The Black Sea Economic Cooperation Project: A Substitute or a Complement to Globalization for the Middle East and the Balkans?

Abstract This paper evaluates Black Sea Economic Cooperation (BSEC) from the perspective of globalization efforts in the Middle East and the Balkans, the regions that future expansion scenarios are most likely to cover. For this purpose, the paper investigates the economic rationale behind the desire to seek/maintain membership, with special reference to the trade creation and diversion effects it could generate. A major challenge here is the size and the quality of data. In addition to the relatively short history of BSEC, the exchange rate and GDP/GNP data are unreliable due to the transition state status of most of the current members (Albania, Armenia, Azerbaijan, Bulgaria, Greece, Moldova, Romania, Russia, Turkey and Ukraine). To overcome this problem, a version of the so-called gravity model is employed to estimate trade patterns. In addition to trade among current members, the paper considers the implications of membership by Iran, Egypt, Iraq, Jordan, Lebanon, Syria and by the newly independent republics of former Yugoslavia. Arabic Abstract: