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Eighth Ministerial Council of the Organisation For Security And Co-operation in Europe

Vienna, November 27-29 2000

STATEMENT BY Ms. D. HÜBNER, EXECUTIVE SECRETARY OF  THE UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE

THE ECONOMIC DIMENSION &CONFLICT PREVENTION

 Introduction

Looking back over the last ten years, the transition economies of central and Eastern Europe and the CIS have made tremendous progress in passing reforms and developing freedom. However, inter-ethnic conflicts have ravaged many regions in Europe. As a result we must strengthen our resolve to ensure that there is never a repetition. Tensions and inter-ethic rivalries are inevitable in a region facing massive change and economic adjustment. Violence, however, is not inevitable and preventing tensions from generating into conflicts and destruction of lives and property is a matter of critical importance.

The United Nations Economic Commission for Europe (UN/ECE) has worked closely with the economic dimension of the OSCE. We are committed to strengthening the role of the economic dimension within OSCE. The economic dimension is one of the components of the OSCE’s comprehensive approach to security, and the necessary complement of the human dimension. It has grown more prominent each year under excellent Presidencies and with the strong support of the OSCE secretariat. Faced with instability still existing in our region, however, there is now a compelling urgency to achieve even more tangible results. We are confident that with its expertise in transition issues, its common membership with that of OSCE and its intergovernmental machinery for the elaboration of norms, standards and conventions, the UN/ECE has an important role in the implementation of the European Security Charter adopted in 1999 in Istanbul.

Moreover, the work of the UN/ECE helps in conflict prevention. For example, the UN/ECE Water Convention and the Convention on Environmental Impact Assessment in a Trans-boundary Context are important instruments for avoiding disputes and their ratification and implementation can improve security in our region. The Århus Convention in addition, fosters public participation in environmental matters and sets benchmarks for good governance more broadly. For instance, participation of citizens and interest groups in policy making at an early stage is, not only a democratic requirement, but an essential element in ensuring the quality and applicability of government decisions. The UN/ECE finally plays an active role in developing partnerships between the public and private sectors in delivery of essential services, which involve consumers and local communities. Such initiatives are important in contributing to securing peace and stability in the region in which the UN/ECE is involved.

In the light of this long-term cooperation with the OSCE we are committed to developing early warning systems and conflict prevention and evaluating how these can be applied effectively.

Relationship between the economic dimension and regional conflict

In our annual Economic Surveys, the UN/ECE carefully monitors the progress of countries in their transition to market economies. While some transition economies have embarked on a path of sustained recovery, others are still struggling with the transformational recession. There is an increasing divergence in economic performance between countries, rising social costs (unemployment, declining health) and a widening gap within countries between those who have gained from transition and those who have not. Indeed of all the transition countries in no more than 7 or 8 have the citizens received concrete benefits.

Poor economic performance and transition problems are not by themselves causes of insecurity and conflict. The relationship between the economic dimension and insecurity is rather complex. No linear relationship exists between the two. Generally, it does not help to identify those economic situations, which could lead to, or contribute to specific conflicts, in isolation from the political, environmental, social and ethnic dimension.

One can identify several aspects in conflicts which bears out its multidimensional character. First, discrimination in the labour market is often a first sign of an impending conflict. A prime example of how discrimination in the labour market led to conflict developed in southeast Europe in the early 1990s. During this time various ethnic groups lost jobs or were prevented from entering certain professional and management occupations because of their ethnic affiliation. Secondly, difficulties in the access to economic resources (land, water, credit) are a contributor to rising tensions. For example, in the Central Asian republics access to water has become an important issue as a result of depleted supplies of water caused by poor economic management that has severely affected the livelihoods of communities. The improper management of these resources by states upstream can escalate tensions and create political instability. Third, institutional weakness and lack of transparency which is evident in many transition economies, holds back the development of appropriate oversight and regulation that would mitigate and resolve conflicts. Compounding this situation is the lack of an effective legal system and a court systems for solving disputes. Fourth, conflicts arising over access to resources often can reflect the failure of economic policies. More effective economic policies, for example, which support SMEs and remove the restrictions on the private sector, would increase the available wealth to be shared between various groups, and generate more opportunities, which would result in defusing tensions.

Experience has shown that tensions arising from discrimination and access to resources can be managed in ways, which prevent them from escalating into outright violence. The Eighth Ministerial Council Meeting of the OSCE will examine the proposal for rapid response mechanisms being put in place by the United Nations, the European Union and the OSCE. The development of prevention is also critically important in the economic dimension and a number of proposals can be suggested which can reinforce the states’ abilities to foresee threats and deal with them effectively.

Improved monitoring in the economic dimension to preempt conflicts

In the experience of conflict in the Balkans, economic insecurity has been a major factor fomenting problems: Early warning to impending conflict, as mentioned above, has been given in several forms including ethnic discrimination in the labour market and unequal access by ethnic groups to resources (land, water, credit). The UN/ECE in cooperation with the OSCE is ready to invite representatives from the ILO, who have a program on discrimination in the work place. This joint program would monitor discrimination of ethnic groups and would to report to the OSCE annual Economic Forum on areas of concern.

However such monitoring will remain academic if it does not lead to mobilization of effort to check the problems at the earliest possible stage. OSCE might consider how such monitoring can lead to actions when necessary. The UN/ECE, for its part, will continue to survey the economic commitments contained in various OSCE economic declarations such as the Bonn document of 1990. However, these declarations cover a different period and do not discuss the treatment of ethnic groups or their rights to security and access to resources.

Training in conflict prevention in the economic dimension

The UN/ECE is ready to organize training of government officials in order to sensitize them on the security risks that can arise from economic distortions and on effectively preventing those becoming triggers for civil conflicts. The UN has now established new training programs based on international experience where officials can learn to apply the best practical measures. As a first step, we suggest training the OSCE delegates along with OSCE field missions in the UN’s training center in Turin. Following this training, the OSCE officials can identify the appropriate government officials in their respective countries of operation for training, using the same approaches and models. The strongest side of this particular training program is that it allows students to acquire an effective interdisciplinary approach and a team-work experience for identifying emerging trends that are potentially dangerous, and then identifies the remedial means of intervention available at the national and/or international level. Amongst the latter are, for example, development intervention, which include a wide range of options, from economic diversification to institutional change. The training will develop case-studies based on concrete experiences in these countries in the economic and environmental areas.

We would like to accord in this regard special priority to building economic cooperation in regions of Europe where conflict has occurred or where tensions can develop. The UN/ECE will continue to support CEI and BSEC, and in addition continue to contribute to SECI and further develop SPECA. Our objective is a lasting settlement in south east Europe. For the central Asian republics, we want to assist in developing concrete programs and comprehensive strategies for development. We consider that a training programme for officials in these countries would be a useful basis for stimulating cooperation.

The UN/ECE is also seeking partners who are interested in supporting this new and worthwhile endeavor.

Involvement of the private sector and civil society

The private sector has become an influential player in the world of today, including conflict-prone countries. It has a critical role to play in improving the stability of the region. It can improve corporate governance, it can contribute to the development of strong institutions and enforceable laws. Measures to make the private sector stronger in the transition economies are conducive to economic growth and structural change. They also contribute to conflict prevention and stability. Domestic companies and multinationals can no longer afford to ignore causes and costs of conflicts. The UN/ECE has established public-private partnerships in several areas. In December 2000, it will create a Public-Private Partnership Alliance between governments, businesses, regional development banks and other international bodies that support the development of dialogue between governments and businesses in south east Europe. ECE can thus provide its own framework to OSCE for joint activities that can allow the private sector to play a real role in conflict prevention and resolution.

Conclusions

The lessons of the 1990s have demonstrated the need for more efforts on conflict prevention. Most conflicts are multidimensional, and comprise a complex interplay of interrelated economic, ethnic, religious, social and political factors. Prevention will only be effective if all of these multidimensional aspects are considered. Developing the skills and the capacity to assess the multidimensional character of conflicts and the managing of tensions on the one hand and better monitoring on the other, are two important ways to help conflict prevention in the region.

In conclusion, cooperation between the UN/ECE and OSCE has grown over the years and has worked well. Both our organizations must renew their efforts to reach out to new challenges to be innovative; to generate new resources and to achieve sustainable results. We look forward to working with you in building a strong and productive partnership.