New oil pipeline to bring Caspian oil to Mediterranean

Five Southeast European states signed a ministerial declaration on construction of a pan-European oil pipeline linking the Romanian Black Sea port of Constanta to the Italian port of Trieste.

"This project is a good example of enhanced co-operation among the members of the Energy Community," EU Commissioner Andris Piebalgs said.
Five Southeast European countries have pledged to boost co-operation under a plan to build a new oil pipeline that would link the Black Sea with Italy and supply oil from the Caspian region to the European market.

Economy ministers and state secretaries of Croatia, Italy, Romania, Serbia and Slovenia voiced their support for the Pan-European Pipeline (PEOP) in a declaration signed in Zagreb on April 3rd. The 1,856km-long pipeline, which will pass through all the five countries, will be capable of carrying 40 million tones of oil annually during its first phase, with capacity due to grow to 90 million tones.

EU Energy Commissioner Andris Piebalgs signed the declaration as well. "The Pan-European oil pipeline corresponds greatly to the EU criteria," he said.
Officials from the bloc say building the necessary infrastructure to link markets with oil-rich regions will prove essential if global oil demand increases by the expected 41% in the next 25 years.

The pipeline is expected to be operational between 2011 and 2013, and the total construction cost is envisioned at $2.62 billion for an annual capacity of 60 million tones, or $3.96 billion for a 90 million tone capacity. It would effectively cut down on the number of oil tankers in the Turkish straits and Northern Adriatic.

The project is of "strategic importance" for the Southeast European countries involved in its development, as the regional economy is expected to benefit greatly from it, Croatian Prime Minister Ivo Sanader said at the signing last week.

Until now, the governments of Romania, Serbia and Croatia have been promoting the project most actively. Romanian President Traian Basescu has been the biggest booster, citing a study predicting that his country could receive between $2.27 billion and $4.39 billion in benefits over 20 years of operation.

The government of Slovenia, by contrast, has been hesitant, pointing to environmental concerns and a lack of domestic interest.

With the Zagreb declaration, the project appears to be set in motion. Companies wishing to export oil from the Caspian region via this route and potential buyers can now be officially identified. If interest is sufficient, the necessary documentation -- such as feasibility and environmental impact studies -- will have to be drawn up.
According to Slovenian Economy Minister Andrej Vizak, the declaration should not be binding, but instead convey political will.

Last week's signing took place in a complicated regional energy context. Just a few weeks earlier, an agreement on a competing pipeline, linking Burgas and Alexandroupolis, was signed by Russia, Bulgaria and Greece.

Unlike the Trieste-Constanta declaration, the earlier deal is a proper plan of action, establishing a four-year deadline for pipeline construction.

According to analysts, as competition heats up on the energy market, the next months are expected to be more intense than ever.

Source: www.balkantimes.com
By Gabriela Preda for Southeast European Times - 09/04/07

Corruption down in Romania, but still an issue

The 2006 anti-corruption report on Romania shows increased and sustained activity on the part of authorities. But a higher number of defendants proves graft is still a reality.

Fighting corruption has been one of the top priorities of Romanian authorities, especially since graft was one of the main sectors in which EU monitored Romania closely before its January 1st, 2007, accession. However, this social scourge is far from being eradicated, a report released by the National Anti-corruption Department (DNA) shows.
"We can now see the struggle of the wretched system in its entire splendor," said President Traian Basescu, who attended the official release of the report. He called on prosecutors to make themselves immune to "media pressures" and to break the criminal relationships between politicians and businessmen.
"Your mission is to go to the very end, to the political factor that enables the protection of the high-profile crimes and that costs the Romanian citizen everyday," he added.

Last year was crucial for the implementation of the national anti-corruption reform -- in 2005, the EU imposed a special safeguard clause on Romania that permitted accession to be delayed a year if requirements in this field were not met.

According to the report, DNA prosecutors solved more than 1,000 files out of a total of 2,600 in 2006. Out of the 1,092 solved cases, 127 were sent to trial, representing 929 crimes.
Of the 360 defendants indicted, 149 had important, leading or control positions. "The whole damage inflicted amounts to more than 50m euros," said DNA chief prosecutor Daniel Morar.
Seven MPs, one minister, two state secretaries, two counsel presidents, one DNA chief-prosecutor prefect and two mayors were investigated and indicted in 2006. In most of these cases, the acts of corruption were linked to the prerogatives of the suspects' positions. In 2006, DNA also charged five magistrates, four judges and a prosecutor.

The number of customs officers indicted by the DNA last year increased eight times compared to 2005 -- 24 compared to 3, said Morar. As for police officers, 54 were investigated last year compared to 24 in 2005. Morar explained that a network of 20 police workers involved in illegal activities had been uncovered. Some of the officers were charged after obstructing justice during investigations by giving bribes or trafficking influence.

The chief-prosecutor stressed that such corruption cases can no longer be viewed as isolated incidents. Their frequency explains the high Corruption Perception Index in Romania, as defendants are part of the professional segments that the public interacts with daily.

Source: www.balkantimes.com
By Paul Ciocoiu for Southeast European Times in Bucharest - 09/04/07

Turkey's 2006 growth surpasses projections

Official statistics released on Monday showed that Turkey's economy grew by more than 6% last year, significantly surpassing earlier projections.
Official figures released on Monday (April 2nd) showed that Turkey's real GDP growth reached 6.1% in 2006, well above the 5% forecast for the fifth year since the devastating financial crisis of 2001.

"The cumulative rate of real GDP growth reached 40% in the past five years, marking it as the longest stretch of uninterrupted growth in Turkey's history," Bloomberg news agency quoted Serhan Cevik, an economist at London-based Morgan Stanley, as saying in a note to investors.

A report published by the Turkish Statistical Institute on Monday showed that GDP growth for the fourth quarter last year was 5.2% year on year, much higher than an earlier projection of 4.3% for the last three months of 2006 and 0.4% higher than the 4.8% rise in the third quarter.

Turkey's gross national product (GNP) -- the total wealth earned or brought into existence in a particular year by a country -- rose by 6% in 2006, to stand at almost $400 billion.
Describing Turkey's macroeconomic performance since 2001 as "impressive," an IMF statement last month attributed it to political stability, structural reforms, and favourable external conditions. "In particular, improvements in the bank supervisory framework, tax reform, and privatisation have strengthened the banking system, promoted foreign direct investment, and enhanced productivity."

A move by the Turkish Central Bank last spring to raise its overnight lending rates by 4.25 percentage points to 17.5% in response to a major outflow of capital from emerging markets in May and June fuelled expectations for a contraction in the latter half of 2006. But that did not materialise and the economy continued to grow.

"Everybody was expecting a contraction in the second half of last year after the crisis, but that didn't happen," Cevik said. "There has been a significant decoupling of financial volatility and economic performance in Turkey, which is part of being a normal economy."
However, the higher costs of borrowing have brought about a slowdown in consumer spending. A 24% increase in consumer credits in the three months preceding the rate increase was followed by a sharp decline, with banks posting an only 3% rise in the third quarter of last year. This was followed by a rebound in the final quarter, when total outstanding loans to consumers increased by 6.5%.

The fiscal discipline pursued by the government has translated into a reduction of the net public debt stock to 44.8% of GDP in 2006, the Turkish daily Zaman quoted Economy Minister Ali Babacan as saying at a press conference Monday in Ankara. The public debt to GDP ratio for the previous year was 51%, down from 91% in 2001.

Babacan also noted that the national income per capita grew from $2,598 in 2002 to $5,477 last year. As a result of a significant improvement in income distribution, only 0.01% of Turkey's population now lives on less than $1 a day, the minister said.
Prime Minister Recep Tayyip Erdogan, who is also the leader of the ruling Justice and Development Party (AKP), has promised to boost per capita national income to $10,000 by the end of the next five-year period.

"A secure and stable environment allowed for historic jumps in terms of figures in Turkey," a report Monday by the Turkish Press quoted Erdogan as saying. "Foreign investments exceeded $10 billion as of March, which shows that Turkey has become a promising economy for not only domestic investors but also for international ones who trust the economy's stability and resilience."

His statement came ahead of the country's May presidential election. Erdogan is widely expected to run for the post, subject to a vote by Parliament. If he wins the ballot, he will have to step down as AKP leader, potentially affecting the party's chances in the November parliamentary elections.

The AKP won a landslide victory in the November 2002 legislative elections, allowing it to run the country on its own for the past almost five years. It credits the victory with ushering in an era of political stability.

Source: www.balkantimes.com
(Zaman, The New Anatolian - 03/04/07; FT, Bloomberg, Turkish Press - 02/04/07)

REGION: Tirana Hosts Regional Conference on Fighting Corruption

Tirana hosted a conference on fighting corruption, a pervasive issue in the Balkans. Participants called for more co-operations among neighbors in the region.

A regional conference on the most effective practices and initiatives in fighting corruption was organized in Tirana by the OSCE and the Regional Secretariat of the Stability Pact at the beginning of April.

Experts in the region shared their experiences in order to help improve Albanian legislation pertaining to anti-corruption efforts, the head of the OSCE Presence in Albania, Ambassador Pavel Vacek, said.

"This conference is a positive step in the region's attempts to fight corruption with practices and instruments that are in line with UN conventions. It is important to strengthen co-operation at a regional level," he added.
According to Veselin Sukovic, executive secretary of the Stability Pact's anticorruption initiative, meting participants agreed on the need for co-operation among governments, political institutions and NGOs.

"The fight against corruption should be concentrated on specific cases, in order to see the results," Sukovic said.

USAID representative Bruce Kay said it is important not only to adopt measures, but to enforce them. "Fighting corruption takes a long time," he said. "Apart from drafting of better laws, implementation is especially important."
The two-day event brought together participants from Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Moldova, Romania, Serbia and Kosovo.
The Convention against Corruption was adopted by the UN General Assembly in October 2003, and came into force in December 2005. So far, it has been signed by 140 countries and ratified by 88.

Albania, which ratified the Convention in May 2006, ranked 111th out of 163 countries on the most recent Transparency International Corruption Perceptions Index.

"Despite slight progress, Albania remains in the zone of countries where corruption traps millions of people in poverty," Transparency International said, adding that the judicial system has a poor record when it comes to punishing violators.

Speaking at the Tirana conference, Deputy Prime Minister Gazmend Oketa insisted that the administration of Prime Minister Sali Berisha has been taking rapid action to address the problem.

The government has not only drafted anti-corruption policies but has sought to bolster the institutional instruments needed to ensure greater accountability, he said.

Source: www.setimes.com
By Erlis Selimaj for Southeast European Times in Tirana – 10/04/07

Business: Croatian-German railway companies sign agreement

The deal calls for collaboration in organization, project management, and employee training and equipment modernization. Croatian Railways and the German Railway Company sealed a three-year agreement on strategic co-operation, during a meeting in Zagreb on April 4th. The deal provides for collaboration in the organization of rail transport, project management, training of employees and equipment modernization.

Source: www.setimes.com

Business: Economic assistance suggested for Kosovo after status settlement

Kosovo will need 1.5 billion euros in aid to help reconstruct its economy and pay off Yugoslav-era debt, EU Enlargement Commissioner Olli Rehn said. Up to 1.5 billion euros in assistance might be needed for Kosovo during the first three years after the status settlement, EU Enlargement Commissioner Olli Rehn told the European Parliament in Brussels. He said the funding would mostly be needed for economic reconstruction and development and for covering Kosovo's share of the former Yugoslavia's debts.
Source: www.setimes.com

Declaration on construction of pan-European oil pipeline signed

Serbian Minister of Energy and Mining Radomir Naumov, EU Commissioner for Energy Andris Piebalgs and energy ministers of Romania, Croatia, Slovenia and Italy signed today in Zagreb a ministerial Declaration on the construction of pan-European oil pipeline Constanta-Pancevo-Trieste, whose value is estimated at approximately $2.6 billion.

Naumov said that the signing of this act gives a new strong impetus to region’s European integration.

According to him, the construction of this pipeline is of economic and energy importance both for countries of the region as well as for the whole region and the EU.

Naumov recalled that under the energy package of the European Commission considered by the EU Council, and under its 2007 to 2009 plan, European stability directly depends on stability of energy supply in an ecologically sustainable way.

He said that the signing of the interstate document in Zagreb added a new, huge step forward in the realization of this regional infrastructure object, not only because of the European Energy Commissioner’s support, but because of a clearly-defined determination of all signatories to cooperate and synchronize their efforts in order to facilitate and endorse the development of the Pan-European oil pipeline project.

Furthermore, the Declaration implies increased cooperation among countries the pipeline will go through, as well as other countries which have shown interest in the project, said Naumov.

Naumov stressed that through the interstate committee, countries which are hosts of the project will define joint mechanisms, procedures, protocols and activities for commercial realisation of the project, including the set-up of the company for the project’s development.

The Pan-European oil pipeline is increasingly gaining importance and from a regional project is now evolving into an important European infrastructure facility which will connect the oil-rich Caspian Sea and Russian regions with EU countries.

The 1,319 kilometre pipeline will traverse the territory of Romania, Serbia, Croatia, Slovenia and Italy and its construction would considerably disencumber the extremely heavy tanker traffic in the Bosporus and the Dardanelles, as well as in the Adriatic Sea. It is expected that the Pan-European oil pipeline be put into operation between 2011 and 2013. (Economy, April 3.)

Source: www.economy.co.yu

SERBIA: National strategy of economic development based on re-orientation to exports

Assistant Minister at the Sector for competitiveness and cooperation with international institutions at the Serbian Ministry of Economy Mihailo Vesovic said today that one of the main ideas of the National strategy of economic development to 2012 is reorientation of the Serbian economy to exports.

Speaking at a meeting of the Board for international economic relations of the Serbian Chamber of Commerce, Vesovic said that that is possible only with an adequate inflow of foreign direct investments.

He said that he does not believe that Serbia will maintain last year's level of investments which it obtained mainly through privatisation, stressing that Serbia above all needs greenfield investments that will spur employment.

Productivity started to grow owing to renovation of technology, but the unemployment rate of 21% is still very high, Vesovic said and added that that rate will not drop significantly by 2011 because there will be many layoffs in the public sector, and some 120,000 people will find jobs.

The development scenario envisages that the share of investment in GDP increases from last year's 20.5% to 25.8% in 2012, and of exports from 25.4% to 45%.

At the same time, it is necessary to reduce the foreign trade deficit from 20.4% to 6% and that public expenditures reduce their share in GDP from 38.2% to 35.3%, Vesovic said.

The Assistant Minister said that the Strategy is based on exports, with the stress on export of services and better use of preferential rates with the European Union, Russia and the free trade zone of southeastern Europe.

Source: www.economy.co.yu