Economic Diplomacy and Connectivity: The Continuing Contribution of the Organization for Security and Co-operation in Europe (OSCE)

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by guest writer Professor Stefan Wolff

Economic connectivity – reducing barriers to economic exchange and promoting economic ties – is often considered as an instrument to reduce confrontation, build confidence, generate synergies, and enhance co-operation between countries.

With a view to further exploring both the opportunities and challenges associated with economic connectivity, the Office of the Co-ordinator of OSCE Economic and Environmental Activities (OCEEA) and the Department of Political Science and International Studies at the University of Birmingham, together with representatives of the private sector, think-tanks, other international partners and OSCE structures, held a workshop on 25th June 2018 on Economic Diplomacy and Connectivity: the role of the OSCE. The main objectives of the event were to develop a better understanding of the role of the OSCE in promoting economic connectivity and thus enhancing relations between OSCE participating States; to facilitate an in-depth discussion on the opportunities and challenges in enhancing economic connectivity particularly in the fields of trade, energy and digitalisation; and to identify concrete mechanisms and tools aimed at facilitating Economic Diplomacy and Connectivity to be made available to OSCE participating States. The workshop was hosted by the Secretariat of the Energy Community in Vienna.

In 2014, the Swiss Chairmanship of the OSCE set as one of its main priorities the promotion of dialogue and the prevention of further confrontation between participating States by establishing tailored economic confidence-building measures. The German Chairmanship in 2016 emphasised the role of the private sector in trade connectivity, to highlight the benefits of interconnected economies. In parallel, OSCE participating States in their Decision No. 4/16 on “Strengthening Good Governance and Promoting Connectivity” agreed that “connectivity through transport and trade facilitation, including through measures at different levels of government, can enhance economic co-operation that is mutually beneficial and contribute to good-neighbourly relations, confidence-building and trust in the OSCE area”.

The 2017 Austrian Chairmanship further sought to promote the idea of greater cooperation between regional integration processes. Similarly, the current Italian Chairmanship is focusing on another area promoting connectivity, namely digitalisation. For the 2019 Slovak chairmanship, participating States have recently chosen to focus their deliberations in the second dimension on “Promoting economic progress and security in the OSCE area through energy co-operation, new technologies, good governance and connectivity in the digital era”.

Economic connectivity has historically been one of the main priorities of the OSCE in its second economic and environmental dimension. Within the organization, the Office of the Co-ordinator of OSCE Economic and Environmental Activities (OCEEA) plays a key role in turning the 2016 vision of enhanced connectivity into reality.

The OSCE and its participating States can play a critical role in generating and consolidating knowledge about connectivity. This could be a menu of options—a ‘tool box’—from which participating States could choose in their own efforts to enhance economic connectivity bilaterally or multilaterally. Thus, in July 2017, the OCEEA launched an extra-budgetary project “Promoting economic connectivity in the OSCE” and, benefiting from financial support of Austria, Germany and Switzerland, launched activities to assist Belarus, Kazakhstan, and the Republic of Moldova in establishing/enhancing National Trade Facilitation Committees or similar bodies to promote trade and commerce. The OSCE will thus, among other things, continue to act as an international platform for knowledge generation and exchange, mediation, and dialogue on economic connectivity matters and offer its good offices for horizontal and vertical co-ordination between participating States aimed at further promoting and enhancing economic connectivity within the OSCE region.

Economic connectivity may have both positive and negative facets (the so-called “dark side” of connectivity), as it implies an interdependence between countries that can be used as a tool to either enhance relations or exercise pressure. In that sense, it is important to evaluate carefully both its costs and benefits.

A follow-up meeting has been scheduled for September 2018 at the University of Birmingham, which will focus, among other things, on the practical experiences of the OSCE and other regional and international organizations in promoting and enhancing economic connectivity. This will include an examination of the role that connectivity can play at the sub-regional level (e.g., in the Western Balkans, the South Caucasus, and Central Asia) and in easing tensions across contested borders.

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