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1/9/2018


Activities  

PERSONAL STANCE: DO WE NEED THE BERLIN PROCES FOR REGIONAL COOPERATION OR WE ALREADY HAVE A REGIONAL COOPERATION AND GET THE BERLIN PROCESS AS A REWARD?


Branko Azeski, President

Economic Chamber of Macedonia

It is a fact that more than 25 years the main message of the EU was not understood in this region and that is that there must be a regional cooperation. Conversely, the Western Balkan countries ran away from this initiative because they recognized an idea for re-establishing of former Yugoslavia in this type of cooperation , even though that the EU itself was formed as a result of a principled regional cooperation.

From a historical point of view, the economy is always the first to build bridges for connecting the countries. If we look a decade back, from this point of view, it can be certainly stated that starting from 2000 onwards, Western Balkan is experiencing economic transformations. Undoubtedly, there is still much to be done, especially now, when all the countries in the region are directed towards a common European future. The reforms that are being implemented in the Western Balkan countries are a proof of that, and even though there are risks and uncertainties, progress has been achieved compared to the previous years.

However, the trade flows show that the growth of the export in the region is not supported by the strengthening of the internal regional trade, but it is mainly due to the increased demand of the crucial EU markets (for example Italy and Germany). Even though the total amount of the export of the CEFTA region increased from 20 billion euros in 2011 to 25 billion euros in 2015, the scope of the trade in the region has barely increased. Most of the countries to a great extend depend on the EU market (60-70 percent of their export) and CEFTA is on the second place with a participation of about 10 percent. This statistical image says enough that the countries of the region do not succeed to individually stimulate greater trade cooperation.

10 years after the implementation of the CEFTA agreement, the region is not yet consolidated and did not achieve a full harmonization of the market that would guarantee a long-term stability and profitability of the investments coming from abroad. 6 years ago when together with the chambers of commerce from the region, we organized a regional conference for the German investments as a developmental factor of the CEFTA countries, we tried to find possible solutions of how the CEFTA region can become the sole investment destination with special focus on the investment possibilities in the region itself. The Association of German Chambers of Industry and Commerce stated that the German investors want to invest in countries with better business climate regarding the administrative procedures and certification without having different deals and without corruption. In all the surveys they conducted with the enterprises the administrative procedures, certification and the corruption have always been stated as the biggest problems. When this was pointed it did not only refer to Macedonia, but it also referred to all the countries in the region. The fact that different cultures and different business ethics are concerned should not be neglected.

But, our companies, besides the fact that CEFTA has been applied for decades, work on the regional market in which we do not mutually acknowledge the certificates and the other documents that guarantee quality and technical standards, the regulations are not compliant, the prices of the administration of the import and export are both high and different, the customs procedures are not related. We, as chambers of commerce, have given our opinions on all these issues and presented them to the CEFTA structures within the official activities and events.

Prospects for promoting the cooperation

In the multiannual action plan for regional economic area a structured agenda for regional economic integration is proposed, promotion of further trade integration, introduction of a dynamic regional investment area, facilitation of the regional mobility and creating an agenda for digital integration. It is expected that with these activities a free flow of goods, services, capital and highly qualified workforce will be enabled and the region will become more attractive for investments and trade, the process for accelerating the road towards the EU will be encouraged, as well as the prosperity of all citizens and creating equal conditions for everyone in the region. On an economic level, priority is given to the transportation and energy infrastructure, development of small and medium enterprises and support of the investments.

The implementation of a comprehensive agenda presented in the plan will ask for a strong partnership between the governments of the WB, the private sector, the international organizations and the donators active in the provision of support and the European Union. At the same time the dedication to the partnership relation with the private sector in the region is very important to insure that the activities that are being implemented have a full support of the business in the region, i.e. that there is a half a million companies that work in the Western Balkan countries will have a better environment in which they will be able to grow, to invest, employ and use the Regional economic area as a fundamental road to the foreign markets.

In that direction, the activities of the business associations in the following period will be directed towards:

    1.  ensuring free movement of goods/services in the whole region in order to reduce the costs and to increase the competitiveness of the goods and services on the global market. Therefore, it is necessary for all the customs administration to be publicly available on the web-pages of the customs administrations of the whole region and to be transparent, available and foreseeable. To have uniform customs declarations, procedures (also enabling complete accumulation  of the origin and return of the payments) and standardization of all inspections, including sanitary, phytosanitary, veterinary and others, on a regional level in accordance with the EU standards so that every country will acknowledge the same border declarations, documentation for certain type of products from certified laboratories, agencies, etc. Designing and implementation of a regional IT system for connecting all the customs in the region for support of a harmonized and compliant regional customs documentation and procedures for inspection which will result in minimal waiting time at the borders. It is necessary to eliminate all non-tariff barriers in the whole region and to have liberalization of the trade with service, particularly in the field of finances, insurance, transport (for example road transport permits), tourism, liberalization of the e-trade, liberalization of the cross-border data transfer, etc.
    2. free movement of the people from the region and to be able to travel, work and study within the region without additional documentation and too many administrative procedures. This would enable the common labor market to a certain extent to solve the unemployment problems in the region (high unemployment rates in the WB with the lowest being 15% in Serbia and Albania and the highest being 32.5% in Kosovo) and to make a step forward towards preventing brain drain from the region (all the countries in the region have a low rate of keeping the talents in the country) and would open more possibilities in the region. In order for this objective to be achieved it is necessary to be able to conclude multilateral contracts for social insurance and pension funds that will be acknowledged in certain sectors, removing the obstacles for mobility of students, scientists and academics in the region so that the transfer of knowledge is ensured, abolishing the visa requests for the tourists visiting the region and preparing a regional strategy for harmonization of the educational system with the foreseen needs of the labor market.
    3. call for joint strategy for digital transformation that will contribute to the economic growth, creating jobs and better competitiveness and business prosperity of the region and will lead to large changes in the traditional industries (automotive industry, electronic industry).
    4. call for joint regional energy strategy, particularly in the field of production/trade with electricity that can make the region more sustainable and the energy assured having in mind that it will be provided by the region's resources.
    5.  joint promotion of the region as the unique destination for investing by joining the funds and efforts in presenting the investment potential of the region, its creativity, food and traditional cuisine, tourist attraction with the accent being put on the business needs. An Internet platform will be developed for presenting the potentials of the region to the investors.

 

How can the chambers of commerce give the necessary impetus for greater competitiveness and greater economic growth of the region?

The business associations can contribute to the improvement of these situations. Currently, the only Chamber regional platform that has the aim to promote the business climate in the region and to actively involve the business community in the Berlin process is the Chamber Investment Forum (CIF) that was established by the Economic Chamber of Macedonia together with the Union of Chambers of Commerce and Industry of Albania, Foreign Trade Chamber of Bosnia and Herzegovina, Chamber of Economy of Montenegro, Chamber of Commerce and Industry of Serbia and the Kosovo Chamber of Commerce.

With the implementation of the conclusions from the Berlin process, via strengthening the regional cooperation, on August 27, 2015, in Vienna, during the Vienna Summit, an Agreement for establishing the Chamber Investment Forum was signed, which emphasized the intention for an active inclusion of the national chambers of commerce in the realization of the concrete objectives from this process.

The Chamber Investment Forum is seen as an instrument that can support the economic cooperation and to be a cohesive factor of the political functioning of Western Balkan. There is a clearly defined action plan and a well organized structure that can entirely fulfill the objectives for which working groups have been formed that put the accent on the transportation, energy and utility infrastructure, promotion of the business and investment climate and development of the private sector.

The aim of the Cambers gathered in CIF is the increase of the competitiveness of the small and medium enterprises, creating favorable entrepreneurship climate, reduction of the unemployment, creating an economic stability zone, as well as reducing the rate of moving out of the country of young people. It is necessary to intensify the dialogue between the CIF members, the EU and the international organizations in order to show the new power of the chambers of commerce in the region. The establishment of the CIF is just the beginning of a new era in the cooperation in the region that has the aim to build strong foundations for future cooperation in the next 10 years.

The joint activities of the chambers of commerce were wrapped up in Trieste by opening the Office of the permanent CIF Secretariat that will be the main support of the business community in the region responsible for the realization of joint projects that will become part of the multiannual plan for creating a regional economic area on Western Balkan. It is planned that these projects should contribute to raising the level of investments, competitiveness and free movement of the workforce.

The regional integration of the trade of Western Balkan is its contribution towards the political stability and growth of the region, first and foremost regarding the European perspective of the region, as well as its contribution to the European political stability and safety and prosperity, which is, in fact, one of the priorities set in the general EU policy. 

It is clear that the main key for the success of the region is the feeling for independent governance with the processes and the knowledge that it is led by the countries signatories of the CEFTA Agreement.

 As a positive example for successful  regional cooperation supported by the private and public sector at the same time, I would mention the prompt reaction of the chambers of commerce of Serbia, Bosnia and Herzegovina and Macedonia regarding the request for urgent withdrawal of the Rulebook for inspection surveillance and control for the compliance of fruits and vegetables with the market standards that in July, this year was adopted by the Republic of Croatia and with which the costs for the quality control of the fruits and vegetable imported in the Croatian market from third countries  (i.e. countries that are not EU member states, encompassing the countries from the Western Balkans) were greatly increased. At the same time, the competent ministries of the Republic of Macedonia, Republic of Serbia and Bosnia and Herzegovina reacted upon the request of the chambers to the competent directorates in the European Commission, and with the joint stance and reaction the Rulebook was withdrawn.

It is a fact that in the past period, and particularly since the beginning of the functioning of the Chamber Investment Forum, a great number of initiatives and projects have been started with which the business climate will improve. It particularly concerns the formation of a digital platform of the chambers of commerce, that will gather all the information and services of the chambers, then the internationalization of CIF with the help of which the small and medium enterprises will more easily enter the foreign markets. The dual system of education project is not of less importance and with this project would solve the problem with noncompliance of the educational system and the labor market would be solved in the CIF countries. Initiatives were started for the promotion of the cooperation per sectors, particularly in the metal and electrical industries, as well as in the construction, by forming consortia and other forms of association, with the aim to have a joint performance on the markets in Western Balkan and on third markets. 

All of this points out that there is an interest and willingness for development of the regional cooperation by solving the crucial regional challenges, and the fact that joint activities are undertaken in several fields confirms that there is a mutual trust.











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