***

According to experts competent in international processes, a mere transferred projection of the trends existing in the world cannot be helpful in the preparation of a correct forecast and prediction of the rate and direction of future development². The content of the previous stage of development of the post-soviet territory was that new independent states formed on the basis of the disintegrated UssR within the soviet borders, “within the format” of the former soviet republics having their so-called “title nations”. However this does not mean in any way that this “national structure” will successfully continue its existence in the 21st century. on the contrary, it is more likely that the future belongs to a Europe (and, maybe, even a world) of regions, which is the new reality of the new world order³.

An attentive researcher may fnd some important features of the new world order in such ab­normal phenomena of international relations as the so-called unrecognized states. in this respect, the Moldova-transdniestria confict, on the one side of which there is an ethnic unitary state, while on the other – a social and territorial entity that is essentially based on the idea of multi-nationality and multiculturalism, is very signifcant. it is even more signifcant that both parties to the confict have as a foundation a common history of the region, similar ethnic and national structure of the population and integrative culture. perhaps the viability of trandsniestria is based on the potential of similar transboundary ambivalent entities, which may become the future of the Black sea coast. The people living on the Black sea coast should integrate both ideas, i.e. national and transboundary ones, in order to reconcile them, to fll them with new quality and integrity on a higher level of development. nobody should conquer anyone, we – Ukrainians, Russians, Moldovans, Romanians, Gagauz and Jews can fnd together some kind of synthesis of the leading ideas of the 21st century – the idea of national revival and the idea of formation of transboundary Euro-regions.

A close examination of the issue of transdniestrian confict settlement results in the broad­ening of the settlement context: the matter in question is not a banal political reformatting of the space but the appearance of a new quality – a macro-region that organically includes the space of actual transboundary cooperation: Right Bank Moldova, including Gagauzia, transdniestria and the Ukrainian Black sea coast. Formation of a common market, common communications, common style and way of life, harmonization of interests and interpenetration of cultures has been taking place here for many years and the time has come to acknowledge and understand this process. We could call the region “Dniester / Nistru”, although the understanding of the nature of this region of some Ukrainian politicians already using this name difers from ours. perhaps, taking into account the value of Odessa as a port, as well as a cultural and historical centre, this macro region could be called the “Odessa macro-region”. in the context of social, economic and cultural changes taking place in the new region, we bring up the issue of the role of the Ukrainian Black sea coast in the settlement of the transdniestrian confict and the role of Ukraine in the creation of an intellectual, economic and social basis for this settlement. The systematic economic contribution of Ukraine can become a missing component for the settlement, the “ffh element” needed for peace and development in the region.

Economic Preconditions and Challenges for the Establishment of the Odessa Macro Region as a foundation for Confict Settlement

Comparative characteristics of the economies of the Right Bank Moldova, transdniestria and the Ukrainian Black sea coast show their complementarity and potential for symbiosis. The well-known Russian expert t.Guzenkova notes the agrarian orientation of the economy of the Republic of Moldova and prevalence of the industrial sector in the economy of transdniestria⁴. According to the structure of their economies, the Ukrainian Odessa and mykolaiv Regions are industrially agrarian, while Kherson Region is agrarian and industrial, with Odessa Region being one of the most economically developed regions in Ukraine. However, the most important factor here is transit and the trading potential of the Ukrainian Black sea coast. Tis is the region where the major Black sea ports of Ukraine, such as Odessa, Ilichivsk, Bilhorod-Dnistrovskyi, mykolaiv, Kherson and skadovsk are concentrated; the ports located on the Danube being Reni, izmayil, Vylkovo, Kiliya. Here are also located the pipeline of Odessa-Brody and the developed network of rail roads and highways⁵. The agrarian Right Bank Moldova, including Gagauzia, industrial transdniestria and transit and trading Black Sea Coast practically supplement each other.

The essential precondition for the formation of the Odessa economic macro region is the transboundary nature of the Black sea coast countries⁶. Both Right Bank Moldova and transd-niestria, as well as the south of Ukraine are populated by transboundary ethnicities (minorities): Russians, Ukrainians, Moldovans, Gagauz, Bulgarians, Jews, etc. similar ethnic components of population in these countries and regions bring forth a unique feeling of their afnity.

The creation of Odessa (Dnister / Nistru – Black Sea Coast) macro-region is also precondi­tioned by the Euroregion of “Lower Danube” already established in 1998 and including: Odessa Region (Ukraine), the districts of cahul and cantemir (Republic of Moldova) and the districts of Braila, Galati and tulcea (Romania). Tis Euroregion is established under the provisions of the European Framework convention on transboundary cooperation between territorial com­munities or Authorities.

During the period of 1993 to 2007, Ukraine participated in the creation of seven Eurore-gions involving nine administrative regions. in 2002, the interdepartmental commission on the Development of transboundary cooperation and Euroregions (which has not convened since 2003) was created with the program of Euroregions Development approved. However, in reality the Euroregions are not functional, which can be easily seen from the websites of the respective regional state administrations – they are flled with outdated information about ritualistic meetings of ofcials. Why doesn’t transboundary cooperation develop, when it has such a huge economic potential? is this accidental?

The major circumstances negatively impacting the development of transboundary coopera­tion and those that can evidently impede creation of the integrated Odessa macro region in the inter-stream area of the Dniester / Nistru and Dnipro rivers as a form of economic integration of the regions and overcoming of the chronic regional transdniestrian confict are described below.

The authorities in Kyiv are afraid to the point of panic of even a hint of separatism being well aware of the lack of a “reserve of sturdiness” in the Ukrainian state. Tis is the reason why the issue of federalization of Ukraine and of a territorial and administrative reform related to the modifca-tion of stalin’s division of the country into oblasts (regions) has been excluded from the agenda. Tis is the reason why the outstanding leaders who actively supported the idea of federalization, ofen from opposite political positions ( V. chornovol and E. Kushnarev), are out of the picture. Tis is the reason why Ukraine ended up “without Kuchma” who had developed the project of dividing Ukraine into 9 regions with their own parliaments and governments. Tis is the reason why stalin’s oblasts had been renamed by the Kyiv theorists into “regions”, which was just another attempt to “substitute the labels” on the old soviet institutions that had not changed their actual nature. And this is the reason why the heads of regions are not elected but are appointed by Kyiv ofcials from among those who can never become charismatic leaders and can never be elected by the population of the region. Kyiv authorities do not grant the right to develop real international transboundary relations to regional administrations and keep the monopoly of the center on foreign policy. Declaring its aspiration to the Europe of Regions, Ukraine, in fact, reproduces totalitarian centralization both in policy and economy. in policy this is manifested in the tabooing of whole branches (for example, transboundary cooperation), in economy, for example, that Kyiv, as capital, is one of the two donor regions along with Donbass. The reason is not that industry in Kyiv is like that in Donbass, but that “Kyiv is the moscow of today” – the place that artifcially, using administrative leverage, concentrates fnancial fows and creates a “special economic zone” like it used to be in the USSR for moscow, where prices, salaries and the purchasing capacity of the hryvnia are higher than in the country as a whole. An invisible economic border has been created around Kyiv separating this showpiece of Ukraine from the miserable provinces. Kyiv allocates subventions to the Ukrainian regions at its own discretion, selling to the local elites and population a faulty and anti-market idea of their imaginary ‘unproftability’, ‘helplessness’ and dependence on Kyiv.

In regional administrations, the issues of transboundary cooperation are supervised by the ofces for international relations, which exist from soviet times and whose task is not to develop transboundary cooperation but to emasculate it, bringing this cooperation down to the level of ceremonial meetings and signing of the soviet-type “protocols of intent”. As an example, we can mention here that in the democratic Ukraine, the visiting of local authorities by foreigners without a special permission from the special services, which should be obtained several weeks before the visit, is still prohibited. Besides, it is necessary to prove in detail the need for such visits and to provide information on the visitors. (The author had a chance to come to know about this order of the cabinet of ministers when receiving a polish delegation in Kherson on 14-17.04.2008 with senator of the Republic of poland stanislav Gogach and professor of the Lublin catholic University slavomir partitsky being members of this delegation. The Deputy Head of the regional administration L. olenkovskaya refused to meet with the delegation explaining her refusal with this prohibition). it is clear that federalism and regionalism of the “soviet type” cannot serve as a structural model for modern Ukraine, while hushing up and negation of the European type of federalism and regionalism cannot be justifed by any fears, and are just the way to retain a com­monplace monopoly of the central power, i.e. the notorious “power vertical” that the outdated by nature and totalitarian by origin Ukrainian post-soviet nomenclature tries to defend.

All the following reasons for the insufcient development of transboundary cooperation given by modern experts and analysts result from the major reason stated above.

According to the authoritative magazine “nationalna bezpeka i oborona”^* these reasons are as follows:

- ambiguous nature of powers of local authorities and local governments with regard to transboundary cooperation;

- insufcient state support (including fnancial) for the programs and projects of trans-boundary cooperation; slow rates of construction of border region infrastructure by the Ukrainian side;

- poor involvement of entrepreneurial structures and those of the “third sector”;

- lack of horizontal communication;

- imited reliable and comparative statistical information on the status and development of regions; insufcient level of presentation of Ukrainian regions in the EU countries;

- insufcient quality of preparation and unclear orientation of regional cooperation projects submitted by Ukraine for consideration to the European commission. As a result, its representatives have understandable doubts regarding the obtainment of any value added within these projects and, consequently, their fnancial support⁷.

* Editor’s note: meaning “national security and Defense” in Ukrainian

The recent accession of our neighbours into the schengen zone and the newly arisen difcul-ties with the obtainment of visas needed for visiting the neighbouring countries also does not promote the development of transboundary cooperation.

Today, we can draw an unquestioned conclusion that Ukrainian policy on transboundary cooperation mismatches the European norms and ideals and does not make use of the European experience of regionalism.

Both Ukraine and Moldova have similar macroeconomic problems – a low level of inclu­sion of the economy in the process of economic globalization, lack of serious structural changes derived from involvement in European and global economic structures, as well as a low level of international competitiveness. At the same time, similarity of problems does not imply their sameness: Ukraine, nevertheless, is more advanced in its integration in the global economy, which is another argument in favour of its participation in the construction of the Odessa transbound-ary macro-region. The attractiveness of the Odessa macro-region can grow due to the increased performance of the region’s economy, its higher involvement in the global division of labour and bigger share of high-tech industry.

The best known complex evaluation of the involvement of specifc countries in the globali­zation processes is carried out within the Globalization index Rankings. Tis index takes into consideration: inclusion in global political processes (involvement in international organizations, number of diplomatic missions, etc.), development of global technologies (number of internet users, number of internet servers, etc.), individual international contacts (tourism, remittances from abroad, etc.) and the level of development of economic integration (trade, investments, etc.). According to this indicator, Ukraine is in the 42^nd place, it is more engaged in the development of economic integration and less in the system of individual contacts, development of high technolo­gies and global political processes⁸. Moldova is not yet included in the list of evaluated states.

The future macro-region will face the problem of lagging behind on the subject of how it func­tions in global networks. According to the global networked Readiness index 2007-2008 rankings, Ukraine is only in the 70^th place (3.69 points), while Moldova is in the 96^th place (3.21 points). The maximum score of 5.78 points belongs to Denmark, while the minimum one of 2.40 points – to chad⁹. Tis index includes the index of the use of networks and the index of development of op­portunities. The index of the use of networks is scored on the basis of the following indicators: the number of internet users (per 100 persons), the number of mobile telecommunication users (per 100 persons), the number of internet users per one server, percentage of computers connected to the internet, availability of internet services. The index of development of opportunities includes availability of networks, policy of networks development, development of social networks and development of a network economy (e-government and e-commerce).

Corruption can become another severe problem of the macro-region. The international or­ganization ‘transparency international’. estimates the corruption perceptions index (perception of corruption of the public sector by businesspeople and experts). According to its information for 2008, Moldova was in the 109^th place (2.9 points) and Ukraine – in the 134^th (2.5). The as­sessments are based on a 10-point scale, where 10 points mean an absence of corruption, while 0 – its highest level¹⁰.

A common type of economic life and certain similarities in the economic behaviour of house­holds can become a major precondition for the integration of the macro-region’s economies. Tis can be explained by the similarity of geographical, climatic and socio-cultural life conditions of the population.

At the same time, there persists the issue of social and economic dependence of part of the population as a phenomenon of consciousness and economic behaviour of the Ukrainian and Moldovan population. in spite of the fact that the Ukrainian, Moldovan and transdniestrian societies have joined the global process of individualization of economic life, part of the population is nevertheless drawn to the old regime, which implies a narrower space of individual freedoms and minimal individual responsibility. There also persists the phenomenon of a mass “dependence” mentality due to the exchange of economic resources. in Ukraine, Moldova and transdniestria politicians and representatives of the authorities frequently use the rhetoric of “redistribution”. The dominant moods are those welcoming of greater social assistance programs.

Costs of the Policy of Restriction of Economic freedoms in the Region

For the idea of the Odessa macro-region (Dniester / Nistru – Black sea coast macro-region) to be successfully implemented, Ukraine should put into life a serious and systematic program of transboundary cooperation and, at least, to stop the attempts of holding an artifcial policy of restriction of economic freedom of transdniestria that undermines the idea of economic integra­tion of the region as a way to resolve and settle the regional confict.

According to the most conservative estimates, the average annual foreign trade turnover of transdniestria makes about 770 mln dollars. more than 144 enterprises in the energy, mechanical engineering, metal working, iron and steel works, and other industries ensure foreign economic relations of the region with 59-70 countries¹¹. The major transit of goods goes via Ukraine. Tis is the major prerequisite for the complementarity of regions within the Odessa macro-region that can serve as a basis for confict settlement. should economic integration be implemented as a way to settlement and should this be done in the situation of economic freedom instead of economic blockades and boycotts, Ukrainian transit can become a necessary component of the whole project.

Introduction of new customs rules (economic blockade of transdniestria) by Ukraine in march 2006 was a step taken against the economic interests of Ukraine and against the idea of economic integration of the macro-region. Tis decision coincided with signing with the UsA of the agreement on Ukraine’s accession to the Wto and the cancellation of the Jackson-Vanik amendment limiting the fow of goods from Ukraine to the UsA since soviet times.

In the situation of a lack of transparency in the ofcial Ukrainian authorities’ policy in relation to Moldova-transdniestria, the actual sum of economic losses incurred by Ukraine as a result of the introduction of the new customs rules (or economic blockade, according to the transdniestrian terminology) is unknown to the population of the Ukraine. similar hushing up of consequences of foreign policy steps caused an irreparable damage to the image of the “demo­cratic” governments of the Ukraine.

To estimate at least the number of zeroes in the amount of this damage we can note that the volume of goods imported from the Ukrainian frontier area is estimated at 270 mln dollars, the Moldovan steel Works located in Ribnitsa alone in 2004 purchased raw materials from Ukraine for the sum over 50 mln dollars; every month Moldovan steel Works purchase 100 thousand tons of scrap metal from the Ukraine. Every month, Moldovan steel Works ship 85 thousand tons of rolled metal products via Ukrainian sea ports. The losses sufered by Ukraine from the introduc­tion of the new customs rules can be possibly estimated at hundreds of millions of dollars¹².

The railway incident of 2006, the main point of which was a unilateral termination of rail­way communication with transdniestria by Ukraine, also meant heavy losses for the Ukrainian enterprises and the state. Ukraine quickly overcame this anti-economic decision.

Ukraine has serious business interests in transdniestria. The overall segment of the Ukrain­ian business in transdniestria is of no less than 1 bln dollars a year¹³. However, the existence of business interests does not afect in any way the public operations of the business. in fact, these interests are in “kept in the dark” from public.

Restricting freedom of trade with transdniestria turned out to be a serious foreign policy mistake of Ukraine that entailed both enormous economic losses and political losses in the form of a self-removal by Ukraine from its natural peacemaking role in the transdniestrian confict.

Economic Way of Settlement and Its Europeanization

Researchers, observers and participants of the regional confict settlement process practi­cally unanimously come to the conclusion regarding the inevitability of the Europeanization of the settlement. At the same time, this conclusion is made not in the logic of war according to the principle of “either / or” but rather in the logic of “and / or”, when Europeanization just sup­plements the already available substantial components of settlement. The matter in question is in no way an infringement of the rights of any groups of the population, does not suppose some unilateral privileges being given to other groups, nor any immediate cancellation of the socio-cultural distinctiveness or identity of people.

We understand “Europeanization” in the feld of confict settlement as the “process put in action and stimulated by the European institutions and, frst of all, the European Union, through tying up the fnal outcome of the confict with a certain level of integration of interested parties in the European structures. Tis tying up shall be carried out by means of specifc mechanisms of conditionality and socialization built into the “Europeanization process”¹⁴. Europeanization can be specifcally expressed both in the form of active participation of the EU in the settlement process and in the form of a “framework structure” of such settlement being developed by the EU. Europeanization is always asymmetric, since the other participants of the settlement process, as a rule, have no institutional mechanisms to infuence the position of the European Union.

The European Union is paying increasing attention to the transdniestrian confict. Tis is due both to the EU institutional development, and to the change of its policy determined by the accession of new members – poland, Lithuania and Romania for whom the transdniestrian issue is extremely important¹⁵.

The EU policy towards Moldova-transdniestria is conceptually expressed in the European neighborhood policy which consists of the proposal by the EU of close cooperation to the coun­tries that at present have no prospects to become its members¹⁶.

Troughout 6 years, the European Union has come a long way in its involvement in transd-niestrian confict settlement:

- measures taken for the diplomatic blockade of transdniestria – interdiction to issue visas to representatives of transdniestrian authorities – 2003;

- ntermediation in the Ukrainian-Moldovan negotiations regarding cooperation in border management – 2003;

- formation of the attractive foreign policy alternative of European partnership for Moldova, compared to the Russian plan for federalization of a common Moldovan state – 2003;

- formation of an attractive foreign policy alternative for Moldova, based on European partnership – viz a viz the Russian federalisation plan for a common Moldovan state in 2003;

- EU joining the negotiation process as an observer in the “5+2” format in conformity with Moldova’s invitation – 2005;

- Establishment of the EU special Representative’s ofce in Moldova – 2005;

- creation of the EU mission to support border management (EU Border Assistance mis­sion – EUBAM) – 2005.

On the whole, the EU asserted itself as a powerful factor in the process of settlement, a power centre, without which confict settlement is practically impossible. At the same time, the measures taken have not yet practically led to the desirable outcome, i.e. settlement of the transdniestrian confict based on the European platform. The attempt to transform Moldova into a law-abiding democratic and prospering state that could become attractive for transdniestrian residents has not yet been successful. The measures of the diplomatic and economic blockade of transdnies-tria appeared to be of low efect. Ukraine’s assistance in confict resolution on a European basis is mainly of a declarative nature. The EUBAM border mission has not brought about the antici­pated results, i.e. confrmation of the large scale international crimes ostensibly committed by the transdniestrian elite (smuggled drugs, weapons, trafcked human beings, etc.). The attempt to coordinate and consolidate the EU foreign policy with the foreign policy and rhetoric of the new EU member – Romania concerning the Moldova-transdniestria confict has proved to be inef­fective. The EU has not been able to set up constructive cooperation with Russia – an important player in the confict settlement process.

The EU position and policy are changing – the greater attention paid by the EU to transd-niestria itself is very important, as is attention to transdniestria’s internal political dynamics, its prospects of negotiating a solution, the loyalty of its business elite in relation to the European model of frozen confict settlement. The EU is expanding the application of conditionality princi­ple envisaging not only punishment of the transdniestrian elite, but also its motivation, especially with the account of its dependence on the export of goods to the EU countries.

The following issues are also important for us. How far interconnected are the economic path for settlement and its Europeanization? What are advantages and disadvantages of the Europeani-zation of the settlement process? What is the optimal succession of stages in the Europeanization and settlement?

It is obvious that at the initial stage of settlement, the transdniestrian confict was on the periphery of EU interests. subsequent steps undertaken by the EU were rather indicative of the dominating political approaches to the settlement. However, with the transdniestrian confict being in stagnation, while the transdniestrian moldavian Republic was de facto demonstrating its viability, the insufciency of the political approach became obvious. At the same time, Moldova demonstrated political tendencies of crisis, while Ukraine appeared incapable of fnalizing its policy of the isolation of transdniestria. The EU displayed interest in the sources of viability of the transdniestrian economy. Economic integration turned out to be the link that can now unite the whole moldo-Black sea region.

Europeanization of transdniestrian settlement may include the following components: 1) consolidation of freedom of economic activities principle in the macro-region; 2) motivation of economic integration and transboundary interaction of economic actors of Moldova-transdnies-tria and the Ukrainian Black sea coast; 3) investment in joint transboundary economic projects by the EU; 4) allocation of direct large fnancial grants for economic integration in the region; 5) inclusion of parties to the confict in the euro-integration process as a way to settle the confict; 6) granting of certain type of euro-integration privileges to the settlement participants.

This is the point when the debatable issue of the sequence of Europeanization and settle­ment stages arises. The following steps should be decided frst of all: should participants to the confict be granted a certain level of neighbourhood cooperation (integration) with the EU as a favorable condition for the settlement, or, on the contrary, it should be declared that this level of euro-integration is a settlement prize for its participants?¹⁷ taking into account the considerably decreased interest of Moldova’s population to the issue of reintegration, one can say that this interest can completely disappear in case of euro-integration (of the Republic of Moldova, in this or that form). Tis circumstance makes euro-integration of Moldova before its reintegration very problematic. As an argument in favour of this way there can be only attractiveness of Right Bank Moldova for transdniestria that can be ensured using EU money. However, the way of extending fnancial grants to depressive countries is not popular with the EU members, which fact can be proven by the example of Bulgaria that, on the contrary, was fnancially penalized for the inactiv­ity in its combating corruption.

The issue of representation of regional elites’ interests can become a serious objection against the economic way of settlement that may not coincide with the interests of Europeanization. The economic way of confict resolution, economic freedom and integration on the macro-regional level will considerably lower the importance of political elites of the states in the region and can generate subregional business elites that may underestimate both political sovereignty of the national states and the role of political elites of these states. today the public in Moldova-transd-niestria and Ukraine is raising the issue of excessive impact of fnancial and oligarchic clans, their disproportionate and shadow infuence on political processes in the region and the situation with national economies and consciousness of the masses in Ukraine, Moldova and transdniestria. The “economic approach” to the settlement can make these unattractive actors the major subjects of settlement, which might have an unpredictable outcome for democracy in the region.

Both from the point of view of mass consciousness corrupted by political populism and from the point of view of struggle of the post-soviet elites for spheres of infuence, as well as from the point of view of aggravated competition between regional fnancial and oligarchic clans, the economic approach to the confict settlement as the major one raises the issue of large scale re­distribution of property, as well as the principles and rules of such redistribution. Tis principle, most likely, will be based on the principle “the bigger absorbs the smaller one”. not everyone likes such a prospect. There appear groups of interests that do not support any form of transboundary economic integration that threatens their well-being and their existence as such. The existing economic risks and political fear operates like a cumulative mechanism, strengthening manifold the opposition to confict settlement and economic integration.

The main argument in favor of Europeanization is the European advantages related to eco­nomic freedom and a high standard of living. These failsafe arguments can become weighty precisely as a result of implementing the program of ‘economizing’ the confict settlement proc­ess. Tis is the case when politicians and oligarchs are running a risk, while small and average businesses are getting a chance. socially and economically dependent groups of the population will go through this polarization: some of them will want to have a dependable and kind owner-employer, while others will go through the syndrome of “feeing from freedom”, being afraid of intensifcation of their labour activity, pension age increase and denial of habitual social privileges and benefts.

Europeanization in the interpretation of the post-soviet propagandists having been educated at the marxism-Leninism universities appears as a stereotypic version of the “bright future”, a kind of reincarnated communism in which “everyone will get as much as one needs”. The appalling banality of this euro-integrationist propaganda reduces to nothing the advantages of freedom of information and speech, of independent and competent opinion.

Europeanization of confict settlement is certainly not free of its shortcomings. The traditional type of economic life based on orthodox traditions and practically slave-type relations including social and economic dependency and parasitism will be overcome. The romanticism of this way of living and its aesthetics will also disappear.

Macro-region cities can and will live better, but they will cease to be Byzantian “capitals” with their parades, presidents and “courts”. many citizens will have their feelings and pride hurt by this.

The European Union has not yet developed a policy in relation to the Russian-speaking population of the former soviet Empire. Tis is a very serious shortcoming, which means for this population a loss of their uniqueness (the “Baltic syndrome”).

Europeanization is accompanied by such illnesses as migration, degradation of the social sphere, marginalization of the part of the population characterized by low adaptability to the new lifestyle.

However, this can be balanced by the aspiration for higher level and better quality of life, ap­pearance of a new European identity, human rights protection system, guarantees of safety and freedom from corruption and, eventually, cancellation of the hated borders. in other words, a new and diferent life … for a new and diferent people.

Advantages and Disadvantages of the Europeanization of Transdniestrian Confict

From the point of view of south Ukrainian experts, the major tool of Eurointegration and socialization of participants to the transdniestrian confict settlement process is transbound-ary cooperation. Tis idea is refected in Ukraine’s national program of integration in the EU approved in september 2000 and refected in Ukraine’s Law on transboundary cooperation adopted on June 24, 2002

What is amazing is the fact that transboundary cooperation is practically localized only on the Western borders of Ukraine and is practically frozen on its southern borders, i.e. with nAto members – turkey and Romania and friendly Moldova-transdniestria. The reason for this situa­tion is latent conficts between Ukraine and these countries, with the EU in no way contributing to the resolution of these conficts.

On the other hand, in the most southern Ukrainian regions, organization of transbound-ary cooperation is a responsibility of the ofces for international cooperation within regional administrations that have been created and are functioning practically following the soviet lines and rather blocking than promoting this cooperation.

In modern Ukraine there has appeared something that can be possibly called a Window to Europe that is located on the Ukrainian-polish border. Tis is the place where modern European models of transboundary cooperation are being created. The border in the south of Ukraine is of an absolutely diferent nature and with its own diferent aims.

Conglomerate Societies in the Macro-region and the Economic Path of Moldova-Transdniestria Confict Settlement

Considering the prospects and benefts of economic integration in the macro-region (moldo-va-transdniestria, Ukrainian Black sea coast), it is important to distinguish in the developed subregions the ambivalence of the existing societies consisting of two components – globalist-postmodern and traditionalist-patriarchal. “modern societies become similar to a, let us say, conglomerate with two enclaves coexisting within it. The frst one “encloses” everything modern and post-modern – it is a “globalization chamber”. The second one is something that is carefully protected, taken care of and cherished as it is traditional, indigenous and dear,” writes a well known expert in international relations A. Bogaturov¹⁸. Economic integration in the Odessa macro-region (“Danube” Euroregion) includes both of these components, but to diferent degrees and in diferent styles.

In our works devoted to the internal political dynamics in transdniestria¹⁹, we note the functioning of these two enclaves in transdniestria.

Interaction and relationships between the ruling regime and business has become one of the major political issues in conglomeratic societies. Both in Ukraine and in the Right Bank Moldova and transdniestria, these relations are, to a greater or lesser extent, full of fghts and problems. Financial and oligarchic clans are in charge in Ukraine, with the government only just embarking on the process of suppression of oligarchy according to putin’s model, and establishing masterdom over the oligarchic clans. Right Bank Moldova is characterized by the domination of the government, while transdniestria has created a scheme of mutual penetration of interests of the authorities and business and of positional turf war for infuence which takes place out of the public eye.

It would be a mistake and a simplifcation to draw a conclusion that only one of the parties to these domination-subordination disputes can be a possessor of the idea of macro-regional economic integration. Actually, both parties are loyal to such integration due to the motives of their own participation and implementation of their ideology of such integration.

The necessary conditions for economic integration in the macro-region can be as follows: 1) guarantees of mutual recognition of ownership rights of the business elites participating in economic integration (this is particularly true for the transdniestrian property and the property located on transdniestrian territory); 2) preservation of the conglomerate nature of subregions, including transdniestria, i.e. guarantee of preservation of the political class of “traditionalists”; 3) propagation of the European model of mutual relations between the government and business; formation of modern management of strategic regional development.

We are proceeding from the fact that macro-region’s societies will for a long time continue keeping the outlines of conglomerate societies and the problem of interaction of globalist and traditional principles will persist in the foreseeable future. Tis coexistence crystallizes very vividly in the political design of regional societies – in transdniestria it is a combination of the “star of sherif^*” as a globalist logo and the Red star as a logo of the soviet times.

Dividends of Peace and Economic Integration

The major result of Ukrainian participation in the macro-regional economic integration is competitiveness generated in the new entity and the new market. presently, the regions under consideration are noncompetitive. Their competitive potential can manifest itself only in the conditions of economic integration and prospering transboundary cooperation based on the new pan-European basis.

* A diversifed transdniestrian commercial group with a strong retail brand presence

We understand competitiveness of the region as a European model, as ability of the region to ensure rather high life standards for the population with criteria of this kind of competitiveness being labour migration and infow of investments to the region. By the defnition of the organiza­tion for Economic cooperation and Development (oEcD), a competitive region is, “the one that can attract and support successful companies and ensure higher life standards for the residents in the region. skilled labour and investments try to “fee” from non-competitive regions to more competitive ones.”²⁰

The idea of competitiveness consists in the fact that a region is based upon clusters, or groups of enterprises united not due to their political belonging to this or that state but according to geographical and economic principles, complementing each other and forming around them­selves a pool of providers of diferent services. The agrarian Right Bank Moldova, industrial transdniestria and Ukrainian Black sea coast ports very well supplement each other forming a uniform macro-region. clusterization of the Odessa macro-region shows an economic integra­tion vector – from the West to the East, from Right Bank Moldova, via transdniestria, to the Ukrainian Black sea coast.

The criteria for the evaluation of competitiveness of regions in the macro-region that is being presently formed should be like those included in the European competitiveness index²¹ calcu­lated for some regions and countries of Europe. The calculations are made according to 40 factors that are grouped as fve categories: creativity, economic efciency, infrastructure and accessibility, employment in the knowledge sector of economy and education. creativity is estimated as the number of those employed in research, development and design jobs per 1000 persons of the population; expenses for R&D per capita; number of applications for the obtainment of patents per 1 million persons, number of persons employed in the information and communication services sector per 1000 people.

When estimating the competitiveness of our regions, we can see the historical basis that can support economic integration and modernization. These are, first of all, the traditional economic structure and householding type inherent both in Moldova-transdniestria and in the south of Ukraine. Here is also included a combination of the agrarian-oriented and industrially-oriented regions supplementing each other. The high level of local communities’ consolidation and their solidarity with local authorities is also important. intensity of communications in the region also plays an important role.

The regional revival mechanisms are well-known. They include new leadership, Europeaniza-tion of mentality (standards and strategic planning), as well as the international legal system of transboundary cooperation.

The dividends of peace and economic integration include: formation in the regions of the middle class, holder of the European values; creation of a high standard of living based on the European standards; creation of new jobs and reduction of labour migration.

Dividends of Peace and advantage of Competitiveness in the Formation of the Odessa Macro-region

The Ukrainian government, being guided by the idea of ensuring equal opportunities to all the citizens of Ukraine, irrespective of the place they live, will aim its policy at the creation of the Odessa macro-region without being afraid of any destructive political consequences.

The interests of the stakeholders from Kyiv participating in the development of policy for regional development have practically no overlap with the interests of the regions. Their purpose is to deplete the regions, to direct fnancial fows via Kyiv, via “their own” banks, to make a rule that large enterprises open their representation ofces in Kyiv and efect their most important transactions there. The customs predominating in the corridors of power can be illustrated through the fact that when resolving the issue of connection of the new building of the Kherson University and the new ice palace in Kherson to the electricity grid (placing the technical order), we found out that neither the regional authorities, nor the Regional Energy ofce could issue a respective decision or sign the respective documents. Local authorities unanimously say that such issues are resolved only in Kyiv. The present government is concerned only about creation of the “Kyiv shopfront” and neglects the interests of the regions, arranging a huge redistributive Field of Wonders in Kyiv with regions completely dependant on capital subventions, on tranches allocated by ofcials as prizes for “correct political behaviour”. The present government is indif­ferent to regional transboundary development.

The process of regional communities’ consolidation, without which it is impossible to mo­bilize internal resources for the revival of the macro-region, presents a big difculty. Tis kind of territorial community consolidation, on the territory artifcially delineated by Bolsheviks into regions (oblasts) is impossible. The most important condition for consolidation is going beyond the boundaries of regional division and formation of natural territorial communities on the ter­ritory having a common historical past and a common economic complex (clusters), afnity of a socio-cultural nature (language, traditions, mentality, character, behaviour patterns, etc.). The Dniester / Nistru – Dnipro macro-region (Odessa macro-region) can become a format for the new territorial community, a new European macro-region.

A specifc feature of the Odessa macro-region is the domination of the Russian language in economic communication. Tis takes into consideration the Russian language’s potential in the region, its prevalence. According to the international agency “Eurasian monitor”, having held a survey of prevalence of the Russian language in 2007, those fuently speaking, writing and read­ing in Russian make 70% of the Ukrainian population, another 13% can fuently speak and read but are writing with mistakes. in Right Bank Moldova – 51% of the population fuently speaks Russian and another 19% fuently speaks and reads but writes with mistakes²². According to the survey held by the Eurasian monitor those fuently speaking Russian in transdniestria make 62% and another 31% can fuently speak, but write with mistakes²³. The Russian language has for a long time been the key language for the experts involved in the transdniestrian settlement and regional cooperation.

It is necessary to take into consideration the variability of political development scenarios of regionalism in the area of Moldova-transdniestria and Ukrainian Black sea coast. several options are possible moving forward:

- Creation of the “Dniester / Nistru” Euroregion or Odessa macro-region in the specifed area and implementation of the European model of regionalism;

- Economic integration is localized in the form of the creation of transnational cartels, hold­ings, corporations and - conditions of formation of neutral status of the states in the region does not result in the formation of efective transboundary forms of integration;
- Economic interaction and transboundary cooperation does not become transformed into integration, does not result in the creation of supranational structures and shall be subject to a low level stagnation;
- Rejection by the states in the region of economic interpenetration, preservation of the Frozen confict, relapses of economic embargoes, violation of economic freedoms, ten­dency towards isolationism and economic depression. Te uniqueness of the future macro-region is associated with a complex interconnection of geopolitical interests of the power centers on its territory: the UsA, Russia, EU and other countries. The effect of these interests can both slow down and speed up formation of the Odessa macro-region.

Conclusions and Recommendations

The major conclusion that we made as a result of our analysis of the situation existing in the region²⁴ is that economic integration and cooperation are invariant in relation to any other settlement issues. The Frozen status of the transdniestrian confict, its stagnation, the lengthy duration of the existing economic freedom restrictions, negatively afects the economy and the social well-being of the population. The confict in Moldova-transdniestria is a source of eco­nomic complications not only for Moldova-transdniestria, but also for Ukraine, that, in fact, has incurred huge, multimillion losses from the imposing of new customs rules on the transdniestrian segment of the Ukrainian border.

Economic integration of Moldova-transdniestria would be an incomplete and insufcient way out of the existing situation. Reintegration of Moldova in the narrow sense of this word does not take into consideration some points, the frst being the context of the existing Moldovan-Ukrainian and transdniestrian-Ukrainian economic cooperation, the second – the complementary nature of the regional economy of Right Bank Moldova, transdniestria and the Ukrainian Black sea coast, the third one – mutual acceptability of economic integration of the south of Ukraine with Right Bank Moldova and transdniestria as opposed to reintegration in the narrow sense of the word.

The most efective and mutually acceptable macroeconomic format for the powerful economic integration process could be the formation of the Odessa (Dniester / Nistru – Black sea coast) macro-region based on an essentially new level of transboundary cooperation in the Dniester / Nistru river basin and the Ukrainian Black sea coast.

The possible name of “Odessa macro-region” could be acceptable for the conficting parties and would strengthen the regional role of Ukraine. Odessa, the largest city in the macro-region, mother of peculiar economic and commercial culture, is an attractive cultural, intellectual and economic centre in the macro-region where people come from all corners of the macro-region to recreate themselves, do shopping, study and carry on business.

The existing practice of formal transboundary cooperation can be overcome only in a legal way, ensuring an upgraded legislative framework both for transboundary cooperation as a whole and for the formation of the Odessa macro-region in particular. These laws should defne the priority of the integrated territorial approach versus the notorious chain of command (adminis­tration in the economic sphere).

Creation of a single information and statistics centre for the macro-region’s development could become a good start for integration. it is not steel but information that is the main issue for economic integration today. Tis integrated centre could be created under an arrangement between Moldova, transdniestria and Ukraine and agreed in the “5+2” format with other partici­pants of the negotiation process. The EU countries could render fnancial and expert assistance ensuring Europeanization in the creation of the common information and statistical system for the infrastructural development of the territory. it is necessary to have common criteria for the economic development evaluation, fxing of statistic standards and creation of a joint database of comparative statistical data on the macro-region.

A major step towards the creation of an integrated economy of the macro-region could be­come a strategy of its development for the period of 2008 through 2028. Tis strategy could defne the principles and directions of rapprochement of the economies in the regions (countries), as well as goals and methods of assurance of the macro-region’s sustainable development. Development of such a strategy could become a joint project for economic institutions of Odessa, tiraspol and chisinau supported by the EU grant (transboundary cooperation).

Attention should be focused on the Leadership school for regional elites. Unfortunately, the existing regional elites in the southern regions of Ukraine and, possibly, in the adjacent border regions of Moldova-transdniestria are not capable of leading the development of the regions towards better life; they have neither sufcient education nor sufcient will, interest or necessary abilities. The creation of such a Regional Leadership school could become a mega project for the third sector of our countries.

For the successful promotion of the idea of economic integration in the macro-region it is necessary to work out and adapt economic development models: regional diferentiation of credit and tax policy, support of special economic zones and depressive regions etc.

It would be expedient to create in the macro region a standing Annual Moldovan Economic Forum devoted to the issues of transboundary cooperation, creation of the economic macro-region and modernization of its economy. The Moldovan Economic Forum would become a platform for creative activity of economists in the region, a place for sharing ideas and information between economists and managers of Moldova-transdniestria and Ukraine. The Forum’s products could be used by the policy-making agencies and economic policy entities in the macro-region. At the same time, it would perform the role of public mobilizer towards settlement of regional problems, attraction of investors and training of regional elites in the issues of macro-regional management. The Forum could be held alternatively in Odessa, Chisinau, Tiraspol, Kherson and Mykolaiv.

5 october 2008, Kherson

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