BUSINESS ADVISORY COUNCIL
In the Framework of CBSS
A Call
for a New Start for
the Northern Dimension
from
the Business Advisory Council
(BAC).
Presented at
the Northern Dimension Business Forum
during
the 4th Annual Baltic Development Forum Summit
14 October 2002
1
2
3
Summary ...........................................................................................................................3
What is BAC......................................................................................................................4
The Northern Dimension: background and function....................................................6
3.1
History in brief..........................................................................................................6
3.2
The present basis – the Action Plan from 2002......................................................7
3.3
Activities within the Northern Dimension..............................................................8
3.4
Shortcomings in the Northern Dimension..............................................................9
3.4.1
The Concept of the Northern Dimension .......................................................9
3.4.2
The administration of the Northern Dimension. .........................................10
3.5
Conclusions..............................................................................................................10
4
An opportunity for a New Start ....................................................................................11
4.1
The Forthcoming Enlargement .............................................................................11
4.2
Focus on Russia.......................................................................................................11
4.3
A special role for trade and investments ..............................................................12
4.4
Better administration .............................................................................................13
5
Practical implementation ...............................................................................................14
5.1
Proposals for Northern Dimension initiatives......................................................14
5.2
Advisory structure..................................................................................................18
6
Address ............................................................................................................................19
2
1
Summary
The Northern Dimension policy of the Union was launched some five years ago and led to
expectations in the business communities in the Baltic Sea Region that this would be a vehicle
for intensified commercial contacts. Not least were there hopes that the Northern Dimension
policy process would facilitate large investments in infrastructure.
After prolonged preparations the Northern Dimension became operational in 2001. By this
time expectations were modest. The Northern Dimension has to a large extent become an
extra label on Phare and the Tacis projects. There have also been some efforts to improve
cross border cooperation. A notable positive exception is the Northern Dimension
Environmental Partnership (NDEP)1, whereby international financial institutions cooperate to
facilitate financing for major projects with environment benefits in Russia. Another
interesting offspring from the Northern Dimension is the Northern eDimension Action Plan2,
a number of coordinated initiatives to accelerate the transition to the information society in
the region through closer co-operation.
The BAC conclusion is that
The present Northern Dimension policy concept is too vague and has no clear focus.
It is a definite drawback that there is no special budget line for the Northern Dimension
initiatives. The use of funds from different programmes is met with large obstacles.
The staff for handling the Northern Dimension within DG External is very limited, only
one person can be said to work on an every day basis with the Northern Dimension.
In the other DGs, as well as among most of the Commissioners, the Northern Dimension
has attained very marginal attention.
BAC presumes that Estonia, Latvia, Lithuania and Poland very shortly will show that they are
able and willing to take on the obligations of European Union membership and hence, that the
enlargement of the European Union will take place as envisaged in 2004. This will open new
opportunities for the Northern Dimension.
BAC believes that it is necessary to
Reshape the concept of the Northern Dimension, providing a clear focus.
Identify priorities for action, formulating concrete projects.
Provide adequate funding.
Establish an effective institutional set-up.
The focus of the policy should be on Russia; the Northern Dimension should be the European
Union policy for creating a positive development along the border between the enlarged
1
2
http://europa.eu.int/comm/external_relations/north_dim/ndep/infomemo.pdf
http://www.riso.ee/en/nordic/
3
European Union and Russia. People on both sides of the border should be brought in closer
contact and develop different types of ties between individuals, business, institutions.
The role of trade and investments differ from most other possible areas of cooperation in the
Northern Dimension concept. Most other cooperation structures will be dependent on a
continuous flow of European Union and member state’s funds to maintain the activities.
However, in the case of trade, investments and other forms of business interaction, the whole
idea must be to create such an environment for business that profitable business interaction
can sustain and develop. Hence, much more attention must be paid to efforts that improve
conditions for trade and investments based on market demand.
The Northern Dimension initiatives need a budget line and an efficient coordinating office.
Even if the business communities in the Baltic Sea Region have been disappointed by the first
years of the Northern Dimension initiative, it should still be seen as potentially essential for
fostering increased growth and development in the region.
BAC would be prepared to participate with advice during the preparation of the new Action
Plan, as well as its implementation. BAC would also assist in efforts to encourage the private
sector's engagement and involvement in forthcoming ND activities.
2
What is BAC
The Business Advisory Council, BAC,3 is a body in the framework of the Council of Baltic
Sea States, CBSS4. BAC is not an organisation; it is an advisory council. The
representatives are nominated by national business organisations and appointed by each
government. The Council came into operation in 1997.
BAC is a small and informal body. It does not receive any funding from CBSS.
3
http://www.chamber.se/bac/index.htm
4
http://www.cbss.st/
4
Mr. Peter Egardt, Chairman
Stockholm Chamber of Commerce
PO Sweden Box 16050
SE-103 21 Stockholm
Sweden
Phone: + 46 8 555 100 00
Fax: + 46 8 566 316 39
[email protected]
Denmark
Estonia
Ms. Heide Ehlert-Jürgensen (on leave)
Mr Siim Raie
Estonian Chamber of Commerce
Mr. Anders Ladefoged
Confederation of Danish Industries, DI
Toom-Kooli 17
DK-1787 Copenhagen V
EE-0130 Tallinn
Denmark
Estonia
Phone: +45 3377 3426
Tel: +372 6 460 244
[email protected]
Fax: +372 6 460 245
[email protected],
Finland
Mr. Filip Hamro-Drotz
Confederation of Finnish Industry and Employers – TT
PO Box 30
FI-00131 Helsinki
Finland
Phone: + 358 9 68 68 23 63
Fax: + 358 9 68 68 27 10
[email protected]
Germany
Mr. Wolf Rüdiger Janzen
Kiel Chamber of Commerce and Industry
PO Box
D-241 00 Kiel
Germany
Phone: +49 431 5194 209
Fax: + 49 431 5194 234
[email protected]
Iceland
Mr. Vilhjálmur Egilsson
Icelandic Chamber of Commerce
Kringlan 7,
IS-103 Reykjavik
Iceland
Phone: +354-510-7100
Fax: +354-568-6564
[email protected]
Latvia
Mr. Voldemârs Gavars
Latvian Chamber of Commerce and Industry
Valdemāra ielā 35.
LV-1849 Riga
Latvia
Phone: + 371-7-22 5595
Fax: +371-7-82 0092
[email protected]
Lithuania
Mr. Gintaras Morkis
Confederation of Lithuanian Industrialists - LPK
A. Vienuolio str. 8
LT-2600 Vilnius
Lithuania
Phone: +370-2-623801
Fax: +370 2 22 52 09
[email protected]
Norway
Mr. Olaf Harald Mehus
ABB
Postboks 94
NO-3075 Billingsta
Norway
Phone: +47 668 44239 Mob +47 911 42332
Fax: +47 47 668 43010
[email protected]
Poland
Mr. Dariusz Stepien
The North Chamber of Commerce
Al. Wojska Polskiego
PL-71-335 Szczecin
Poland
Phone: +48 91- 433 10 10, 433 20 11, 486 0765
GSM: +48 501 51 7744
Fax: + 48 9 486 0768
[email protected]
Russia
Mr Alexandr V Chistoserdov
Saint Petersburg Chamber of Commerce and Industry
Tchaikovsky Ul 46-48
RU-191123 St. Petersburg
Russia
Phone: +7 812 723 4896 / 279 0383
Fax + 7 812 272 8612
[email protected]
5
BAC has presented reports to the Heads of Government when they have met in Riga, Latvia,
Kolding, Denmark and St. Petersburg, Russia. The latest report was “the Status Report to the
Heads of Government of the Baltic Sea States regarding Growth and Development in the
Baltic Sea Region”, June 2002
BAC has also presented reports to the Foreign Ministers in CBSS at their annual meetings.
The latest meeting was held in Svetlogorsk, in Kaliningrad Oblast in March 2002. BAC then
presented a special report “Recommendations for Increased Trade and Investments in the
Kaliningrad Region. A set of viewpoints from the Business Advisory Council - BAC”.
BAC participates actively in the work of the Working Group for Economic Co-operation
(WGEC) in CBSS and has made inputs to the meetings of the Trade and Economy Ministers
that were held in Bergen in 2000 and in Moscow in February 2002.
For more information about BAC and its reports please look at www.chamber.se/BAC
3
The Northern Dimension: background and function.
3.1
History in brief
The Northern Dimension in the External and Cross-Border Policies of the European Union
was introduced in 1997, originally by the Finnish government. Although the concept was well
received it took a remarkably remarkable long time before any practical activities
materialized.
The Northern Dimension has been mentioned at most European Councils during the last years
December 1997, the Luxembourg European Council endorsed the Northern
Dimension.
December 1998, a Communication on the Northern Dimension was presented to the
Vienna European Council.
June 1999, guidelines were adopted by the Cologne European Council
November 1999, the Commission presented a Communication on Strengthening the
Northern Dimension of European energy policy.
June 2000, the Santa Maria da Feira European Council adopted the Action Plan for
the Northern Dimension.
June 2001, the Göteborg European Council endorsed the Full Report on the Northern
Dimension Policies prepared by the Presidency and the Commission.
Since the Action Plan was adopted in 2000 and after the further measures were taken during
2001, a number of projects are now underway that the Commission attributes to the Northern
Dimension.
The Commission presently describes the Northern Dimension as:
The Northern Dimension aims to intensify cross border cooperation between the European Union and its
neighbouring countries and regions in northern Europe. It aims to create security and stability in the region, as
well as building a safe, clean and accessible environment for all people in the north. The Northern Dimension
6
also has the objectives of addressing the problems related to uneven regional development and avoiding the
emergence of new dividing lines as new countries join the Union.
3.2
The present basis – the Action Plan from 2002
Unfortunately, the European Union’s Northern Dimension has been rather poorly funded,
both institutionally and financially.
1. The time lag from introduction of the concept in 1997 until any practical results were
shown, was very disappointing and greatly reduced any interest in the business
communities.
2. The Action Plan for the Northern Dimension adopted in 2000 is not very precise
The Action Plan will be a reference document for actions planned or implemented in the Northern
Dimension during 2000-2003. This period is considered appropriate for achieving tangible results.
The Action Plan serves as a political recommendation to be taken into account by relevant actors
whenever appropriate, inter alia in preparing strategies for and projects to be funded by the relevant
European Union and member states budgetary instruments.
The Action Plan in its own phraseology consists of two parts:
–
a horizontal part, which recalls the major challenges associated with Northern Europe, the priorities for
action agreed by the partner countries and the legal, institutional and financial framework for activities
relating to the Northern Dimension;
–
an operational part, which sets out objectives and perspectives for actions during 2000-2003 in those
sectors where expected added value is greatest.
However, the operational elements in the Action Plan were also vague.
3. Another obvious drawback in the present Action Plan is the weak role for trade and
investments5. Although it is obvious that commercial contacts create a multitude of
contacts across borders, very little emphasis has been placed on supporting efforts that
facilitates increased trade and investments.
4. The Northern Dimension does not have any budget line in the European Union
system. The idea is that any project that fall into the Northern Dimension Category
5
In the section on Trade, Business Cooperation and Investment Promotion it is stated under the headline,
Action that:
Action in this area will focus on removing local trade barriers, facilitating trade, enhancing customs administrations
promoting business cooperation and creating a legal and administrative environment conductive to private investment
and free trade. Clearly defined activities will be identified during the ongoing implementation of the Europe Agreements
and the PCA with Russia with technical assistance being provided through PHARE, TACIS and the European Union
multi-annual programme for enterprises and entrepreneurship.
…..
∗
The Commission will further develop support to business co-operation through the new multi-annual programme
for enterprise and entrepreneurship (2001-2006). The Northern Dimension countries and companies will continue
to have full access to the network of Euro-Info-Centres and Euro-Info-Correspondence-Centres …., to the business
co-operation networks and to Partenariat events.
∗
Encouraging co-operation between companies in the energy, environment, forestry, transport and
telecommunications sectors with particular reference to supply chain relationships, subcontracting and public
procurement opportunities, would foster the Northern Dimension and at the same time strengthen the
competitiveness of supply industries in Europe.
7
should be financed by other means, by Member States, by Northern DimensionPartner countries, from International Financial Institutions and finding financing
within the rules and budget allocation of Phare, Tacis, Interreg and also, to some
extent, ISPA and Sappard.
Although the Commission has made efforts6 to improve coordination between the
various cooperation instruments, it is still quite difficult to combine the requirements
and procedures of different programmes,
3.3
Activities within the Northern Dimension
When the Commission describes the results within the Northern Dimension so far7, it is
obvious that the cross border character in the projects is not always apparent. The
Commission in several cases just mention the volume of Phare and Tacis support given.
Projects that should anyway have been launched under the Tacis or Phare programmes appear
to be given just an additional label “Northern Dimension”. It is apparent that far from all
members of the Commission staff understand the Northern Dimension concept.
There is also a Baltic Special Facility, which has a separate budget line. It is jointly managed
by Phare and Tacis according to Cross Border Cooperation rules. The Tacis component will
focus on border crossings and on health care.
However, there are also some interesting initiatives that stems from the Northern Dimension.
6
A Guide to Bringing Interreg and Tacis Funding Together
http://europa.eu.int/comm/external_relations/north_dim/conf/formin2
7
This text is the official presentation of Northern Dimension activities made by the Commission:
Environment and Nuclear Safety: Phare spent roughly €55 M between 1994 and 2000 on environmental
projects in the Baltic Sea region. Roughly €500m a year from will be made available by the ISPA
Programme (the Instrument for Structural Policies for Pre-Accession) and will be allocated for
environmental projects (mainly wastewater treatment systems) in the period 2000- 2006. Under the Tacis
programme special attention is being paid to the environment in Northwest Russia in sectors such as water,
wastewater treatment, energy efficiency, district heating, waste. As for Nuclear projects, the European
Union is participating in the decommissioning of the Ignalina (Lithuania) nuclear power plant, with a
financial assistance that will amount to some € 165 M in the 2000-2006 period. More initiatives are being
implemented in Northwest Russia, principally to solve urgent problems concerning radioactive waste
disposal.
Environment and nuclear safety will be the core priorities of the Northern Dimension Environmental
Partnership Support Fund, due to be launched this year. The Commission has already indicated its
willingness to contribute some € 50 M towards the fund, with a clear focus on nuclear-related projects.
The Commission, along with other Western Donors and Russia, has participated in the negotiations that
will lead to the signature of the Multilateral Nuclear Environmental Programme for Russia (MNEPR),
whose main purpose is to set the legal framework for Western firms carrying out nuclear-related project in
the Russian Federation.
Border-Crossing Facilities: Under the Tacis Cross-Border Co-operation Programme €38 M has been
allocated for technical assistance and infrastructure works at border crossings. Almost 40% of this amount
has been spent on the Finnish-Russian border, with the construction of crossings at Salla-Kelloselka and
Svetogorsk-Imatra being completed. Some €11.5m will be spent soon in Kaliningrad on border crossings
with Lithuania and Poland.
Telecommunications and Information Technology: in close co-operation with the Council of the Baltic
Sea States, a wide-ranging Northern Dimension has been developed and proposed for financing. The Tacis
Cross-Border Programme will support the Northern eDimension Action Plan with some € 12 M over two
years.
Kaliningrad: to date, the Commission has spent € 39 M on projects ranging from SME and human
resource development, to healthcare, energy and tourism. Kaliningrad will continue to be a priority region
under the Tacis national programme for Russia and future priorities include environment, administration
and law enforcement and public health. To support the effective implementation of these projects and
programmes, a new Tacis office was opened in Kaliningrad at the beginning of 2001.
8
The Northern Dimension Environmental Partnership (NDEP)8 is an interesting initiative.
This is basically a cooperation structure between International Financial Institutions9.
They appear to have established a well functioning structure to help financing large
investments related to environment. NDEP is a good example as in a rather short time this
cooperation was established10. NDEP has two vital elements that are not sufficiently
developed in the rest of the Northern Dimension.
o A survey/general view over potential projects and a desire to make strategic priorities.
o Cooperation between different parties.
Another interesting approach is the Northern e-Dimension Action Plan (NeDAP) 11. It is
based on eEurope and eEurope+ concept but is designed to take advantage of the
relatively favourable development in the “e” sectors in some of the Baltic Sea Region
countries. This is funded by Tacis Cross Border Programme but is an example of
cooperation between the CBSS countries and also with ambitions to involve private
enterprises. The individual countries, which are responsible for the performance of the
specific NeDAP-lines, should be encouraged to increased efforts if positive results are to
be achieved
However, both NDEP and NeDAP are rather exceptions than rules, concepts that have
developed under the general heading of the Northern Dimension led by the EU-Presidency but
almost completely independently of the, at times vague, efforts of the Commission regarding
the Northern Dimension.
3.4
Shortcomings in the Northern Dimension
It is obvious that there are problems with the Northern Dimension.
3.4.1
The Concept of the Northern Dimension
The identity of the Northern Dimension concept has been quite vague. To put is simply, most
people within the Commission structures and also in the Baltic Sea Region government
structures have difficulties in understanding the Northern Dimension concept.
The Northern Dimension has often been seen as the same as the efforts directed towards
the Baltic Sea Region. The Northern Dimension is seen as a special policy for one
segment of several European Union border regions. As no good arguments have been
presented and no special institutional arrangements have been made, some European
Union officials obviously regard the Northern Dimension as a piece of “liturgy” that
should be mentioned, but without any significance.
The link to the European Union’s Russian policy has been implicit rather than explicit and
hence easy to overlook or misunderstand.
8
http://europa.eu.int/comm/external_relations/north_dim/conf/formin2
Nordic Investment Bank (NIB), Nordic Environment Finance Cooperation (NEFCO), European Bank for
Reconstruction and Development (EBRD), the World Bank (WB) and shortly also the European Investment
Bank (EIB)
10
To a large extent thanks to the efforts of the Nordic Investment Bank (NIB)
11
http://www.riso.ee/en/nordic/
9
9
Many of the Member States have not engaged themselves in the building of the ND. The
partner countries have not been sufficiently engaged in the regular performance.
3.4.2
The administration of the Northern Dimension
There is no special budget line for the Northern Dimension. While this may be
understandable considering that the Northern Dimension has been portrayed as a process,
the consequence is that the Northern Dimension does not carry any “weight” within the
Commission structures.
The Northern Dimension unit within DG External is very small, only one person can be
said to work on an every day basis with the Northern Dimension.
In the other DGs, as well as among most of the Commissioners, the Northern Dimension
has attained very marginal attention.
To reach the ambitions set in the Northern Dimension Action Plan a close cooperation
with the Phare and Tacis programmes is necessary. However, since this approach was
presented there has been a development in Phare and Tacis as well. Phare has been
redesigned to decentralized decision-making.
Hence a national perspective is
dominating.12 The use of funds from different programmes is also met with large
obstacles. The units responsible for those programmes have a sceptical attitude to
fulfilling the Northern Dimension objectives using funds from the existing programmes.
There is an obvious and also explicitly mentioned role for national governments and
international financial institutions. The latter participate, mainly in the Northern
Dimension Environmental Partnership, while the role for national governments in the
present European Union member states has not been sufficiently understood. Neither can
the partner countries be said to have fully grasped or been sufficiently involved in the
Northern Dimension.
3.5
Conclusions
The Northern Dimension has not yet become the vehicle of development and close
cooperation as it has been portrayed as. A combination of different factors have resulted in the
Northern Dimension more being a set of phrases than efforts to enhance contacts and
development in the region.
Even if the business communities in the Baltic Sea Region have been disappointed by the first
years of the Northern Dimension policy, it should still be seen as potentially positive for
fostering increased growth and development in the region, provided that the Northern
Dimension can be redirected. That requires:
Reshaping the concept of the Northern Dimension, giving it a clear focus.
Identifying priorities for action, formulating concrete projects.
Providing the adequate funding.
Establishing an effective institutional set-up.
12
However, the Commission has tried to make it easier to coordinate applications directed to both Phare, Yacis
and Interreg programs
10
4
An opportunity for a New Start
4.1
The Forthcoming Enlargement
BAC presumes that Estonia, Latvia, Lithuania and Poland very shortly will show that
they are able and willing to take on the obligations of a European Union membership
and hence that the enlargement of the European Union will take place as envisaged.
This will have important implications for the future development of the Northern Dimension.
The next two months present an opportunity to strengthen the Northern Dimension as the
Danish European Union Presidency is under the obligation to map out the guidelines for the
next Northern Dimension Action Plan. The new action plan itself will be drafted by the
Commission next year, but the principles on which the revision should be build will have to
be decided in the second half of 2002.
Hence, BAC presents some proposals intended to encourage the European Union Presidency
and the European Commission to create conditions for a New Start for the Northern
Dimension. The proposals are partly based on BAC earlier input: Proposals for the Further
Development of the Northern Dimension from the Business Advisory Council (BAC).
Furthermore the Confederation of Finnish Industry and Employers (TT)13, the Confederation
of Danish Industries (DI)14, as well as the European Economic and Social Committee15, have
recently expressed interesting views and concrete recommendations aiming to improve the
Northern Dimension
4.2
Focus on Russia
The enlargement of the European Union will mean that not only Finland among the European
Union member states will border Russia; also Estonia, Latvia, Lithuania and Poland will share
a common border with the Russian Federation.
Russia, with a population of 150 million inhabitants, representing an enormous geographic
area and with a large industrial potential and an important source of raw material will be a
vital cooperation partner for the European Union.16 This is clearly indicated by the present
13
Recommendations of Business Community for Developing the Northern Dimension of the European Union,
January 2002 The Confederation of Finnish Industry and Employers (TT)
PUbusinessrecomLra
ntajan02.doc
14
The Northern Dimension of the European Union - strengthening the regional approach to Russia, July 2002,
Danish Industries (DI) http://billed.di.dk/wimpfiles/lores/image.asp?objno=/185730.doc
15
The Future of the EU's Northern Dimension, August 2002 : Statement To The Ministerial Meeting in Ilulissat,
August 2002, The Economic and Social Committee www.esc.eu.int
di_ces148-2002_di_e
n_.doc
16
European Union account for 24.7% of Russia's imports and 34.9% of its export trade. However Russia's share
in European Union external trade in 2000 was 4.0% of the imports and 1.9% of European Union exports. Energy
supplies represent 45% of Russia's exports to the European Union, which, in turn, account for 42% of the
European Union's needs in imported natural gas (17% of total gas consumption) and 17% of oil imports.
11
European Union-Russia Policy, first laid down in the European Union‘s Common Strategy on
Russia from 1999 and then subsequently developed.
A new start for the Northern Dimension should give the Northern Dimension a clear purpose.
The focus for activity should be on Russia. The Northern Dimension should be the
European Union policy and framework to support the overall European Union-Russia
policy by establishing good relations between on the one hand the parts of Russia close to
the border with European Union and on the other hand the European Union countries
near Russia. A North-European Strategy of the European Union to improve neighbour
relations should be the basis for future actions.
The Northern Dimension should be the European Union policy for creating a positive
development on both sides of the border between the enlarged European Union and Russia.
People of both sides of the border should be brought in closer contact and develop different
types of ties between individuals, business, institutions in the different countries.
The image of the European Union, in the eyes of most Russians, will be determined of what
the conditions are in this area where Russia meets the European Union.
It is important that the border is not perceived as a poverty line.
It is essential to allow for frequent and easy contacts across the border.
There will be a need for a lot of cooperation in various fields such as environment,
civil security, transport etc. It is vital to find suitable and flexible forms for such
contacts.
The concept of the Northern Dimension should also, clearer than today, reflect the fact that
the Northern Dimension is a policy that will benefit the European Union as a whole and
strengthen its relations with Russia.
A clear focus on Russia would not be at the expense of the candidate countries. The
neighbours to Russia - Estonia, Latvia, Lithuania and Poland - stand to gain most from
favourable development across the border.
The Danish Government's proposal at the High Level Conference on the Northern Dimension
and the Arctic Window in Ilulissat, Greenland, 28 August 2002, to attach an Artic Window to
the Northern Dimension naturally carries some benefits as there is a need to develop Artic
technology and environmental methods in the Arctic region. However, BAC believes that it is
vital to keep the concept of the Northern Dimension as clear as possible. The Northern
Dimension should therefore focus clearly on Russia and the efforts to bridge the borders
between Russian border regions and neighbouring countries in the European Union.
4.3
A special role for trade and investments
The role of trade, investments and other forms of business interaction, based on
commercial principles, differ from most other possible areas of cooperation in the
Northern Dimension concept. Most other cooperation structures will be dependent on a
continuous flow of European Union and member state’s funds to maintain the activities.
However, in the case of trade and investments the whole idea must be to create such an
environment for business that profitable trade and investment can sustain and develop.
12
The Northern Dimension initiatives must be developed in a dialogue with the Russian
partners. The commitment and interest of the Russian national government must be a
cornerstone for the development of the New Northern Dimension. However, as the focus
should be on the regions bordering the enlarged European Union, it is essential that the
regional government structures in North West Russia understands the Northern Dimension
concept and is willing to commit themselves to work together for a common goal.
Seen from a business perspective, there is still an undeniable need for improving the general
framework conditions for business in Russia. Approximation of regulations and procedures to
those of the WTO and the European Union will open up new opportunities for trade in goods
and services and create a more predictable business environment in the whole of Russia
A very large part of the transport that flows in and out of Russia goes either on ships across
the Baltic Sea or passes the land borders of other countries in the that region. Hence adequate
transport infrastructure such as maritime, road and railway transport routes in the Baltic Sea
Region are of crucial importance. Well-functioning border crossings with modern customs
procedures are necessary for fast, reliable and affordable trade routes.
The long-term aim is that the border will be of no significant relevance for trade and
investments. Although that will not be rapidly or easily achieved, the short-term goal
nevertheless must be to reduce barriers and to improve conditions.
Hence, a New Start for the Northern Dimension must pay much more attention to efforts that
improve conditions for trade and investments and other forms of business interaction.
Even if the business communities in the Baltic Sea Region have been disappointed by the first
years of the Northern Dimension initiative, it should still be seen as potentially essential for
fostering increased growth and development in the region, if developed in the right way.
4.4
Better administration
The experience from the last year and a half indicates that the present arrangements within the
Commission have not been sufficient for the full and continued development of the Northern
Dimension policy. Several of the proposals in the Full Report on the Northern Dimension to
the European Union Gothenburg Summit, June 2000, are still not implemented.
BAC has the following proposals.
1. There ought to be a separate budget line for the Northern Dimension. This does not
exclude that also TACIS and Interreg as well as, when applicable, ISPA and Sappard
can be utilized for the Northern Dimension initiatives. A budget line would give the
Northern Dimension an identity.
2. There must be a sufficiently staffed special coordination office for the Northern
Dimension in DG External. This office should take overall responsibility for the
Northern Dimension and make sure that the Northern Dimension efforts would be in
line with the European Union policies. Other DGs' involvement should also be
strengthened.
3. It is essential to secure an improved participation of the member states, partner states
such as Norway, regional foras and main actors concerned. Arrangements should be
established to monitor and co-ordinate the activities.
13
4. The Northern Dimension is a European Union policy but it should not merely be
implemented by European Union funds. There is a need to develop further economic
cooperation with European Union member states in the region as well as with IFI´s.
5. The Northern Dimension should not only be a list of traditional projects. There is also
a need for other forms of cooperation across borders, such as various forms of
administrative and legislative commitments to improve trans-border interaction. The
European Union and Russian government, both on national and regional levels, could
establish mutual goals, as well as timetables and procedures for monitoring and
follow-up actions.
6. A precondition for the future success of the Northern Dimension initiative is that the
member states and the European Commission gives its full backing to it, both in words
and in deeds.
5
Practical implementation
From a business viewpoint, specific regional actions are needed to promote:
• Facilitation of trade and investment and other forms of business interaction.
• Intensification of business based on energy and other natural resources.
• Stimulation of infrastructure and the transport business
• Promotion of the development, and use of information and communication technology.
5.1
Proposals for Northern Dimension initiatives
BAC presented proposals in December 2000 in Proposals for the Further Development of the
Northern Dimension from the Business Advisory Council (BAC)
Since 2000, conditions for various forms of business interaction across the border to Russia
have improved. Legal and economic conditions have changed to the better. This has opened
new opportunities for trade and investments. However, the general problems remain basically
the same. There is still a very large potential for business interaction. Both in the form of
European Union export to Russia and investments in Russia but not least in increased export
of manufactured goods from Russia to the countries in the enlarged European Union.
Thus, most of the suggested initiatives are still valid and relevant. As they are still topical
BAC has not made a complete revision of the proposed initiatives. They are summarised
below.
14
Initiatives and project-concepts proposed by BAC already in 2000.
Energy and Natural Resources
Initiative/project A joint European
Union-Russia
committee on energy
exploration
Technical cooperation
regarding gas and oil
production in the
Barents Sea
Resumed/increased
production at old
oilfields
Refinery
capacity
Purpose
This committee
should review
legislation and rules
to ensure that the
barriers preventing
European Union
companies to
compete fully with
Russian firms for the
right to explore and
exploit petroleum
resources are
identified. The
committee should
also consider various
ways to support
Russia in developing
policies regarding oil
and gas.
European Union
should, together with
Norway, offer to
provide advice and
help. The objective
ought not necessarily to
be a fast exploration but
a process where Russia
can increase production
by utilising reserves that
are the most
economically
favourable
Licenses could be given
to firms to revitalize
production and use the
remaining reserves. At
the same time the
operators could rectify
some of the
environmental
hazardous legacies from
previous production
periods
An assessment of
the state of
conditions in
Russian
refineries in NW
Russia.
Partners
Russian government
officials, European
Union
representatives,
representatives of the
Northern Dimensioncountries,
representatives from
relevant Russian
firms in the energy
sector, representatives
of relevant existing
and potential
investors in the
energy sector.
Russian authorities,
private foreign
investors/operators,
experts from European
Union and EES
countries, Norwegian
authorities
Russian authorities,
private foreign
investors/operators,
International Financial
Institutions
Russian oil
companies,
European Union
experts
Possible
financing
Mainly participants
European Union, Russia
self-financing + some
European Union
funds.
Private capital, possibly
International Financial
Institutions, European
Union or International
Financial Institutions
for pilot study to review
technical aspects but
also to design the
complicated license
agreements.
The purpose is
not to finance the
modernisation of
the refineries, as
they compete
with other
refineries on the
world market, the
financing must
be made on the
conditions of the
market.
15
Initiative/project Natural gas pipe-line capacity
and transparency in pricing
and neutrality in taxation
Integration of electricity
grids in the Baltic Sea
Region.
Private companies role
in forest management
and ownership
Purpose
Possibly in the framework of the
European Union - Russia energy
dialogue to find suitable
agreements regarding the
routing of future extended
natural gas pipeline capacity
from Russia to European Union.
Also to help the countries in the
Baltic Sea Region to develop a
setting where commercial
companies and governments can
make rational investment
decisions in transit
infrastructure, by improving the
transparency in pricing of transit
services and to eliminate
discriminatory taxation.
To further determine what kind
of structure is suitable for the
electricity grids in the Baltic
Sea Region. To determine a
suitable way to secure both
technically and economically
the supply of electricity in the
Kaliningrad exclave. To
indicate the potential for
investments in expansion and
modification of the national
grid and international
connection including DC links
between the three different
systems in the Baltic Sea
Region;
To create legal and
practical means for
foreign investors to play a
larger role in the Russian
forestry sector and to use
their know-how to
introduce sustainable and
profitable methods.
Partners
European Union, members
states, concerned Baltic Sea
States, Russian authorities,
Russian companies, energy
companies in European Union,
International Financial
Institutions
Electricity companies (national
governments, European Union
experts, International Financial
Institutions.
Experts from European
Union members states and
Russia, private
companies, International
Financial Institutions
Possible
financing
International Financial
Institutions, European Union
European Union-funds,
European Union funds,
(the actual
acquisitions/leases must
be mainly privately
financed, possibly with
some International
Financial Institutions
lending)
16
Transport
Initiative/project Via Baltica
Investment
Programme
Rail
transport in
Transport
Corridors I
and IA
Development
of investment
plans for
roads in
Transport
Corridor II
and in the
north and
middle
sections of
Transport
Corridor IX
Improving
interoperability
between
haulage
companies in
different parts
of the Baltic
Sea Region.
Private
rail
operators
in
Transport
Corridors
II and IX
Air
transport
cooperation
Purpose
Gradual
improvement of
the roads
making up
Transport
Corridor I. A
continuation of
the present
programme.
To evaluate
the future
potential for
increased rail
transport.
Study
concepts for
commercially
viable
investments.
Building on
existing
agreements,
further trying
to find
strategies for
the improved
roads.
To make it
possible for
more companies
in the region to
meet the
requirement of
being able to
operate
transport chains
with high
quality
demands.
Another aspect
is the alignment
of the legislation
for international
road traffic
between
European Union
and Russia, thus
making
operations
easier.
To find
what
conditions
are needed
to attract
private
investors to
help own
and run rail
transport
along the
two
transport
corridors.
To increase
air safety by
improving
cooperation
between
Russian air
control and
other
countries in
the Baltic
Sea Region.
To improve
safety
standards.
To review
the barriers
to foreign
investors
operating air
lines in
Russia.
Partners
National road
administrations,
TINA
Secretariat,
International
Financial
Institutions
Baltic
countries and
Polish
government,
rail operators,
business
community
representative
s, European
Union
experts,
International
Financial
Institutions
Government
officials from
the concerned
countries,
Phare, Tacis,
TINA,
International
Financial
Institutions,
private
investors.
Private haulage
companies,
shippers,
European Union
experts, Phare,
Tacis, national
authorities.
IFI, private
companies,
government
officials
from the
concerned
countries
National air
transport
authorities,
Eurocontrol,
air
companies
Possible
financing
National tax
payers,
International
Financial
Institutions
Private
companies,
IFI´s ,
European
Union
Countries,
International
Financial
Institutions .
ISPA
Phare, Tacis
IFI,
European
Union
17
Trade
Initiative/project Efforts to reduce
waiting times at
border crossings
Russian commitment
to the principle of a
sizeable reduction in
national standards
and requirements that
are not in conformity
with international or
European standards.
Using applicant
countries experience
in giving advice to
Russian firms on
export ability
Improved export
promotion
activities
Purpose
In line with the
concept “2 hours in
2000” reduce waiting
times for lorries at
border crossing by
new procedures,
training and by
combating corruption
To help trade
integration by
removing technical
barriers that stops or
impairs trade.
To increase economic
integration by helping
Russian
manufacturing
industry to export.
This also helps to
build a competitive
consultancy sector in
the applicant
countries.
To help
governments to
develop export
promotion efforts
by using the most
effective means
and learning from
the experience of
other agencies.
Partners
National customs
administration, other
national authorities
maintaining border
control functions,
European Union
experts,
Russian and European
standardisation bodies,
relevant Russian
ministries
Business
organisations, private
consultants.
Export promotion
agencies, MoFA's,
private export
consultants
Possible
financing
Countries concerned, Tacis
Phare, Tacis, Intereg
Tacis
National financing,
Phare
Investments
Initiative/project Review of conditions for foreign direct
investments in Russia.
Forums for structured dialogue between
government and investors.
Purpose
To study and evaluate conditions for foreign
investments, particularly in northwestern
Russia. Based on the result appropriate
changes can be initiated by the government..
To open for a prepared and structured
dialogue about problems facing foreign
investors in the country and to agree on
plans to eliminate or reduce problems.
Partners
Russian government (federal, regional and
local), foreign companies, European Union
experts
National governments, foreign investors
Possible
financing
Russian government, Tacis, IFC,
Governments, business organisations or
private companies.
5.2
Advisory structure
It is obvious that there is a need to widely discuss the various possible initiatives to increase
business interaction across the border between the European Union and Russia. BAC, with is
representation from Chambers of Commerce and Confederations of Industries in all the Baltic
Sea Region countries, offers a body that can contribute to the preparation and implementation
of the new Northern Dimension Action Plan, as well as assisting in efforts to encourage
business in forthcoming Northern Dimension activities.
18
6
Address
This call for a New Start for the Northern Dimension will be presented at the Northern
Dimension Business Forum as part of the 4th Annual Baltic Development Forum
Summit held in Copenhagen on October 14, 2002, during the Danish presidency of the
European Union.
Hence this call is addressed to the Presidency of the European Union
It is naturally also addressed to the European Commission, and to all the concerned
governments and the Council of Baltic Sea States.
It is our hope that the remarks and proposals we have made can be of use when deciding
upon the future of the Northern Dimension and the efforts to increase interaction
between the enlarged European Union and its major neighbour Russia.
October 4, 2002
Mr. Peter Egardt, Chairman
Stockholm Chamber of Commerce
Sweden
Me. Anders Ladefoged
Mr. Siim Raie
Confederation of Danish Industries, DI
Estonian Chamber of Commerce
Denmark
Estonia
Mr. Filip Hamro-Drotz
Mr. Wolf Rüdiger Janzen
Confederation of Finnish Industry and
Employers – TT
Industrie und Handelskammer zu Kiel
Germany
Finland
Mr. Vilhjálmur Egilsson
Mr. Voldemârs Gavars
Icelandic Chamber of Commerce
Latvian Chamber of Commerce and Industry
Iceland
Latvia
Mr. Gintaras Morkis
Mr. Olaf Harald Mehus
Confederation of Lithuanian Industrialists - LPK ABB
Lithuania
Norway
Mr. Dariusz Stepien
Mr Alexandr V Chistoserdov
The North Chamber of Commerce
St. Petersburg Chamber of Commerce and
Industry
Poland
Russia
19
This document is downloadable at http://www.chamber.se/bac/index.htm
Questions can be directed to the BAC Secretariat:
Mr. Hans Jeppson
Stockholm Chamber of Commerce
PO Box 16050
Phone:+ 46 8 555 100 39
SE-103 21 Stockholm, Sweden
Fax: + 46 8 566 316 39
[email protected]
20