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U.S. Department of State

Great Seal Secretary of State Madeleine K. Albright
Remarks to East-West Institute Panel
Metropolitan Pavilion
New York, New York, May 2, 2000
As released by the Office of the Spokesman
U.S. Department of State
Blue Line

(As Prepared for Delivery)

"The New Geopolitics of Southeast Europe:
Building a Secure Investment Climate for the 21st Century"

President Ahtisaari, High Representative Solana, Foreign Ministers Papandreou, Cem and Tarasyuk, Ambassador Hill, distinguished guests, good afternoon.

I want to thank the East-West Institute for the chance to participate in this landmark conference regarding investment and the new geopolitics of Southeast Europe.

Both the topic and the timing are appropriate, because the changes in this region are historic and ongoing.

Two decades ago, Southeast Europe was still divided by the Iron Curtain, with the majority of its people locked in by brutal systems of political repression and centralized economic control.

A decade ago, these shackles broke and countries moved, some forward into democracy, some backward into division and strife. Much of the former Yugoslavia became a battleground, scarred by Europe's worst bloodshed in more than half a century.

Today, a new spirit is emerging of integration and cooperation. Where democracy had already begun, it has gained strength. Where conflict had reigned, peace has broken out.

With NATO's help, the fighting in Bosnia and Kosovo has ended. And regional leaders have forged a pact with outside donors to transform this area of chronic instability into a full partner in the Euro-Atlantic community.

The United States welcomes this, because we learned in the last century that America cannot be secure if Europe is at risk; and that Europe will always be endangered if its southeast corner is embattled.

Fortunately, our Pact for stability in Southeast Europe begins with a solid foundation.

With strong support from Foreign Ministers Cem and Papandreou, and from business leaders in both countries, Turkey and Greece are aiding development, promoting investment, and helping to turn the Balkans problem into the Southeast European opportunity.

Hungary and Slovenia are engaged actively with their neighbors, drawing on their experience in how to make democratic transitions work.

Leaders in Bucharest, Skopje, Sofia and Tirana are participating in the Pact with enthusiasm and offering creative ideas for promoting regional integration.

Croatia's new government is setting that pivotal nation on a direct course towards partnership with Europe.

And Bosnia continues to make progress towards joint institutions and multiethnic democracy.

Despite this, the road we have chosen remains rocky and uphill. Many people, especially in the former Yugoslavia, have yet to free themselves from the prejudices and hatreds of the past. Economies are plagued by underdevelopment and the ravenous parasite of corruption. And quite a few in the region, especially the young, are pessimistic and eager to leave.

All this explains why the Stability Pact is not a one-way street, but rather a two-way bargain. The international community has agreed to provide financial and technical help. The region has agreed to do all it can to create the economic, political and security conditions that will make development possible and private investment rewarding.

Success requires that both sides of the bargain be kept. Without sound policies, assistance will be wasted. Without assistance, sound policies will not get off the ground.

But there is a third necessary ingredient, and that is the private sector. In this era, no country can thrive on outside assistance alone. And as the outcome of the Cold War revealed, economies that exclude free enterprise deprive themselves of the very fuel required for sustained growth.

So we must move ahead in each country, on all fronts, together. And to date, the international community has been doing its part.

On the security side, NATO rolled back Milosevic's campaign of terror. By so doing, it sent a message throughout the region that ethnic cleansing is unacceptable. Now, we have joined with the UN and other partners in striving to create the conditions for recovery in Kosovo. Our goal is to isolate violent extremists, and give wiser heads time to build a society in which all may be secure.

We are also keeping our economic commitments. At the regional conference in Brussels a month ago, donors pledged roughly 6 billion Euros. The majority was from the EU. The U.S. share was 624 million.

Of the total, more than a third will be used for "quick-start" projects, aimed at making an early and tangible difference in people's lives. The amounts pledged in Brussels will also help bring down barriers to private investment by building up regional infrastructure.

The approach we are taking is inclusive. Assistance is being provided not only to the region's national governments, but also to Montenegro.

And Serbia will be welcome to participate in the projects and programs of the Pact when it, too, becomes democratic.

Recently, a hundred thousand Serbs took to the streets to demonstrate their dissatisfaction with Milosevic and their desire for freedom. One of the ruling parties responded by saying that Serbs are used to suffering. But defeatism is no substitute for democracy. We should plan now for how we can help a democratic Serbia recover from the devastation wrought by the past decade of misrule.

The Conference in Brussels helped create a framework for governments in the region to accelerate reforms and spur growth. Those governments must do their part by working to create a sound environment for investment, reduce barriers to trade, deepen democracy and promote human rights.

The international community can assist, but it cannot impose, these reforms. Each government must choose its own course. Each must confront and resist the temptations posed by kleptocracy and authoritarianism. Each must learn from the models of economic and political openness that have brought relative prosperity to much of the industrialized world.

And each must contribute to a sound political and social foundation for regional growth by striving to cooperate with one another. The more the countries of Southeast Europe think like a team, the better they will do as individual nations.

That is why the Stability Pact has become a catalyst for cooperation. With its help, nations have agreed to seize and destroy illicit weapons shipments and to align regional arms exports to international standards. Recently, in Prague, I announced U.S. support for a regional project aimed at promoting the rule of law.

And this spring's flooding, including the disastrous chemical spill in the Danube, showed the need for a cooperative emergency response capability.

The importance of this was also shown by the earthquakes last fall in Turkey and Greece. If nations within a region can learn to work together when time is short and lives are at risk, they should find it easier to establish common ground during periods of normalcy. We are currently working with our Stability Pact partners to develop such a capability.

We are also heartened by support both within and outside the region for a project aimed at promoting more objective teaching of Southeast European history. Under this plan, a multinational academic panel will work with governments to increase the ratio of facts to hate in the textbooks children read. This is vital, because for far too long, too many in this region have allowed past grievances to obscure future prospects.

International assistance, internal reform, and progress towards integration can bring Southeast Europe much of the way forward. But sustained progress will not be possible without significant long-term financial investment from the private sector.

Some of the elements required to attract such investment are already present. Citizens in the region are motivated and skilled. Natural resources are abundant. And these countries are located astride one of the world's great commercial crossroads.

But let's be frank. Corruption kills investment dead. Not even a golden goose could stay in business long if every egg were inspected thrice, taxed twice, and then stolen with its owner having no viable legal remedy.

The countries that will prosper in the new global economy are those able to attract investment, because their financial systems are open, their rules transparent, their laws enforced, and their standards consistent with global norms.

A democratic government blessed by accountable leaders who respect human rights will earn the allegiance of its own people and the confidence of those with funds to invest.

To build momentum, the Stability Pact has established a Business Advisory Council to provide direct private sector input on business climate reform. We hope the Council will be closely involved with the work of the country economic teams that have been set up to monitor implementation of reforms under the Stability Pact, including a regional anti-corruption initiative and an Investment Compact.

Before closing, I want to raise a flag of warning. The success of the Stability Pact depends primarily on choices made in Southeast Europe, and on assistance that will come primarily from elsewhere in Europe. But the United States has an important supporting role that we cannot play without resources.

Most Americans are astonished when I tell them we devote a smaller percentage of our wealth to assisting overseas development than any other industrialized country. During the past decade, our rate of investment has declined by half; since the days of Truman and Marshall, by more than ninety percent.

This makes it harder for us to leverage the help of others, and often leaves us with no other choice than to shortchange one urgent need in order to cope with another.

Already this year, Congress has approved a budget resolution that will slash more than ten percent from the President's foreign affairs funding request, while failing to approve emergency funds to pay our share of UN peace operations in Kosovo and elsewhere.

This is irresponsible. The 21st Century is no time for America to retreat. Congress should approve the funds the President has requested, so that we can protect our interests and meet our responsibilities in Southeast Europe and around the world.

The history of the last century in Europe was a struggle between the forces of disintegration and the need to come together; between the dictatorial urge and the human aspiration to be free; between extreme nationalism and acceptance that the differences that define us cannot and should not be allowed to obscure the common humanity that binds us.

Nowhere has this struggle been more acute than in Southeast Europe.

Today, we see the dawn of a new geopolitics, in which historic adversaries are exploring ways to cooperate through democratic means, on behalf of shared interests, in support of a common future. I hope all of us, each in our own way, will continue to invest our resources, energies, and skills in creating such a future.

Thank you very much.

[End of Document]
Blue Line

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