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									  SECI                                                      Southeast
    Fourteenth Meeting of the Business Advisory Council to SECI
                             September 26, 2000
                                Divan Hotel
                              Istanbul, Turkey

Chairman:          Mr. Rahmi M. Koç
Co-Chair:          Mr. Costa Carras

SECI:              Dr. Erhard Busek
                   Ms. Vera M. Budway

BAC Members:       Mr. Çelik Arsel
                   Mr. Ferenc Bartha
                   Mr. Giorgio Dominese
                   Mr. Nikos Efthymiadis
                   Mr. Samo Ivanchich
                   Mr. Svetozar Janevski
                   Mr. Roland Jurecka
                   Mr. Muhtar Kent
                   Mr. Bosko Kostic
                   Mr. Anto Krvavac
                   Mr. Gunther Mittl
                   Mr. Michael Mix
                   Mr. Misu Negitoiu
                   Mr. John Scherer
                   Mr. Ivan Stancioff
                   Mr. Piet Steel
                   Mr. Vassili Takas
                   Mr. Matthew Trilling
                   Mr. Vebi Velija
                   Mr. Gianfranco Zoppas

Participants:      Ms. Tatiana Hadjiemannuel, HELLASPRO/BICC
                   Mr. Will Keenan, UN/ECE
                   Ambassador Richard Schifter

Observers/Contributors: Mr. Gerald Ollivier (World Bank)
                        Mr. Graham Smith (World Bank)
                        Mr. Daniel Van Damme (Amylum, Adana)

1) Opening

The Business Advisory Council to SECI (BAC) meeting was opened and chaired by
Mr. Rahmi M. Koç. He welcomed the new members of the BAC Mr. Piet Steel and
Mr. Roland Jurecka. He stressed the fact that we have accomplished so much since
the first BAC meeting in Thessaloniki three years ago and pointed to some of the
major achievements such as the border crossing facilitation and anti-crime efforts. He
also congratulated the BAC for its initiative in helping establish the PRO committees,
the Business Support Offices and the country committees. He also mentioned the role
of the BAC in contributing to the EastWest Institute Economic Task Force report.
Mr. Koç then reminded that there are still many challenges that lie ahead in working
towards stabilizing the region as a whole.

2) Adoption of the Agenda

The Agenda was adopted with the change that item 8 (discussion of projects) was
moved up to item 5.

3) Adoption of the Minutes and Conclusions of the Thirteenth Meeting

The minutes and conclusions of the Thirteenth meeting of the BAC were unanimously

4) Report from the Country Committees

Mr. Takas reported that the FYRMacedonia country committee has examined the
issue of investment disincentives in the country and conducted a survey on the current
impediments to investment. Based on the results of this survey, the most pressing
problems have been identified and addressed. Most of these problems are of a legal
nature and there is still a general lack of transparency. The country committee hopes
that they will be able to use the results as a means of pressuring the government to
change things. The committee will also meet with government officials to determine
the best way of promoting this report.

Mr. Kent reported that the first meeting of the Romania country committee was held
on 12 September and circulated the minutes from that meeting. He also gave an
overview on the membership of the committee. The Romania Committee also felt that
its main task should be to identify disincentives to investment. It suggested sponsoring
a study on this topic and producing a brochure on securing funds. The study will also
contain useful information on infrastructure projects. The Committee will also
establish links with the other BAC country committees and conduct bilateral
meetings. The next meeting of the committee will be in November.

Mr. Mix did not submit a report from the Croatia committee but reported that he had
been in Zagreb a few times but it was difficult to bring everyone together at the same

time. Following the advice given at the Venice meeting, Mr. Mix announced that the
committee has expanded its membership to include representatives form Germany,
France and Austria. The Committee will meet in full before the next BAC meeting in

Mr. Stancioff announced that the first meeting of the Bulgaria Country Committee
would be on 17 October, on the eve of the Balkan Economic Forum in Sofia. Mr.
Steel, who will chair the Committee, has compiled a list of potential members and
circulated this list among the BAC. The committee will be co-chaired by Nikos
Efthymiadis. The committee will also include those in the government responsible for
SECI as observers. Mr. Stancioff also asked Mr. Koç for advice on a possible Turkish

Mr. Takas suggested that the Bulgarian Committee should include an American and
German investors. Mr. Stancioff said that the Dutch are the biggest investors in
Bulgaria while Italy is very active in small commerce. He also reported that all
members of the committee live in Bulgaria but Mr. Kent said that it is not a
prerequisite to live in the country. Mr. Takas said we should also see what other
initiatives exist in order to avoid duplication and pointed to BIBA - Bulgarian
International Business Association as an example. Mr. Stancioff said that BIBA is
collapsing and it should be transformed into the SECI structure.

Mr. Negritoiu was under the impression that the committees are private sector bodies
and questioned why there were so many officials on the Bulgarian list. Mr. Carras
strongly supported the observation that the BAC decided not to include
representatives from the public sector on the committees. He stressed that it should be
made clear that the state sector will not be invited to all meetings because it might
hinder open discussion. Representatives could be invited to observe on select
occasions, if it is in the interest of the committee. The other problem is that
government representatives are constantly changing which does not ensure continuity.
Mr. Efthymiadis also supported the idea that the committees should be private sector
bodies that will create a lobby to governments in removing disincentives to

Mr. Steel mentioned the European Round Table of Industrialists and said they have
established business enlargement councils in the region and there is room to cooperate
with this body. Mr. Kent supported what was said and stressed we have to stick to
only businessmen otherwise there soon will be no distinction between the country
committees and PRO committees. Distinction must be made between PRO
committees, which are an amalgamation of public and private sector, and the country
committees which must be PRIVATE SECTOR ONLY!!!

Mr. Carras said that in each county there is an interest in the foreign and local
investment community on providing input to governments on legislation affecting
investment. The country committees should be able to form a “hit list” of people to
target when they want change to occur and they should be able to approach the BAC
for advice and assistance. If there are people in the committee in government service
who are attached to current ways of doing things, the entire purpose of the committee

is then negated. Mr. Negritoiu suggested that the same criteria for the BAC should be
applied to country committees.

Mr. Carras then expressed dissatisfaction that the Albania Country Committee was not
able to come together under the leadership of Ms. Busi. He suggested that Mr. Zoppas
contact her and try to determine whether she is willing to bring the committee together
otherwise the BAC will have to decide on next steps at the Zagreb meeting. Mr.
Zoppas said that he hopes to have the situation clarified soon. Mr. Velija reminded
that he has worked very hard to push ALBAPRO and the committee but has always
run into certain obstacles.

5. Status Report of SECI Projects

Ambassador Schifter reported that he had recently met with Bodo Hombach who
praised the SECI BAC and said it can be very useful for the Stability Pact. Concerning
the issue of a meshing between SECI and the Stability Pact, Ambassador Schifter
stressed to Mr. Hombach that it is crucial that both the BAC, Agenda Committee and
coordinators office are preserved. The Agenda Committee will guarantee that the
efforts and decisions will remain with the countries of the region. Mr. Hombach
assured that he would send Ambassador Schifter his position on this issue in writing.
The ultimate decision of what will happen will be made by the participating states in
the Agenda Committee. Ambassador Schifter stressed that the United States acted as a
catalyst in bringing SECI into being but it is the countries of the region that are
controlling SECI.

In reality there has not been much of an overlap between SECI and the Stability Pact
because SECI is focused on operations whereas the Stability Pact is not operational. It
is a platform for organizing meetings and can play a role as a political statement.

Ambassador Schifter commented on the situation in Belgrade saying that the weeks
ahead will determine what Serbia’s future will be. The December 6, 1996 meeting
which launched SECI decided that in case the situation in the FRY changes, it is up to
the Chair of the meeting, in consultation with the participating states, to invite the
FRY to the Agenda Committee. The Chair of that meeting was the United States. If
there is such a change, SECI can play an enormous role in Serbia.

Ambassador Schifter gave an update on where SECI stands with regard to the World
Bank loan application. Six states are going forward for loans to improve border
crossings (Albania, Bulgaria, Bosnia, Croatia, FYRMacedonia and Romania). The
World Bank/SECI Trade and Transport Facilitation in Southeast Europe – TTFSE -
will address physical infrastructure improvements, police, customs, trade facilitation
and work with educational institutions in the region. The other aspect is to halt
illegitimate traffic and facilitate legitimate traffic and the agreement for information
sharing for fighting organized crime is the result of this effort. In the framework of the
anti-crime efforts, three task forces have been established to deal with the trafficking
of human being, narcotics and commercial fraud.

Mr. Koç then asked what Mr. Hombach really meant by the meshing of organizations.
Ambassador Schifter said this all depends on what Mr. Hombach proposed. He
stressed that SECI is in the hands of the 11 participating states and it must remain so,
and that the coordinator’s office must also remain in place. Mr. Koç then asked how
Ambassador Schifter interprets the outcome of the elections in the FRY. Ambassador
Schifter said that the situation is unpredictable – the voters have decided against
Slobodan Milosevic but questions remain on what the consequences are.

Dr. Busek said that that if there is any change in the FRY, everyone will rush in and
declare that they are doing something. It might be helpful to develop a strategy on
what to do and where we can really make a difference. There will be too many
changes and confusion. The BAC must determine where we can assist.

Mr. Kostic said that changes will happen very quickly. There are no police on the
street and the Electoral Commission has virtually disappeared. The Socialist party and
JUL are actually admitting defeat on the local level. He suggested that the BAC can be
in touch with the opposition in Belgrade.

Dr. Busek suggested that the BAC convene a small task force on the FRY before the
Zagreb meeting which will propose a strategy for SECI’s work in the FRY. This
meeting could be held in Budapest. Mr. Carras suggested that the BAC, as individuals,
should be in a mode to work fast. He suggested that the next meeting of the BAC
(after Zagreb) could be held in Belgrade if the situation is favorable. The BAC as
private individuals can move faster than countries, thus the task force needs to be
appointed in order to advise the leadership. Dr. Busek suggested that this task force
could consist of Mr. Kostic, Mr. Takas, Mr. Dominese and an economist from G-17.

Dr. Busek then reported from excellent SECI promotional meeting in Zagreb at the
beginning of July. He stressed the need to keep the SECI office and support for the
ECE in the event of a merger with the Stability Pact.

He said that we need to push funding for infrastructure projects and mentioned that
the SECI crime fighting effort is the only real project in the framework of Working
Table III. Dr. Busek is concerned that there are to many governmental meetings and
we do not have the capacity to attend all these meetings. He appreciated the fact that
BAC members are also willing to represent SECI at some of these meetings. Dr.
Busek expressed satisfaction with the EastWest Institute Economic Task Force report
and said that it is more practical than the World Bank report.

Concerning the other SECI projects, USAID will help fund some of the electricity
projects and not much is happening in the environment field. The first meeting of the
arbitration project group was a great success due to the hard work of BAC members
Mr. Mittl and Mr. Ivanchich. The next meeting of this project group will be on 6
October in Ljubljana. The project on securities exchanges is now focusing on working
with the regulators.

Bulgaria is playing a leading role in the effort to reduce stopping times of shuttle
trains and the telecommunications project will be under discussion at Agenda
Committee meeting. It remains to be seen if all the countries in the region are

interested and how to coordinate this effort with EU. Dr. Busek praised Ambassador
Schifter for two years of work in trying to convince governments to sign agreement on
information sharing and bring liaison officers to the crime-fighting center in
Bucharest. This effort really demonstrates how difficult real cross border work can

Mr. Koç asked if the volume of cross border crime is increasing or decreasing. Dr.
Busek said that this varies form country to country. Interpol is working more
effectively than Europol but there is no consistent plan on who is doing what.

Mr. Dominese said that Mr. Saccomani sends greetings and appreciation for SECI’s
work. He also said that the situation in Yugoslavia will have a great impact on the
Italian business community.

Mr. Velija suggested that SECI could organize another presentation in the framework
of the December BAC meeting in Zagreb. Ambassador Schifter said that there is a
great change of attitude now in Croatia concerning SECI. He mentioned that Croatian
customs did not have funds to participate in the Bucharest Center and the government
sent this request to parliament and it is assumed that funding will be allocated.

Concerning the Stability Pact BAC, Mr. Efthymiadis said that its members are all
powerful business personalities but they are not really informed what is happening in
the region. They are under the impression at meetings that they are learning and not
advising. The problem is that the Stability Pact BAC does not have a regional base. It
also wants to establish country committees. Mr. Efthymiadis tried to organize
meetings with chairmen and he hopes that the SPBAC meeting on 17 October can be
used as an opportunity for such effort.

Mr. Carras hoped that a meeting with SPBAC co-chair Manfred Nussbaumer would
be possible before the Zagreb meeting. He was frustrated that we have been
constantly initiating this effort and now it is time for the SPBAC to start thinking on
how they should best approach us. The “reinvented wheel” does not work well and we
are loosing valuable time. Dr. Busek said that the SECI BAC makes its own decisions
while Nussbaumer must first get permission from Mr. Sacomani and the Stability Pact
office in order to do something. In essence it is the diplomats and bureaucrats who are
making the decisions. In order not to lose more time, the BAC co-chairs proposed to
write a letter to the SPBAC co-chairs and propose an meeting in Istanbul in the
framework of Working Table II. This was done.

6. Report from the SECI Business Support Offices

Mr. Arsel gave a report on the Istanbul BSO and introduced its director Mr. Emre
Gonen. The Istanbul BSO is working on a network to be connected to BSOs in other
cities. The meeting of the BSO coordinators will help contribute to the discussion. It
is important to find ways and means to work together and create mutual links. The
BSOs should prepare a joint strategy for the next BAC meeting in Zagreb.

Mr. Dominese said that the BSOs should follow up on the list of topics discussed by
the BAC. The BSOs should become the point of reference for the BAC network and
not a duplication of other investment offices and chambers of commerce.

Mr. Takas reported that since the Thessaloniki meeting in May, the Thessaloniki BSO
has been developing the “one stop shop” idea. It organized a business delegation from
Kosovo in Thessaloniki and put together a database of EC programs. The BSO is
meeting and coordinating with the various EC offices in Thessaloniki and is providing
logistic support for the FYRMacedonia country committee.

Dr. Busek reported that he is working on trying to establish BSO in Vienna at the
Austrian Chamber of Commerce.

Mr. Kent mentioned that the Istanbul BSO has some 100,000 USD at it disposal and
that it has to prove that this investment was not made in vain. It is imperative that
these offices do not duplicate but rather compliment existing initiatives inside the
country. He reminded that now that all three offices are open, the real work begins.

Mr. Koç requested a report from the BSO coordination meeting.

Mr. Efthymiadis said that all the other instruments need to be coordinated. The BSOs,
country committees, and PRO committees are things which makes SECI different.
SECI is not another consulting company but rather a unique group of dedicated
individuals. The idea to create the Business Information and Clearing Center (BICC)
is to help SECI in coordinating all its initiatives. The start of the BICC was delayed
due to a lack of communication and now we need to decide how it should operate.

Mr. Arsel explained that the Istanbul BSO acts as a secretariat for TURKPRO and all
SECI activities because there is no other instrument. Mr. Takas said that if the BSOs
are supposed to function properly they have to have a mandate.

7. Report from the SECI PRO Meeting

Mr. Keenan gave the report from the eighth meeting of SECIPRO that was held the
previous day. There was general consensus that it was the most successful meeting
yet. Bilateral meetings at specific border crossings are the most effective means of
dealing with border issues. He commended Ambassador Hill and HELLASPRO for
their outstanding initiatives and said that the bilateral meeting between TURKPRO
and HELLASPRO was so successful that the ECE had the report translated into
Russian as a model for similar activities in the CIS.

There have been plenty of changes since the last SECI PRO meeting in Thessaloniki.
SLOVENIA PRO has been reactivated with the help of Mr. Ivanchich and Miro
Senica. ROMPRO had completely reorganized and now involves many people from
the private sector. The new chairman of ROMPRO has taken much initiative to
stimulate activities. He had stressed that there is a strong link between corruption and
excessive bureaucracy. BiHPRO and CROATIA PRO have met in Sarajevo and
BiHPRO also involves participants from Republika Srpska.

Members of the PRO committees want to report that there is real effort to avoid
duplication. The World Bank gave a good presentation of the TTFSE program and
the discussion highlighted new ideas for TTFSE such as including all of the SECI
countries in the customs reform and trade facilitation component of program, even if
they are not involved in loan process. The World Bank will also consider involving
Kosovo in this effort.

Graham Smith from the World Bank reported that loan negotiations have been
concluded with all countries except for Bosnia and that all loan agreements should be
signed by the end of the year. Procurement is underway for X-ray and other technical
equipment for Romania. The project is also expecting a full team of US customs
advisors that will be active in Romania, Bulgaria, FYRMacedonia and Croatia. By end
of the year, a consortium of academic institutions should be mobilized. A Regional
Steering Committee of the 6 borrowing countries (governmental agencies responsible
for the loans) has been established. Turkey will use funds from an existing World
Bank loan for border crossing improvements with Bulgaria and Greece. The project
also plans for tracking and monitoring activities at the borders.

Mr. Keenan reported that the PRO committees agreed on guidelines for SECI PRO,
which includes a clause to invite the SECI National Coordinators to participate in the
PRO committees. The next meeting of SECI PRO will be held on the same day as the
BAC and run in parallel given that SECI PRO needs more time to discuss issues.

Mr. Ivanchich announced that SLOVENIA PRO was formally established through a
decision of Prime Minister. It is located at the American Chamber of Commerce
which can put SLOVENIA PRO on its monthly agenda as a way to promote SECI.
The Chamber has 55 members who meet monthly and includes heads of US
companies and joint ventures which can serve as a base for a country committee for

Mr. Takas said that we should follow rules of country committees and that the
committees should not be associated with a chamber which is supposed to promote
something else. Mr. Ivanchich pointed out that the heads of companies could form a
committee as a group of private investors.

Mr. Carras said the principles of country committees are clear – to first represent the
foreign investment community and then the investment community generally. If Mr.
Ivanchich believes that a Slovenia country committee is necessary, he should discuss
with the chairmen what can be done.

8. New Members of the BAC

Mr. Carras presented the CVs of potential new members of the BAC. Concerning
Bosnia, Fadil Kadic had withdrawn his candidacy. Mr. Ivanchich and Mr. Krvavac
have highly recommended Mr. Nermin Salman. Siemens proposed Mr. Christian
Doerner and Dusko Knezevec was endorsed by an official in the Montenegrin
government. Dr. Busek proposed to postpone a decision on inviting another

Montenegrin member. He also said that Siemens had decided to withdraw Doerner’s
candidacy because they now would like to nominate a more senior representative. Mr.
Koç suggested that the CVs should be presented in a standardized manner in the

Mr. Kostic endorsed Mr. Knezevac and pointed out that he is present both in
Podgorica and Belgrade and Mr. Velija supported this. Mr. Carras moved to postpone
the decision until Zagreb, reminding that the BAC does not accept nominations from
governments. He suggested that the nomination should come from BAC and Mr.
Kostic and Mr. Velija asked that his candidacy be discussed in Zagreb.

Mr. Stancioff proposed Mr. Roberto Nicastro who is an Italian banker.

Mr. Arsel raised the issue of what the policy on BAC membership is and if there are
any limits to the BAC’s size. He suggested that we should invite the Mr. Salman to
join since the BAC does not yet have a Bosnian member. Mr. Carras suggested to
make a rule that the BAC cannot have more that three members from a given country
and reminded that there are already three Italians, Greeks and Turks. Mr. Carras then
proposed to accept Mr. Salman and all were in agreement.

Mr. Takas suggested that new members from multinationals can be accepted as

9. Dates and Preparations for the Next Meetings in Croatia

The next meeting of the BAC in Zagreb will begin on December 4th with a dinner and
then run through December 5th. There was a proposal to meet either in Belgrade
(depending on the situation) or Sarajevo after Zagreb and Dr. Busek said that he will
submit a proposal before the Zagreb meeting.

10. Other business

There was no other business and the meeting was adjourned.

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