H.E. Mr. Zakir HASHIMOV *

Over the past 15 years the BSEC has proved its value as forum of trust, understanding and cooperation. It has fostered significant progress in its Member States' policies on promoting democracy, market economy and open society and. through this, has supported the efforts towards a better positioning of our region in today's world, in which countries arc moving ever closer towards openness and economic integration.

Multi-plane development stream over the last 15 years brought about great chances tor countries of our region. We had founded the BSEC to solve our problems together. The organization expanded in Black Sea region, in last 8-10 years, prepared grounds for economic stability and started the process of member nations' integration with Europe.

As a member of BSEC family Azerbaijan contributed a lot to this organization, the main goals of Azerbaijan in the BSEC are to prove and strengthen the importance and role of this organization in the region, interlink the countries, implement all measures for integration to Europe, continue Azerbaijan's strategy on oil transportation to the West, enforce transit potential, build multilateral partnership mechanism with key countries and develop by protecting our strategic interests.

For the first time in May 6th 2003, our country assumed six months chairmanship in the BSEC. In order to achieve the targeted goals Azerbaijan designed and realized effective and outstanding chairmanship programme in the framework of the Organization.

Despite the fact that six months chairmanship-in-office came to the end in October. 2003 the Republic of Azerbaijan upon the request of the Member States demonstrated its constructive position and took up the responsibility to drive the organization for the consecutive six months period (October 2003 - April 2004).

Being a chairman-in-office, Azerbaijan has raised several issues which were of great importance and needed urgent solutions upon further development of the organization. Among them are incentives on sectoral partnership which were proposed by Azerbaijan based on comparative advantages to take concrete measures toward BSEC cooperation.

The issue of trade facilitation has also gained its significance during the chairmanship of Azerbaijan. It is noteworthy to mention that the draft agreement on facilitation of visa procedures for the businessmen and professional drivers of the region, elimination of non-tariff barriers were discussed at several meetings of BSEC Working Groups. The realisation of projects supported by Food and Agricultural Organization (FAO) in the framework of BSEC should be mentioned in this context as well. Recommendations on trade facilitation were prepared and presented to the consideration of the Member States.

There is no doubt that the establishment of Project Development Fund, with the purpose of financing of projects, is of great achievements of BSEC in 2004. The activities of the Fund, functioned by the volunteer donations of the BSEC Member States were stimulated during the chairmanship of Azerbaijan.

We must also recognize our assistance to laborious cooperative efforts in the framework of BSEC aimed at bringing about positive changes of development and prosperity to our increasingly important region.

The impressive account of activities and results that have been achieved so far as well as the realistic reflections of the organization's current situation and challenges ahead must be appreciated.

The period from 1992 to-date was remarkable with regard to new developments that will inevitably have profound implications on the processes in the region. Accession of Bulgaria and Romania to the EU, most recent Communication from the EC to the Council and European Parliament, implementation and planning of important regional projects in energy and transport that significantly alter economic landscape of the region and further enhance its geo-political importance and significance, -just to name the few.

New positive developments in BSEC, keeps the region, as well as the organization itself in the focus of attention of global economic policy. In this context the achievements in the sphere of transport and energy is to be emphasized.

The new developments in the sphere of cooperation in transport are estimable. Elaborated three Memoranda - "Memorandum of Understanding on Facilitation of Road Transport of Goods in the BSEC Region", "Memorandum of Understanding for the coordinated development of the Black Sea Ring Highway" and "Memorandum of Understanding on the Developments of the Motorways of the Sea at the BSEC Region" in the sphere of transport are an important development in the framework of BSEC that will facilitate regional trade and economic cooperation as well as might contribute to the development of regional networks linked to the Trans European Transport Networks (TEN-T) and serve as an integral part of the East-West transport corridor. This will also contribute to the diversification of transport routes, enhance the efficiency of East-West transport corridor and strengthen the competitive advantage of the region.

In this context, positive development towards the establishment of cooperation between BSEC and TRACECA must be also noted. Experience gained in TRACECA programme will be valuable for BSEC. This cooperation is becoming even more relevant in the context of the enhanced BSEC-EU interaction.

The Government of Azerbaijan believe that BSEC should play more important role in the development of cooperation in energy. As a crossroad of major regional energy pipelines linking East with West, the Black Sea region is emerging as an important pillar for energy security and stability, in particular for Europe. The energy projects that have been implemented with the participation of Turkey, Azerbaijan, Georgia and their national companies will change the economic situation in the region. As a result of sagacious policies country has followed the energy resources from the Azerbaijani part of the Caspian basin have been transported via Baku-Supsa and Baku-Novorossiysk pipelines. Then construction of the Baku-Tbilisi-Ceyhan oil pipeline and Baku-Tbilisi-Erzurum natural gas pipeline entirely changed the energy landscape in the region. Energy policies are strengthening the economic cooperation between the Caspian and Black Sea basins. Commissioning and operation of a number of large regional pipelines, such as the Caspian Pipeline Consortium and Baku-Tbilisi-Ceyhan (BTC) as well as "Blue Stream" and South-Caucasus Pipeline (SCP) (natural gas), just to name the few not only contributed to the development dynamics in the countries of the region, but significantly altered economic landscape of the whole wider Black Sea region that opened good prospects for cooperation in the region as well as for closer integration of this vast area into international economy. Furthermore a number of new important projects will be realized (such as Nabucco natural gas project). This trend will strengthen the Black Sea region as a strategically important East-West energy corridor.

These two areas are backbones for the development of cooperation within the BSEC as well as between BSEC and EU and deserve greater attention.

But main and important trend in the region is the establishment of the enhanced dialogue and close cooperation between BSEC and EU. It is hopeful that the incumbent EU Presidency- Germany, as well as other contributors, will not deny their assistance to establish such cooperation. And the BSEC will not stop its consistent and continuous efforts in this direction. We hope and believe that complementary to the bilateral cooperation under different instruments, development of regional framework of interaction between BSEC and EU will significantly contribute to the development of BSEC region as a cohesive economic area without new dividing lines part of wider European space. This is also essential to encourage BSEC countries remain committed in their process of reforms and development.

Wider Black Sea region is our foreign policy priority and we will support and contribute to positive developments and pledge our commitment as we steadily progress in our economic development.

Due to pursued development strategy and the process of reforms Azerbaijan achieved unprecedented in its history and the highest in the global economy rates of growth: 26.4% in 2005, 36% in 2006, 41% for first two month of 2007. During last three years more man 500.000 new jobs were created in non-oil sector, reducing poverty well below 20%. inflow into Azerbaijan of direct private investments for over a decade exceeded 30 billions of USD and the pace and volumes will continue to grow. Through the phased development of national energy reserves, expected inflow of revenues in the span of 10-15 years will exceed 200 billion USD.

One of the objectives of national strategy is to develop Azerbaijan as a regional hub with powerful and modern infrastructure capable of serving intense trade flows between Asia and Europe.

We have embarked on a comprehensive multibillion programme of upgrading and developing of modern transport infrastructure to be able to handle increasing traffic of goods and general cargo between Europe and Asia. Development of the national transport infrastructure is an integral part of the East-West transport corridor. Recently, in Tbilisi, Heads of State and Government of Participating states Turkey, Georgia and Azerbaijan ha-.c launched the construction of Kars-Akhalkalaki-Tbilisi-Baku railway link as an important part of this corridor.

We have succeeded in the development of the diverse energy infrastructure capable both to support the development and export of national hydrocarbon resources as well as the transit of the resources of Central Asian partners to international markets. We completed the construction and commissioned two important regional pipelines - BTC and SCP core elements of the East-West Energy corridor.

Azerbaijan is hosting Regional Dialogues with the EU on transport anil energy given the importance of these two areas of cooperation for the region and beyond it.

Azerbaijan has proved its credibility as a pioneer and champion for many positive and significant developments in the region as well as a reliable partner. There are many examples of successful cooperation in the region that unite and integrate countries, bring development and stability, thus demonstrating what we can achieve together, united by common goals. At the same time, continuing occupation by the Republic of Armenia of the 20% of our territory makes cooperation with this country impossible and unacceptable. This issue is not new and BSEC Member States are well informed on the matter.

We consider development of cooperation in the Wider Black Sea region as our foreign policy priority. We also attach importance to BSEC so far the only full-fledged regional organization, as useful and comprehensive regional framework for the development of mutually beneficial cooperation.

We support the ongoing process of reforms and restructuring in BSEC to enhance its efficiency and effectiveness. We would urge to continue with the process of improvement and call for not only widening but also deepening of reforms. We need to streamline and simplify the whole process but not create new bureaucratic procedures.

We certainly need more coordinated and better concerted efforts among BSEC Related Bodies. We should consider them altogether as one organizational set up created with one purpose and they should serve one objective.

15 years have been valuable learning experience of our joint efforts to transform this area into zone of peace, stability and cooperation. In principle we acknowledge that this was useful and to the extent successful phase of BSEC evolution into a lull-fledged regional organization with developed institutional infrastructure, instruments and mechanisms of cooperation.

At the same time, talking into consideration of developments and changes in the region, we have to recognize that we have reached the juncture where we have to make a right move ahead with more resolute and dedicated efforts to charge the organization with new common and shared vision, improve organizational setup, streamline and simplify procedures, support it with adequate resources and last but not least - with strong political will and commitment.

We hope that a strong and consolidated BSEC will till a vacuum in the region and be able to play a prominent role in the new economic order and to contribute to international peace and stability. And we believe that BSEC is one of the important chains of the integrate world economy and its importance in the global economy will continue to increase in the future.

* Ambassador Extraordinary and Plenipotentiary of the Republic of Azerbaijan to the Republic of Turkey