Paskal Zhelev

While the Black Sea has historically been an area of significant geostrategic importance, this has not made it a vibrant zone of commerce, transport, energy, tourism, or cultural exchange. Rather, it has become a theater of struggle for dominance and competing geopolitical and geo-economic interests. This situation has been exacerbated by conflict between Russia and countries in the region, like Ukraine and Georgia, that have sought closer ties with the West and aspire to NATO membership and EU integration. These developments have dire consequences for regional security and stability, disrupting political and economic ties in the area and beyond. A long-term solution to the region’s security issues could be based on intensifying trade relations and increasing economic interdependence between the states. This paper identifies major barriers to closer regional trade and economic cooperation and outlines ways to overcome them.

Countries in the Black Sea region have largely failed to integrate with their neighbors, despite common levels of openness and dependence on foreign trade. For many countries in the region, trade has become a driving force for growth, accounting for on average one-third of regional GDP. However, Black Sea supply chains largely connect the region to the outside world – primarily Europe and Asia – instead of neighboring countries. Highly integrated trade relationships, like those seen in Southeast Asia, simply do not exist amongst Black Sea countries.