Whither the Second Basket? Evolution of the Economic and Environmental Dimension of the OSCE
The economic and environmental dimension of the OSCE originated in the second so-called “basket” of the 1975 Helsinki Final Act: “Co-operation in the Field of Economics, of Science and Technology and of the Environment”. From our present-day perspective it may seem surprising how large this basket was and how much it included.
One finds provisions on the promotion of mutual trade in goods and services, elimination of obstacles to the development of trade, improvement of working conditions of representatives of foreign organizations, enterprises, firms and banks, encouragement of industrial co-operation between national enterprises and firms, development of road networks and co-operation aimed at establishing a coherent navigable network in Europe; co-operation in standardization, exchange and dissemination of scientific and technological information, control of air and water pollution and protection of the marine environment.
There was of course a specific, historical reason for this multiplicity of wishes, promises and agreements. It was the necessary and difficult task of strengthening the connection between two fundamentally different economic systems, that of the market economy countries on the one hand and the state trading countries on the other. Already in the preamble, the participating States confirmed their will to intensify their co-operation irrespective of the diversity of their social and economic systems. This was relativized, however – also in the preamble – with the reference to a principle of reciprocity, “permitting, as a whole, an equitable distribution of advantages and obligations of comparable scale.” In the course of the co-operation, there was to be an attempt to compensate for one-sided market advantages and imbalances.
In this context, it proved difficult to include the according of most favoured nation status in the Helsinki Final Act, as desired by some states which did not belong to the GATT [General Agreement on Tariffs and Trade, today the World Trade Organization (WTO)]. Still, agreement was reached on the formulation: ‘The participating States…recognize the benefits that can ensure from the application of most favoured status for the development of trade.”
It is worth noting that already at that time, for many Western European countries, the negotiated elements of “basket two” fell within the exclusive jurisdiction of the European Economic Community (today the European Union). The European Commission, although not formally a participant in the conference, was therefore substantially involved in the consultations. The Italian Prime Minister, Aldo Moro, signed the Helsinki Final Act not only in the name of the Republic of Italy but also in his capacity as President in office of the Council of the European Communities.
“Basket two” also figured prominently in the concluding documents of the Madrid and Vienna Follow-up Meetings in the 1980s. The participating States declared their willingness to strengthen their economic co-operation and a special conference was convened to this end in Bonn for the spring of 1990. However, with the sudden disintegration of the eastern economic system, the agenda changed. With the overcoming of system boundaries – not only in the economic sphere – the task originally set for the Bonn gathering had become obsolete by the time it was held.
Transformation
The political upheavals of the years 1989/90 heightened and changed the significance of economic and social factors for security policy. New challenges emerged, among them the transformation of the planned economies into functioning and environmentally sustainable market economies. This became the centre of attention at the Bonn Conference, which marked the beginning of an – albeit short-lived – appreciation of the significance of the “economic and environmental dimension”, as the “second basket” came to be called in the 1990s. In the concluding document, the participating States emphasized the connection between political pluralism and a market economy and agreed on a series of principles for the process of reform: free elections, multi-party democracy, rule of law, protection of private property, environmental sustainability of economic growth and development, the right to freely establish independent trade unions and expanding the free flow of trade and capital.
In 1992, the Committee of Senior Officials (later renamed the Senior Council) was given the function of an Economic Forum. Its task was to stimulate dialogue on the transition to and development of free market economies as well as on economic co-operation and to encourage activities already underway within specialized international organizations. For example, the fifth meeting of the Economic Forum in 1997 was dedicated to the topic “Market economy and the rule of law”. The participants discussed the importance of reliable legal norms for the economy; it was stressed that tolerating statutory violations such as bribery, money laundering or corruption undermines public support for democracy and the market economy. There was always agreement that the OSCE should avoid overlap with the work of other organizations and institutions and that its task in the economic dimension consisted in promoting interaction between the private and public sectors.
Differing conceptions
The general assertion that security involves economic components is undisputed. Therefore, the economic dimension of the OSCE’s concept of comprehensive security has never been openly and directly challenged. The recommendation that the OSCE should give political impetus to economic co-operation has repeatedly been tabled at various OSCE meetings and is reflected in numerous documents. However, the economic elements of security, as parts of a comprehensive security architecture, have never been developed in such a way as to result in an operational function for the OSCE.
The governments of OSCE participating States have different notions of the scope of the economic and environmental dimension of security and even of its meaning and purpose within the OSCE. The representatives of some countries have put the emphasis on legal and contractual security, protection of economic property and stable, reliable and predictable parameters of economic policy; several have referred to early warning systems. Others have named promoting environmentally sustainable conditions of production and countering economic espionage and international economic criminality as tasks for the OSCE.
It is striking how little reference has been made to the economic and environmental security of people in their roles as citizens, employees and consumers. The focus during the first decade after the end of the Cold War was on instabilities, crises, threats and risks for the economy, i.e. for national economies, enterprises, production or the market. Security, or rather resilience of the economy, economic policy and entrepreneurial activity was the goal. Economic security measures were meant to win the trust of entrepreneurs. It was in this context that measures to counter discrimination against migrant workers or social exclusion were mentioned, already in a chapter entitled "Economic and social aspects of migrant labour" in the Helsinki Final Act and reiterated in the concluding documents of the Madrid and Vienna Follow-up Meetings (1983 and 1989, respectively).
What role today?
Today, securing the economy is no longer the OSCE’s main concern in the second dimension. Nor, certainly, is providing protection from it. Rather, it is dangers and risks that arise from economic activity that have increasingly attracted attention. These include the production, distribution and export of dangerous substances, the transportation of hazardous waste, corruption, trade in and transport of reactor fuel, drugs and weapons, trafficking in human beings and money laundering. The environmental and social aspects of economic security have also been more strongly brought to the fore.
The economic and environmental dimension of security now also extends to economic factors and circumstances that play or could play a role in hotspots and crisis areas, such as energy supply, water resources, natural resources and environmental damage. Addressing these issues is part of the mandate of several of the OSCE field operations. The Co-ordinator of Economic and Environmental Activities, situated in the OSCE Secretariat, has organized seminars on such topics. Most notably, the above-mentioned Economic Forum, which since 2007 has been called the Economic and Environmental Forum, has dealt with these problems extensively, as the following overview shows. However, given the many specialized international – and to some extent financially powerful – organizations and institutions or “clubs” that are active in these areas, the role which the OSCE should play in the economic and environmental dimension remains unclear.
Kurt P. Tudyka is Professor emeritus of the University of Nijmegen/Netherlands and Honorary Professor at the University of Osnabrueck/Germany; he was Editor-in-Chief of the OSCE Yearbook, Hamburg.