Statement by Ms. Danuta Hübner,
Executive Secretary of the United Nations Economic Commission for
Europe,
to the Economic and Social Council at its Substantive Session of 2000
New York, 25 July, 2000
1. The outlook for the ECE region as a whole is now better than
at any time in the past decade. This is true both of the western market economies and of
most of the transition economies of Central and Eastern Europe and the CIS. In Western
Europe the strong upward momentum that was under way in the latter half of last year has
been maintained this year. This is confirmed by the GDP data for the first quarter and by
business surveys for the second. We now expect the increase in GDP to average some 3.5 per
cent this year which is about a quarter of a percentage point more than we expected in the
spring when we published the latest Economic Survey of Europe. This would be the
highest average rate of growth since 1988. We expect the strong rate of expansion to
continue next year as well, although it might slow down to some 3 per cent partly as a
result of some tightening of monetary policy. Exports have been the principal source of
growth so far but as in previous upswings a virtuous circle now seems to be appearing in
which stronger foreign demand spills over to domestic demand via increases in domestic
output and incomes, which in turn increase demand for goods and services produced abroad.
A similar process is emerging in the transition economies where both external and domestic
factors are behind an unexpectedly strong recovery of output in the first half of 2000.
Strong import demand from Western Europe has boosted transition economy exports and
commodity exporters, especially in the CIS, have benefited from rising commodity prices.
Where progress in systemic transformation and institution building is well advanced,
notably in central Europe, such "virtuous circle" effects should be particularly
noticeable. But in many cases, however, the current high rates of growth simply reflect a
recovery from a very low base. Nevertheless short-term forecasts have been steadily
revised upwards since we wrote our last Survey and we now expect GDP growth in the
ECE transition economies as a whole to average some 4.7 per cent this year, which is some
1.5 percentage points more than expected in April. The largest revision to the forecast is
for Russia where the authorities are now forecasting GDP growth of 5 per cent this year.
This generally positive outlook, however, is subject to a number of
risks. One is that, although many observers see the rate of economic expansion in the
United States beginning to slow down, its rate of expansion is still very rapid with
output growth continuing to run ahead of capacity by a large margin. The United States is
currently running a large current account deficit and, if foreign investors suddenly
reduce their willingness to hold dollar financial assets, a marked depreciation of the
dollar could lead to a more severe tightening of US monetary policy than presently
envisaged and, in turn, a marked appreciation of the Euro with negative effects on Europe
and the rest of the world. Other sources of concern are the high levels of share prices,
still significantly over-valued, and uncertainties over the price of oil. Any upset to the
outlook for Western Europe would, of course, have a negative effect on the outlook for the
transition economies, many of which still remain relatively vulnerable to external
disturbances and shocks. Although the outlook in general is increasingly favourable,
inter-country differences, especially among the transition economies, are still
considerable and for some, e.g. Belarus, the Republic of Moldova, Ukraine and some of the
economies of southeast Europe, their situation remains precarious.
2. This year ECE Spring Seminar was devoted to the assessment of
ten years of transition. It focussed on structural change, macroeconomic policies and
social dimension of transition. During the first day of this year’s annual session of
the Commission, ECE took up for its in-depth discussion the issue of the economic
regeneration of southeast Europe. The debate focussed on the transition process and the
international financial and technical assistance required, as well as the role of regional
cooperation, in support of that process. The persisting political instability, the
unsolved questions of sovereignty, national borders, lack of state power and weakness of
institutions hindered economic recovery. Governments in southeast Europe were overtaxed
with the double burden of reconstruction and transition to a market economy. The view was
shared that sustained support was required and that regional cooperation could play a role
in addressing security concerns, liberalization of trade and policy coordination. The
meeting concurred that the main key to a solution to the problems of the region was the
attainment of sustainable growth and that promotion of entrepreneurship, especially with
regard to SMEs, was important.
3. The ECE has continued its work in the development of normative instruments,
thereby fostering regional cooperation, facilitating economic integration and promoting
policy convergence. Efforts have been undertaken to strengthen cross-sectoral approach in
the area of norms and standards setting, with the involvement of partner institutions.
In the field of environment, a Ministerial meeting under the ECE Convention on
Long-range Transboundary Air Pollution (Gothenburg, November 1999) adopted a Protocol to
Abate Acidification, Eutrophication and Ground-level Ozone to the Convention. The ECE
Convention on Transboundary Effects on Industrial Accidents entered into force in April
2000. The ECE Committee on Environmental Policy decided in September 1999 to initiate
preparation for a new legal instrument on Strategic Environmental Assessment. The
Ministerial Conference on Health and Environment (London, June 1999) adopted a Protocol on
water and health to the ECE Convention on Transboundary Watercourses and International
Lakes. The work on the Protocol is serviced jointly by the ECE and WHO/Euro secretariats.
In the field of transport, the following agreements have been amended: the European
Agreement on Main International Traffic Arteries (AGR), of 15 November 1975; the European
Agreeement on Important International Combined Transport Lines and Related Installations
(AGTC), of 1 February 1991; the Agreement on the Construction of Vehicles, of 20 March
1958; the European Agreement concerning the International Carriage of Dangerous Goods by
Road (ADR), of 30 September 1957; the Customs Convention on the International Transport of
Goods under cover of TIR Carnets (TIR Convention), of 15 January 1959. In July 1999, the
European Agreement on Main Inland Waterways of International Importance (AGN) entered into
force. The Inland Transport Committee decided at its 62nd session to establish
a multidisciplinary group of experts on safety in tunnels.
In the field of statistics, cooperation has continued with the IMF, Eurostat, the OECD,
and other organisations, for setting standards (e.g. in censuses, national accounts, price
indices, etc.) and coordinating statistical activities in the framework of the Conference
of European Statisticians. This work has taken on a new momentum due to the growing
political importance of monitoring, benchmarking towards best practises, and using
indicators, particularly in the field of gender and social development.
We have also continued to invest on data collection and databases, in order to make
good quality data available throughout the UN system and to member countries. Particular
efforts have been placed in bridging the gap between economic, social and environmental
statistics, as part of the ECE strategy to contribute to bridge the gap between economic
growth and social concerns.
Other norms and standards have been developed in the fields of trade facilitation and
energy. In its capacity as the international focal point for trade facilitation standards
and recommendations, UN/ECE, through the United Nations Centre for Trade Facilitation and
Electronic Business (UN/CEFACT), has continued to strengthen its work. Its annual session
made important progress on several trade facilitation recommendations.
The Centre also approved a new Recommendation No. 31 - Electronic commerce Agreement
that provides the first legal framework for Internet commerce. The recommendation can
be applied to all electronic media, be it Internet, e-mail, faxes, telexes and tries to
create an environment which allows electronic commerce to have a degree of safety in those
areas where there are no clear guidelines to be applied.
Many experts from governments and industry met during the year, in the framework of the
six UN/CEFACT working groups, to develop common procedures for facilitating business and
elaborating standard languages and rules for electronic business. The Centre progressed
its initiative on ebXML for electronic business on Internet and the world wide web for
small and medium-sized enterprises.
The MoU in the field of electronic business between UN/ECE and the international
standard setting organizations was strengthened by ITU signing the MoU. The Centre
continued its long-standing cooperation with UNCTAD Trade Facilitation. As the
participation of all regional commissions is of particular importance for the continued
relevance of UN/CEFACT's work, it has been agreed that each commission would appoint a
special representative to UN/CEFACT.
ECE is committed to put more emphasis on facilitating the implementation of the already
adopted standards. Over the past year, it has pursued its technical assistance activities
aimed at supporting the effective implementation of the ECE norms and standards in
countries with transition economies, as well as technical activities which contribute to
facilitating the legislative changes required in the countries applying for EU membership.
4. A large part of ECE operational activities was concentrated in two regions
which lag behind in terms of economic development and transition process, namely in
southeast Europe and Central Asia.
The ECE technical assistance has been provided mostly within the framework of regional
and subregional groupings, initiatives and programmes, namely the Stability Pact, the
Southeast European Cooperative Initiative (SECI), the Central European Initiative (CEI),
the Black Sea Economic Cooperation (BSEC) and the Special Programme for the Economies of
Central Asia (SPECA).
For countries of southeast Europe in particular, ECE has provided technical expertise
and other support to projects in the specific fields of: a) border crossing facilitation;
b) development of transport infrastructure; c) interconnection of electric power systems;
d) energy efficiency; e) natural gas network systems and international pipeline
interconnections; f) environmental protection for the Adriatic-Ionian Region; g) promotion
of public-private partnerships; h) promotion of real estate investment. These activities
are carried on through ECE/SECI project groups and groups established under the Stability
Pact. The ECE has presented a number of projects for southeast Europe to its Working Table
II, most of which are being implemented in the framework of ECE/SECI. Together with the
World Bank, IMF and WTO, ECE has provided support to a new working group on trade and
transport facilitation (TTFSE) established within the framework of the Stability Pact
Working Table II.
Within the framework of the United Nations Special Programme for the Economies of
Central Asia (SPECA), established by the Tashkent declaration of March 1998, ECE and ESCAP
continued its collaborative efforts to assist the participating states (Kazakhstan,
Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan) to design and implement development
projects in areas of common interest. Three SPECA working groups have become fully
operational: on transport and border crossing, on rational and efficient use of energy and
water and on international economic conference on development strategy of Tajikistan in
the regional context of Central Asia. In December 1999, the UN General Assembly approved
$1,75 million worth of funding from the UN Development Account for the joint ECE/ESCAP
project on rational and efficient use of energy and water resources in Central Asia. In
this area ECE cooperates closely with OSCE.
5. Last year has been a year of further progress in integrating the
cross-sectoral concerns into the activities of ECE principal subsidiary bodies, with
particularly important breakthrough in transport and environment.
ECE has carried out a number of activities based on a multi-stakeholder approach, in
particular with the NGO community and the private sector. It has also significantly
strengthened its relationship with the European Commission, the Organization for Security
and Cooperation in Europe and the Council of Europe.