Trade and investment ties among Eurasian countries vary, but seldom match their potential. Some neighbors trade with one another little more than if they were on different continents. Similar economic structures and a lack of comparative advantages within the region are one factor, but so are local rigidities, the removal of which in other parts of the world has unleashed trading potential. How important as disincentives to trade are travel and visa issues, customs procedures and processing times, differences in industrial, product or other standards, varying protections provided to investors, etc.? How does the business sector evaluate the regional work being done on these issues, for example, by the Black Sea Economic Cooperation organization, and what would be its priorities for improvements? Are there best practices that may be relevant – e.g., the Southeast Europe Cooperation Initiative?

CHAIR: Dr. Milan Parivodić, Chairman, Foreign Investor Services


  • Dr. Otaviano Canuto, Vice President, Poverty Reduction and Economic Management Network (PREM), The World Bank
  • Mr. Vasile Iuga, Country Managing Director, PricewaterhouseCoopers (PwC)
  • Mr. Daniel R. Matthews, Managing Partner (Baku), Baker & McKenzie LLP; President, American Chamber of Commerce in Azerbaijan
  • Dr. Güven Sak, Managing Director, Economic Policy Research Foundation of Turkey (TEPAV)


Location: Istanbul, Turkey

Time: 10:00 a.m.
Date: Friday, November 18, 2011

Transcript by
Federal News Service
Washington, D.C.

MILAN PARIVODIC: (Off mic) – then it affects both the region and – (off mic) – financing from outside the region.

So we are looking at these topics from the perspective from Mr. Otaviano Canuto, a senior vice president of the World Bank; Mr. Vasile Iuga, who is the country managing partner at PricewaterhouseCoopers of Romania, Mr. Daniel Matthews, who is the managing partner of the Baku office of Baker & McKenzie; and Mr. Guven Sak, the managing director of the Economic Policy Research Foundation of Turkey, a very prominent Turkish economist with a large contribution to the success of the Turkish economy.

So I would start with a question to Mr. Canuto, because he represents the World Bank, the big picture, a viewpoint for the entire world. So how does the World Bank see this region, the Black Sea Region, in terms of the qualities of the business environment?

OTAVIANO CANUTO: The bank views, as one of its main tools to analyze the business environment economics the so-called doing business indicators, which is a tool that’s actually to compare the business environment of 178 countries for a series of aspects of the – (off mic) – environment, really, how much does it cost to start a business, to grow the business, how hard it is to employ people, how tough it is to enforce – (inaudible) – and protect investors in that country; how hard it is and how possible it is to trade across borders and pay taxes and get credit and so forth. And we’ve been doing this estimate already for eight years. And the fact of the matter is that we learned a lot about the specificity of doing business in these several regions of the world.

In the case of the Eastern Europe and Central Asia – (off mic) – region, then I will say something about the Black Sea region – we have noticed in the last few years some improvements in research for establishing appropriate – (off mic) – procedures. This has been the case in the region, but not only here but also in parts of the developing world, because with the – (off mic) – countries have to prepare themselves – (off mic) – process of bankruptcy and dealing with insolvency.

But overall, we have very much different performance here, coming down now to the Black Sea Region. For instance, overall, when one takes the overall doing business ranking that we do, Georgia tops the ranking. Georgia is in 12th position in the ranking. And the good novelty this year has been Macedonia, who has made it to the 14th – (off mic) – on the other hand, you have the other extreme. Uzbekistan and Ukraine rank over 145.

MR. PARIVODIC: And where is Turkey?

MR. CANUTO: Turkey is in the middle.

MR. PARIVODIC: In the middle?

MR. CANUTO: Yeah. One interesting thing is the effort that Kazakhstan has made.

MR. PARIVODIC: The doing business report, does that report on the speed of reforms or on the quality of environment? It does both, basically.

MR. CANUTO: Both, both. It does a ranking, which establishes the position of the countries. But also, it highlights those countries that have made an effort to reform. That’s the case of Kazakhstan, for instance. Kazakhstan does not have, directly, a good standing in the ranking, particularly in areas such as trading across borders. But on the other hand, certain aspects of the business environment has actually made a huge effort this year to improve.

MR. PARIVODIC: The speed of reform ranking is – (off mic) – compared to the overall ranking, which would be the –

MR. CANUTO: Yeah, in that sense; that’s right. And we like to highlight this because, of course, the efforts have to be highlighted, particularly when a country is coming from that position in the ranking.

MR. PARIVODIC: I would like to ask Mr. Iuga, what are the suggestions which the private sector and, how can I say, reputable institutions, think tanks, make on the development of this region, the development of the business environment in this region?

VASILE IUGA: Thank you, Mr. Parivodic.

I would like to add a few comments, given the fact that I’m responsible – (off mic) – for Southeast Europe and I’m also a member of the management board within – (off mic) – Europe and we have – (off mic) – in 39 countries, and if we refer to the – (inaudible) – 30 countries. I think that what, forming from what Mr. Canuto just said, the Black Sea region is amazingly diverse in terms of history, culture, economic, legal systems. The region is strategically important. Many stakeholders try to shape it in different ways.

There is diversity. There are differences, but there are also similarities. I think that Mr. Canuto referred to the World Bank doing business data. I would like to add a few more comments. For instance, in 2010, almost all countries in the Black Sea region, with the exception of Greece, had experienced growth in the GDP, which is good.

The level of the foreign debt as a percentage of the GDP is relatively small. For instance, in Turkey and Russia it’s around 10 percent. Of course, this is more than 140 percent, in the case of Greece. And in terms of doing business now they rank from 12 to 150. But the good news is that all of them improved their position in the rankings in the doing business rank.

We can help – (off mic) – called paying taxes, which is part of doing business. And most countries in the Black Sea region improved rankings between 2009 and 2011. (Off mic) – is critical for the development of Eurasia. And this grew to – (inaudible) – $40 billion U.S. dollars in 2008 and then collapsed to around $70 billion dollars in one year. So the impression I have, in terms of – (off mic). What is interesting is that we did not – (inaudible).

What is important, what is interesting, I would say is that inter-regional trade growth in the Black Sea region is small. It’s staying around 50 percent of the foreign trade of the countries in the region and this was stable as a percentage of their total foreign trade during ’99 and 2009, which confirms the countries aren’t fully connected from a business perspective.


MR. IUGA: Well, we can understand there are differences, in the legal framework, in the –

MR. PARIVODIC: Is it a problem that they do not have – (off mic) –

MR. IUGA: Probably not. Probably not.

I’ll come in a second to what you just asked. We see also a number of influencers and shapers of the region. The WTO, EU is one of them, the OECD, the USAID, the World Bank, the – (off mic) – the EIB, and all these are active institution building and improvements in the business environment. Also, a significant influencer is the private sector, because we have in all these countries business associations, which play an active role in the dialogue of the governments.

MR. PARIVODIC: Do the governments listen?

MR. IUGA: Well, it’s a mixed picture, but we also have a mixed picture in terms of institutions which are active in the region helping, helping, improving the business environment. Like you mentioned, some of the organizations that you know, you are familiar with, which are present in the region: the Black Sea Economic Cooperation, the UNDP Black Sea Trade and Investment Promotion Program, the Black Sea Synergy, the Eastern Partnership, which is part of European Neighborhood program – (off mic) – Eastern Europe Cooperation (initiative ?).

We’ve already got – (off mic) – so that a common and unified system would make significant benefits. The question is, is there a one-size-fits-all approach? Probably not. How can we the ultimate goal achieve? What should be the speed? And how far this should go?

Now, coming with some practical suggestions for policies, based on our experience, as I said, in 30 countries, what are you advocate – what would be a coordinated, consistent regional approach? This would be essential.

MR. PARIVODIC: (Off mic) – Black Sea –

MR. IUGA: For the Black Sea Region.

MR. PARIVODIC: Who would champion this initiative? Would it be the Black Sea organization or –

MR. IUGA: Well, this is an open question. I’m not in a position to decide which of the organizations is the best one. What would be perfect would be to have a coordinated approach among these institutions and avoid (over-actings ?), while for business trying to achieve what would be the common denominator. And in my opinion, a coordinated and consistent regional approach is essential, focusing on what is important regionally, not what is important on the national level.

MR. PARIVODIC: Reduce the customs rates, improving customs procedures –

MR. IUGA: Exactly.

MR. PARIVODIC: – simplifying red tape.

MR. IUGA: For – (off mic) – infrastructure – infrastructure in the broader sense, such as transport infrastructure, energy infrastructure, telecom infrastructure, financial services sector, architecture and so on and so forth. Also, coordination of regulators and they call that – (off mic) – officials in the countries and promote, I would suggest targeted and joint training programs of the professional groups, such as Young Diplomats, such as Young Business Leaders, members of the parliaments.

MR. PARIVODIC: Okay, okay.

MR. IUGA: These are only a few examples. Also, encouraging business associations to talk more with each other and try to find the potential institutional confusion between the institutions that are – (off mic) – and find, in a structured way, a number of that, if not all of that. These are a few suggestions.

MR. PARIVODIC: Thank you very much, Mr. Iuga.

Mr. Matthews, how does this region look to you, as an American-trained lawyer, who lived also in Moscow? How does this region look to you from a private lawyer’s perspective, in terms of the legal environment, red tape, administration, all those key details in doing business?

DANIEL MATTHEWS: I’m happy to comment on that. It’s also kind of in response to what the World Bank does, which is a very valuable service, but it really only answers half the question.

Obviously my response is kind of limited to the 17 years I’ve spent in the former Soviet Union, so more of the Eastern side of the Black Sea. While the World Bank measures objective criteria, whether there’s certain laws that are in place, whether there are certain practices that have been adopted, the real issue, or the second half of the equation, for me, is how is it implemented? What are the conditions on the ground, as far as the people responsible for enforcing these laws or acting pursuant to these laws?

And very often, that can create and does create bigger issues than the laws themselves, because over the last 20 years, most of these countries have been steadily improving the legislation. They haven’t necessarily steadily improved the implementation of the legislation. That is a very substantial barrier to business and business facilitation in the region.

MR. PARIVODIC: That’s all the tyranny of the rulebook.

MR. MATTHEWS: Exactly, exactly. Even though –

MR. PARIVODIC: Separating the legislation, which complicates life. There is legislation on the first glance – (off mic) – as well.

MR. MATTHEWS: On first glance, but then also in the implementation we will have fairly standard legislation across the region, but it doesn’t stop the individuals responsible for interpreting and enforcing it to take the rulebook considered to be a unique, creative interpretation.

I’m just thinking of one in particular and dealing with share premiums. When you buy an institution’s share in a company and you go to sell it later on, basically that stock market activity – (off mic) – activity, at least one of the countries in the region has decided that that is taxable income too in the company itself. So basically, where this is happening, there won’t be any private equity development. There won’t be much of a stock exchange, just because no one’s willing to pay 20 percent on top of whatever their returns are, in addition to the capital gains tax. So for me, it’s all in implementation.

MR. PARIVODIC: It’s all implementation. It’s often an issue.

Mr. Sak, we who are not from Turkey would like to hear what are the key elements of something that could be called the Turkish – (off mic). How do you explain this huge success? We were very impressed with the statements made yesterday by your foreign minister and by your minister of finance. Obviously you have a government which is illuminated, which is an exception, unfortunately, around the world.

So what have they done, and maybe their predecessors, to make this country so successful in such a turbulent situation as we live in?

MR. GUVEN SAK (managing director, Economic Policy Research Foundation of Turkey): Let me start there and then I’ll try to join the conversation. I think it was all started with President Özal’s reforms in the early 1980s. The World Bank was there too, at the time. So the policy reforms that Turkey has started were successful in achieving this structured transformation in the Turkish economy.

In the 1980s – (off mic) – exports – (off mic) – and again in 1980, 90 percent of those exports – (off mic) – basically (impartial ?) products. Now 90 percent of them are manufacturing products – (off mic) – 90 percent of the 130 billion is manufacturing goods, basically. So a structured transformation is being achieved in Turkey. It’s not only achieved at a certain geographic location. It happened all around the country. So not only the – (cross talk) – it also – (off mic) – to the country – (off mic) – I think that that –

MR. PARIVODIC: (Off mic.)

MR. SAK: – not – (off mic) – yet. We had problems with some disparity issues, important in terms of disparity issues. But at least we have achieved this structural transformation in the Turkish economy. I think we are at that stage now where we are going to take the measures to make the next jump. I think Turkey is now ready for it, from a "mid-tech" exporter, because in 1980 we were a low-tech exporter – (off mic) – are basically – (off mic) – we became mid-tech exporters at the same time.

But now the time is for Turkey to decide to become a high-tech exporter and – (off mic) – important human resource element to it, at the same time. What we have achieved since 2002 – (off mic) – in 1996, we have formed the customs union, in the European Union. (Off mic) – at the beginning of this year was the – (off mic) – competition works. So the customs union agreement worked well for the Turkish transformation process, because it increased the pace of the Turkish transformation. And if you look at the numbers, that’s 2005 – (off mic) – the new government in 2003 that they’ve brought to the country has increased the pace of the transformation.

Let me say a few words about –

MR. PARIVODIC: (Off mic.)

MR. SAK: I can only talk about the things we are doing, basically, because if I look at the – (off mic) – it says business – (off mic). Our organization is not doing that for the general federation of Turkey. So we were established in late 2004 and we are working on – (off mic) – integration projects for this region. About five years ago I was asked to focus on this issue of Black Sea region. I completely agree – (off mic) – so it’s very hard to think about a single project or a single idea of how to move forward.

But I think now we are come to this solution and to prepare a few projects about the concept of – (off mic) – connectivity, because the major issue in this region, in Central Asia and also the Black Sea region, is basically it’s not possible – to send goods, for example; it’s not easy to find trade routes. It’s not easy to sign the container cargo in this environment. So we have focused all our attention on such priorities.

MR. PARIVODIC: Transportation infrastructure –

MR. SAK: Transportation infrastructure –

MR. PARIVODIC: – (off mic) –

MR. SAK: – and transportation presentation basically, because what is – (off mic) – management, something is needed – (laughter) – (off mic). But in order to start that kind of a business-led project (basis ?), what we are doing, for example, nowadays, there is Istanbul – (off mic). It is already there, if you look at all the maps, transportation maps – (off mic) – alignment in Istanbul.

But I started looking at this project, for example, about three or four months ago – (off mic) – Istanbul. And we discovered that none of the trains – (off mic) – starting from Istanbul. And all the cargo was sent by the government, basically, because the line is not working, because there are enormous problems. There are enormous disruptions on the way.

There are, as far as I remember now, about five trains, test trains – (off mic) – took about 25 days to get to – (off mic) – but now, we have set up a kind of high-level, I can say, coordination, just –

MR. PARIVODIC: An international or national?

MR. SAK: Yes, international, because we are doing this together with the Iranian, Pakistani and Turkish officials. What we did is talked to each other – (off mic) – we have started this project, and the first objective of the company is just to find cargo for the – (off mic) – talk to the companies and then establish a kind of a telephone network with the (regulator ?) agencies of the countries, get them talking now at this stage. But the – (off mic) – two months and all trains reached Lvov, from Istanbul to Lvov in 15 days. So it is possible to do it. So the – (off mic) – is there.

The only thing that’s missing there is the national implementation – (off mic) – there is the need for it – (off mic) – still, this notion of financial deprivation is not there, because they are doing it, because that’s the modus operandi in this region. They are doing it because the presidents wants thing to be done. That’s what we did. We talked to the presidents, because – (off mic) – we have set up is this committee and now at the presidential palaces there are guys who are from this – (off mic). And what we are trying to do now is to ensure that there is some cargo, there is some – (off mic) – of cargo that they started to go first so that we can make some calculations and see what are we missing in the picture.

And the objective of the companies, at the second stage, is to start investing, especially Pakistan, because thanks to the World Bank again, they already have the regulated organization. They have some law. They also have a public-private partnership law that – (off mic) – operation. So we are now inviting a group of finance ministers in Pakistan just to tell them about the Turkish experience.

And then we would like to start by making – (off mic) – some roads. Five locomotives is enough for the Pakistanis to make the trades and to do the exact operation at the determined time, at the time that it is needed. So I think what is needed – you’re right, absolutely. That legislation is there. The thing is to make things push forward and to increase the – (off mic) – in the countries. And in order to do that, I think – you had mentioned that these associations – (off mic) – that’s what we are – (off mic) – business association. They have partners in the other countries.

So now this company – (off mic) – in Pakistan. We’re going to get the Pakistanis – (off mic) – Pakistani business association. So this is going to be it. I think by establishing some coordination mechanisms, it is possible to increase productivity. That’s what I – it is possible to turn or create some bankable projects at the end of the day, if you are keen on developing some new conceptual framework. It started as conceptual framework.

MR. PARIVODIC: What is your opinion on the quality of contribution of the Black Sea Economic Organization? Is it an effective tool or is it not an effective tool? (Cross talk) – it’s important to get a clear understanding of this because –

MR. SAK: You’re asking to me?

MR. PARIVODIC: – the effectiveness is essential. All of these projects are, you know, very important. They’re enthusiastic, obviously. But they need strong government support and coordinated support and leadership of the governments in place. And that’s why I’m asking, because the Black Sea Economic Organization is a governmental organization. That’s why I’m asking.

MR. SAK: Yeah. I don’t think it’s effective. I don’t think it is working to the point – (off mic). I don’t think the bank knows what side is working – (off mic) – something that is working – (off mic). The results is obvious, as you see. And that’s why there is the need for much – (off mic) – I’d say – (off mic) – going forward and there is the need for some champions to increase connectivity of certain – because, you know, this is very much – (off mic) – because this is good for diversification of those economies, at the end of the day. It teaches a very good – (off mic) – if it is possible to send a container – (off mic) – then you can carry – that’s the first step – (off mic) – so that’s right.

But I think it is possible to find those countries who can champion these issues. And I think – I believe that the business community will contribute to this business relationship, cooperation among the business associations. I think it’s possible, because we have some other projects. Now, also, one of the important areas – (off mic) – for Turkey – (off mic) – we are thinking that basically we are leaving Armenia out. But it is good to have Armenia too in the picture so that, you know, there are alternative routes for cargo – (off mic) – that’s what we have been working on.

The – (off mic) – infrastructure – (off mic) – so there is the need for a cooperation network, something that the bank also, but I think there is the need for a leader instrument and a development fund kind of instrument is much more – (off mic) – for certain parts of the geography.

MR. : I will give an example, but I’ll introduce myself – (off mic) – and I run a consultancy in Belgrade, Serbia, on foreign investment. I used to be minister of international economic – (off mic) – and minister of finance in Serbia. And I was running some of these processes back home.

We were fortunate in the Southeast European region to have the initiative of the European Union as the champion. The initiative of the European Union, which has organized actually first through a set of free trade they have championed – a set of free trade agreements in Central Europe, after the fall of the Berlin Wall, and then in Eastern Europe, through trade agreements. And then those free trade agreements became the so-called CEFTA, the Central European Free Trade Area, which was then in 2006 expanded to the region of the Balkans and Southeast Europe.

That has proved to be a very good multilateral agreement, which has seriously facilitated trade. But there was a champion, and that was the European Union. And that was personified in the personality of Erhard Busek, the former vice-chancellor of Austria, who was the person who was running the process of coordinating it with the governments, because nothing like this can – (off mic) – cannot be done with the strong support and commitment of the government, but also you have to have a champion, a single, very remarkable, enthusiastic, charismatic figure who is capable, with the support of European Union or whoever, or those governments who appointed him, to coordinate and run the entire process.

So this is the experience that I have from my region. Of course, maybe the Black Sea region is more diverse than, for example, Southeast Europe or particularly Western Europe. You have very different histories, and therefore, it is not easy to put it all together. But I fully agree with what you said.

MR. SAK: It is diverse, but there is this thing also which – (off mic) – for example, the decision-making process is not that complex. We just have to visit the president’s office – (off mic) – decided there is something that needs to be done. We just put the project together. Go and visit our president at the Çankaya Palace and tell him that, "Now, let’s organize something with these presidents." It’s like talking – (off mic).

MR. PARIVODIC: Mr. Canuto, how does the World Bank help facilitation of trade in the regions, generally? How do you do that?

MR. CANUTO: We do it – (off mic) – we give our technical support, whenever it is appropriate, to regional efforts in integration. We’ve been working, for instance, with integrated logistic projects across countries, not everywhere in the world, but particularly – (off mic) – examples of regional transport systems in sub-Saharan Africa. But there is also important work that is done at the country level. Certainly, the inter-regional trade here, the Black Sea, could be much better if we had in place appropriate logistic and facilitation systems. And there’s a lot that can be done. I will give you just a couple of examples.

Customs organization: Many countries around the world are evolving towards using risk profiles of types of cargoes and types of carriers. And that allows a more efficient and randomized process of inspection, avoiding, for instance, open cargo inspection. Just to give an example, we have – (off mic) – here made one Turkish exporter – (off mic) – Turkey had fallen by between 10 and 15 percent. But also, what we have learned is that problems are not only with respect to the need to customize customs or to modernize customs, but also some work is needed behind the borders.

On the provisional service, in many countries – (off mic) – Black Sea region, the regulation does not allow for more competitive market structures in provision of service. And the provision of service – (off mic) – is something that matters a lot to the cost of logistics. So we – at the bank we have – (off mic) – hundreds, we have learned lessons, we have observed lessons of organization that have been applied in some countries. And we like to bring these and make available to the leaders in our countries so that they can use best practices.

We should keep in mind that small and medium enterprise are the ones that are hurt most by cumbersome procedures and so on. The big guys find their way.

MR. PARIVODIC: That is always so, yes.

MR. CANUTO: Yeah, but the question then is if you want to have – (off mic) – one in which there is a higher presence of – (off mic) – one of the easy gains, the low-hanging fruit, is to work on easing the cost of doing trade across borders. And the region here – (off mic) – doing business has some countries that are among the worst, so there’s a lot that can be gained by – (off mic).

MR. PARIVODIC: And the World Bank is acting, naturally.

MR. CANUTO: Yes. This has been made one of the pillars of our trade strategy. And we are ready to do it. In fact, the scope of the countries that have come to the World Bank to work with us in that area has widened substantially in the last five years – (off mic) – (realizing ?) that in this area there are many dead-weight losses, inefficiencies that do not serve any guiding purpose. They, at most, serve to (engrossed ?) interest groups, bur that – (off mic) –

MR. PARIVODIC: One question to all of you gentlemen: On one hand, it is clear that infrastructure must be improved in the region, communication – (off mic). On the other hand, we were discussing, you know, Eastern Europe has the acting acquis communautaire, the European law, which it adopts in various areas of law and there is no discussion about it.

Could we talk about some level of harmonization of law in this part of the world? And if the answer is in the positive, could we maybe detect what inspiration could it come from? What could be the inspiration for this harmonization? Which laws could be maybe adopted, at least partially, by the countries of the region?

Mr. Iuga?

MR. IUGA: (Off mic) – come from a new EU member state. To a certain extent, the conversation reminds me of the situation in the situation in – (off mic) – countries 15 years ago, where, for instance, countries were trying to implement reforms and restructure and privatize and improve the legal framework.

Now, one of my comments at that time was that the countries inside Eastern Europe were not talking about each other but talking about to Brussels, to Bonn, to Paris, to Rome, or to the World Bank. And World Bank – (off mic) – are fine, but I think countries should talk more about – among each other, in the (long-term ?) sense. And in this respect, I think for countries in the Black Sea region, (it would be pushed ?) to learn, to the extent possible, from the experience of the World Bank in the Balkans and the Danube region, because the (simple membership ?) of the EU for a country is not – (off mic) – problems. And a word of warning, a word of caution, for instance – countries are benefiting from assistance from different donors, donor agencies. And consultants are involved in improving the framework. Make sure that this is properly coordinated, otherwise you can end up in a legal framework conundrum and this is going to make matters worse, because I (think what they want you want ?) is internal consistency of the legal framework in each country and consistency and alignment, to the extent possible, which is one of the common denominators for the entire region.

So there are different models, but don’t talk only to the donors. Talk only to the countries which have been through this in the recent past. And one example, for instance, I think we may – (off mic) – mentioned in this conference, and this is a (biggie ?) – (off mic) – their experience in the legal framework as a member of the European Union, which has reserves and has a strong energy sector, among other things, significant reserves, which are not yet discussed a lot in shale gas and in gas hydrates. And the main emphasis can contribute to the countries in the Black Sea region their experience in giving you practical terms with the EU legal framework in energy, because the country has made good progress in this respect. So talk more to each other and try to align, to the extent possible, the legal framework.

MR. PARIVODIC: Understood. I always praise this excellent example of transportation of law. When the Turkish civil law was adopted, I think, in 1927, I think that was one of the main state-building moves of Turkey in that time.

MR. SAK: We have just translated it –

MR. PARIVODIC: (Off mic) – and this is something that I advocate for my country, as well.

MR. SAK: May I add something onto what you have just said? I think it is good for the country to start – (off mic) – it is also good not to – I’m kind of a skeptic of those grand reforms that the World Bank is very fond of. It’s better to focus on very specific and limited improvements, so a type of border procedures, standardization kind of things, so it should be practical –

MR. : Absolutely.

MR. SAK: So there are already business associations, the international world transport union kind of member organizations that are already operating. But I think they are too much for this – (off mic) – ready to help develop – (off mic). I think the important issue is to put some project on the ground, just design a cooperation network among the countries.

MR. MATTHEWS: I agree completely with the need to form a modest approach, because the three big things that facilitate a business – taxes, customs and finance – and two of those, taxes and finance, are such an expression of national sovereignty that it’s really hard to –

MR. PARIVODIC: Even in the European Union –

MR. MATTHEWS: Even in the European Union, where they can’t harmonize the taxes between various countries, and it’s very key to being a nation. So I would think that a more modest approach would probably be more effective.

MR. : The customs is a good point to start, so I think –

MR. IUGA: And communicate the success stories, because those who are doing the good work will be rewarded by benefiting from increased level of investment. And this is going to have a snowball effect.

MR. CANUTO: That is why there is the need for a – (off mic) – too cumbersome.

MR. MATTHEWS: And from a lawyer’s perspective, I couldn’t overemphasize the quality of – (off mic) –

MR. PARIVODIC: When reforms are made, they shouldn’t be half-hearted. They should really be full-hearted. And when a problem is noticed, it should be eliminated and then you address another problem. It shouldn’t be half-resolved, which is the case often in the region where I am.

So gentlemen, I want to thank you very much. Our time is out. But I would ask, kindly, our audience to make a few questions. Please, sir?

Q: I’m the secretary-general of the – (off mic) –

MR. PARIVODIC: (Off mic.) (Laughter.) No, no, no. This is a debate – (off mic) –

Q: I would just like to make some remarks on the question of – (off mic) – in your question of this – (off mic) – we have a program – (off mic) – that was started in – (off mic) – it’s called the Black Sea Trade and Investment Program. It was all financed by Greece, Turkey and by us, where we targeted seven areas where there was low business transactions – (off mic) – and we had meetings of the interested parties and we were able, during the global financial crisis, to increase the transactions in those seven areas that we targeted. So that was a silent success story. We did not want to advertise it very much. But also we’re doing something that I was here about this afternoon, two big infrastructure projects, the Black Sea Ring Highway and the Motorways of the Sea. These are two projects that will incredibly assist the economic development of the area during these difficult times.

MR. PARIVODIC: Thank you sir, very much. It is important that you are here with us – (off mic).

Any further questions?

Gentlemen, would you like to add anything? Okay, thank you very much. (Applause.)