Presentation of Igor Burakovsky at NATO Parliamentary Assembly 95th Rose-Roth Seminar In Cooperation with the Verkhovna Rada of Ukraine Towards a Secure and Stable Ukraine and Black Sea Region. Session “Supporting Growth in the Black Sea Region” Kyiv, Ukraine, 3-5 July 2017

1. NATO Parliamentary Assembly 95th Rose-Roth Seminar
In Cooperation with the Verkhovna Rada of Ukraine
Towards a Secure and Stable Ukraine and Black Sea Region
Session “Supporting Growth in the Black Sea Region”
Ukraine in the Black Sea region: economic interests
Igor Burakovsky,
Institute for Economic Research and Policy Consulting
(Kiev, Ukraine)
Kyiv, Ukraine
3-5 July 2017

2. 2
1. Black Sea countries are members to different international and
regional political and economic organizations: special unified
regulatory regime in Black Sea region is absent.
2. 9 out 12 Black Sea Economic Cooperation Council are affiliated
with EU (EU members, EU candidates or parties to AA with EU):
EU regulations plays critical role in determining regulatory
environment in the region.
3. Currently economic cooperation with Russia is affected by the
sanctions imposed by EU to punish Russia for annexation of
Crimea and war in the eastern part of Ukraine.
4. The role of BSEC and its institutions has yet to be clarified and
increased.
5. There is no any country-world economic leader in the region and
“local” regional leader has yet to emerge.
Black Sea region: institutional
landscape

3. 3
6. Regional (political and economic) identity requires careful
reconsideration taking into account changes happened from
the time when the Black Sea Economic Cooperation was
launched.
7. Rules of economic game (regulatory regimes) have been
traditionally designed beyond the region (WTO, EU etc).
8. BSEC has clear potential for development and
implementation of the projects in the region than for rule-
making. But at the moment BSEC countries do not speak in
one voice.
9. BSEC countries have to deal with different political and
economic challenges and these diverse agendas affect their
motivation to cooperate in the region.
Black Sea region: institutional
landscape

4. 4
№
№
Country
Security
status
WTO EU/CIS
Black Sea
Economic
Cooperation
Black Sea
Trade and
Development
Bank
GUAM
1. Bulgaria NATO member
WTO
member
EU member BSEC member BSTDB member
2. Georgia
Acquiring NATO
membership
WTO
member
Association
Agreement with
EU
BSEC member BSTDB member
GUAM, GUAM
Free Trade
Agreement
3. Romania NATO member
WTO
member
EU member BSEC member BSTDB member
4. Moldova
Constitutional
neutrality,
NATO Individual
Partnership Action
Plan
WTO
member
Association
Agreement with
EU
BSEC member BSTDB member
5. Russia
Collective Security
Treaty Organization
WTO
member
CIS member BSEC member BSTDB member
6. Turkey NATO member
WTO
Member
EU Customs
Union member
BSEC member BSTDB member
Observer to
GUAM
7. Ukraine
Charter on
Distinctive
Partnership with
NATO
WTO
member
Association
Agreement with
EU
BSEC member BSTDB member
GUAM, GUAM
Free Trade
Agreement
Economic cooperation in the Black sea region:
narrow dimension

5. 5
## Country NATO WTO EU/CIS
Black Sea
Economic
Cooperation
Black Sea Trade
and Development
Bank
GUAM
1. Albania NATO member
WTO
Member
EU candidate BSEC member BSTDB member
2. Armenia
Collective
Security Treaty
Organization
WTO
member
Member of
Eurasian
economic union
BSEC member BSTDB member
GUAM, GUAM
Free Trade
Agreement
3. Azerbaijan
Individual
Partnership
Action Plan with
NATO
WTO
Member
CIS member,
Partnership and
Cooperation
Agreement with
EU
BSEC member BSTDB member
GUAM, GUAM
Free Trade
Agreement
4. Greece NATO member
WTO
Member
EU member BSEC member BSTDB member
5. Serbia
Neutrality , but
links with NATO
WTO
accession in
progress
EU candidate BSEC member BSTDB member
Economic cooperation in the Black sea region:
wider dimension

6. 6Russia: the most contentious player in the
region
Russia
Moldova
EU AA,
Transdnistria
Romania
NATO, EU
sanctions,
Moldova (TD)
NATO, Syria,
Ukraine
Turkey
Annexation of
Crimea, war
in the East
Ukraine
NAT0, EU
sanctions,
South Stream
Bulgaria
Georgia
EU AA,
Abkhazia,
South Osettia

7. 7
2011 2012 2013 2014 2015 2016
Export, total, % 100 100 100 100 100 100
Bulgaria, m USD 749 567 585 547 418 416
% 1.2 0.9 1.0 1.1 1.2 1.3
Georgia, m USD 651 535 532 489 399 390
% 1.1 0.8 0.9 1.0 1.1 1.2
Moldova, m USD 865 813 893 736 518 474
% 1.4 1.3 1.5 1.5 1.5 1.4
Romania, m USD 822 428 427 459 468 533
% 1.3 0.7 0.7 0.9 1.3 1.6
Russia, m USD 16,262 15,686 13,483 8,696 4,200 3,069
% 26.2 24.7 23.2 17.6 12.1 9.3
Turkey, m USD 3,718 3,663 3,778 3,543 2,750 2,033
% 6.0 5.8 6.5 7.2 7.9 6.2
Total BS countries,
%
37.2 34.2 33.8 29.3 25.1 21.0
Ukraine: export to Black Sea countries (goods)
Source: National Bank of Ukraine, statistics does not cover occupied Crimea, Sevastopol since 2014.

8. 8
Ukraine: import from Black Sea (goods)
2011 2012 2013 2014 2015 2016
(%) 100 100 100 100 100 100
Bulgaria, m USD 269 280 274 202 252 171
% 0.3 0.3 0.4 0.4 0.7 0.5
Georgia, mn USD, 141* 177* 218* 154* 62* 66*
% 0,2 0,2 0,3 0,3 0,2 0,2
Moldova, mn USD, 130* 122* 102* 62* 41* 48*
% 0,2 0,2 0,1 0,1 0,1 0,1
Romania, mn USD, 1,081 891 864 789 290 315
% 1.4 1.1 1.2 1.5 0.8 0.9
Russia, mn USD, 26,762 26,875 22,583 12,394 7,420 5,109
% 34.4 33.1 30.9 24.2 21.1 13.9
Turkey, mn USD, 1,431 1,885 1,809 1,248 815 1,055
% 1.8 2.3 2.5 2.4 2.3 2.9
Total BS countries 38.3
37.15
35.4 31.6 25.2 18.5
Source: National Bank of Ukraine, *State Statistical Service of Ukraine, statistics does not cover
occupied Crimea, Sevastopol since 2014

9. 9
Ukraine-Black Sea countries trade regime:
free trade dominates
Deep and Comprehensive Free Trade
Area (EU-Ukraine Association
Agreement ): Bulgaria, Romania,
EU GSP
CIS Free Trade Agreement: Moldova,
Russia (suspended)
Bilateral Free Trade Agreements:
Turkey (under negotiations),
Georgia, Turkey GSP
GUAM Free Trade Agreement:
Georgia, Moldova
Ukraine's trade regime with
Black Sea countries

10. 10
1. Cooperation in Black Sea region can be important but as an
additional factor of Ukraine’s economic growth.
2. Ukraine enjoys free trade regime in the BSEC region, except
Albania, Russia, Serbia and Turkey.
3. Perspectives of economic cooperation critically depend upon
Ukraine and partner countries economic performance and trade
facilitation measures.
4. Ukraine’s current interests: maintaining sanctions against Russia
(Crimea) as such and joint efforts to prevent violation of sanctions
regime.
5. DFCTA implementation is a key prerequisite to improve
regulatory environment in Ukraine.
6. Customs (border management) reform is a pressing priority fro
Ukraine.
7. Gas transit: bypass routes challenge Ukraine’s gas transit position,
EU positon is important.
Ukraine in the Black Sea region:
15 issues

11. 11
8. Key element of cooperation: regional and sub-regional projects.
9. Black Sea as regional alternative of energy resources: exploring
shale gas potential and other options.
10. Kerchensky bridge presents political, economic and ecological
challenge for Ukraine and region as such.
11. Ukraine (as well as other Black sea countries) dramatically needs
large-scale FDI to radically improve its economic performance in
medium and long-term perspective.
12. Ukraine is interested in strengthening cooperation aimed at
solving environmental problems in the region (waste water
treatment etc.)
13. Ukraine is interested in developing cooperation in the field of
transportation and transit.
14. Ukraine is interested in developing cultural, educational, tourist
and recreation potential of the region.
15. Increasing regional attractiveness for investors.
Ukraine in the Black Sea region

12. Дякую за увагу!
Thanks for Your attention!
@IER_Kyivwww.ier.com.ua
Institute for Economic Research and Policy Consulting
вул. Рейтарська 8/5-А, Київ 01030, Україна
тел: +38-044-278-6360
e-mail: institute@ier.kiev.ua
Reytarska str. 8/5-A, Kiev 01030, Ukraine
tel : +38-044-278-6360
e-mail: institute@ier.kiev.ua
IER.Kyiv