THE ADDRESS OF SECRETARY GENERAL OF THE RCC, GORAN SVILANOVIC, AT THE WB6 MEETING IN BELGRADE – ECONOMIC GOVERNANCE AND CONNECTIVITY

SECRETARY GENERAL, GORAN SVILANOVIC

SECRETARY GENERAL, GORAN SVILANOVIC

Excellences, ladies and gentlemen,

It is a great honour to be here amongst you today, and I thank the hosts for recognizing the efforts of the RCC and the contribution that regional cooperation can have to strengthen economic governance in the region. I am particularly pleased that we are discussing today the economic reforms and the need to modernize the way we manage their process.

Over the past couple of years, we at RCC have refocused the bulk of our activities towards sustainable development and growth. We didn’t want to signal with this shift that political stability, reconciliation and security are not important in the regional context anymore – they are of course crucial.  What we wanted to stress is that they will always remain fragile without strong and vibrant regional economies.

It was encouraging to see that the EU is making this shift as well, by putting the economic governance at the centre of its enlargement policy. It is a clear signal for us and our participants that we were on the right track when we adopted a shared vision, joint developmental targets and a set of measures and instruments within the SEE 2020 Strategy to help set our economies on the path of sustainable development. Simply, without growth, there is no convergence; and without convergence, EU accession is not possible.

While regional cooperation can help in achieving our development goals, the bulk of activities lies in the national domain. Nowhere was this more evident than in the SEE 2020 development process where a considerable discrepancy was inherent between the regional cooperation agenda and the ambitious growth targets put forth by the countries. Simply, what we were planning to do regionally was nowhere near enough to get us to where we want to be in 2020, so it was clear that we needed to make the national reform agendas explicit in this process.

Thus, most of the participating economies agreed to compile the SEE 2020 National Action Plans (NAP) taking stock of existing, and planning additional reforms in the sectors covered by the Strategy. Most of these NAPs were developed, and some of them were also adopted by our governments during this year. I would like to congratulate here those of my colleagues around the table that have undertaken this complex and cumbersome activity and have created this centrally coordinated document outlining reform efforts. I hope this exercise and the intra-governmental coordination will prove valuable in the upcoming efforts to create the National Economic Reform Programmes (NERPs)

Going forward, we intend to recommend to the Governing Board that NAPs be replaced by the National Economic Reform Programmes (NERPs) to ensure streamlining and avoid duplication of efforts that would unnecessarily burden our already stretched administrations. This we see as the first step in bringing the SEE 2020 in full alignment with the process of strengthening economic governance.

The second step relates to SEE 2020 targets. The SEE 2020 targets were developed during 2011, and a lot has changed since then in the region. Croatia has joined the EU, the region experienced a double-dip recession, our main trading and investment partner, the EU, still shows only sluggish growth, and, on top of this, several countries have experienced the most devastating floods on record during this year. So the context has changed considerably. This is one of the reasons why our Governing Board has asked us to look into the existing SEE 2020 targets and recommend certain revisions if necessary in order to make them more relevant to the current context.

It is important to remind ourselves here that the regional targets were aggregated from the national ones, so full involvement of the governments will be necessary in this process. We will be setting up a task force – with your approval – by the end of this year to look into the SEE 2020 targets and indicators and bring those more in line with the current realities in all of our countries. We are also engaging with Eurostat on this and we see this as another excellent opportunity to further align the SEE 2020 with the economic governance process, especially since the process requires convergence of national targets with those put forth by SEE 2020.

The third step in aligning the SEE 2020 with the economic governance process is in the interventions themselves. The five pillars of SEE 2020 (integrated, smart, sustainable, inclusive growth and good governance) are a good fit to the priorities of the NERP (human and physical capital, better industrial structures, good business environment and trade integration). The first set of NERPs to be developed early next year will help us further fine tune the regional action plans to complement the policies and reform measures being put forward at the national level. The NERPs will also become key reference documents for all of us in designing regional interventions that are relevant for the national context and will become key inputs in our own programming at the regional level.

However, while some of the specifics of regional interventions remain to be defined, the broad regional agenda will stay largely the same with a continued focus on (i) closer trade and investment integration, (ii) improved connectivity and infrastructure and (iii) enhanced skills and technological base. In many of these intervention areas, the participants have made commitments, such as removal of certain trade-distortive measures or meeting different energy efficiency and renewables targets, etc.

Our job at the regional level will be to continue building consensus around key regional reforms, to support the governments in meeting commitments, and to monitor our joint efforts to ensure their effectiveness.

I can assure you here that the RCC and our regional partners stand ready to support this crucial effort and help our economies return to the path of sustainable growth.

The RCC is fully relying on supportive engagement of the South East Cooperation Process and its Albanian Chairmanship-in-Office, so that wider region can join and support our efforts.

Thank you