REPORT on the activities of the United Nations

12 December 1994

Doc. 7199

REPORT on the activities of the United Nations

Economic Commission for Europe

(Rapporteur: Mr MALINOWSKI, Poland, Liberal, Democratic and Reformers Group)

Summary

Founded shortly after the second world war, the United Nations Economic Commission for Europe (ECE) was, in the decades of east-west confrontation, virtually the only organisation providing a forum for east-west European co-operation in the economic and related fields. Since the demise of communism in central and eastern Europe, the ECE has undertaken a thorough review of its mission, and now concentrates on assisting the economic reform process in the region, particularly by helping rebuild neglected infrastructure and promoting the reintegration of the countries concerned into the world economy.

The Parliamentary Assembly — for which political and economic stability and the securing of democracy and human rights in central and eastern Europe has become a foremost priority — should strengthen its co-operation with the ECE and lend political support to its more technical activities, which greatly contribute to a growing together of Europe's different parts.

I. Draft resolution

1. From its inception in 1947 and throughout the cold war, the United Nations Economic Commission for Europe (ECE) served as the foremost forum for east-west co-operation in the economic and related fields. Even today it is the only permanent intergovernmental forum for economic co-operation covering all the countries of Europe, Canada, the United States and Israel, as well as the central Asian republics of the former Soviet Union. Since the fall of communism in central and eastern Europe the organisation has fundamentally reassessed its mandate, which, in addition to its priority sectoral activities, today consists primarily in fostering the economic reform process in the region and assisting the economies in transition in their integration into the European and global economy.

2. The Assembly notes with satisfaction the complementary efforts of the Council of Europe and the ECE to foster democracy and development in the transition economies of central and eastern Europe.

3. In view of the Council of Europe's expanding membership, its privileged links with countries whose parliaments enjoy special guest status with the Parliamentary Assembly, and its longstanding co-operation with the ECE, the Assembly resolves to strengthen its links with the organisation, notably by serving as the ECE's parliamentary forum for regular debates on its activities, on the basis of reports prepared by the Assembly's Committee on Economic Affairs and Development.

4. The Assembly invites the member states of the United Nations Economic Commission for Europe:

i. to reinforce the ECE's capacity for economic analysis of the transformation processes under way in the transition countries, seeing that it provides an independent and highly professional assessment of the situation in those countries, and also considering the great importance attached by policy-makers, other international organisations and professional institutions to this analysis. This work also provides views and commentary which foster the debate under way in the economies in transition, and which promote the process by which national policy-makers adopt within their own country reforms generally advocated for the region as a whole;

ii. to enable the ECE to intensify its regulatory work aimed at the establishment of international norms and standards, the elaboration of international legally-binding instruments, the adoption of regional strategies and the development of coherent international infrastructure networks. This work is as valid today as it was in the past when it provided, at times, the only vehicle for co-operation among countries unable to bridge the east-west divide at political level;

iii. to enable the ECE to pursue and expand its programme of technical co-operation — in particular its workshops, seminars and regional advisory services — which has proved to be of great importance to the countries in transition;

iv. to recognise the value of the ECE's work, including its contribution to global programmes and to developing countries in other regions, especially those of direct interest to the transition process in central and eastern Europe, while avoiding any duplication of work with other international organisations, and to improve toward this end co-operation with the Council of Europe;

v. to enable the Organisation to pay greater attention in its future work to the social dimension of the transition process in central and eastern Europe.

5. The Assembly calls on the governments of Council of Europe member states, and on the European Union:

i. where applicable, to accede to ECE conventions and agreements in the transport and the environmental fields;

ii. to enhance access to their markets for the exports of the new democracies in central and eastern Europe — including their agricultural and other "sensitive" products. In this context the Assembly welcomes proposals aimed at establishing a European multilateral trading framework respectful of the principles of the future World Trade Organisation;

iii. to improve substantially the co-ordination of their conceptual and material assistance to the countries of central and eastern Europe. In this context, the Assembly fully supports the efforts of ECE for a better co-ordination of foreign assistance among donors, taking into account the needs of the transition economies and their capacity to absorb assistance, and recommends that the ECE be given the role of mapping current assistance efforts so as to make them more transparent;

iv. to support financially the ECE Trust Fund for Assistance to Countries in Transition (TFACT), thereby permitting a continuation and, where necessary, an expansion of the programme of workshops, seminars and other activities on the problems of transition carried out under ECE auspices;

6. The Assembly recalls its Resolution 1036 (1994), on the progress of economic reform in central and eastern Europe, and reiterates the need for all the European countries to be in a position to engage in closer co-operation in the economic and social fields, and proposes that the Council of Europe and the ECE take new initiatives toward this end, notably through joint projects.

II. Explanatory memorandum

by Mr MALINOWSKI

Contents

Page

A. Background. Co-operation between the United Nations Economic

Commission for Europe and the Parliamentary Assembly 5

B. The changing role and mission of the ECE (1990-93) 5

C. Methods of work 6

D. The main fields of activity of the ECE 6

i. Assistance to the countries in transition 6

ii. Transport 8

iii. Environment 9

iv. Energy 10

v. Facilitating international trade 10

vi. Economic analysis 11

vii. Women in a changing world 13

E. Conclusion 13

A. Background. Co-operation between the United Nations Economic Commission for Europe and the Parliamentary Assembly

1. In its motion for a resolution presented in December 1993 by Mr Holtz and others (Doc. 6981) the Assembly pointed to the "the complementary effort of the Council of Europe and the ECE to foster democracy and development in post-communist central and eastern Europe". The motion called for intensified co-operation between the Parliamentary Assembly and the ECE. It could be modeled on those it already engages in with other organisations, such as OECD and the European Bank for Reconstruction and Development.

2. The aim of the present report is to analyse the changing role and functions of the ECE as from the end of the cold war, and to assess the organisation's role as a key instrument of pan-European co-operation.

3. The work of the ECE, which lacks a parliamentary counterpart in its often pragmatic and technical activities, could benefit greatly from closer co-operation with the Assembly, just as the latter would be in a position to take cognizance of the difficulties facing the ECE in its quest for pan-European integration, and to propose political solutions to upcoming problems. At the forty-ninth session of the ECE in April 1994, Mr Yves Berthelot, Executive Secretary of the organisation, expressed his wish for deeper co-operation with the Parliamentary Assembly.

4. This report also draws on the highly informative exchanges of views the Rapporteur was able to hold with Mr Berthelot and with senior officials of the ECE Commission during his visit to the organisation's headquarters in Geneva in September 1994.

B. The changing role and mission of the ECE (1990-93)

5. The United Nations Economic Commission for Europe was created in 1947 on an experimental basis, to promote concerted action for the economic reconstruction of Europe after the second world war. The ECE was the first of five regional commissions established by the United Nations Economic and Social Council. (The others are: Economic and Social Commission for Asia and the Pacific (ESCAP); the Economic Commission for Africa (ECA); the Economic Commission for Latin America and the Caribbean (ECLAC) and the Economic and Social Commission for Western Asia (ESCWA)).

6. For more than forty years, ECE served as a unique instrument for economic dialogue and co-operation between two radically different political and economic systems. Still today, it is the only permanent intergovernmental forum for economic co-operation covering all the countries of Europe, the United States, Canada, Israel and the Central Asian Republics of the former Soviet Union.

7. In only four years, from 1991 to 1994, the membership of the ECE rose from thirty-four to fifty-five countries. The dissolution of the USSR and the Yugoslav Federation, as well as the separation of the Czech and Slovak Republics, brought new members to the United Nations and to the Commission. At present, nearly half the member states are receiving special technical assistance as they make the difficult transition from centrally-planned to market-oriented economies.

8. In response to the dramatic changes in the region during the last five years, the ECE has undertaken a thorough reassessment of its role and functions. In addition to defining its priority areas of work (protection of the environment, transport, statistics, trade facilitation and economic analysis), the Commission has launched a major programme to assist the reform process in post-communist central and eastern Europe, thereby facilitating the reintegration of the region into the European and world economy.

9. The Commission's work centres on two basic areas: macro-economic analysis of the situation in all countries of the region , and the development of norms and standards for them. The first activity is instrumental in fostering debate among governments and in providing policy-makers in the economies in transition with analytical, statistical, normative and other tools to promote the transition process. The second activity is the cornerstone for the integration of the countries of the region, especially the newly-independent countries, in the European and world economy. It encompasses the development of standards, regional strategies and legal instruments, as well as infrastructure projects which are coherent throughout the region. This work also promotes intra-regional trade.

10. At the same time, the ECE has adopted as a guiding principle the concept of sustainable development. Practically speaking this means that environmental considerations are to be incorporated into all ECE programmes.

C. Methods of work

11. The Commission holds an annual session in April to review overall policies and its work programme, and to make recommendations to its parent body, the Economic and Social Council of the United Nations. The Commission's programme of meetings, workshops and seminars serves the following purposes:

—th e exchange of information and experience among countries of the region which reinforces economic co-operation (policy recommendations); —

— t he development of norms, standards, regulations and international legally-binding instruments (standard setting); and—

—me asures to facilitate trade and transport and promote sustainable development.12

12. Some 150 meetings are arranged by the ECE in Geneva each year with, in addition, around twenty seminars which are usually held in a member country, and about thirty workshops which address specific problems of the transition economies.

D. The main fields of activity of the ECE

i. Assistance to the countries in transition

13. Building entrepreneurial capacity in the transition economies is critical to the success of economic reform. The organisation offers technical assistance in the form of workshops and other training programmes in order to contribute to the "human transition" — the most difficult, yet the most decisive, part of the transition process.

14. In the context of the restructuring of the United Nations Secretariat in the economic and social sectors, the overall distribution of resources assigned by the General Assembly for advisory services has been modified in the biennium 1994/95, making the regional commissions the main providers of advisory services funded through the United Nations programme budget. Resources under this programme are intended to foster the economic development of the less industrially developed countries of the region, in areas which they themselves identify as being of the highest priority.

15. As a result of this new allocation of resources, which is in addition to other resources allocated to the ECE from the United Nations programme budget, the ECE will be in a position to provide regional advisory services in most of its sectors of work. The principal function of the advisory services is to provide member governments with advice of a broad nature, in order to promote their capacity and institution-building and thus facilitate their transition to a market economy and their integration into the European and global economy.

16. This will be achieved at regional level by identifying specific programme and project needs, and by establishing a network of linkages both with the ECE regular programme of work and with the activities carried out by other international organisations and institutions active in the region, including donor organisations. The programme will make full use of the UN-integrated offices established in a number of countries in transition under the direction of resident co-ordinators.

17. In the past, the ECE has benefited from the services of a regional adviser in the transport sector, responding to requests from a number of countries in transition by providing services in the field on a range of issues concerning transport policy and technology. An expanded programme is being launched in 1994 and is expected to cover the fields of environment, transport, statistics, trade facilitation, energy, development of international trade, industry and technology, and agriculture and timber.

18. The administration of this programme and the setting of priorities in providing advisory services and identifying basic needs will be "demand-driven", and will take into account data available to ECE. Additionally, co-ordination with the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) will be maintained to avoid duplication of assistance in the case of countries in transition which enjoy dual membership. Simultaneously, co-operation with other UN institutions and organisations will be strengthened and will cover data collection, sharing of common services and facilities offered by the United Nations Development Programme (UNDP) in the countries in transition.

19. Indeed, the workshop programme continues to serve as the main form of ECE assistance to the economies in transition. The workshops and other similar informal fora complement the Commission's regular programme of activities to promote economic reform in all sectors of importance to the countries concerned. The workshops not only respond to the needs of governments but also facilitate contacts among business communities in the region and generate an exchange of technical know-how and expert advice.

20. To date, more than 135 workshops have been held, and the demand is expected to grow. To the extent possible workshops are held in the countries in transition, which enables a wide audience in these countries to profit from them. Among the issues addressed are privatisation, restructuring of state enterprises, industrial policy, trade and investment, promotion of direct foreign investment, the development of small- and medium-size enterprises (SMEs), pricing policies, quality control, statistical and accounting practices, environmental management and new technologies, sustainable industrial management, efficient use of energy, adaptation of transport enterprises, development of housing markets, forest legislation and others.

21. To avoid duplication the ECE co-operates closely with other international organisations and institutions active in the region. The European Union, OECD, the World Bank, EUROSTAT, UNDP, WHO, IMF, GATT, ITC, UNIDO and UNHCR all participate in ECE workshops.

22. The workshops are financed from extra-budgetary resources, mainly by the countries in transition themselves. They are sometimes supported by grants from local authorities or business communities, or through bilateral contributions from governments and private sponsors in market-economy countries. Systematic planning of workshops has, however, been hampered by the uncertainty of future funding.

23. To overcome this problem the secretariat has continued to seek contributions from the Trust Fund for Assistance to Countries in Transition (TFACT), which it established in 1993 and which serves as a channel through which Governments, international organisation, institutions and other donors may support ECE programmes.

24. Another important part of the ECE's contribution is its legal assistance to transition economies. Among international organisations the ECE — through studies and building on its long experience in the region — has been foremost in stressing the importance of an appropriate legal and institutional environment to make economic adjustments.

25. Technical assistance in the legal field is provided through the Working Party on International Contract Practices in Industry. It consists of legal experts operating under the auspices of one of the Commission's principal bodies, the Committee for the Development of Trade. It draws up guidelines, standard clauses and model contracts which facilitate trade, foreign direct investment and industrial co-operation between east and west, including joint ventures.

ii. Transport

26. The United Nations Economic Commission for Europe has been active in pan-European transport for forty-five years, and its work in this field is reflected in various conventions (for instance the very successful convention on transboundary transport (TIR). The Inland Transport Committee of the organisation is active in three main directions: the harmonisation of technical and operational transport regulations; the facilitation of border crossings; and the co-ordinated development of infrastructure networks. The conventions and agreements concluded among its members in the fields of transport include transport infrastructure networks; road traffic safety; transport facilitation; transport of dangerous goods and transport of perishable foodstuffs. The Commission is at present preparing a new convention on inland waterway transport. Recommendations of the ECE represent so-called "soft law", but they are frequently transformed into national laws or European Union directives.

27. After decades of neglect of their transport infrastructure, the countries in transition have much catching up to do. Indeed, transport infrastructure is the perhaps primary condition for economic growth, and for integrating the countries in question into the European and world economy. To lead to the desired results it must, however, be carried out according to a co-ordinated plan, including major international routes, as well as common norms for them.

28. A pan-European plan of this kind already exists, building on three international agreements negotiated within the ECE and kept under constant review. They are: the European Agreement on Main International Traffic Arteries (AGR); the European Agreement on International Railway Lines (AGC); and the European Agreement on Main International Combined Transport Lines and Related Installations (AGTC). These agreements have been adopted by the Second Pan-European Transport Conference (Crete, 14-16 March 1994) as basic instruments for the identification of priority investment projects in central and eastern Europe.

29. Two long-term ECE projects have been concluded to assist road, rail and combined transport in Central and Eastern Europe. The Trans-European North-South Motorway (TEM) will create a network of motorways stretching from the Baltic to the Black Sea. Eleven central, east and south-east European transition countries are partners in the project, and the development of east-west connections has become one of its priorities. Similarly, the Trans-European Railways Project (TER) started as a north-south corridor but has since become a network with east-west links as well. The ECE provides technical support for both projects and is responsible for co-ordination.

iii. Environment

30. The countries of the ECE region are responsible for more than three quarters of world pollution and are the heaviest consumers of natural resources and energy. Political and economic changes have made Europe more transparent, and there is now a clearer view of the socio-economic and environmental problems faced by the countries of central and eastern Europe. The situation calls for intensified international efforts, in which the ECE, with experience and knowledge accumulated over decades in east-west co-operation, has a logical and important role to play. Major aspects of the organisation's response in the field of environment are strategies, policy recommendations and legally binding multilateral instruments.

31. The ECE has been a regional forum for co-operation on water management, air pollution and other environmental problems for more than thirty years, with special focus on pollution transcending national boundaries. Over the last fifteen years nine multilateral instruments — four conventions and five protocols — have been elaborated under ECE auspices: the 1979 Convention on Long-range Transboundary Air Pollution and its Protocols regarding monitoring and evaluation of long-range transmission of air pollutants in Europe; reduction of sulphur emissions; control of emissions of nitrogen oxides and of volatile organic compounds or their transboundary fluxes; the 1991 Convention on Environmental Impact Assessment in a Transboundary Context; the 1992 Convention on the Transboundary Effects of Industrial Accidents; and the 1992 Convention on the Protection and Use of Transboundary Watercourses and International Lakes.

32. The Rapporteur believes that the increased membership of the ECE, and the growing potential for transboundary environmental problems in Europe, enhance the importance of these agreements as a basis for international co-operation and action. By the same token, the conventions and protocols in the fields of transport and environment are important building-blocks to a common regional legal framework among countries having to cope with urgent transport and environmental problems. They will facilitate the process whereby the economies in transition can gradually be inserted into a pan-European legal and economic space. Therefore, the Parliamentary Assembly should assist the ECE in promoting the adhesion by Council of Europe member states to pan-European conventions elaborated by the Commission.

33. Under ECE auspices, a group of senior governmental officials was established as the central co-ordinating body for the further development of the "Environment for Europe" process. This process is expected to develop a common European policy framework that reflects a long-term perspective and cross-sectoral approach and promotes convergence of economic, social and environmental policies, plans and policy instruments. The senior governmental officials also oversee the preparations for the 1995 Ministerial Conference ("Environment for Europe"), in which the Council of Europe plays an important role regarding nature conservation, as was the case for the 1993 Lucerne Ministerial Conference, together with other international organisations and institutions. The continued active involvement of the Council of Europe in this process should be promoted.

iv. Energy

34. The ECE has developed a whole range of activities to assist the countries in transition in the transformation of their energy sector. They include workshops, the "Energy Efficiency 2000" Project, and a planned centre for the promotion and development of a market-based gas industry. The main responsibilities are vested in the Committee on Energy and its three Working Parties on Coal, Gas and Electric Power.

35. The Energy Efficiency 2000 Project, launched in 1990 through the Bergen Ministerial Declaration on Sustainable Development in the ECE Region, provides a forum in which all member states co-operate on economic reform in central and eastern Europe as equal partners. Its main aim is to enhance trade and co-operation in energy-efficient technology, leading to a better protection of the environment, improved living conditions and higher industrial productivity.

36. The innovative feature of the project is that it promotes investment which in turn can finance continued technical assistance. This will encourage further policy reform, out of which new markets and financing mechanisms can arise, and so on. For instance, the Committee on Energy recently recommended that a new UNDP-ECE project entitled "Demonstration zones for implementing energy efficiency strategies in central and eastern Europe" be considered eligible for support by the Global Environmental Facility of the World Bank.

v. Facilitating international trade

37. The ECE is a "standard-setting" organisation in the field of international trade, and plays an important role in the harmonisation of customs requirements. Another important part of the ECE's work which helps integrate the central and eastern European countries into the world economy is the elaboration of legally binding instruments for trade transactions. Thus, in recent years guides were prepared on legal aspects of privatisation in industry, on comparisons between national legislations on foreign direct investment and privatisation, on financing east-west trade and privatisation, and on property taxation. These publications examine the legal situation in the countries of central and eastern Europe and give recommendations to policy-makers in the region.

38. The organisation has also done important work in assessing the role of foreign investments in the economies in transition, in looking into the problems of privatisation, and in promoting foreign direct investment and small- and medium-size enterprises (SMEs).

39. The facilitation of trade through the simplification and harmonisation of procedures, and the development of standard documentation and rules for electronic data interchange, form other priority fields of the ECE. For this reason the organisation in 1986 launched an Electronic Data Interchange for Administration, Commerce and Transport (UN/EDIFACT). The aim was to devise a single electronic data interchange standard, flexible enough to meet the needs of both governments and private enterprises worldwide. To date more than 100 United Nations standard "messages" — formats for electronic trade transactions — have been approved and are used by many multinational and regional organisations.

vi. Economic analysis

40. The principal annual publications in the field of economic analysis are the Economic Survey of Europe and the Economic Bulletin for Europe. They provide regular, comprehensive analyses of economic trends and prospects in the entire ECE region, give a broad coverage of developments in the transition economies that helps draw the attention of policy-makers and public opinion to their problems, and play an important role in what has become known as the "internalisation of economic reform". The objective analytical work of the Commission is appreciated and widely used, inter alia, at decision-making level of the European Union and other international organisations.

41. In recent years, financial assistance and the need for greater market access to the established market economies have received special attention in these publications. They argue, for example, that despite the network of extended free trade agreements, the goal of pan-European integration and a barrier-free European market is still far from realised. As the new trade and co-operation agreements have come into force, there is a tendency by western governments — in the absence of the traditional forms of protection which have been abolished by the agreements — to resort to special safeguards, anti-dumping, and countervailing duties in sensitive sectors. The use of these non-tariff measures to protect domestic industries from central and eastern European products has, it is argued, undermined the spirit of the agreements.

42. For some time, the ECE has been proposing the formulation of a comprehensive and wide-ranging framework for western assistance to the countries of central and eastern Europe. Such recommendations are based on the recognition of the difficulties of achieving a rapid transition to a market economy, and in part draw on lessons learnt at the time of the European Recovery Programme after the second world war. Regrettably, however, these recommendations have not been translated into policy action. Little in the way of grants has so far been accorded to the transition economies, whilst technical assistance is often conspicuous for its lack of coherence and effectiveness.

43. The ECE has since long argued for a better co-ordination of foreign assistance, both among donors and in relation to domestic objectives in the transition economies. In this respect, the first point to stress is that information about the total amount of current assistance efforts varies. According to OECD estimates, resources committed by the G-24 to the countries of central and eastern Europe (including the C.I.S. countries) in 1991-92 amounted to $ 43 thousand million. Among the major donor countries were Germany ($ 27,5 thousand million), the United States ($ 3,3 thousand million), France ($ 1,7 thousand million), the Netherlands ($ 1,6 thousand million), Canada ($ 1,4 thousand million), Spain ($ 1,4 thousand million), Italy ($ 1,1 thousand million) and Austria ($ 1,1 thousand million).

44. It should be added, however, that more than four-fifths of these gross financial flows have been debt-creating. Portfolio and foreign direct investment to the region was negligible, as were official aid and grants. In fact, in 1991-92 there was a net outflow from most central and eastern European countries because of their large servicing obligations on foreign debts incurred by the previous regimes and, in some cases, due to capital flight.

45. There is also an element of competition among donors to support the most prestigious projects, or to use assistance as a tool of economic penetration. Donor credibility also risks being undermined by donors' increasing tendency to refer to virtually all financial flows to the transition countries — from outright grants to loans at market rates — as "assistance". An accurate monitoring of the levels and composition of financial flows to the transition economies is therefore urgently needed in order to improve co-ordination among the providers of assistance. In this context, your Rapporteur fully supports the idea, proposed by several members of the Committee of Economic Affairs and Development at its November 1994 meeting, that the ECE be given a "clearing house" role of mapping current assistance efforts so as to make them more transparent.

46. The ECE is also advocating a more generous programme of assistance, but here little improvement is to be seen. At the 1994 annual session of the ECE, Mr Berthelot compared the gross financial flows into the transition economies in 1992 with the Marshall Plan. The former, including debt relief, amounted only to some 0,26% of the GDP of OECD countries, while "aid proper" (grants and assistance according to DAC criteria) reached only 0,02% of GDP. The Marshall Plan, by contrast, that is, the aid by the United States for the reconstruction of western Europe in the late 1940s (virtually all in the form of grants) averaged 1,2% of that country's GDP over a four-year period.

47. The Parliamentary Assembly has an important role to play in supporting the ECE in its task to help reconstruct and develop the transition economies. That role is one of stimulating a comprehensive, wide-ranging debate on pan-European economic issues, international trade and agriculture, environmental issues, education, as well as on the institutional and legislative conditions for economic and social development, especially as they relate to democracy, human rights and social protection standards.

vii. Women in a changing world

48. Within the framework of intra- and inter-regional approaches and multilateral arrangements, consultation mechanisms should be developed, primarily within the existing regional organisations. If necessary, new mechanisms should be established within the limit of current resources to ensure the participation of all countries and partners concerned in the preparation, implementation and monitoring of programmes relating to strategic objectives.

49. The task of monitoring the implementation of the Regional Platform for Action adopted by the ECE Regional Preparatory Meeting for the Fourth World Conference on Women (Vienna, 17-21 October 1994) should be given primarily to existing regional organisations such as the ECE, the Council of Europe, the Organisation for Economic Co-operation and Development (OECD), the Conference on Security and Co-operation in Europe (CSCE), as well as to the European Union — or to subregional bodies in line with their competence. Exchanges of experiences from various national monitoring exercises should be facilitated, for example through regional meetings. Such meetings should be jointly organised by major regional organisations according to their respective priority areas and budgetary resources.

E. Conclusion

50. From its inception in 1947 and throughout the cold war, the United Nations Economic Commission for Europe served as the foremost forum for east-west co-operation in the economic and related fields. Since the fall of communism in central and eastern Europe, the organisation has had fundamentally to reassess its mandate, which now primarily consists in assisting the economic reform process in the region, rebuilding its physical infrastructure, and helping it to become reintegrated into the world economy.

51. Needless to say the integration of all European countries is very much helped by the ratification and implementation of the various ECE conventions and agreements in the fields of transport and the environment. Moreover, standardisation and harmonisation by the ECE of some of the rules and regulations that assist trade — for example in the construction of vehicles, the transportation of dangerous goods, quality standards for food commodities or frontier formalities — are other important instruments of integration.

52. The ECE plays an essential — if deliberately low-key and "down-to earth" — role in assisting the transition economies, building as it does on its decades-long experience of east-west economic co-operation gained at a time when it was just about the only body active in that field. It does so through its highly efficient programme of workshops, seminars and similar informal activities on transition issues. However, that programme, as necessary as it is, has to a large extent had to be financed from "extra-budgetary" resources of the organisation, and so the ECE is constantly on the look-out for external sponsoring by member governments and other interested parties.

53. One limitation to the ECE's realising its full potential resides in the fact that its mandate is restricted to purely economic issues. (A legacy of the time when it was created, when economic reconstruction was the paramount concern.) However, as its multifaceted activities could not be carried out in disregard of social trends, the ECE has developed a knowledge base in a variety of social areas, primarily in the fields of "human settlements" (essentially housing patterns) and demography statistics.

54. However, economic changes so fundamental as the ones in central and eastern Europe have vast social, political and environmental consequences, making it unrealistic to dissociate the two domains. Recent times have clearly shown that a purely economic vision of society is not sufficient. Progress has to be made simultaneously in areas as varied as domestic and international peace, economic growth, environment clean-up, social justice and democratic government at all levels. In other words, progress in one area risks being hampered if any of the others are neglected. Accordingly, it may well be that if its mandate were reviewed and expanded, the ECE would be better equipped to address the — socially often painful — transition processes in central and eastern Europe.

55. In addition, the Rapporteur believes that the Council of Europe and the ECE have a highly complementary role to play in fostering democracy and development in the transition economies of central and eastern Europe. In view of the Council of Europe's expanding membership, its privileged links with numerous special guest parliaments and its long-standing co-operation with the ECE, the Parliamentary Assembly of the Council of Europe would be a most suitable forum for regular debates on ECE activities.

56. During his exchanges of views with Mr Berthelot and his senior officials, the Rapporteur encountered a readiness to institute more formal links between the two organisations. As mentioned, these debates could be modeled on those already engaged in with other organisations, such as OECD and the European Bank for Reconstruction and Development.

57. The Rapporteur firmly hopes that these debates already engaged in with other organisations could lead — at a later stage — to the creation, within the Council of Europe, of an institutional framework for pan-European co-operation on economic issues, along the lines suggested by the Assembly in various resolutions — and notably Resolution 995 (1993), on economic renaissance of the Baltic Sea region and Resolution 1036 (1994), on the progress of economic reform in central and eastern Europe, involving the European Union and other European organisations concerned.

58. The Council of Europe would be an ideal forum for general political and social consultations in areas such as infrastructure development, communications, and transport matters, since it is likely soon to embrace all democratic European nations and has a strong, established parliamentary dimension. It would work in close co-operation with the ECE to maintain the complementarity of activities between the two organisations.

Reporting committee: Committee on Economic Affairs and Development.

Budgetary implications for the Assembly: none.

Reference to committee: Doc. 6981, Reference No. 1913 of 24 January 1994.

Draft resolution adopted by the committee on 14 November 1994.

Members of the committee: Mr Holtz (Chairman), Dame Peggy Fenner (Vice-Chairman), MM. Andreoli, Billing, Gudmundur Bjarnason, Mrs Blattmann, MM. Bloetzer, Bogar, Bonnici, Mrs Burbiené, MM. Buzatu (Alternate: Pop), Caballero (Alternate: Ms Guirado), Mrs Calner, MM. Coviello, Davis, Demiralp, Draguiev, Mrs Durrieu, MM. Figel, Flückiger, Gjellerod, Goerens, Goop, Kempinaire, Kiliç, Kittelmann, Kolár, Konecny, La Russa, Latronico, Leers, Le Grand, Liapis, Malinowski, Mändmets, Mautner-Markhof, Molloy (Alternate: Deasy), Novak, Pahor, Pinto, Pirinski, Puche Rodriguez-Acosta, Radulescu Botica, Rehn, Rodrigues, Mrs von Teichman, MM. Townend, Uczkiewicz, Valleix, Mrs Verspaget, MM. Vrettos, Wintgens.

N.B. The names of those members present at the meeting are printed in italics.

Secretaries to the committee: MM. Torbiörn and Mezei.