Economic Development and Security in the Black Sea Region

DAS Pekala: Thank you very much, Janusz [Bugajski]. Thanks to the organizers for putting this together, and thanks especially to so many of you who have come. I really appreciate the opportunity to exchange views with you.

I don't want to talk for my full allotted time. I spend too much time talking and I really relish the opportunity to listen. So I want to offer a few thoughts as the basis for our discussion but then I look forward to your challenges, objections, initiatives, suggestions, complaints, or other constructive elements of our discussion.

Let me say a little bit about our policy toward Europe generally and then more about how we are fashioning our policy toward the Black Sea region as part of a coherent policy for Europe.

There are a lot of historians in the room. Let's start 65 years ago. For the last six decades of the 20^th century our relations with Europe were largely about Europe. We fought World War II together with our European allies. Out of the rubble of World War II we tried to do what we could to reconstruct economies and democracies in the immediate post-war period. We worked together with our allies and friends in the establishment of NATO and in deterring the Soviet threat for the remainder of the 20^th Century. And then in 1989 when the Soviet empire crumbled, we worked with countries to help them reestablish their independence, establish their independence, help with the creation of democratic and free market principles, and did what we could to help these countries get from the end of the 20^th century into the beginning of the 21^st century.

So for the last six decades of the 20^th century most of what we did with Europe was about Europe. In the 21^st century, and I would say especially in the second term of the Bush administration, our relations with Europe are largely about other issues. We look to Europe to be the strongest possible partner as we and they pursue our common objectives of promoting democracy at the periphery of Europe and beyond; and helping countries that want to, no matter where they find themselves on the globe, establish stability, peace, democracy, prosperity, free enterprise, the respect for human rights, and so on. So we work together with our European friends and allies on the key global issues of our time -- Afghanistan, Iraq, North Korea, Iran, the Middle East peace process, and so on. And we do this very effectively.

I won't spend too much time on this, but it is the major component of our relationship with Europe, to act together as partners outside of Europe.

Closer to home in Europe, one of the President's top foreign policy priorities and one of the Secretary of State's top foreign policy priorities, is democracy promotion: moving the frontiers of freedom outward; literally expanding the territory of the globe that's governed by democracy, respect for human rights, free enterprise, free markets, dignity, prosperity, a future for your children; literally moving those frontiers of freedom outward so that countries can enjoy, so that people can enjoy what they want (If they tell us they want help, we try to provide help); the construct, the structure that allows people to freely express their political will.

So these are the basic elements of our policy toward Europe: working together on promoting democracy outside of Europe and pushing outward, literally pushing outward, the frontiers of freedom.

So how does the Black Sea fit into this? Quite well, in fact. Let me give you some premises of our policy toward the Black Sea and some of the components of the strategy that we're even now working on formulating.

The premises are clear. The Black Sea region is important. It's a crossroads and has been a crossroads for many centuries, of commerce, politics, culture, and it is a crossroads for good things, that is the advancement of these frontiers of freedom outward, and it is a crossroads of things that are not good, that are threats to our security. Possible routes of smuggling, possible routes of weapons of mass destruction, possible routes of trafficking in persons and so on.

The Black Sea, depending on from where you look at it, is near that frontier of freedom that we're pushing outward, and the Black Sea on the globe is very near the broader Middle East, an area that we're working very closely with our European friends and allies on.

So one, it's a crossroads. It is a front line region in a number of these challenges that we face.

Two, here's a premise that's obvious but let's spell it out. We believe that democracy, prosperity, and freedom are good things. They're good things for us, and they're good things for our partners and our friends. There are countries in the region and countries in the world who want help, assistance on the road to peace, democracy, prosperity, and freedom, and to the extent that they want that help, we want to give them that help.

The third premise that maybe we can discuss, we want to help those countries in this region who have Euro-Atlantic aspirations; we want to help them fulfill those Euro-Atlantic aspirations. Let's be more specific. If they want to get toward membership in the European Union and in NATO, and if they express this desire, we want to help countries work on the very tough reforms necessary to make progress toward meriting, toward earning performance-based membership in these organizations. So those are obvious but clear premises of our thinking about the Black Sea.

Until very recently we, the United States government, hadn't viewed the Black Sea region as a region as such, as a specific area for a specific set of policies. We've always been very active. We have worked for a decade and a half and more on the resolution of frozen conflicts. We've worked for that long and much more on promoting democracy and civil society and the institutions of healthy government and healthy societies in these areas. We have tried to pursue economic reform that leads to greater trade and greater prosperity, and certainly we've talked to countries in the region for a very long time about energy. It's not that we haven't been active. We've been very active on all these fronts. But we haven't put it together into a clear set of Black Sea objectives and a Black Sea strategy.

Partly, we've been slowed -- we were talking about this just now -- partly we've been slowed by our own bureaucratic divisions. The Black Sea falls, again, at a crossroads not just of cultures and centuries of commerce, but it falls at the crossroads of our bureaucratic division between Eastern Europe and Western Europe and Southern Europe and Central Europe and so on. Our own bureaucracies have slowed us.

We obviously find significant differences in the region on particular issues. That has slowed us a bit on putting together a coherent strategy. And one I'll come back to, we think there isn't a single institution in the region that can take ownership of the vast complexity of the issues that can move these issues forward. There isn't a single institution that owns the issues. So these forces have kept us a little bit behind on the formulation of the Black Sea strategy or policy for the region as such.

But forces are now coming together, I think, to help us formulate such a policy. One of the forces is sitting at the table. David Kostelancik is one of the engines of Black Sea thinking. Peter Najera, too. These guys are working very very hard to bring together the complex, difficult elements of our policy that cross-cuts regions and issues to put together our regional strategy. These are forces to be reckoned with, these two guys.

Other historic forces are helping us move in this direction, too. The frontiers of freedom are making progress as we look at the region and as we look at Europe more generally.

So it's time now for us to put together a regional strategy about the Black Sea. Let me say a little bit about what it is, and then how we're doing, and then open it up to discussion. And I'm keenly aware of the time.

We have put our strategic interests in the Black Sea into three basic baskets, three basic categories. The first is democracy promotion and helping, as I say, countries create all the institutions, all the mechanisms, and all the structures that can help democracy be born, and help democracy be fertilized and grow. So the rule of law program, civil society program, training on elections, training for judges, training for prosecutors -- all those elements that come together to create a healthy civil society, we want to help.

There is a potential for improvement in these areas as countries work on domestic human rights, minority rights, and all the functioning elements of a civil society, and we want to help.

It is, as I say, one of the highest priorities of the President and the Secretary of State to promote democracy in this fashion. So one, democracy promotion.

Two, security. You can flip those, if you want. You can put security ahead of democracy promotion because these are, in our view, government's basic fundamental responsibilities. You have to secure the safety of your population, and we believe governments have an obligation to provide a system that allows for the free expression of the political will of their citizens on security.

We all know what the threats are, and they're quite clear, in this region and others. Terrorism, weapons of mass destruction, cross-border threats that aren't neatly categorized under the responsibility of any one country, so these are health threats, organized crime, transnational threats, stuff like that. Even natural disasters, catastrophes. We've seen in our own recent history, and so have other countries represented around this table, that we need to do better at preparing for natural disasters. They're as much a threat to individual security as some of these other elements are.

So first, the democracy function. Second, security.

Third is commerce, trade. Under this rubric comes energy. We feel that in the Black Sea region there is enormous potential for increasing the bilateral trade among countries in the region and then trade with countries outside of the region, namely us, by developing communications and transportation infrastructure, by again developing the system of fair rule of law that allows companies to get a fair hearing when they need one; tourism; science; technology; environmental protection. Again, promotion of small and medium-sized business. When I was in Estonia, I found that small and medium-sized entities on either side of the Estonian-Russian border were tremendously interested in cross-border trade and developing the infrastructure for that, even if national governments weren't so interested. It was down there on the border that people on both sides really wanted to get a lot of work done. We want to help promote this to the extent we can.

So those are the basic objectives. How do you get there? What are the elements of your strategy?

We've thought about this a lot. We're still in the formative stages of the strategy but I think we're making some pretty good progress.

One of our basic conceptions is that you can't do it all at the same time. We don't have the resources, nor does any other country around the region have the resources to do all these things at the same time. Some of these issues are more controversial than others. So one of our ideas is that we want to approach these issues, which we believe we share with all the countries, not just that are on this, littoral countries on the Black Sea but neighbors as well -- Moldova, Greece, Armenia, Azerbaijan. We want to take these in small steps. Create successes in particular areas, whether it be democracy promotion, security, commerce, trade; create successes that are important in and of themselves because they are successful; but also because they will provide the framework, structure, and the confidence to move outward from the low-hanging fruit, they easy ones, to get into the more complicated ones in an environment where countries and entities and governments and people begin to trust each other more and understand the mutual benefits of this kind of arrangement.

So those are the objectives. We want to kind of start small. Again, we find there are a couple of hindrances that I mentioned before and here it's time to list them again.

We don't find that there is a particular Black Sea institution that can do all these things together at the same time. There are lots of Black Sea institutions or institutions that are around in some configuration. SECI, the Southeast European Cooperation Initiative, a great organization that tackles some of these issues head on -- border security, customs, law enforcement, and other issues. We're a very strong supporter of SECI, and we hope that we provide the kind of support that can make it work.

GUUAM countries are represented in some configuration in the Black Sea, and they've taken on many of these issues. The Southeast European Defense Ministerial Organization also addresses some of these issues.

BSEC, the Black Sea Economic Cooperation Initiative has another chunk of these issues. We are now, the United States, an observer in BSEC. We're very happy, we're proud to be an observer in BSEC. There's a ministerial meeting tomorrow in Moscow where we'll be represented as an observer. We're very glad.

But we don't want to create a new institution. We don't want to make a mega-institution or insist on a merger of these institutions. Rather what we're trying to do, we're outside the Black Sea region, and I don't want anything to make it appear that we are leading in this effort. We want to support the mutual efforts of those there. But we don't want to create a new institution, we want to use the best parts of the existing ones to energize themselves, even energize each other as we try to work forward on these issues.

On June 5^th in Bucharest the Romanian government hosted the Black Sea Forum which was, I think, a very good initial effort to do this. To create a clearinghouse of information, to create a shared set of values and ideas and objectives, and to energize existing institutions to pursue policies that can fulfill these objectives. I thought the Romanian government did a superb job. I don't know if President Basescu mentioned it this morning. I expect that he did. He can be quite proud of the achievements that were laid on the table there. I hope he outlined his thoughts about the potential for further concrete steps along this way, which is what we would like to see and what we would like to be part of.

Again, we don't want to create a new institution; we want to move forward with the ones that do exist. And we are aware, let me say clearly, that there are differences of view among the countries on the Black Sea on the various issues. If it were easy to get all of them together all the time on these issues it would have been done already. It's not so easy. There are different perspectives on security and transnational threats and even on democracy promotion and other such issues.

So our view with respect to that element of the context is that we want to work together with countries to make achievements in these areas in a non-exclusive fashion, in a voluntarily inclusive fashion. If every country and we want to get together to work on customs cooperation or radiation protection across the border or preparedness for national disaster, then we shall get together, we shall do it. But if there's a country or two that doesn't want to participate, that's okay for now. We would never insist on unanimous participation. But on the other hand, we're not going to be satisfied with an effort in which individual countries get to veto the collective efforts of others.

So if a particular country doesn't want to participate in an exercise or in a training program, they have a choice, of course, whether or not to participate in such a program, but we wouldn't want to see a situation in which that country has the ability to veto the entire endeavor.

So we have what we call a non-exclusive or inclusive approach to the various configurations on the various issues.

So how are we doing? How are we doing? Pretty good I think. Some progress as we put this together with a long list of things that we can in the future make progress on. There's a lot of work to be done, and we want to do it in cooperation with the countries of the Black Sea.

On democracy promotion, as I say we've always been involved in the kind of effort bilaterally, and even sometimes regionally, but now there's a context and a structure. The German Marshall Fund together with the Romanian government unveiled at the Black Sea Forum at the beginning of June in Bucharest the Black Sea Trust. This is a phenomenal public/private partnership, an endeavor that will have a lot of resources to work on two separate but related things. One is individual programs in individual countries on all the elements of civil society and the other element is cross-border cooperation on these kinds of programs. So it's two distinct elements of the same endeavor to promote democracy, civil society, protection of human rights, development of the institutions for free and fair elections, and so on. The United States is committed to making, I would say, a major financial contribution to the Black Sea Trust, and we look forward to working on the concrete projects that come out of the GMF thinking and work.

On security, we've made a lot of good progress. Not much of it very highly publicized, but I think we're well underway. The best example of regional counter-terrorism cooperation is Operation Black Sea Harmony led by the Turkish government. We would like to see further, deeper cooperation by others, but this is an operation that monitors the movement of vessels on the Black Sea and even allows for the interdiction and boarding of suspect vessels in this sensitive area geographically, and the sensitive area of non-proliferation issues.

This is a real concrete effort that's making good progress.

Also since the beginning of 2004, a little more than two and a half years ago, the Romanian government again took the lead in the Black Sea Border Security Initiative with other countries in the region and has developed good programs and good ties, again on non-proliferation. Exercises have been undertaken and the United States government, the Defense Department and the State Department provide technical and funding support for the Black Sea Border Security Initiative. It's precisely this kind of hard core cooperation on important issues that obviously works, and we want to support and to the extent that we can even improve and expand these kinds of operations.

One element that really doesn't get enough publicity is a program that's funded by the Department of Defense. That's the Black Sea Civil/Military Emergency Preparedness Program. Again, for a couple of years now we've helped support, financially and otherwise, exercises in countries on natural disasters and a couple of exercises have been on nuclear power plant accidents. The Russian government has participated in these, as well. We find just what you'd expect to find. These are very important issues. As years go by, countries and individuals create a network, a personal and institutional network, of how to handle a civil emergency like this. And not only are they better prepared for an event that we hope doesn't happen, but it provides the context and the reality of kind of information sharing, confidence building and an understanding that in a way we're all in this together on these very important issues. So I think we're making pretty good -- People dismiss the ability to make progress on security questions related to the Black Sea. I would say no, we're making good progress on some very important security elements of the Black Sea region.

Economic development and energy, we could have a whole new conference or a year-long course on economic development and energy, and many have. But I guess very briefly I would say not just with respect to the Black Sea region but Europe more generally, and really the world, what we're trying to do for ourselves and with our partners and friends is now quite clear. You read about it on the front pages daily now. We want to work with companies and countries to enhance energy security by diversifying sources of supply, the gas and the oil, and diversifying the ownership of the means of transmission, the pipelines; so that countries are confident about the security of their supply of energy.

Also we would like to, and I can't put a timeline on this but it's not a short term question. It's a medium or a long term question. We'd like to do what we can to help create in the future an environment in which there's something more like a global market for gas, one that's transparent and stable and predictable and operates by free market principles. Now some countries can buy gas for $40 per thousand cubic meters and other countries are buying gas for $260 per thousand cubic meters. That's because there's no world market for gas. But if you create, everyone is talking companies as well, any option has to be commercially viable. It can't just be a political decision by a government. But if there is in the future a more diverse system of pipelines and suppliers, one that allows for more competition and transparency and openness, you can approach maybe, and this is very brief because I need to be very brief, you can approach a situation that's more like a market for gas which by itself creates incentives to operate on market principles, transparently, stably, and predictably. Six or ten years from now Azerbaijan might be a major supplier of European gas; Kazakhstan, Turkmenistan, Iraq could be major suppliers of European gas. So we want to work with companies and countries to ensure stability of supply by, to the extent possible, increasing diversity of suppliers and ownership of the means of transmission.

I'll stop because I do want to get your reactions and thoughts, but what we are trying to do with Europe, as I say, is push the frontiers of freedom outward and work together with our European partners, friends and allies on democracy promotion outside the region, and the Black Sea is a perfect example of both of those things where we want to do more work on democracy promotion and we look forward to even more work with our partners and friends on the other issues that face us outside the region.

We think it's going pretty well.

Another point to make, maybe a different part of the conversation, is that clearly the frontiers of freedom are moving in that direction. NATO is on the Black Sea. After the first of January, the European Union will be on the Black Sea. This is an opportunity for us to continue to work even harder with these countries and to continue to help other countries who have Euro-Atlantic aspirations do what they need to do to make the hard efforts toward reform, to get where they want to get.

That's sort of what we're about, and I thank you for your time.