Towards a new EU Strategy for Central Asia

Author(s): Jos Boonstra,Nargis Kassenova,Marlène Laruelle,Fabienne Bossuyt,Luca Anceschi,Jeremy Smith / Language(s): English

Ten years after the inception of the European Union’s (EU) Strategy for Central Asia, in June 2017 the European Council initiated a process to develop a new strategy by 2019. The ‘reviewed and renewed’ strategy will take into account geopolitical developments, Central Asian preferences as well as the EU’s 2016 Global Strategy. This process offers an opportunity for all stakeholders – Central Asian governments, EU member states, human rights defenders and the research community, among others – to play a role in re-shaping the EU’s policy towards the region. After a decade of relationship-building and cooperation, it is time to evaluate what worked and what did not, and gather and apply lessons learnt to improve the new strategy amidst a drastically different internat ional environment.

MONTENEGRO: Issues and Questions Background Briefing 1999-05

Author(s): Author Not Specified / Language(s): English

There is a real threat of parallel structures consolidating in parts of Montenegro governed by the SNP (the pro-Milosevic party of Momir Bulatovic), as municipalities in the area are passing resolutions to assert their autonomy from Podgorica, should the government in Podgorica move towards independence. This was timed to coincide with the beginning of negotiations between the governments. - Even holding a potential referendum on independence in these areas is considered impossible by some observers. The implementation of new laws on state enterprises and the regulations to control currency transfers across the borders will indicate the extent of the authority of the Podgorica administration.The Montenegrin Interior Ministry continues to remain confident that it can maintain control of a complex security situation. While tribal assemblies (plemenske skupstine) in the Northern municipalities continue to meet, they have lost some of their initial momentum since September. - The economic and social situation continues to deteriorate. There is fear that social unrest and strikes at major enterprises in protest at delays in payments of wages and social benefits could be instrumentalists to weaken the hold of the Podgorica government.

DEMOCRACY, SECURITY AND THE FUTURE OF THE STABILITY PACT FOR SOUTH EASTERN EUROPE. A Framework for Debate

Author(s): Marcus Cox,Minna Järvenpää,Gerald Knaus,Ivan Yotov Krastev / Language(s): English

Regional co-operation will only lead to meaningful results if it is fully supported by regional governments, which means it must help them deliver concrete benefits to their citizens. With this in mind, and drawing lessons from the experience of post-war European integration, this study proposes an approach based on functional integration in politically important sectors of the economy. A concrete proposal is to commit Western donors substantially to increase support to regional governments in reforming their energy sectors in return for a commitment by these governments to create a genuine common market, integrated with that of the European Union. … The study also proposes significantly more support for institution building to strengthen the capacity of states in the region to fight trans-border crime, while holding out the concrete promise of easier access to the European Union for their citizens. The role of the Stability Pact Office would be to identify gaps and shortcomings in assistance in this field and to develop a concrete vision of increasing mobility while fighting criminal networks.

Governance and development. A real life story of private sector growth in Bosnia and Herzegovina. LESSONS FROM BOSNIA FOR KOSOVO. Part I

Author(s): Author Not Specified / Language(s): English

This report presents the results of a detailed study of the post-privatisation political economy in the municipality of Kalesija, one of Bosnia’s least developed rural areas. It is part of an extended ESI study of patterns of local development in South Eastern Europe for the Lessons Learned and Analysis Unit of the European Union Pillar of UNMIK, tracing the evolution of key actors and institutions and examining the role of local government in the emergence of the new private sector.1 By carrying out an exhaustive study of a particular locality, it is possible to assemble a picture of the economic transition process and draw lessons which may be generalisable across Bosnia and in other locations, particularly Kosovo.

TOWARDS A KOSOVO DEVELOPMENT PLAN. The state of the Kosovo economy and possible ways forward

Author(s): John Bradley,Gerald Knaus,Besim Beqaj,Andreas Wittkowsky / Language(s): English

The key priority for this (2004) and future Kosovo governments is to identify ways in which Kosovo can catch up with the rest of Europe. The overriding goal of Kosovo’s economic policy must be to bring about a substantial process of convergence towards European living standards within the next generation.To achieve this objective all government ministries, public institutions and agencies involved in formulating and implementing economic development policy – both at the central and at the local level – need a common strategic focus. The role of UNMIK, the European Union and of international donors is to support this focus on economic and social convergence and to assist with advice and – as part of the process of European integration – economic resources.

THE COST OF NON-EUROPE. Textile towns and the future of Serbia

Author(s): Author Not Specified / Language(s): English

This is a story about the economic decline and social crisis of a formerly proud textile town in a country well-placed on the edge of the largest market for clothes and textiles in the world (the EU), but unable to take advantage of it. It is also a story about the costs of non-Europe in the Balkans. The town is Leskovac; the country is Serbia; and the key policy question is how it was possible that all of Serbia’s neighbors were winners in the global restructuring of the textile and clothing industry (TCI), while Serbia was a looser. || The facts are clear and so are the consequences. In 2004 Serbia employed 56,781 people in the textile and clothing sector. In Bulgaria that number was 168,000. Since then the number has continued to fall in Serbia and has continued to rise in Bulgaria. In 1990 Serbia exported three times more textiles and clothing than small Macedonia. By 2004 Macedonia exported more than double the amount of Serbia.

BOSNIA AS WUNDERKIND OF DOING BUSINESS. Outline of 14 steps to take

Author(s): Adnan Ćerimagić,Gerald Knaus / Language(s): English

„To be frank, let us note what we can and cannot do. We can advise you on how to improve Bosnia’s ranking within one year. We do not promise that this will actually lead to any more jobs or investment. And yet, it is time for some surprising good news from Bosnia. What the European Commission has asked you to do you can do, and more. And then turn to policies which might actually make a real difference in the long run.“ (from the letter of ESI to the members of the Presidency of Bosnia and Hercegovia)

THE OTTOMAN DILEMMA. Power and Property Relations under the United Nations Mission in Kosovo

Author(s): Author Not Specified / Language(s): English

The United Nations Mission in Kosovo (UNMIK) has made itself responsible as trustee and administrator for a vast amount of state and socially owned property across Kosovo, including some 370 socially owned enterprises (SOEs). However, over the past three years, it has lacked the institutional resources to establish an effective property regime. As a result, control over some of Kosovo’s most valuable economic assets is being determined outside the legal system, in countless individual power struggles across Kosovo. The results have been harmful both to economic development, social and political stability and the establishment of the rule of law. || This report analyses different strategies employed by UNMIK to fulfil its responsibility as trustee of social property, including direct administration of SOEs, the restoration of Yugoslav workplace democracy (‘self-management’) under the 1988 Law on Enterprises, and granting concessions over SOEs to private investors (‘commercialisation’). It concludes that these efforts have done little to curb the confusion over commercial property or to promote an environment more conducive for private sector growth.

TREPČA, 1965-2000

Author(s): Michael Palairet / Language(s): English

I initiated research on this report in July 2002, mainly using materials in the public domain in Belgrade, Yugoslavia. In particular, use was made of Trepča, the Combine’s internal newspaper, for 1989-1999. This preliminary research familiarised me with the central issues regarding the business of RMHK “Trepča” in the recent past, and identified issues likely to bear on the problems of the enterprise. It provided a basis for further research carried out October-December 2002 on documents held at RMHK “Trepča”s head office at Zvečan, files at the offices of EU in Priština, and Trepča documents also held by UNMIK/EU and stored on 25 CD-Rom disks.

PROTESTS and ILLUSIONS. How Bosnia and Herzegovina lost a decade

Author(s): Author Not Specified / Language(s): English

On 7 February 2014 violence broke out in Tuzla, the regional capital of Tuzla Canton in Northern Bosnia. War veterans, unemployed youth and football supporters of the local club took to the streets. The core group of protestors were former workers in socially owned enterprises who had been demonstrating to save their companies for more than a decade. Demonstrators entered the cantonal government building and set it on fire. The same day violent clashes spread to other Bosnian cities, Zenica, Sarajevo, Mostar and Bihac. Three more cantonal buildings and the state archive in Sarajevo all went up in flames. Already on 7 February Tuzla protestors published a declaration that stated that “Today in Tuzla a new future is being created.” (a Bosnian writer)

WHY KOSOVO NEEDS MIGRATION. From research to policy

Author(s): Author Not Specified / Language(s): English

In 2005 ESI undertook research on rural poverty, migration and remittances in Kosovo. Our conclusions were published in 2006 in a report called “Cutting the Lifeline” that showed how migration had been a necessity for many generations of young men in particular. The report also examined how after 1999, the European doors to legal work migration closed, and only the lucky few with close family in the diaspora could migrate through family reunification schemes. In the report, we described in detail the economic realities of two villages that are representative of the wider social and economic situation in Kosovo: Cerrce, located in north-west Kosovo on the border with Albania, and Lubishte, situated in the mountainous southeast. Our findings clearly showed that economic development, without significant numbers of people leaving such villages to find work, skills and capital elsewhere, is simply inconceivable. || In the decade after our research was concluded little has changed anywhere in Kosovo. In 2005 a Labour Force Survey showed an employment rate of only 29 percent among 15 to 64 year olds (and only 12 percent among women). The 2013 Labour Force Survey was no less dramatic, with an employment rate of 28.4 percent (12.9 percent among women). Close to ninety percent of adult women are not working and have no prospect of ever finding a job.

№08 Kosovo 2020: A Complex Agenda for the New Government

Author(s): Author Not Specified / Language(s): English

The new government that takes office, whatever its colour will inherit a long list of issues from its predecessor. Dysfunctional healthcare and education systems, an untaxed shadow economy, a slow and often ineffective judiciary, weak public administration all require major interventions. The failure of public services is graphically illustrated with the high number of patients being treated abroad and the regular enrolment of politicians’ children in private and international schools.17 To further complicate the matter, despite the generally cordial campaign that preceded the elections, relations between key political actors remain tense; leaders do not trust each other and basic norms of cooperation between actors are still missing. That is especially true for the case of Albin Kurti, the leader of Vetëvendosje, who has spent much of his time in opposition (and before that, as an activist) attacking other parties, including his current potential partner LDK. If Kurti aims to secure the premiership and stay in power he will have to build some relations with both his coalition partner and the opposition, with whom he never tried to reconcile. Any new government will have to create a favourable climate to enact the promised reforms. In the case of Kurti, especially, that would entail making a U-turn and engaging with the opposition from day one. These priorities for the new government listed in this report do not intend to be comprehensive, but to present an outline of the more pressing issues the government will need to work on to ensure progress is made. The composition of the government, domestic politics and international developments can also influence how a priority is defined. Yet, these issues require careful attention and will not disappear from the public agenda in the short term.

DPC POLICY NOTE 02: The Iceland Experiment (2009-2013). A Participatory Approach to Constitutional Reform

Author(s): Hannah Fillmore-Patrick / Language(s): English

The EU’s Failing Policy Initiative for Bosnia and Herzegovina

Author(s): Bodo Weber / Language(s): English

This Policy Paper is a Reform Agenda & Questionnaire Monitoring Report. The new EU BiH initiative did yield some initial successes in 2015 and 2016. BiH authorities agreed a ‘Reform Agenda 2015-18’ with the EU and International Financial Institutions (IFIs), a broad blueprint for socio-economic reform that, if fully implemented, could have broken the country’s patronage system. Some initial implementation of the Reform Agenda and the formal fulfillment of some additional EU conditions prompted the EU’s General Affairs Council in September 2016 to grant the final reward in EU integration envisioned in the initiative – a referral of BiH’s membership application to the European Commission for its Opinion on granting candidate status. In December 2016 the Commission took the next step and handed over its Questionnaire to BiH. More significantly, the International Monetary Fund signed a loan arrangement with BiH in September 2016 designed to support the Reform Agenda, based on exceptionally strict financial conditionality and prompting the governments in BiH to concede on some previously unimaginable reforms. However, these successes were short-lived, limited and superficial. From early 2017, it became evident that the initiative would be a failure when it formally concludes at the end of 2018. Throughout 2017, implementation on all fronts came to an almost complete standstill, although EU representatives and other international officials continue to pretend the initiative is still alive.

Case Study on the Improvement of the Commercial Relations within GUAM (valid for CEFTA also)

Author(s): Viorel Chivriga / Language(s): English

In 2002-2005, in Moldova have been approved a considerable number of normative acts to ex¬pand economic cooperation between Member States of GUAM. From these acts, particularly can be mentioned the Government’s Decision no.178, which specifies 99 activities of the public institutions related to the harmonization of the national legislation with the international standards, the expansion and development of institutional capacities of the Customs Department and Department of Border Guards, selection, training and raising staff qualifications of Customs Department and Department of Border Guards, improve the forms of incentives, implementing anti-corruption policy, combating terrorism, cross-border crime, smuggling, violations of customs rules and illegal migration, border protection of intel¬lectual property, harmonization of procedures related to border guards and customs control and customs clearance procedures, with international standards, implementation of information systems, technologies and communications, ensuring mutual compatibility of transit systems, development of infrastructure and equipment with technical means of control, public relations.Evaluation of the Project on the facilitate trade and transport within GUUAM was to be made later, with the participation of donors financing the implementation of the project.Enforcement measures that require external financing would start from the time of the respective financing.In 2002-2005, in Moldova have been approved a considerable number of normative acts to ex¬pand economic cooperation between Member States of GUAM. From these acts, particularly can be mentioned the Government’s Decision no.178, which specifies 99 activities of the public institutions related to the harmonization of the national legislation with the international standards, the expansion and development of institutional capacities of the Customs Department and Department of Border Guards, selection, training and raising staff qualifications of Customs Department and Department of Border Guards, improve the forms of incentives, implementing anti-corruption policy, combating terrorism, cross-border crime, smuggling, violations of customs rules and illegal migration, border protection of intel¬lectual property, harmonization of procedures related to border guards and customs control and customs clearance procedures, with international standards, implementation of information systems, technologies and communications, ensuring mutual compatibility of transit systems, development of infrastructure and equipment with technical means of control, public relations.Evaluation of the Project on the facilitate trade and transport within GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan, Moldova)was to be made later, with the participation of donors financing the implementation of the project.Enforcement measures that require external financing would start from the time of the respective financing.

Noile modificări ale legislației fiscale vor provoca probleme financiare populației şi statului

Author(s): Gheorghe Costandachi / Language(s): Romanian

Moldova faces major tax problems. One of the problems of the tax system in the Republic of Moldova, which requires urgent solution, is tax evasion by individuals. This finding is brought from their own conclusions made in several studies and reports published by the Tax Service. Total annual tax losses on the full range of tax evasion are currently not estimated. The most widespread way of tax evasion is the intentional violation of tax law. This type of evasion can be committed consciously by the individual by concealing, from the tax service, income and wealth. In Moldova this type of evasion is used on the largest scale. The main factor is impunity…

Politica tarifară – Un Instrument economic şi social al Statului

Author(s): Nicolae Mogoreanu,Sergiu Aparatu / Language(s): Romanian

The European Community has been studying the issue of tariff and price policies for the main energy carriers for several years and is drawing up directives which will then be transposed into laws and regulations at Member State level. Since the beginning of the years ‘80 The Council of Ministers of the Community pointed out that “ ...cost transparency must allow the consumer to form an opinion on trends in the formation of tariffs for electricity and natural gas. He must be informed of the methods of determining tariffs, of the prices that the energy industry must pay for primary energy resources, as well as of other costs involved in transforming primary energy into final energy and its transport and distribution to consumers.” It is known that cross-subsidies can exist not only between different activities of the electricity sector (production, transport, distribution), but even between activities in other sectors (water, natural gas, heat) or even within the same sector, between different categories of consumers.

President Maia Sandu’s Visit to Kyiv – Realities and Perspectives

Author(s): Ion Tăbârţă / Language(s): English

Following the visit of the President of Romania, Klaus Iohannis, to Chișinău at the end of 2020, at the beginning of 2021, the President of the Republic of Moldova, Maia Sandu, undertook her first visit abroad as head of state, meeting in Kyiv with her Ukrainian counterpart - Volodymyr Zelensky. Thus, even from the start of her mandate, President Sandu gave a clear signal that the relationship with the neighbours is a priority of the foreign policy of the Republic of Moldova. Regarding the visit of the Moldovan president to Kyiv, its purpose is to overcome the period of “freezing” of relations between Chișinău and Kyiv, a freezing caused by the former president – Igor Dodon, but also to contribute to bringing the bilateral Moldovan-Ukrainian relationship to another level.

Recalibrating Conventional Wisdom: Romania-IMF relations under scrutin

Author(s): Cornel Ban,Daniela Gabor / Language(s): English

This study proposes a critical evaluation of Romania-IMF relations by focusing on financial, monetary and fiscal policy choices. As such, the study has two pillars. First, Daniela Gabor scrutinizes the IMF’s take on the Romanian central bank’s monetary and financial stability policies. Gabor finds that the central bank and the IMF have constructed and reproduced the fiction that the central bank controls monetary (and to some extent financial) conditions in the economy through its inflation-targeting regime. This fiction is useful for the central bank to deny responsibility for domestic economic developments, and for the IMF to construct balance of payment crises as crises of state intervention in the economy. Moreover, the central bank uses liquidity management instruments (standing facilities, open market operations) for the purpose of managing capital flows, and not for inflation targeting, as the IMF demands. Finally, both the central bank and the Fund share the belief that a gradual, orderly transition to a local banking model is to be achieved by market means rather than via regulatory interventions. This market-driven approach enables transnational banks to forge alliances with the central bank in order to oppose government-initiated measures by narrating them as measures that pose serious risks to financial stability.

Dialogul social în timpul crizei economice. Supraviețuirea negocierilor colective în sectorul industrial din România

Author(s): Aurora Trif / Language(s): Romanian

Legislative changes coupled with the economic crisis have made collective bargaining for unions at the unit level much more difficult. The number of collective agreements decreased by 25% between 2008 and 2013, but collective bargaining has generally survived in large organizations. The degree of change in terms and conditions of employment after 2011 in the industrial sector depends on three factors: (a) the attitude of the employer (and top management) towards employees and their representatives; (b) the local labor market; and (c) the ability to mobilize the union in the company.