free trade zone etc.). Some of these steps were discussed at the last, October’s, session of the Committee of National Coordinators in Moldova, where GUUAM Action Plan for 2000-2001 was approved. It should be a meaningful and pragmatic cooperation, based on real possibilities and specific needs.

GUUAM is an unique interregional alliance, with its three pillars situated in Eastern Europe, South-Caucus and Central Asia. in my opinion this represents a tremendous opportunity, offering the chance to our countries to have better access to distant regions and countries through our allies in GUUAM. But this geographical disparity might also represent an important obstacle, especially if we will not manage to find efficient ways of structuring our relations and identifying adequate and realistic goals and fields of cooperation.

I think the greatest potential represents collaboration in the energy sector, in developing oil and gas resources of the Caspian Sea region and creation of a multiple pipeline transportation system to world markets. Without repeating those being said at the previous panel, I would like to stress that Moldova has major interest in successful establishment of a viable Trans-Caucasus transportation corridor to deliver oil and gas of the Caspian Sea region to the Western Europe. In particular, we are interested in ensuring that this corridor will transit Moldovan territory or at least take into consideration our needs.

To this end, Moldovan experts are working on a proposal to ship oil from Supsa to the Romanian port of Constanta and then to the Onesti refinery in north-eastern Romania. Another option might be the Giurgiulesti oil terminal that we have been building on the Moldovan portion of the Danube river. This is a vital subject for Moldova, since our country is totally dependent on energy imports, and therefore is more vulnerable to different political pressures from outside. Actually we are told that Moldova is the second country in the world in terms of share of the energy imports in the GDP. That is why, diversification of the energy supplies is our strategic economic objective. That is way, we are so interested in assuring that we will benefit directly from developing the Caspian oil reserves. Creation of the Eurasian Transportation Corridor is not only a means of extending economic cooperation, but also an important factor of strengthening economic and political sovereignty of our states.

Another related subject is connected to recent discussions about a new pipeline from Russia to the Western Europe that would bypass Ukraine. Such a scenario would inevitable affect not only Ukraine but Moldova as well. Therefore I agree with my Ukrainian colleague regarding the need to coordinate efforts to help Ukraine to preserve it’s role as the main transit route of Russian gas and oil exports to Western and South-Eastern Europe. And we know that US might say a heavy word on this subject as well.

United States is viewed as a “strategic partner” by each of our countries and we should spare no efforts to expand cooperation among themselves and with the United States. I would like to call on our American partners to examine the possibility to organize with the assistance and funding from the Department of Commerce a conference on investment opportunities in the GUUAM countries.

Speaking of the Economic Advisory Board I think it is worthy for our experts to examine the possibility of establishing such an organ. We should also think in the direction of launching joint American-GUUAM’s working groups, funded either by major universities and think tanks (including Stanford) and U.S. Administration, toward preparing some studies on potential joint projects.

In my opinion another valuable idea is that of an establishment of a tourist route through the five countries of the GUUAM group - ‘the Silk road tour”; To this end we might organize a conference in the United States by major tourist companies of our countries, and may be US might provide financial assistance.

Moldova and Azerbaijan are exploring the possibilities of joining Science and Technology Center in Ukraine. Three other GUUAM countries – Ukraine, Georgia and Uzbekistan - are already members in of STCU. Once our two countries become members, this center may become de facto a GUUAM science club and we will have to think about joint science projects.

A feasibility study and implementation of the “Silk Sat” project might be one of such joint science projects. We had productive discussions about this projects, and as I know all our leaders voiced our country’s support for it. We should take advantage of the support for this project in US Congress, in particular by Senator Brownback, and jointly lobby for including of funds for this project in the next year’s budget.

Last, but obviously, not the least, and may be even the most important practical idea is the decision to establish a free trade zone and to harmonize our tariffs. It is a major decision, that if successfully implemented, will represent degree of partnership . But there are should be no mistakes: we should build this free trade zone on the basis of WTO standards and criteria. Georgia is the first GUUAM’s WTO member, and Moldova might join the organization by the end of this year and Ukraine, Azerbaijan and Uzbekistan are in the process of bilateral accession negotiatiation. With this in mind, based on conditions negotiated with WTO we can create a preferential trade regime between GUUAM countries that will promote trade and investments, thus helping us to integrate into the global economy.

For Moldova – GUUAM is not a final destination, it is a means of jointly addressing our problems and advancing toward our strategic goal of integration into the European Union. Economic factor is most important one in these efforts, and that is why we are deeply interested in developing economic cooperation between GUUAM members. Apart from this, closer cooperation within GUUAM group represents a token of Moldova’s openness to regional cooperation that is strengthening our European bid.

The development of closer economic links and improvement of infrastructure between GUUAM countries would definitely contribute to the increase of Western businesses to our markets which combined population is about 100 mln people. It is my strong conviction that expansion of relations between countries of the region and the United States is essential for stable and peaceful development of the GUUAM countries as well as of all the states along the historic Silk Road.