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Environmental Assistance to Eastern Europe - Annual Report 2000

2. Comments

By Erik Hoffmeyer, former Governor of the Danish Central Bank, chairman of the Advisory Committee to the Danish Environmental Support Fund for Eastern Europe

As appears from this Annual Report, the work of the Advisory Committee has been influenced by economic and political developments in the Eastern European countries and by the resulting need to adapt our strategy for the provision of environmental assistance.

It is a well-known fact that according to official statistical estimates, the radical changes that took place in the political system and the elaboration of economic policies after 1989 led to a substantial decline in total production.

The mid-1990s witnessed an economic turnround, and within a short time, quite a few of the countries reached 1989-levels of production.

The rising wealth has triggered an increasing desire to acquire western market oriented technology. This, in turn, has led to a shift in the relative weighting between assistance for tangible investments (plant and machinery) and intangible investments (technical assistance, "know-how").

This has affected environmental assistance to some extent, as tangible investments - according to conventional thinking - are more valuable than the less clearly measurable intangible investments.

This played a part in the debate that took place when commemorating the 10^th anniversary of the launching of the environmental assistance programme for Eastern Europe. In this connection, it should be remembered that historic experience - not least from the time of the Marshall-aid - shows that technological know-how is a strong lever for economic growth.

On the political front, the enlargement of the EU towards east is of increasing importance to the strategy governing the provision of environmental assistance. Complying with the standards for membership demands great insight into environmental problems and knowledge of how to draw up a new set of rules. Also this development pulls in the direction of increased technical assistance.

Finally, it should be mentioned that conservation of natural amenities is given high priority in many recipient countries. There has thus been a move away from a situation where there was an almost desperate need to intervene against especially water and air pollution to a situation more similar to our own.

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