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Austria’s foreign policy focus on the Black Sea and Caucasus region
Dr Michael Spindelegger
Federal Minister for European and International Affairs
Joint Vienna Institute, Annual Lecture, 14 March 2011
Austria’s foreign policy focus on the Black Sea and Caucasus Region has developed as a logical geographical continuation of our initiative for a European Strategy for the Danube Region. We have to move our focus gradually eastward towards the Black Sea and Caucasus region.
This region – at the crossroad between Europe, the Middle East, Asia and Russia – becomes politically and economically increasingly important.
In economic terms, the region has witnessed significant changes over the past two decades. One of the frontlines in the Cold War, it was a place where market economies encountered centrally planned ones.
The fall of the Iron Curtain altered this state of affairs in a radical way. After a tumultuous early 1990s, the region as a whole stabilized. The post-2000 period saw sustained high levels of growth that transformed economic and social structures. It is true that the 2008 financial crisis stopped short the period of high growth. But since 2010 the economic recovery in the Black Sea and Caucasus Region has been even stronger than in the developed world.
[Economic prospects and opportunities]
In the long term the Black Sea region’s economic prospects are excellent. It already is one of the most important and dynamic regions in the European neighbourhood. Austria must not pass up the chance to gain a foothold in this market that has such great future potential. Our goal is to intensify our contacts at all levels – economic, political, cultural and inter-personal.
Our relations with the countries of this region still contain a lot of potential that we want to leverage together. The fields in which cooperation could be intensified are highly diverse: business, science, culture, security and energy supply. In these areas, acting with foresight and in concert is a decisive prerequisite for developing our cooperation in a dynamic way. We must start today to provide security for the day after tomorrow.
By expanding in this promising market of 140 million inhabitants and rising demand, the negative effects of the international financial and economic crisis for Austrian exporters can be mitigated.
Austrian exports to the six countries (Armenia, Azerbaijan, Georgia, Moldova, Turkey and Ukraine) could be doubled from € 2.1 billion (2008) to 4 billion € in the next 4 years. Direct Austrian investments could increase from € 6.3 billion (2007) to € 13 billion in 2014.
When I inaugurated, together with my colleague, the Austrian minister for Economic Affairs Mr Mitterlehner, the Austrian Embassy in Baku last year I made clear that this Embassy should also work as a “door opener” for Austrian companies looking for business partners in the region.
Our strategy to choose this region as a priority area for Austrian exports has been supported by two expert studies from the Austrian Institute of Economic Research and the Institute for the Danube Region and Central Europe.
The wider Black Sea area is core to the EU’s energy security strategy. One of the EU’s six priority axes of energy infrastructure, the Southern Energy Corridor, relies both as to origins of supply as well as transit heavily on this region. Apart from supply and transit, this area offers also fast growing energy markets and a huge potential for development in the energy sector.
One of the main pillars of the external dimension of the European Unions Energy Policy is the building of strategic energy partnerships with key countries and along strategic corridors.
Austria is firmly committed to the Nabucco project as a strategic gas corridor, which will respond to the need of diversifying Europe’s energy supply as to origins and routes and an Austrian company, OMV, has the lead in this project amongst six European share-holders.
Apart from Nabucco, also South Stream, with which Austria also cooperates under the provisions of an intergovernmental agreement, will also have an important black sea cooperation dimension.
Austria’s investment and innovative contribution to energy in the broadest sense, including projects to increase energy efficiency and develop renewable energy sources, is steadily increasing.
This will also be reflected in a regional conference co-organised by my Ministry, the Ministry of Environment and the Austrian Chamber of Economy on “Energy between Danube and Caucasus” focussing on the role of renewable energy and energy efficiency as keys for economic development, and which will be held on 28-29 April 2011 in Vienna.
On energy, political or economic cooperation our Black Sea and Caucasus focus is not only about bilateral cooperation and engagement. Austria is also very active in working together with other countries in multilateral fora in order to address the numerous challenges of this region as well as with other international partners.
[Regional Forum of the World Economic Forum]
On 8-9 June 2011, the Regional Forum of the World Economic Forum will take place in Vienna for the first time. Priorities such as Black Sea and the Caucasus Region are expected to attract some 500 participants, including heads of state and government as well as representatives of business and civil society.
We must widen our horizon. If we want to strengthen Vienna as a hub and gateway to Eastern Europe and Central Asia, we must intensify our networks with the Black Sea and Caucasus region. This important event will give us an opportunity to identify the most promising opportunities and to design strategies to promote innovation so critical to the future.
We are also working together with the OECD, and Austria will not only make a substantial financial contribution to the OECD’s Eurasia Competitiveness Programme but we will also actively participate in its working groups and activities. With the OECD, we have an important partner on board. It is a key organisation in the region.
Though we have every reason to be upbeat on the economic prospects we cannot deny the considerable political challenges in the Black Sea and Caucasus area. The countries of the region have been hampered for too long to realize their huge potential mainly due to the well-known unresolved political conflicts.
We are ready to address these challenges together with our partners in the EU and OSCE and I am convinced we Austrians can make use of our unique experience on how to work in a different environment which we have gained as a leading investor and major political partner in the countries in the Western Balkans during the last two decades.
Austria supports an increased role of the OSCE in the Southern Caucasus and therefore the continuation and expansion of cross-dimensional activities of the OSCE office in Baku.
In the context of the ongoing “Corfu Process” Austria and her EU partners emphasise, inter alia, the importance of progress in the so called “protracted conflicts” or “frozen conflicts”. Austria actively encourages both parties to the Nagorny-Karabakh conflict to pursue efforts in the framework of the Minsk Group and to consider making use of confidence- and security building measures in the framework of the OSCE.
In our regular contacts with the partners of the region we stress the importance to find a peaceful settlement of the Nagorno-Karabakh conflict. In my discussions with my Armenian and Azerbaijani colleagues I called on the parties to the conflict to redouble their efforts to find a negotiated solution. Together with our EU partners Austria is ready to offer support to this end.
The EU is ready to assume an even greater part in the search for a resolution of the Transnistria issue. With the approval of the "mediators" in the 5+2 format, the EU - so far an observer - could be given status of a full-fledged participant. But even without that status question, invigorated EU-Russian cooperation on this very issue could contribute to speeding up the entire process - in the understanding that full transparency is maintained vis-à-vis the 5+2 format.
Finally, I would like to mention the difficult political situation in Georgia. It is the EU's intention to remain actively involved in confidence building measures and conflict resolution. The EU Monitoring Mission has proven to be a crucial factor of stability. It will remain so also in the future. Austria considers that a more dynamic Geneva process is of utmost importance.
We also hope EUMM will be able to enter South Ossetia and Abkhazia to completely fulfil its important mandate.
[The EU’s Eastern Partnership]
The EU does not only have an important role in encouraging and facilitating a negotiated solution of the political conflicts, the EU has also taken a number of initiatives which will bring these countries closer to Europe and which will boost their economic prospects.
The Eastern Partnership, established in 2009, is a specific Eastern dimension to the European Neighborhood Policy and has been designed to foster political association and economic integration with 5 countries of the Black Sea Region (Ukraine, Moldova, Azerbaijan, Armenia and Georgia) and Belarus.
In exchange for undertaking political and economic reform, the Eastern Partnership offers new contractual relations, deep and comprehensive free trade agreements and a multilateral framework, in which to discuss subjects of common interest for instance economic integration and convergence with EU policies or energy security.
[Cultural and development cooperation]
Our bilateral efforts do not exclusively concentrate on economic cooperation. As Austria’s foreign policy focus is a comprehensive strategy it involves also cultural and development cooperation.
Moldova has been a priority country for Austria’s development cooperation since 2006, the main projects focus on water treatment and vocational training. In the future we are committed to redirect resources from the Western Balkan countries which are expected to need less aid, to the Southern Caucasus region.
Our primary goal is to help others to help themselves. In these efforts, poverty reduction, rural development, climate protection, education as well as the protection of women’s and children’s rights are at the centre of our endeavors. In order to do a good job we need to increase our presence in the region and that is the reason why we envisage the establishment of a technical cooperation office in Tiflis in the medium term.
In the field of cultural cooperation we managed to further enlarge the existing Black Sea Cluster of Austrian libraries in the region by the establishment of Austrian libraries in Iasi (Moldova), Samsun (Turkey), Yerevan (Armenia) and Baku (Azerbaijan) last year.
Our objective is to make Austria more visible on the cultural map of this promising region. These libraries are important contact points for those interested in our country, providing an opportunity to discover Austria’s multifaceted culture.
We helped to organise a number of cultural events in the region, e.g. the “FLOW festival of conversation for culture and science” in Chisinau in September 2010, and we will arrange a conference of religious leaders from the Southern Caucasus in Vienna in June 2011 in order to contribute to a better understanding between the religious communities in the region.
This is also part of our targeted effort to establish Vienna as a long-term venue for dialogue and as a hub for peace.
The most perfect cooperation scheme cannot outweigh the importance of close and trustful personal relations. Therefore I went twice to the region last year, in June I visited Armenia, Azerbaijan and Georgia, in October Turkey.
One of the high points of my trip in June was the inauguration of the Austrian Embassy in Baku, which I already briefly mentioned. One reason for this first opening of an Austrian Embassy in the Southern Caucasus Region is certainly Austria’s interest in Nabucco. But beyond considerations of energy supplies the new Embassy in Baku can be seen as a base camp for Austrians in the region, providing concrete assistance to Austrian businessmen or tourists travelling in the region.
In my personal contacts I try to meet people from the region from all walks of life as often as possible, representatives from the governments, from opposition parties, from the civil society and business people.
Two weeks ago I met the Armenian Foreign Minister Nalbandian in Vienna, and I am positively impressed by my interlocutors’ strong interest in closer ties with Europe and Austria by their eagerness to deepen relations in all fields, political, business or cultural relations.
[Foreign policy and the economy]
The Caucasus and the Black Sea region is among the political and economic regions that hold great potential for Europe in the future. This is not only about oil and gas, all EU member states are interested in these regions. We simply have to be faster, as, to a great extent, our economic future lies in these markets.
The region offers enormous development opportunities. Using diplomatic means, we want to break the ground and make a concerted effort to open up this region with its great future potential for Austrian enterprises. Business and foreign policy work hand in hand in order to open up future opportunities.
Foreign policy can pave the way for business. In the Black Sea and Caucasus region in particular, a political approach has repeatedly proved important in opening doors to enterprises.
I am convinced that this region may in future become for Austria what the Balkans are for Austria today. In the past years Austria has shown that it knows how to support and leverage the development potential in eastern and south-eastern Europe. We now want to transfer this know-how and experience to a new region. We have every reason to be optimistic that we will succeed.
How are we going to maintain our prosperity in the future and at the same time ensure more social justice throughout the world? This is the core question around which everything revolves. How does a developed social market economy, a high-pay country like Austria, manage to secure its future position in a world in which the economic poles are shifting? I am convinced that we can keep and develop our position if we put our economic growth on a broader basis and if we continue our focus on new regions and new markets.