Economic Connectivity and Diplomacy

A new report by Stefan Wolff, Professor of International Security at the University of Birmingham, assesses the unique role played by the Organization for Security and Cooperation in Europe (OSCE) in promoting and enhancing economic connectivity within and across its participating states.

The report argues that connectivity is crucial to inclusive economic development in the OSCE area. Long-term and sustainable investment in transport networks, and communication and energy infrastructures has the potential to contribute to reducing regional tensions and to participating States’ future security and stability.

While the term ‘economic connectivity’ is more recent, the principle itself has been an established goal of the OSCE since the 1975 Helsinki Final Act when signatories expressed the conviction ‘that their efforts to develop co-operation in the fields of trade, industry, science and technology, the environment and other areas of economic activity contribute to the reinforcement of peace and security in Europe and in the world as a whole’ and ‘that co-operation in these fields would promote economic and social progress and the improvement of the conditions of life’.

A successful track record

The OSCE has engaged with the Western Balkans for more than two decades, working in partnership with regional and international organisations on political stabilisation, the restoration of trade links, and closer integration with the EU.

In Central Asia, the OSCE has a well-established presence in all five countries in the region. Through a combination of support for the management of free economic zones, harmonisation of customs regulations, and training for entrepreneurs, both on a national and regional level, the OSCE has played an important role in enhancing economic development in individual countries in the region and promoting higher levels of connectivity between them.

In Moldova, the OSCE has facilitated discussions on a settlement of the conflict in the Transdniestrian region since 1993. While its mandate does not specifically cover economic activities, the OSCE Mission in Moldova has contributed significantly to facilitating projects that have enhanced economic connectivity between communities and businesses on both sides of the River Nistru/Dniester, increased confidence between the sides, and dramatically reduced the risk of renewed conflict.

Future potential

In a crowded international arena, the OSCE has the experience and standing to have a real and tangible impact on promoting better relations through economic diplomacy. The report proposes that the OSCE could lead the way in generating and sharing best practice, facilitating exchanges, and offering mediation and dialogue on issues of improving connectivity within the region. Such an endeavour should extend engagement to new partners from the private sector, civil society, and academia, providing a flexible and responsive mechanism to maximise emerging opportunities.

This would also lay the groundwork for involving China in the discussion on economic connectivity. A closer relationship would be a vital step to capitalise on important synergies, avoid misunderstandings, and promote confidence as China becomes a more important economic and political actor in the OSCE area.

Report launch

A launch event for the report will be held on Thursday 6th December 2018 as part of the OSCE Ministerial Council in Milan. The keynote speakers are H.E. Kairat Abdrakhmanov, Minister of Foreign Affairs of the Republic of Kazakhstan, and H.E. Guglielmo Picchi, Deputy Minister of Foreign Affairs and International Cooperation, Italian OSCE 2018 Chairmanship.

Notes:

  • The full report can be downloaded here.
  • The author of the report is Stefan Wolff, Professor of International Security and a specialist in international conflict management and post-conflict state-building. Since 2016, Professor Wolff has worked with the OSCE on economic and environmental confidence-building measures, including in areas of protracted conflict, producing two earlier reports on “Protracted Conflicts in the OSCE Area: Innovative Approaches for Co-operation in the Conflict Zones” and on “OSCE Confidence Building in the Economic and Environmental Dimension: Current Opportunities and Constraints”.
  • The idea of a comprehensive report on economic diplomacy and economic connectivity was borne out of discussions with the Economic Governance Unit within the Office of the Co-ordinator of OSCE Economic and Environmental Activities with Andrei Muntean, Brigitte Krech, Zukhra Bektepova, and Jonas Graetz.
  • The report was realised thanks to the support of the University of Birmingham, the Economic and Social Research Council of the UK, the Office of the Co-ordinator of OSCE Economic and Environmental Activities, and many experts from across the OSCE region who contributed to two workshops in Vienna (at the offices of the Energy Community) and the University of Birmingham (at the Institute for Conflict, Cooperation, and Security).