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Ukraine: Mounting Challenges

By Oxford Business Group*

The Ukrainian government is bracing itself for a tough ride ahead. In an address to the parliament on March 31, President Viktor Yushchenko said the economy shrank 25-30% year-on-year in the first two months of 2009 and that further hardships would have to be endured before there was a return to positive growth.

“We have lost our foreign markets and 60% of Ukrainian exports. All our foreign currency earnings depended on these markets, as did the jobs of nearly 2m people in steel, chemicals and related sectors,” he said.

Saying that the country had been “ill-prepared to confront the crisis”, the president also called on the parliament to act by responding to the downturn.

And act it did, though not in the way the head of state meant. The following day parliament voted overwhelmingly in favour of a resolution to move forward the date of the next presidential election from January 2010 to October 25, 2009. The move, described by Yushchenko as illegal, has further heightened tensions between the head of state and the government of Prime Minister Yulia Tymoshenko, former allies in the “Orange Revolution” of 2004.

The two have been increasingly at odds over how the economic crisis in Ukraine should be handled, with Yushchenko opposing government plans to strengthen ties with Russia, including seeking a $5bn loan from Moscow, and over what the president claims is the slow pace of implementing reforms required by the IMF under its $16.4bn standby agreement with Kiev, which was brokered in November.

While some in the parliament are reluctant to ratify measures required by the IMF, including raising taxes on some products and bringing the budget deficit down to 3% from 5%, the government is in urgent need of funds to support the economy.

Concerns over the country’s financial institutions have prompted the government to announce plans to shore up Ukraine’s banks by releasing up to $5.7bn in funds, the equivalent of 2-3% of GDP, to recapitalise the sector.

On March 31, Alexander Savchenko, the deputy chairman of the National Bank of Ukraine, told journalists that between 10 and 15 banks could benefit from the recapitalisation programme, which he said aimed to restore banks’ ability to pay on household deposits and meet its obligations to corporate entities.

The question of how to further support banks and encourage them to resume lending to the private sector was being considered, and measures would be taken at a later day, said Savchenko. “It would be difficult, under current circumstances, to demand that all banks provide lending to the real sector,” he added.

Many analysts estimate that around one-third of household deposits have already been withdrawn from local banks since late 2008, with many lenders now struggling to meet cash demands from depositors and some banks restricting withdrawals to 20% or less of a customer’s account.

The run on the banks has mainly been caused by depositors seeking to switch their holdings to foreign currency as a hedge against inflation and the possible collapse of the hryvni, which has lost 37% against the US dollar since September.

The proposed state funding could help restore confidence in the country’s banks, though with Savchenko suggesting a maximum of 15 of Ukraine’s 180 banks could gain assistance, the public may remain uneasy over the plight of the unassisted majority.

Furthermore, the planned state bailout may not be enough. According to a recent IMF report, the amount needed to recapitalise Ukraine’s banks is around $8bn, some 4.5% of GDP.

A further threat to the stability of the Ukrainian economy is the distinct possibility of another confrontation with Russia over gas supplies, a potential clash that could affect the rest of Europe. Moscow has made clear its displeasure at Kiev striking a deal in mid-March with the EU for $2.5bn in funds to upgrade Ukraine’s gas pipeline network.

Moscow is opposed to the plan since it would undermine energy giant Gazprom’s monopoly on transiting Russian gas through Ukrainian territory. On March 25, a senior Gazprom official said if Ukraine went ahead with the EU-funded upgrade, there could be “unpredictable consequences”.

With exports plunging, industrial production down 34% year-on-year in January, inflation running at around 22% due to surging food prices and government spending, and the IMF blocking the release of the second trance of its standby loan until key reforms are made, Ukraine’s government is finding its room for manoeuvre increasingly limited.

*Oxford Business Group (OBG), a UK-based publishing, research and consultancy organisation, publishes economic and political intelligence on the markets of Eastern Europe, North and South Africa, the Middle East, and Asia.

OBG offers comprehensive analysis of political, macroeconomic and sectoral developments, including banking, capital markets, energy, infrastructure, industry and insurance.

OBG’s acclaimed economic, political and business reports are the leading source of local and regional intelligence, while OBG’s online economic briefings provide up-to-date in-depth analysis. OBG’s consultancy arm offers tailor-made market intelligence and advice to firms operating in these markets and those looking to enter them.

Social Patronage in the Post-Soviet Russian Army

Post-Soviet NATO, or the Rebirth of the Warsaw Pact?

By Anahit Shirinyan*

On February 4, 2009, the presidents of the seven member states of the Collective Security Treaty Organization (CSTO), Russia, Armenia, Belarus, Uzbekistan, Kazakhstan, Kyrgyzstan, and Tajikistan, signed an agreement in Moscow during a session of the Collective Security Council to set up a rapid response force.

In the past the CSTO had such a rapid deployment force consisting of 3,000 troops however, as noted by Russian Federation President Dmitry Medvedyev, all this merely existed on paper. The new agreement envisages increasing the number of troops to 10,000. Each of the member states will allocate one battalion to the rapid reaction force. Each nation’s battalion will be stationed on its own soil and under its command.

Will Armenian forces fight against the Taliban?

The signing of the agreement has lead analysts to conclude that Moscow wishes to bring the Warsaw Pact back to life and that the new agreement is nothing less than a challenge to Washington and its NATO allies. In particular it was Russian President Medvedyev who gave rise to such conclusions when he declared that the force to be created would be combat ready, armed with the latest military technology and on a par with NATO forces in terms of overall military resources.

Medvedyev also noted that the CSTO and EurAsEC (Eurasian Economic Community) summits signal new qualitative Russian relations with the member states of these organizations both on a multilateral and bilateral level. According to official information,   The officials at various levels enumerated possible missions such as: deterring and repelling aggression by conventional military forces; defending the sovereignty and territorial integrity of the organization’s member countries; conducting “special operations”; and dealing with asymmetrical threats and challenges, including international terrorism, radical Islam, and other forms of “violent extremism,” trans-border organized crime and drug trafficking, and even natural or technological disasters.

These challenges, by the way, are mostly hanging over the head of the central Asian republics and their source is to be found in neighboring Afghanistan. As expressed by Sergei Prikhodko, the Russian President’s Foreign Policy Advisor, Afghanistan is the primary threat to the organization in terms of security.   “The CSTO summit and its decisions are the joint response to those threats arising from its southern borders – the activities of the Taliban, the situation in Afghanistan and, to a large degree, in Palestine,” he stated.

Collective disagreement

The signing of the agreement, however, wasn’t unanimously accepted by all member states of the organization. Ukraine signed on with certain reservations, agreeing to the deployment of its forces to individual missions rather than on a permanent basis. The agreement led to widespread displeasure in Belarus. The political opposition there charged Belarusian President Alexander Lukashenka with violating the country’s constitution because it prohibits the deployment of Belarus armed forces outside its state borders.

In addition, the Belarus Constitution notes that the Belarus strives to be a neutral nation. Nevertheless, a spokesperson for the country’s ministry of foreign affairs publicly declared that the Belarus army cannot be stationed in post-Soviet hot spots, in conflict zones, given that the country’s constitution doesn’t allow it.

Perhaps what is noteworthy is that the CSTO member states are either not buoyed by the prospect of the application of collective forces in general or either each of them regards that new mechanisms are more beneficial. In addition, some of the CSTO member states are on friendly terms with one another.

In the estimation of analysts, the new agreement is most beneficial for Russia. As noted by Kremlin advisor Gleb Pavlovsky, the CSTO is of prime significance to Russia “in opposition to Georgia, a vengeful aggressor state that seeks to revise borders”. Experts are of the opinion that the most important program in the back of Moscow’s mind is to employ CSTO forces as a peacekeeping detachment across the post-Soviet expanse.

Aleksei Maleshenko, a resident scholar at the Moscow office of the Carnegie Endowment for International Peace, views the new agreement as the latest step by Moscow to strengthen its influence in former Soviet countries. Nevertheless, Mr. Maleshenko doesn’t think that the CSTO will begin to play an active role in regional security issues. “I cannot picture the CSTO taking any real action. For example, it will not fight against NATO in Abkhazia or within the borders of Georgia. In the same manner, it will not come to the rescue of any of the presidents in the case of an Islamic-inspired uprising,” notes Mr. Maleshenko.

“In a more tangible sense than other CSTO countries, Armenia regards this arrangement as beneficial to itself. Yerevan welcomes the February 4 decision to create a rapid response force in Yerevan’s own frame of reference,” writes the Eurasia Daily Monitor, alluding to the Karabakh conflict. “Armenia views the CSTO primarily as a conventional military actor as well as a framework for Russian protection of Armenian territorial gains against Azerbaijan. This traditional view contrasts with that of Central Asian governments, which expect the CSTO to deal with asymmetrical threats and challenges, such as those associated with terrorism, from non-state sources”.

The prime targets of the CSTO, terrorism, Islamic extremism, narco-trafficking, etc, are truly the most vexing problems confronting Central Asia. However, these countries however aren’t all that disposed to deploying there forces in other locations. In addition, conflicts amongst these countries on a host of issues (water resources, ethnic problems) continue till today and securing cooperation amongst them is a complex task indeed.

What is most important, however, is that for Russia the central Asian countries aren’t the most reliable of partners. It was only after Russia agreed to give Kyrgyzstan a financial package     of $300 million in cash (in addition to $1.7 billion investment and $180 million in debt relief) to close the American military base at Manas.

In the words of Kyrgyz President Kurmanbek Bakiyev the reason for the move is because the rent being paid by the United States wasn’t sufficient as well as the fact that a negative backlash had taken hold in Kyrgyz society regarding the activities of the American forces.

The Manas military base, established in 2001, plays an important role in the U.S.-led war against terrorism in Afghanistan. The possibility that the Kyrgyz authorities will back down from their ultimatum to close the base if the U.S. agrees to a rent increase, cannot be ruled out.

At the same time, Tajikistan announced on February 6 that it was ready to allow its airspace to be used by non-military NATO aircraft for the transfer of materials to Afghanistan. According to other news in circulation, Uzbekistan still holds out hope of mending fences with the West, particularly the United States. One of the rumors is that Uzbekistan might soon possibly pull out of the CSTO all together as it did once before in 1999.

Due to their natural resources and military strategic position, the nations of Central Asia have found themselves at the center of conflicting interest amongst global geo-political forces. For this reason they are attempting to reap benefits by cooperating with all parties. This factor makes them unreliable partners for Russia.

A scarecrow for NATO

In the opinion of political scientist Sergei Kiselyov, the attempt by the Russian authorities to erect a scarecrow for NATO is perhaps doomed to failure. In Mr. Kiselyov’s view what awaits Russia is the fate of the useless CIS and the never realized Russia-Belarus union state.

In such conditions, when the CSTO has practically no possibility of becoming a political-military alliance on an equal footing with NATO, representing the common interest of the member states, the question arises as to why the need for the “improved” alliance in the first place.

Perhaps, the Russian program to transform the CSTO into a competing military-political alliance vis-à-vis NATO seeks to create an illusion, rather than a reality. Russia will not be capable of ensuring cooperation amongst the “allies” in emergency situations. Instead, Russia will be able to create conditions where the West will pay it more importance and will more frequently enter into cooperation with it regarding pressing international and regional problems.

It is by no means coincidental that the CSTO confirmed Afghanistan as the prime target for joint action. Medvedyev declared that the CSTO is ready to cooperate with the United States in the war against terrorism in Central Asia. And all this comes at a time when NATO intends to intensify its anti-terrorism operations in Afghanistan.

………………

*Anahit Shirinyan is an investigative journalist with Hetq Online, based in Yerevan, Armenia. She holds a master’s degree in international relations from Yerevan State University. Her articles mainly focus on Caucasian regional issues, Post-Soviet developments and Armenian-Turkish relations. She has published several articles in the South Caucasus Regional Analytical Journal of the Caucasus Journalists Network.

The Hetq Online website has been operating since 2001, when it began as an initiative of the Armenian Association of Investigative Journalists. Today, Hetq Online is the leading voice for independent journalism and analysis in the country. The present article on Balkanalysis.com was originally published by Hetq Online on February 16, 2009.

The Battle for Tskhinvali: Georgia’s Initial Attack

By Scott Taylor for Balkanalysis.com*

Editor’s note: Two former British military officers working as OSCE observers during the August conflict in South Ossetia have recently spoken out in The Times of London, condemning Georgia, and not Russia, for the commencement of hostilities then. Their verdict harmonizes with the following special briefing for Balkanalysis.com, written by Canadian war reporter Scott Taylor.

These revelations, along with a November 7 New York Times article questioning the US government’s official line blaming Russia, citing other OSCE monitors, is already having repercussions for international relations. Caught in a lie, the US State Department is predictably enough now saying that it is ‘not important’ who started the conflict.

Robert Wood, deputy spokesman at the State Department was quoted as saying: “I think we need to get away from looking at who did what first, because, as I said, I don’t think we’ll ever really get to the bottom of that… the important thing is for us to move forward, and that’s what we’re trying to do, in terms of trying to reconstruct Georgia, bring about stability to the general region. And that’s what we are going to focus on.”

However, just because the US government has decided that it will not “focus on” finding responsibility for a deadly and unnecessary conflict, that is not stopping intrepid journalists from fulfilling their responsibilities for them- as Scott Taylor now reports.

………………

Tskhinvali, South Ossetia: For the casual observer,  relying only upon the scant coverage offered in the Western media, the outbreak of hostilities in the Caucasus last August was presented and understood as an act of aggression on the part of the Russian Federation. The real story, however, was more complex.

When Russian tanks began pouring  into the disputed territory of South Ossetia to engage the Georgian military, the US State Department reiterated its stance that Georgia was simply exercising its  control over sovereign land.

Few pundits or analysts understood the South Ossetians’  long-standing declaration of autonomy from the Tbilisi regime.

Most significantly, almost no one understood the fact that Georgia had unleashed the initial attack on 7 August, killing Russian peacekeepers in the process, and committed some horrific war crimes before the tables were turned on them militarily with Russia’s entry into the fray three days later.

Since 1989, ethnic Ossetians and Georgians have been engaged in four separate clashes for control of this region, the most recent being the one this past August, sparked by the Georgian invasion. At the time, the world’s attention was focused on the Beijing Olympics opening ceremonies.

That night, Georgian tanks rolled into South Ossetia in an attempt to submit the breakaway region, around midnight- despite the explicit assurances of Georgian President Mikhail Saakashvili, issued just a few hours earlier on national radio, that no attack was in the offing.

South Ossetia must be one of the very most difficult places I have ever tried to reach as a reporter. Geographically, it’s linked to North Ossetia, Russia by only a single winding pass cutting through the Caucasus Mountains. All access routes to the south, into Georgia proper, have been blocked since the conflict, and the extensive Russian-Georgian border remains closed.

It was thus only possible to get to Tskhinvali, de facto capital of South Ossetia, from the north. Despite assurances from the highest levels of the Russian administration, Russian border guards at the crossing prevented our team from entering, claiming that no foreign journalist were allowed into the conflict zone.

We thus were forced to spend three frustrating days waiting, stranded at a remote mountain checkpoint, before a phone call from the press secretary of Russian President Dmitry Medvedev’s came, ordering the local commander to let us pass.

The lack of on-site independent monitors when the Georgian tanks rolled into South Ossetia on 7 August ensured that the first media reports were inconsistent and vague.

So, since very little has been reported about the initial Georgian attack, I made it my business to find out what really happened in those pivotal early hours of the five-day showdown between the world’s largest country and its small, but US-supported Caucasus neighbor to the south.

Ossetian officials admit that they had reason to be suspicious in the days leading up to the attack, though there was little they could do in any case. They were aware an attack was looming after the Georgians began massing armored formations along the administrative boundary on 1 August, and in response mobilized the statelet’s small but spirited militia.

They also saw to it that additional medical supplies were stockpiled at the Tskhinvali hospital. Nevertheless, President Saakashvili’s public assurances of peace prompted the people to sleep unworried on that fateful night- in which, shortly after midnight, Georgian missiles rained down on an unsuspecting barracks housing Russian peacekeepers. Some 150 people died in the unprovoked sneak attack.

Georgian army units in T-72 tanks then penetrated Ossetian terrain, but were forced to take an alternate route to the west, crossing a garbage dump and canal; the main road had been mined as a precaution by the Ossetians.

As the Georgian tanks entered Tskhinvali, additional Georgian columns swept clear the few villages outside the city, then captured the ridgeline north of it. From this vantage point the Georgians could engage the columns of fleeing Ossetians and provide fire support for their troops inside the city.

Then, in villages along the main road leading northwards towards Russia, ethnic Georgian villagers carried out attacks on their Ossetian neighbors. The only route into the city was thus made unsafe, and civilians were trapped.

Nevertheless, the Georgian military made several baffling errors that in the end ruined their chances of a complete victory. Their aircraft attacked, but failed to destroy, a key bridge on the main road. Still more puzzling, they failed to even attempt to block the vital seven-kilometer tunnel linking South Ossetia to Russia.

“If they began their attack at the tunnel, this could only have resulted in a complete Georgian victory,” one senior Ossetian commander told me. “No matter how bravely we fought, without the Russians we would have been finished in a few days.”

Casualties quickly mounted inside occupied Tskhinvali, the scene of fierce fighting between heavily armed Georgians and rag-tag Ossetian militia fighters. Compounding the carnage, the city hospital was shelled repeatedly by the Georgians.

Dr. Nikolai Zagoyev, the head surgeon in this hospital, told me that he and his surgical staff would perform a total of 700 operations by candlelight in the operating room- hastily relocated to the basement. With the road blocked, and no helicopters available, there was no possibility to extract the casualties – both military and civilian – from the combat zone.

“Twenty-five of my medical staff became casualties in the attack,” said Dr. Zagoyev. “Conditions were deplorable, blood supplies were so low my doctors donated their own blood to patients before performing surgery. We didn’t have the possibility to even test for blood types. It was a miracle that so many of our patients survived.”

According to Dr Zagoyev, priority was given to medically treating the lightly wounded South Ossetian soldiers so that they could return to the fighting. “Some of our soldiers were injured two or three times, and we would simply stitch them up while they still clutched their rifles,” he stated. “The fighting was only a few blocks away, and they would rush straight back out to rejoin their units”

Although the Georgian tanks reached the center of Tskhinvali, they crucially could not completely secure the city in the first 72 hours of the invasion. Despite being heavily outgunned, the South Ossetian militia continued to fiercely resist with short sharp ambushes.

“The Georgians were in their tanks with the hatches down, driving on streets which they did not recognize,” said Vitaly, a 32-year-old policeman/reservist who was wounded during the fighting. “We live in this city all of our lives, we know every alley, every sewer, even hiding place. They could have been here for 10 years and they could not crush the resistance.”

On my tour of the battle zone, it was very clear that it had been a fierce fight. The shattered remains of Georgian tank turrets still litter the central square in Tskhinvali, grim testimony to the intensity of the resistance put up by the Ossetian fighters.

Frustrated and unable to suppress the Ossetians, the Georgians engaged in a campaign of vandalism, arson and looting. The tide turned on the morning of 10 August: Russian armored units, supported by helicopter gunships, poured through the tunnel from North Ossetia and swept south, preparing to take their revenge for the cowardly Georgian attack on their barracks.

The Russian  tank columns blasted their way down the main highway then swept west to clear the Georgians drom the ridgeline above Tskhinvali. “Until this point, the Georgian airforce had been in control of the airspace, even though we knocked out some of their aircraft with groundfire” said a senior Ossetian commander.

“Once the Russians came, the situation was reversed. Without the  helicopter gunships, it would have been impossible to clear the Georgians from the heights”.

The Georgian soldiers put up only a minimal fight against the Russians, and their orderly withdrawal from South Ossetia quickly turned into a panicked rout. The ethnic Georgian villagers that had turned on their Ossetian neighbours, fled south if they were able to do so. Those trapped behind the lines faced the brutal revenge of the enraged Ossetians.

As the Russian troops broke through into Tskhinvali, the South Ossetian militia took their turn at burning and looting the hastily vacated Georgian homes in retaliation.

The Russian troops quickly routed the Georgians, driving them more than 20 kilometers back into Georgia proper. By this point Georgia’s Western allies had become alarmed at the escalation of events, and the US State Department voiced support for an embattled President Saakashvili as they denounced what they termed “Russian aggression.”

When the battlefield was pushed south in pursuit of Saakashvili’s shattered units, and the dust settled on South Ossetia, the entire region was a scene of tragic devastation.

Although a massive Russian-sponsored reconstruction program is now underway, the immediate future for the surviving Ossetians will prove difficult. The onset of winter is imminent, utilities have yet to be fully restored, and outside of Tskhinvali there are very few habitable buildings.

With the majority of able-bodied Ossetian males still mobilized for military service, a lot of the reconstruction and labor work is being conducted by the women. Most of the Russian troops still in the territory are construction battalions, and they are also heavily engaged in restoring the basic infrastructure.

The hardliners in South Ossetia point to the fact that with Russian assistance they were able to win a military victory. However, the pragmatic Ossetians have either fled north to start a new life, or are making plans to do so as soon as possible.

“If I could find a buyer for my home, I would leave here tomorrow,” said Evelena, a 51-year-old widow who runs a small informal bed and breakfast. “But who in their right mind is looking to buy a house in a potential war zone like Tskhinvali?”

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*Award-winning Canadian war reporter Scott Taylor is the author of five bestselling books on conflict zones from the Balkans to Iraq and Afghanistan. He is the editor of Esprit de Corps Magazine, Canada’s leading journal on military affairs.

Rusyn Aspirations in Ukraine

This unusual dispatch comes from our friends at Hidden Europe Magazine.

Father Dymytrij Sydor is a determined man. No-one quite believed him when he asserted that he could raise the funds to build a massive new cathedral at Uzhgorod. But Dymytrij pulled every string he could, and sure enough Uzhgorod now has a gleaming new cathedral – one of the largest in eastern Europe.

So we might do well to take note of Dymytrij’s latest pronouncement. Last week he proclaimed to the world that the province of Zakarpattya, of which Uzhgorod is the administrative centre, should secede from Ukraine. This southwesternmost province of Ukraine is hill country, and it is home to the Rusyns – an ethnic and cultural minority who emphasise their distinct identity. The Rusyns argue that they are very different from the Ukrainians, Poles, Slovaks, Hungarians and Romanians who also live in the lands around the Carpathian mountains. We featured the Rusyn people in hidden europe 2 (May 2005), but at that time there was no serious talk of Rusyn independence.

Three years is a long time in the politics of central and eastern Europe, and during those years the self-confidence of Rusyns, particularly in Ukraine, has grown enormously. “If Ukraine can have an Orange Revolution,” runs the argument, “and in so doing asserts its independence from neighbouring Russia, then we, the Rusyn people, demand a similar right to demonstrate our independence from Ukraine.”

Rusyn politicians have quietly watched as the West has backed Kosovo’s bid for independence. If Kosovo is allowed to defect from Serbia, why should the Rusyns not sever their link with Ukraine? Russia’s recognition of South Ossetia as a breakaway region from Georgia has further fuelled the Rusyn spirit. But Father Sydor plays down parallels with other parts of Europe and the Black Sea region. Speaking at a meeting of the Carpathian-Rusyn congress in Mukaceve on 25 October, he argued that the Rusyns of Ukraine should look not to Transnistria or Abkhazia as a model for their own future, but rather to the Czech and Slovak Republics which peacefully sealed their velvet divorce in 1993. “We hope Ukrainians will give us a divorce in a peaceful way, just like the Czechs and Slovaks split,” said Dymytrij as the congress proclaimed a new independent status for that part of the Rusyn homeland that lies within Ukrainian territory. The congress adopted the name Podkarpatsk√° Rus for the would-be autonomous region, recalling one of Europe’s more fleeting microstates, Carpatho-Ukraine, which briefly existed in the same area in early 1939.

All eyes are now on the assembly of Ukraine’s Zakarpattya Oblast which meets in Uzhgorod on 1 December. The assembly is unlikely to back Father Sydor separatist aspirations. For not only does the region have a large number of Ukrainians, but it is also home to other minorities beyond the Rusyns, notably the Hutsuls. But Dymytrij Sydor is not a man to back down easily. If the oblast assembly does not support the Rusyns claim for independence, then Father Sodor says that the Rusyn minority will consider more forceful ways of securing their goals.

The hills around Uzhgorod are one of the most tranquil parts of Europe. That tranquillity might be on the brink of being shattered.

It is unlikely that the Rusyns in Ukraine will get their way. And, interestingly, Rusyns across the border in neighbouring Slovakia show no appetite for independence. But if Podkarpatsk√° Rus ever comes to pass, it will join a legion of European microstates, the majority of which have quickly been regained by larger neighbours.

We review some of those lost microstates, mere footnotes to history, in the November issue of hidden europe. You can see the full table of contents of that latest issue online.

Russian Pipeline Development, International Deals Point to Resurgent Role

By Ioannis Michaletos

Energy issues related to the rapid increase of Russia’s prominence on the global political stage, greatly assisted through the country’s use of its energy riches, have captured considerable attention from world policymakers. Russian is the major supplier of natural gas to Europe, providing an estimated 50 percent of gas consumed in the EU. Moscow’s major strategy here is to increase this dependency, while at the same time to develop closer ties with Asian powers such as China, so as to counterbalance any potential retaliation by Europe in case relations between them deteriorate in the future.

After the five-day war in Georgia in August, there were numerous calls for breaking or sharply limiting ties between Brussels and Moscow, mostly echoing the American neoconservative strategy that seems determined to pursue a renewed Cold War, conditions permitting. In order to fully examine the situation at hand, one should present Russia’s strategy, which has been indicated in several ways intimating the country’s future intentions.

Over the past few years, Russia has gives its utmost attention to completing a series of infrastructure projects in the Eurasian region. One is the Burgas-Alexandroupoli (B-A) oil pipeline from Bulgaria to Greece, allowing oil sent via ship on the Black Sea to bypass the crowded Bosporus. Another, the South Stream gas pipeline, partially seeks to bypass Ukraine, which has drifted towards NATO since the “Orange Revolution” in late 2004. Similarly, the North Stream gas pipeline, meant to bypass another former Soviet neighbor now oriented against it, Poland, will allow Russia to supply Germany and Western Europe in general with 55 billion cubic meters of gas.

At the same time, Russia has engaged domestically in the modernization of its own pipeline infrastructure. It has also started upgrading the oil terminal of its Arctic Murmansk port, and has found additional gas deposits on Russian-owned territory. The Caspian pipeline system will be used in order to secure imports of oil from Central Asian states; a great percentage of those will be used to supply the B-A pipeline.

The region surrounding the Caspian is one of the focal areas in Eurasia, mainly because of its immense energy potential. Presently, Kazakhstan exports over 1 million barrels of oil via the Caspian Pipeline Consortium pipeline (CPC), while Azerbaijan manages to export 800,000 barrels from the BTC pipeline, a number that will increase up to 50 percent over the coming years.

The CPC pipeline has a total length of 1,510 km and transfers hydrocarbons from the gigantic Tengiz oil field up to the Novorossiysk Russian port on the Black Sea. It is estimated that by 2010 over 1.3 million barrels could be thus transferred on a daily basis. The projects are however facing several issues, the most interesting being the absence of a conclusive agreement between neighboring countries regarding sovereignty issues in the Caspian Sea- a chronic headache that has slowed development.

This is an issue of great importance. A country like Azerbaijan produces over 80 percent of its oil offshore, and up to 60 miles from the coastline. Iran claims it has the right to exploit some 20 percent of the total Caspian surface area (143.244 sq km), whereas Russia, Kazakhstan and Azerbaijan argue jointly that the Iranian percentage should actually be 13 percent, maximum.

For the moment, the strongest partner in this region is Russia, since it effectively controls the pipeline networks and the export revenues of Kazakhstan, while the two main Russian rivers, the Volga and the Don, are interconnected via a channel. In essence, Moscow provides the Caspian states the capability to connect to the Black Sea and the North Sea through its own territory.

The Western Siberian pipeline is another key route. The completion of the Western Siberian oil pipeline will supply the Asian market and, from a geo-economic point of view, will ultimately lead to a decrease in the significance of the Singapore Straits, from where the bulk of Middle Eastern oil currently passes on its way to China and Japan.

On March 21, 2006, the first strategic agreement was implemented for the exportation of Russian natural gas to China. The Gazprom- CNPC (China National Oil Corporation) agreement anticipates a yearly exportation of some 40 billion cubic meters of natural gas to China from the Western Siberian Pipeline, starting in 2011.The pipeline to be constructed has a total length of 3,000 km, and is estimated to cost over $10 billion. There is still no specific information regarding how the total cost is going to be shared by the involved parties, since other technicalities remain unsolved. However, this is clearly a major deal that harmonizes the Chinese need for more energy and the Russian need to expand and diversify its export base, for both economic and geopolitical reasons.

The aforementioned projects will cost, according to unofficial estimations, from $70 billion to $100 billion. This is small change, if one takes into account that the revenues from oil alone for 2007 were approximately 180 billion Euros, and before the price hike that saw the oil index go from $75 to $147 per barrel during the first quarter of 2008.

Currently, however, due to the global financial crisis, the price of oil has decreased to $87 per barrel. Nevertheless, the value of the dollar has risen by 15 percent in less than three weeks, so the fall is less than would seem.

Russia, should it completes the above projects, would be able to alter to its advantage one of the strongest points of the so-called maritime powers (i.e. USA), and that is the control of vital geo-economic points such as maritime straits or ‘sensitively-placed’ countries. Such impediments can simply be bypassed by the main energy corridors that will flow through Russia on the Eurasian terrain.

Furthermore, Moscow has also been able to exercise strong influence in the energy industries of the other CIS states with its abundance of natural resources. Tajikistan, Kazakhstan and Turkmenistan have strategic partnerships with the likes of Lukoil and Gazprom, and great portions of their hydrocarbons are being transferred to the West over Russian soil and via Russian pipelines.

Moreover there are several relevant energy projects underway in Russia’s near-abroad. Kazakhstan is promoting a multibillion program by 2020 to modernize its oil industry. The country aims to achieve the status of an energy supplier for the Azerbaijan-Georgia-Turkey Baku-Ceyhan pipeline and to invest in Georgia itself as well. Turkmenistan has similar plans, that include mostly investing in identifying and exploiting new reservoirs of oil and natural gas by 2020. And the Russian corporation Lukoil plans to invest $5 billion in an oil project in Uzbekistan, while Gazprom has formed a strategic partnership agreement with Tajikistan. At the same time, Russia has moved to enhance its influence through the media in such states by increasing its television presence in Central Asia.

Despite the degree of unpredictability that the current global financial crisis is having for all the major players, these simultaneous events and developments indicate that Russia’s economic and political resurgence, driven by its wealth of natural resources, can only be expanded, in parallel with its pipeline network- meaning the country will remain a force to be reckoned with for America and Europe in a variety of spheres.

……………………

Frequent Balkanalysis.com contributor Ioannis Michaletos is a Balkan security analyst for the RIEAS Institute in Athens, Greece. He is also Southeastern European Coordinator and Editor for the World Security Network Foundation.

Postscript: Author’s Choice of Further Relevant Sources Online

www.rusenergy.com/english

www.gazprom.com

www.iea.org

www.energyintel.com

www.rbcnews.com

www.press.lukoil.ru

www.en.ria.ru

www.gasandoil.com

www.ipem.ru

www.naturalgas.org

www.eia.doe.gov

www.energytribune.com

www.lukoil.com

www.mosnews.com

www.oilru.com

www.energybulletin.net

www.europeanenergyreview.eu

Balkanalysis.com Announces New 2006 Archive Uploads

Balkanalysis.com would like to announce that nine months’ worth of archived articles, many previously unavailable on the website, have now been uploaded to our page at the Central and Eastern European Online Library (CEEOL.com).

The articles in question number more than 50, and cover the months March-December 2006. They will be of interest to researchers of contemporary Balkan history. They complete the current archive of Balkanalysis.com articles, covering the period 2001-2006. These articles specifically include articles on Macedonia, Serbia, Montenegro and Kosovo.

Over 220 instititutions from 21 countries currently offer access to articles in the Library. If you would like to access these articles, but your institution is not yet a member of the CEEOL.com program, please have your institution’s acquisitions or reference librarian contact CEEOL.com directly.

Sincerely,

Balkanalysis.com team

The Indispensable Power: Energy as a Tool in Russian Foreign Policy-Making

By Mehmet Efe Biresselioglu*

Russia has reappeared on the global strategic and economic map in recent years due to the combination of international concerns about energy security, instability in the Middle East, and dramatically rising oil prices. Russia has benefited tremendously from the changing global situation since 1999, being one of the world’s most energy-rich countries. The Russian economy grew by more than 6 percent last year with the help of energy exports.

Russia has used this opportunity to regain the dominant position on the global energy market that it had enjoyed in the 1970’s and 1980’s, when the USSR was the leading oil producer in the world. In the aftermath of the recent shift in the global situation, Russia is transforming itself into a new “energy superpower’ with the help of high energy prices and increased global demand of energy. Energy will remain the base of Russia’s power for the foreseeable future. It will underpin the Russian economy and domestic stability, and enhance Russia’s political and economic position in Eurasia, by making it a major player in Asia as well as in Europe, and by increasing its significance to the United States.

Russia has mostly been a producer and a supplier of raw materials which account for nearly 80 percent of its exports. Many analysts insist that the prevalence of raw materials amongst a nation’s exports can be used as a lever for exercising its global influence. Since the demand for oil and natural gas in the developed nations is expected to grow, as Russia has the world’s biggest oil and natural gas reserves among non-OPEC member countries, Russia has a chance to use its energy power to become a stable supplier of oil and natural gas to the Western nations and China.

However, there are complications in the country’s resource-based economy. The root of these problems lies in ownership patterns rather then resource abundance per se, and present potential challenges to the state. The main one that Russia may face is the external shock caused by falling energy prices. Another challenge is the possibility of Russia becoming a victim of “Dutch Disease’ due to negative consequences of energy income.

Energy is increasingly being used as a tool of Russian foreign policy. Russia seeks to ensure control over oil and gas pipeline routes both across her territory and elsewhere, in order to gain leverage in relationships with both potential allies and adversaries. The Russian state is also increasing its control over its own energy resources. What is happening there today can be understood as a re-allocation of natural resources by the state. The privatizations of the 1990’s were characterized by oligarchic seizure of formerly state-owned entities. Under Putin, the state has taken back what it used to have in the Soviet period. State control over the natural resources and economy takes the form of controlling the assets as a tool for Russia’s foreign policy implementation. As a recent example, Kremlin used natural gas as a bargaining chip in winter 2006, this time with respect to neighboring pro-Western countries, including Ukraine and Georgia.

The Russian energy sector has come to represent the Russian state interests globally. Russia’s energy companies are expanding internationally with the assistance of the government. President Putin, then the director of the FSB, wrote an article for the Mining Institute’s journal entitled, “Mineral Natural Resources in the Development Strategy for the Russian Economy.” In that article, the future president stated that hydrocarbons were crucial to Russia’s development and the restoration of its former power. Putin discussed that the most effective way to exploit this resource was through state regulation of the fuel sector, and by creating large and vertically integrated companies that would work in partnership with the state. With the Putin administration, Russia has been following the strategy of using energy as a key policy in her foreign policy.

Gazprom and oil companies like LUKoil have become particularly prominent in sensitive energy ventures and regions of strategic importance to the Russian state since 1999, including the Middle East, Central Asia, neighboring states of Eastern Europe, the whole of the EU and the United States. At the G-8 meeting of 2006, Russian Finance Minister Aleksei Kudrin pointed out that Russia’s role as an energy supplier and therefore an influential power is not likely to fade soon. The government of Russia believes that Russia will remain a major player in energy, especially in global natural gas markets.

The main challenge for state ownership of the natural resources is the issue of “good management.’ As political economists argued, production and reserve levels have continued to grow only in well-managed resource economies. Many other resource-based economies have performed poorly before, not because they have over-emphasized minerals, but because they have failed to develop their mineral potential through appropriate policies.

Russian energy policy, therefore, is currently at an important watershed. On the one hand, Moscow is emerging as an alternative non-OPEC supplier of energy. On the other hand, however, there is notable concern that the Russian energy strategy is coming closer to the ‘energy capitalism model’, whereby foreign energy companies are welcome to invest, but only on the government’s terms and in partnership with a state-controlled national energy company.

* Mehmet Efe Biresselioglu is a PhD candidate at IMT Lucca Institute for Advanced Studies, Italy and a Visiting Research Fellow at NUPI, Norway. He has a degree in M.A in European Studies from Jean Monnet Center of Excellence at University of Turku, Finland. He specialized in Energy Politics, Geopolitics, Security Mechanisms, and Foreign Policies in the geographic focus of Turkey, EU, Central Eurasia, Caucasus, Caspian Sea Region and US. He is currently working on his dissertation about “European Energy Security: Turkey’s Role as a Major Conduit for the Oil and Natural Gas of Central Asian and Caspian Sea Regions’. Contact the author by email at: efe.biresselioglu@imtlucca.it

2007 Balkan Year in Review: Key Underreported Trends for the Future

The year 2007 was an eventful one in the Balkans, though several major trends remained underreported or were simply ignored. The Western media utilized most of its limited capacity to the political dimensions of the future status of Kosovo, choosing to tell and retell a tired story of good vs. bad (i.e., the West vs. Russia and Serbia), barely scratching the surface of what is if not necessarily the most important, at least the most hyped issue in the region.

Kosovo is however intimately tied to specific events and factors that, on the larger level, indicate an emerging strategic balance of power in the region, one that may not quite be what had been planned by the West, and thus which will likely leave a complicit media scrambling to find explanations for years to come. In this special retrospective report, Balkanalysis.com discusses a few of the major trends that have been identified in 2007 and which will likely help shape the Balkans in 2008.

The first major event has to be the growing power of Russia in the region and the future way in which this power, even if lessened, will be exerted. Less than a decade ago, the chief successor state to the USSR was grasping for economic stability and political respect on the global stage, with the nadir being reached in March 1999, when it proved powerless to stop NATO’s air war on Yugoslavia over Kosovo. This national humiliation was aggravated when the West failed to grant Russia equal partner status in keeping the peace in post-war Kosovo. Russia could only watch helplessly as half of Kosovo’s Serbian Orthodox population was driven out of the province by Albanian ethnic cleansers, with tacit Western approval.

From the ashes of this defeat arose Vladimir Putin, the ex-KGB officer determined to not let the national interest be trampled on again. In fact, Putin’s opportunity was created by the West in its reckless game in 1999. Until the question of changing Kosovo’s political status arose, Russia had not had a point of strategic leverage in the Balkans. For Putin, simply fomenting stubborn diplomatic opposition while an increasingly frantic West tries to appease the independence-minded Albanians has proven a very cost-effective and powerful strategy to contest Western ambitions and reassert his country’s role as a major power.

Nevertheless, the Western media has more often than not chosen to simply condemn these tactics rather than provide objective analysis, thus betraying their own sympathies with Western governments. Although there is little to be learned from boring invective, it would prove embarrassing to the powers that bombed Kosovo in 1999 for journalists to ask whether the intervention itself provided an opportunity for Russia to expand its sphere of influence, and precisely an opportunity that had simply not existed before. True, the US got its enormous military base in the heart of the Balkans with Camp Bondsteel – now more than a liability than anything else – but Russia has made major inroads on Balkan energy acquisitions, as well as buying considerable valuable seaside real estate in Montenegro, that former partner republic with Serbia whose independence, myopic and partisan Western diplomats still today maintain, is yet another well deserved punishment for the Serbs.

Reporting on the changing Russian role in the Balkans becomes even scantier in terms of its relation to the year’s second key trend, and perhaps the most astonishing- the diplomatic triumphs of Greece. A member of both the EU and NATO, Greece is a thoroughly Western country which has however sought to maintain its diverse relationships in nurturing national interests- in the process perhaps becoming guilty of wanting to have its cake and eat it too. While Greece’s major new alliance, with Russia, is more a harmonious convergence of certain interests than a deliberate planned partnership, it has been amply displayed and was singled out in a ‘power audit’ by the new interventionist think-tank, the European Council on Foreign Relations, some of whose members are famous for their roles in the Kosovo war and peace.

Greece’s convergence of interests with Russia owes primarily to two things; wariness over national security, vis-à-vis perennial enemy Turkey, and its ambition to be a regional player in the energy sector. As with the Russian bear’s awakening over Kosovo, Greece determined these interests in the late 1990’s, in response to Turkey’s enhanced position globally. The first Greek concerns were registered with the Clinton administration’s determination to use the Turkish Mediterranean port of Ceyhan for the terminus of a new oil pipeline (the Baku-Tbilisi-Ceyhan, or BTC pipeline) that would bring Caspian oil to the West and bypass Russia in the process. Under such a scenario, it was only natural that both affronted parties would reach out to one another in the energy sector, as has been the case with both LUKoil’s acquisitions in Hellenic Petroleum and in the major efforts to hammer out a deal on the anticipated Burgas-Alexandroupoli Pipeline bringing Russian oil to the Aegean via Bulgaria.

Greece’s second point of panic, though a far less reported one, came with the deepening alliance in the late 1990’s between Turkey and Israel. This first of all involved the transfer of lobbying know-how from the latter to the former in Washington, and soon developed into full-fledged intelligence cooperation, with one jarring result being the Turkish MIT’s kidnapping of Kurdish guerrilla leader Abdullah Ocalan, supposedly under Greek protection, in Nairobi. The Israelis had participated in gathering intelligence. It was a major embarrassment for Athens and a wild success for the Turkish government, by which it effectively ended the Kurdish insurrection, at least for a few years. Israeli-Turkish cooperation would strengthen and, with the victory of George W. Bush in 2000, catapult the neoconservatives, closely affiliated to both Israeli and Turkish lobby groups, into power in Washington.

Greece, like Russia a historic ally of Serbia, had also been less than thrilled about the NATO intervention of 1999, and chose not to participate in NATO air strikes; pivotally, however, it also chose not to veto the operation as Serbia had hoped. Alienated and insulted on all sides, Greece began to develop a parallel security infrastructure to that of NATO, turning to Russian expertise, most significantly in the advanced S-300 and TOR M-1 mobile anti-aircraft system which by virtue of its provenance was not supposed to be acquired by a NATO member. Intense interest in Greece’s air defense capacities from the Turks led, in May 2006, to a brief skirmish between Turkish and Greek fighter jets near the island of Karpathos, leading to the accidental death of a Greek pilot.

Aside from the defense sector, Greece’s budding partnership with Russia has also comprised energy diplomacy- the factor that will raise Greece’s political and economic stature as a transit corridor for oil, at a time of fierce competition between European countries desiring such a role. The expected Burgas-Alexandroupoli pipeline, in which Russia’s stake will be larger than either of the two countries through which the pipeline will actually go, is also seen by Athens as a defensive precaution against Turkey: it will hug the militarized eastern border in Evros, a tangible investment deterring any Turkish invasion. This factor was dramatically enhanced with the Greek Cypriot government’s decision, against Turkish protests, to drill for oil off of the island’s coast. Should multinational oil companies be active in Cypriot oil projects, the logic goes, Turkey will have to take a less bellicose stance towards Nicosia and, by extension, Athens.

The larger implications of Greece’s diplomatic success in 2004 in lobbying for Cyprus’ unconditional entry into the EU – that is, with its membership not being contingent on the passage of the ‘Annan Plan’ for unification – have indeed registered this year, with the EU’s second Greek state ready to uphold Athens’ policies within the bloc, particularly on the Kosovo issue, thus relieving Greece of having to take the strongest stance possible against Kosovo independence. So long as Cyprus can be counted on to conduct an identical policy, Greece can desist and so appear more ‘accommodating’ to Western interests- something that also buys it more political capital to expend on issues which are (erroneously, perhaps) equated with the national interest, such as trying to force the Republic of Macedonia to change its constitutional name. Despite increasing world sympathy for the Macedonian side, Greece has continued to prevent major EU powers from recognizing the country’s name, allegedly due to economic threats. At the same time, Greece is happy to let Turkey remain bogged down on its eastern front, embroiled in a war against Kurdish guerrillas that has now unwisely led it into northern Iraq.

That said, the major point of inquiry for journalists in 2008 has got to be the question of finding the source of Greek power. A NATO member that uses Russian military technology, opposes Kosovo independence, and that has threatened to torpedo NATO plans by vetoing Macedonian accession in April, Greece nevertheless continues to have its way with the West. Despite all of these apparent red flags, there has never been a detailed media investigation into precisely how Greece wields its economic and diplomatic clout to extract results that diverge wildly from those of its allies.

This brings us to the third major issue in the Balkans this year, though before considering it we must acknowledge that for the Greeks, success may be coming at a price: the massive summer fires, which blazed along fronts of up to 70km in width and which reached urban Athens, while decimating large stretches of the Peloponnese, can be considered the greatest threat to national security, and we expect that they will be happen again this coming summer.

While some fires occurred due to natural causes amidst parched, hot natural conditions, the majority occurred due to human involvement. Everyone from arsonists to property developers to Kosovo Albanians have been blamed, all with different alleged motives. While the last of these propositions has been derided as conspiracy-theorizing, it is clear that for irredentists with no chance of undertaking military action against much stronger state forces, the only other possibility for pressuring Greek policy is by causing widespread material destruction through fires or other terrorist acts. However, the Western press by and large chose not to look at the situation from this strategic aspect.

The third major underreported issue of the year in the Balkans has been the intrinsic connections and future possibilities of the major international bodies’ self-created problems in the region. The issue of Kosovo, Western governments have continuously maintained, is one that cannot be considered a precedent for any other of the numerous self-determination struggles across the globe- even as the representatives of these independence movements continue to remind that no, in fact Kosovo is being perceived as a precedent for them.

The possibility that Kosovo could be partitioned, anathema to the West as potentially having the capacity to set off a chain reaction in the Balkans, has ironically been given precedent due to the admission of a divided Cyprus into the EU in 2004. In that case, both the UN and EU were unable, or unwilling, to force Greek and Turkish Cypriots to settle their differences and enter as one nation, thus exacerbating the existing political animosities between Greece and Turkey. Whatever the reason for Cyprus entering the EU divided may have been, it is clear now that the whole thing has proven an embarrassment for the credibility of the supranational world bodies.

Since the UN could not force the non-warring Greeks and Turks of Cyprus to come together in 2004, it should be no surprise that the UN is now saying it can’t do anything more to solve the Kosovo conundrum, and will hand it off to the EU to figure out. This is another blow to the credibility of the alleged global peacekeeper, and will be perceived by potential secessionists around the world as evidence that the UN has no ability to curtail their future ambitions.

For its part, the EU has enough of a headache dealing with embarrassments more recent than the Cyprus fiasco. The two countries that made headlines on Jan 1 by joining the bloc, Bulgaria and Romania, did so on condition of implementing further reforms in the future. European diplomats state that by the end of 2006, the whole train of EU enlargement had built up such momentum that it could not be stopped; and, had everything gone according to plan with the Romanians and Bulgarians, the EU might be more confident now of its future enlargement. However, the complacency that has been shown by the new members – disinterested in finishing reforms, safe in knowing that they are finally in the club – is making Brussels much more circumspect about further Balkan enlargement. While the value of Croatia’s tourism industry and its relatively homogenous Christian society could indeed keep it on track for membership, Macedonia, Bosnia, Albania and Serbia could find themselves out in the cold, stymied both by the cancerous presence of Kosovo in the middle and the recent legacy of less-than-honest candidate countries.

For 2008 at least, therefore, events in the Balkans should continue to outstrip the control of supranational institutions, and perhaps at an accelerated pace. While this is not necessarily a recipe for war, it does mean that the demonstrated trends in the region towards the bold and unpredictable unilateralism of the pre-WWII alliance systems will intensify. To paraphrase the friendly Chinese curse, we are indeed living in interesting times.

Finally, another emerging trend in the Balkans to watch during 2008 will be the activities of Islamic extremist groups in the region. Although their activities in 2007 were reported mostly in the local medias, the international press took interest as well when Serbian police in March broke up a Wahhabi training camp in the mountains of Novi Pazar, in the southwest Sandzak region; recently, from the other side of the border, Montenegro’s intelligence chief attested that the fundamentalists inhabited camps in Montenegrin Sandzak, while also masquerading their activities in NGOs and youth groups. Also in 2007 Macedonian special police carried out an action against an Albanian irredentist group near the Kosovo border, killing at least one known Islamic extremist in the process. And failed jihadi plots against the US Embassy in Vienna and Ft. Dix in New Jersey both had clear connections with the Balkans. These are only a few of the stories that emerged this year, indicating activity that we believe will increase in the year ahead. The fact that certain Western countries and Israel are starting to take a closer look at the phenomenon of Islamic extremism in the Balkans provides further indications that it remains one of the major, if more underreported, issues affecting regional security.

News from Balkanalysis.com: Summer Recess, New Books, Essential Articles

Balkanalysis.com would like to inform its readers that the site will be on summer recess through September. Look for new articles and photos to be posted then. Until we’re back, readers may like to check out two new books from Balkanalysis.com director Christopher Deliso, and to peruse the archive- as well as new hand-picked essential background articles presented for you below.

The first new book, The Coming Balkan Caliphate: The Threat of Radical Islam to Europe and the West, published by Praeger Security International, details in depth the sordid story of how Western interventions in the Balkans during the 1990’s directly allowed foreign Islamic terrorist groups to set up shop- and how Western policy since has created a climate in which extremist groups can thrive, boding ill for regional security.

A work of unprecedented depth, The Coming Balkan Caliphate analyzes the situation on a country-by-country basis, and will be useful for general-interest ‘beginners’ to Balkan issues and experienced professionals alike. Relying on five years of field research and dozens of interviews with ranking security officials from several Western and regional countries, The Coming Balkan Caliphate dispels myths and enhances our knowledge of the emerging extremist threat coming from the Balkans.

The second new book, Hidden Macedonia: The Mystic Lakes of Ohrid and Prespa, is a travelogue out now from London’s Haus Publishing, which details the author’s circular journey around Lakes Prespa and Ohrid, through Greece, Albania and the Republic of Macedonia. Along the way, the history, culture and contemporary life of the great Macedonian lakes are intertwined with a little adventure, camaraderie and good food and drink. Hidden Macedonia will appeal to travelers looking forward to visiting the region, or those who are content to imagine the Macedonian lakes from afar.

Finally, here is a list of twelve original and essential articles (in no particular order). All are among those published over the last year, and will enhance readers’ knowledge and help tide you over until we return from summer recess.

Thanks for your understanding and continued reading.

-Balkanalysis.com

The Strategic Significance of Greek Thrace: Current Dynamics and Emerging Factors (Ioannis Michaletos & Christopher Deliso)

Turkey: Why a Coup, Soft or Hard is Unlikely in 2007 (Mehmet Kalyoncu, December 2, 2006)

Estimating Yugoslavia, (David Binder, December 22, 2006)

In Macedonia, New Concerns over Rural Fundamentalism (Christopher Deliso, October 2, 2006)

Bulgaria To Finally Open Secret Files (Jan Buruma, May 15, 2007)

A Brief Travelers’ Guide to Sarajevo’s Local Traditions, (Lidija Jularić, November 17, 2006)

Exclusive: How the US Ordered Increased Activity against Macedonia’s Islamists after the Fort Dix Arrests (Balkanalysis.com, June 22, 2007)

Turkey: Europe’s Emerging Energy Corridor for Central Eurasian, Caucasian and Caspian Oil and Gas (Mehmet Efe Biresselioglu, January 20, 2007)

Varieties of Religious Experience in a Macedonian Village (Christopher Deliso, September 27, 2006)

The Hijacking of a Nation (Sibel Edmonds, November 29, 2006)

Wahhabis in Labunista Antagonize Locals, as New Details Emerge about Italian Arrests, (Balkanalysis.com, January 5, 2007)

Greece, Turkey and Balkan Security: Interview with John M. Nomikos (Balkanalysis.com, December 12, 2006)

The End of an Era in the Armenian Genocide Debate: Will Recognition Lead to a Turkish Policy Transformation?

If Turkey gives up its opposition to potential US recognition of the atrocities between Turks and Armenians that took place during World War One as α “genocide,” will its diplomatic hand ultimately be strengthened? The following article argues that this just might be the case.
By Mehmet Kalyoncu
What should have happened ninety-two years ago [...]

The Assassination of Hrant Dink: Another Deadly Incident Destined to Remain Unsolved?

By Mehmet Kalyoncu

The assassination of Hrant Dink, one of the most prominent Turkish Armenians and the editor-in-chief of bilingual Turkish-Armenian weekly newspaper Agos outside his newspaper’s office was a deplorable act by any definition. Yet it was not an unexpected one, given the selection of the target and its expected/actual impact on Turkish society and on Turkey’s position vis-Ã  -vis the issue of the “Armenian genocide’ that has taken on new proportions internationally of late, with the US Congress weighing a resolution on the issue. Ankara has already warned about the implications of American genocide recognition for bilateral relations.

This is at least the thesis of a good percentage of the population in Turkey, where all too often such murky crimes are blamed ultimately on malevolent and all-powerful outside forces- with the result that it is rare that full investigations are ever executed.

The Turkish police caught Mr. Dink’s assassin in just 32 hours, something which the government took great pride in noting. Yet has the problem been solved with the simple arrest of a 17-year-old gunman? Was he the ultimate and sole perpetrator of the killing? Just as with other recent violent events in Turkey, such as with the 16-year-old who killed a Catholic priest in Trabzon last year, the murder of the Turkish-Armenian journalist has been added to the pile of unsolved or semi-solved incidents that have been planned against the peace and stability of Turkey by the so-called “dark hands.”

This expression — karanlik eller in the Turkish — is the metaphor mostly used to refer to what the public views as the sinister masterminds behind the scenes. It is used in general to refer to those who allegedly always wanted to stir things up in Turkey. Even officials have used the “dark hands” metaphor after unsolved assassinations, bombings and the like. And there have been more than a few over the past year or so.

Fortunately, it seems like the killing did not breed the expected conflict between the Turkish Armenians and the Turks, mostly due to the fact that both sides are more aware than ever of the detrimental results that possible provocations could cause. Regarding the killing of Mr. Dink, the Turkish Armenian Patriarch Mesrob II noted, “[t]his assassination is a deplorable act that targets our country’s stability and its international relations.”[1] Moreover, regardless of their ethnic background, thousands took the street and protested the Dink killing by shouting “We are all Hrant, We are all Armenian!” Further, the fact that the killer was identified and reported to the police by his very own father suffices to suggest that the Dink killing has so far failed to cause social conflict between ethnic Armenian Turks and the Turks.

Nevertheless, it is imperative for the AK Party government to not let the Dink case go unresolved, or be left semi-resolved as were three other infamous recent incidents: the bookstore bombing in the southeastern Kurdish-inhabited town of Semdinli, the aforementioned killing of the Catholic priest, and the murder of Supreme Court magistrate Mustafa Yucel Ozbilgin in May of last year.

The Semdinli Incidents

On November 9, 2005, a bookstore (Umut Kitabevi) in Semdinli, near Hakkari, the most notable town in the southeast of Turkey, was bombed, killing two and injuring fourteen. The local people nearby managed to apprehend the suspected bomber and two other men allegedly involved with the bombing. In the alleged suspects’ automobile were discovered AK-47 assault rifles, Semdinli area maps, a name list of the political opposition leaders, and a document consisting of information about certain individuals in Semdinli.

Interestingly, two of the three alleged perpetrators were identified to be gendarmerie intelligence officers (JITEM) and one, a PKK [the armed Kurdish separatist group] informant. More interestingly, one of the JITEM officers was allegedly linked to then-Commander of Land Forces General Yasar Buyukanit, who is now the Chief of General Staff and whose relationship was never officially denied.

Immediately after the bombing, despite the call for calm by Kurdish community leaders and the officials, about a thousand people took to the streets and put the police checkpoint under fire.[2] The AK Party government assured the public that those responsible would be brought to justice shortly, and immediately established an investigation committee. The committee still continues its inquiry today, and the three alleged perpetrators were sentenced. However, the public is hardly convinced that the three men sentenced were the masterminds behind the Semdinli bombing.

The Semdinli bombing took place during a period when the military-civilian relationship was being scrutinized and it was argued that the civilian administration should have higher control over the military- to keep in line with EU requirements.

The Killing of Catholic Priest Andrea Santoro

On February 5, 2006, Priest Andrea Santoro of Italian Sancta Maria Catholic Church in Trabzon, who ministered to Turkey’s small Catholic population in this northeastern Black Sea town, was murdered by a 16-year-old boy. The killer reportedly had a personal problem with the priest, rather than a religious or ideological one.[3] However, before the investigation was even completed, the European press in general and the Italian press in particular had been quick to link the killing to the Prophet Mohammed cartoon crisis in Denmark and elsewhere. The Italian press thus portrayed the incident as an indication of religious fanaticism in Turkey- whose European Union bid has always been clouded in many Europeans’ eyes by the religious make-up of the country.

Indeed, a Corriere Della Sera article reported that the killer shouted “Allahu-Akbar” before killing the priest, thereby sufficing it to seem an act motivated by religious fanaticism.[4] Similarly another Italian newpaper, La Repubblica, reported that the killer interrupted the service, approached Priest Santoro and shot him after screaming “Allah Akbar”.[5] La Republica also reported that there hade been similar attacks in Beirut as well on the same day due to the Denmark-sparked cartoon crisis.

The investigation started immediately after the killing and identified other suspects involved with the killing of the priest. The prolonged judicial process, focusing exclusively on the 16-year-old gunman, ended after the 9th court trial, with an 18-year sentence imposed.[6]

Yet was the whole case really solved? The Turkish public still hardly believes that it was. Again the familiar reference to “Dark Hands” manipulating the killing from offstage was made. Priest Santoro’s killing also took place right after Turkey started EU accession negotiations with the European Union in October 3, 2005.

The Killing of the Supreme Court Magistrate

On May 17, 2006, Mustafa Yucel Ozbilgin, a Turkish Supreme Court Magistrate, was shot dead by a young attorney Alparslan Arslan. The immediate news reports noted that the assailant screamed “We are Allah’s soldiers. Allahu Akbar” while shooting Ozbilgin, a claim which was, later on, disputed.[7] Certain ultra-secular groups allegedly related the killing with the Supreme Court’s ban on the headscarf, and sought to send a warning to the AK Party government which was seeking a formula to resolve the headscarf problem. The family members and immediate friends of the assailant denied that he was even a practicing Muslim let alone a fanatic who would perpetrate such a killing due to religious motivations.

As of today, the Alparslan Aslan court trial still continues. Will the case be solved when he is sentenced? It may seem so, but it is still hard for the Turkish public to believe that he was the mastermind of the killing.

Finally, Hrant Dink: The Latest, but Unlikely to be the Last

The assassination of Hrant Dink has come during a time when the Armenian Diaspora is preparing to wage full battle against Turkey. On February 8, 2007, a resolution that recognizes the Armenian genocide and foresees certain sanctions on Turkey will be voted on in the U.S. House of Representatives, where long-time supporter of the so-called resolution Nancy Pelosi of California is the incoming Speaker. Bolstering the correlation of the timing of the Dink killing with the upcoming voting on the resolution, Aram Hamparian, Executive Director of ANCA (Armenian National Committee of America) noted, “Hrant Dink’s murder is tragic proof that the Turkish government –through its campaign of denial, threats and intimidation against the recognition of the Armenian Genocide — continues to fuel the same hatred and intolerance that initially led to this crime against humanity more than 90 years ago.”[8]

Ironically, however, as Turkish Armenian Patriarch Mesrob II noted, Hrant Dink was known as the foremost Armenian Turkish intellectual, and one disliked by the Armenian Diaspora due to his efforts to promote dialogue between Turkey and Armenia, and settle the conflict over historical disputes through open intellectual exchanges. Nevertheless, Dink’s death presents a matchless opportunity for the Armenian Diaspora to exploit against Turkey at this crucial time. Again, another mysterious death at a politically sensitive moment for Turkey- the fourth in just 15 months.

The “Dark Hands” Syndrome

The real challenge for the AK Party government now is less finding the assailant of the Dink killing but more pursuing the very investigation, wherever it may lead, to find the mastermind(s). The Turkish authorities and population have proven indulgent in the past about blaming such attacks on abstract external powers, or the so-called “dark hands.”

From top government officials to prominent intellectuals, almost everyone refers to the so-called “dark hands” that target the peace and stability of Turkey and try to drag the country into chaos.

Given the fact that in 2007 will be held two critical elections, presidential and parliamentary, in which chaos in Turkey hampers the political process and the government’s abilities to cope with ever-more complex situation, there is no reason to not expect such random assassinations as that of Hrant Dink in the days and weeks ahead. Nevertheless, popular acceptance of the so-called “dark hands” phenomenon would be an easy way out and would hinder the AK government’s ability to investigate the assassination and bring those really responsible to justice.

Referring to the assassination as a mere provocation attempt Prime Minister Erdogan recently noted, “we know that those who shot him (Mr. Dink) have in fact shot Turkey. Our solidarity, democracy, freedom of thought, peace and stability was the target.”[9] Similarly, the intelligence officers cited, the strategists and commentators, have in the immediate aftermath so far followed the course and attributed the latest killing to the so-called “external powers.”[10] Most importantly, they have all drawed attention to the correlation between the timing of the Dink assassination and the upcoming discussion of the Armenian genocide in the U.S. House of Representatives. The argument is that certain interest groups should have wanted to bolster the Armenian Diaspora’s hand as it prepares to pass resolution in the U.S. Congress to recognize the Armenian genocide.

Former MIT (Turkish National Intelligence Service) officer Mahir Kaynak suggests, “[H]rant Dink’s killing would benefit the Armenian Diaspora in the United States. He was the right choice to start a long-term campaign against Turkey”. Similarly, former Chief of Intelligence Bulent Orakoglu stresses that the assassination of Dink is a signal for similar future killings: “such assassinations were already expected starting in early 2007. Creating chaos is the strategy of certain powers.”

Along similar lines, Retired Lt. General Edip Baser, Special Coordinator for Terrorism, views the killing as a deliberate effort to divert the AK Party government’s attention away from the situation in Northern Iraq.

Certainly the failure to bring the mastermind(s) of Hrant Dink assassination to justice will weaken the AK Party government’s public image as it nears the presidential and parliamentary election domestically and Turkey’s position vis-Ã  -vis the genocide allegations internationally. Perhaps it was such a motivation that led the so-called “dark hands” to kill this prominent Turkish Armenian journalist- if they actually did, of course. If history is any judge, we may never know.

Why the EU Needs a Strategy for the Black Sea Region

By Lara Scarpitta*

It is old news that geography matters in foreign policy. A dormant EC/EU had to learn this vital lesson in 1989, when communism crumbled behind its safe walls. Faced with the sudden prospect of bordering poor, unpredictable and unstable neighbours, it responded by anchoring the former soviet satellites of Central Europe with the offer of EU membership. But now that a new enlargement has been completed, geography matters even more. With the accession of Romania and Bulgaria on the 1st of January, the EU’s new eastern border has moved south, to the shore of the Black Sea. Across its waters, however, lies one of the most unstable and conflict-prone regions of post-Soviet Eurasia.

For centuries, the Black Sea region has been a theatre of violent conflicts and power struggles, due primarily to its geographical location and character as a transit route. During the Cold War, all Black Sea states (except Turkey) were within the Soviet sphere of influence and at the periphery of international strategic interests. But as the Soviet Union began to break down in 1991, the Black Sea region plunged into chaos, torn apart by several ethnic and separatist conflicts. The end of the Cold War’s artificial stability freed long concealed (and suppressed) historical grievances and a number of new independent states such as Ukraine, Georgia, Moldova and Azerbaijan emerged from the ashes of the Soviet Empire.

Nevertheless, most of them are still very weak democracies, facing territorial separatism, ethnic tensions, undemocratic trends in domestic politics, slow economic progress, environmental degradation and endemic corruption of public officials. The long years of armed conflicts have caused disruption to trade and damaged infrastructure. Due to its potential for conflict, the region has attracted relatively little foreign investment and most such countries are still today heavily dependent on the Russian economy. Unemployment rates are generally very high, with almost all states suffer from a hemorrhagic migration abroad of a consistent percentage of the working-age population.

Today the Black Sea region is also a major source and transit area of several security threats, from terrorism to international organised crime as well as arms and human trafficking. It is home to four so-called “frozen” conflicts — Transnistria, Abkhazia, Nagorno-Karabakh and South Ossetia – the unresolved separatist issues which followed the breakdown of the USSR.

Despite years of diplomacy and talks, hopes for finding a peaceful and long-standing resolution for these conflicts remain bleak. Apart from fuelling bilateral tensions, these “frozen’ conflicts have been a bane for the region’s democratic and economic development, breeding instability and corruption and favouring the proliferation of organised crime. Uncontrolled territories in Transnistria and Nagorno-Karabakh, for example, have become safe havens for the activities of powerful organised criminal groups involved in people smuggling, human trafficking as well as goods and arms trafficking. The phenomenon of arms trafficking is widespread in the region and much of the large weapons stockpiles abandoned by Russia in the early 1990s have ended up on the grey and black markets. The region is also a major source of drug production and a trafficking route for drugs coming from Central Asia and the Middle East (especially Afghanistan) into Europe. Large profits are also being made from smuggling people across the region with a promise of a better life in the West, and there is evidence that these profits are being reinvested into drugs and arms trafficking, as well as financing terrorist activities, as a recent Europol report highlighted.

This situation carries significant implications for EU security. A power vacuum in the region can potentially result in a security vacuum with consequences which are self-evident yet highly unpredictable. Because of its sudden and new geographical proximity to the wider Black Sea states, the EU will no longer be immune from the backlashes of instability and conflicts in the region, but rather will be directly exposed to a whole range of security threats, from organised crime to drugs and arms trafficking, as well as refugee and illegal migration pressures.

Aside from these security concerns, however, the Black Sea region offers many positive opportunities. The most obvious is in the field of energy. Thanks to its proximity to the oil-rich Caspian Sea and its vast energy resources, the Black Sea region can play a major role for the EU’s energy strategy, to secure alternatives to Russian energy supply.

Many ambitious pipeline projects were launched in the 1990s to guarantee direct access to Caspian oil via the Black Sea. These include the U.S. East-West Energy Corridor and the EU Traceca project (Transit Corridor Europe-Caucasus-Central Asia).

Although these failed to materialise when conflicts erupted in the Balkans and in the South Caucasus in the 1990s, it is in the interests of the EU that these projects be reinvigorated to ensure greater Western access to Caspian energy resources.

Perhaps most importantly, the Black Sea region matters for its strategic importance, owing to its proximity to the Middle East. Since 9/11, the US has played an active role in the region to safeguard its vast security and economic interests, especially access to Caspian oil and gas reserves. American “pipeline politics’ has gone hand in hand with its war on terror and the U.S. administration has been keen to support the NATO aspirations of some Black Sea countries.

Yet is the EU ready take up these challenges with similar energy? Can it exploit the region’s huge and lucrative potentials and prevent the Black Sea from becoming a permanent source of security threats?

Most likely, it will only be able to do so partially. The reasons are multiple. First, the EU does not have a Black Sea policy, or at least not a coherent strategy as such. It has opted instead for a patchwork of policies and approaches: enlargement to South-eastern Europe and Turkey, the “European Neighbourhood” policy and a structured cooperation with the South Caucasus states.

Indeed, therein lays part of the problem. While the EU enlargement policy – with its strict conditionality and convergence to EU norms and standards – has (at least so far) been relatively a success story, other policies failed to deliver the expected results. Bilateral cooperation with post-Soviet Eastern neighbours like Ukraine, Belarus and Moldova, as well as with the South Caucasus states (Georgia, Armenia and Azerbaijan), put in place since the mid-1990s hardly proved a recipe for stabilisation and prosperity. The over 3 billion euros from the EU’s TACIS funds allocated in the last ten years have failed to convince reluctant post-Soviet governments to introduce sound democratic and market-based economic reforms. Part of the problem is that the EU lacks sufficient leverage to push for such reforms. This is hardly a surprise if one considers that most of these states are still heavily under Russia’s influence. The 2006 energy crisis in Ukraine and Moldova, as well as Russian import bans on Moldovan and Georgian wines and water are a stark remainder of Russia’s economic power over its neighbours.

The EU, by contrast, continues to have a limited impact on the region. But the EU “stabilisation’ policy has also been too weak in its incentives to push for reforms. The so-called Partnership and Cooperation Agreements (PACs), lacked not only a prospect for membership but also a strict conditionality and were based primarily on a multidimensional cooperation on economic and cultural questions and a political dialogue on issues concerning minorities, human rights and security in Europe.

The “European Neighbourhood” policy, launched officially on the eve of the 2004 “big bang’ enlargement, was aimed at addressing some of these problems. But judging by the results so far, the innovative offer of “everything except institutions,” has not been the trump card the EU was looking for as an alternative to enlargement. The colour revolutions in Ukraine and Georgia have not given way to the expected substantial democratic reforms. Moldova continues to struggle to control its separatist region of Transnistria and there are no signs of Belarus abandoning its totalitarian regime. Little progress has been made in fulfilling the various Action Plans, the EU’s own financial commitment for the region for 2007-2013 has increased but remains marginal and the EU has continued to politely dismiss the long-term membership aspirations of some of its pro-Western neighbours.

Paradoxically, with these differentiated approaches towards its neighbours the EU has in fact achieved the rather unexpected results of widening the economic, political and social gap between them. While in Romania and Bulgaria the EU accession process has arguably ensured the successful creation of sound democratic institutions and fast economic growth, the EU’s eastern neighbours have witnessed a halt or reversal of their democratic process, as highlighted by the 2005 Freedom House Report, with most struggling with macroeconomic and structural difficulties and declining standards of living.

So what should the EU do? For a start, think strategically. After the 2007 enlargement and with the accession negotiations already underway with Turkey, the EU has already become an actor in the Black Sea region. Developing a coherent and well articulated Black Sea policy to protect EU economic and strategic interests has therefore become imperative.

No doubt, anchoring the countries of the Black Sea region is not going to be easy, not least of all because without a realistic prospect of EU membership for most of these states, the EU lacks its most powerful point of leverage. On the positive side, however, the EU is now in a far better position to develop an ambitious and realistic policy for the region than it was some years ago. It can now draw on its expertise and the instruments developed in the past decade, by abandoning rhetoric and reinforcing its concrete actions.

The coming months may be crucial for the development of a coherent EU Black Sea strategy. German Foreign Minister Frank Walter Steinmeier made it clear that Germany intends to achieve concrete results in Black Sea Region during its presidency by examining the effectiveness of the European Neighbourhood policy.

Still, by itself this policy is not sufficient. The stability of the region requires political courage and long-term strategic thinking. The EU should certainly put “some meat on the bone’ on its neighbourhood policy, by offering to its neighbours concrete and lucrative economic incentives in exchange for serious and tangible commitments to democratic and market-based reforms and the protection of human rights. But a credible EU Black Sea policy also needs to demonstrate that the EU is serious about the resolution of all the “frozen’ conflicts in the region. The support for the EU Border Assistance Mission between Ukraine and Moldova and the appointment of a EU Special Representative for Moldova in 2005 is a positive sign that EU commitment heads in this direction.

However, concrete steps must be taken at regional and bilateral levels to find durable peaceful solutions. In this respect Brussels must also find the political courage and determination to take the initiative diplomatically with Russia. Unfortunately, EU reactions to Russia’s allegedly “imperialist’ policy to its near abroad have remained weak and not much more has been done beyond expressing disappointment.

Finally the EU needs to step in with greater support and financial involvement to support regional cooperation efforts. So far the EU has paid lip service to regional cooperation preferring to focus instead on bilateral relations. As active regional partners and new EU members, Romania and Bulgaria are likely to play an active role in this respect.

Romanian President Traian Basescu has made it clear on several occasions that Romania intends to promote more assertively the idea of a strategic vision for the Black Sea region and a greater involvement in regional dynamics. Black Sea economic cooperation in particular can offer the EU an ideal forum for promoting projects in the field of energy as well as non economic areas, such as the protection of the environment, controlling immigration and fighting arms and human trafficking. Ultimately, the extent to which the EU will be able to secure its immediate and distant neighbours in the Black Sea region will depend on its ability to increase its role and impact on the region and become a pulling factor for democratic change. A democratic and fully integrated Turkey will be crucial in this respect.

The benefits of a coherent, realistic and forward-looking strategy towards the Black Sea region are enormous. If the EU’s “close’ and “distant’ neighbours can successfully complete their economic and political transition, security threats will be weakened. Similarly, the creation of stable democratic institutions, functioning economic structures and vibrant civil societies will undermine the operation of criminal groups. To achieve this long-term objective all EU instruments and forces should be mobilised. Otherwise, the region may well plunge once again into chaos. However, this time EU citizens many not be immune.

*Lara Scarpitta is a PhD candidate at the Centre for Russian and East European Studies of the University of Birmingham. Before embarking on a PhD, Lara worked in Holland, Italy and recently in Brussels where she worked as an intern in the Cabinet of Vice President of the European Commission Franco Frattini, EU Commissioner for Freedom, Security and Justice.

Limited Opportunities and the Rise of Islamic Extremism in the North Caucasus, Balkans and Turkey

By Alisa Voznaya

The tenets of Islamic radicalism, often associated with Wahhabism, a fundamentalist form of Islam prevalent in Saudi Arabia, are slowly penetrating the previously secular populations in the Balkans and the North Caucasus. In Turkey, where 99 percent of the population identify themselves as Muslim, the unique sense of secularism is also beginning to disintegrate in the face of the resurgence of violence from the Kurdistan Workers’ Party (PKK) and rising national discontent, as illuminated by the most recent terrorist attacks in Marmaris, Antalya, and Istanbul.

The suppression of any kind of religion during the Soviet communist regime, the forced amalgamation of religions and nationalities in Yugoslavia, and the ascent in the dawning 21^st century of politically, rather than religiously, motivated leaders in Turkey have secured what now appears to have been temporary secular rule. Today, secular politics face an internal threat from the emerging elements of international radical Islam. However, the degree of such incursion varies among these three regions: from marginal streams in the Balkans to growing unrest in Turkey and to fully formulated jamaats with strategic visions in the North Caucasus. Yet, the motivation behind these recent insurgencies stems from the same root; the flag of radicalism brings attention to the political and economic problems experienced by the marginalized groups, such as the Kurds, Balkan Muslims and Chechens.

The most recent concern regarding radical Islam in the Balkans is the fear that Al-Qaeda has begun a recruitment campaign of “white Muslims.” The arrest and pending trial of three young men in Bosnia, suspected of planning terrorist attacks on Western targets, has raised questions regarding Bosnia’s vulnerability of becoming a haven for terrorists. The suspects were arrested last October in the Sarajevo suburbs of Butmir and Hadzici.

Since their arrest, Bosnian police has appealed to Scotland Yard and the FBI for forensic assistance to strengthen the case against the men. Jamestown Foundation reports that this particular investigation has extended well beyond Bosnia, signifying the likelihood of a “white Al-Qaeda network” operating across Europe. Though it is highly unlikely that Bosnia would officially support Islamic extremism, it is nevertheless a home to several hundred Arab mujahideen warriors who came to Bosnia during the 1992-95 war to fight on the side of the Bosnian Muslim against the Serbs. Thus, the Jamestown Foundation speculates, Bosnia’s institutional weaknesses, primarily its decentralized power centers, and its wartime history of cooperation with Arab mujahideen could make it an easy and symbolic recruitment point for a new, “white Al-Qaeda” network.

The situation was aggravated by the recent decision by Bosnian authorities to deport 50 naturalized citizens, mostly former Islamic fighters. The Bosnia and Herzegovina (BiH) State Commission for the Revision of Decisions on Naturalization of Foreign Citizens began its work of reviewing the status of citizens who acquired BiH citizenship between April 1992 and January 2006 in March 2006. Around 1,500 people could potentially be affected by the work of this commission. However, the commission has yet to locate most of the people on its lists, as their coordinates are currently unavailable to the government. Meanwhile, the potential for conflict increases every day — the Muslim fighters, who see themselves as heroes and liberators in Bosnia may request outside support to bolster their right to Bosnian citizenship. Once again, external radical forces may influence the internal make-up of the Bosnian Islamic space.

Bosnia is not the only Balkan country undergoing an ambiguous Islamic revival. Indeed, the global trend for radicalism is appearing in Albania and Kosovo, predominantly populated by Muslims. According to TOL, Wahhabism seeped into the countries through energetic and enthusiastic graduate students who studied at foreign universities and through Islamic charities. The Islam conveyed through the prism of these two sources is a distortion of the traditional Hanafi Sunni Islam, known as tolerant and peaceful, and widespread in Turkey as well as the Balkans. Yet, the religious radicals have yet to secure a wide support base for their cause: last year in Albania, young radical Muslims attempted to change the statute of the Islamic Community to bring it closer to their way of more rigid worship. In Kosovo, the Wahhabi movement is in its early development and does not yet have a well-organized structure, albeit it has already inspired sensationalism in the local papers regarding the extensive proportions of Wahhabism in Kosovo.

While Wahhabism is making its inaugural appearance in the Balkans, radical Islam is beginning to reappear in Turkey. The Kurdistan Freedom Falcons, a branch of the PKK, quickly took on the responsibility for the recent bombings in the country’s tourist areas. The terrorist acts bring to light the existing problems that Turkey has yet to resolve with its Kurdish community. The Economist reports that around 60 new Islamically-minded groups have formed in recent years. Such groups offer scholarships, financial aid and “moral support” to the poor. In fact, disenfranchised Kurds are not the only segment that could be easily subverted to radicalism. Current disapproval of Israeli and American actions runs high among all members of Turkish society. Coupled with financial incentives and moral rigidity, the appeal of radicalism directly confronts the political and economic decisions of the secular government.

The May attack by Alparslan Arslan that claimed the life of Turkish Council of State judge Mustafa Yucel Ozbilgin brings to light the growing conflict between the secular government and the increasingly religious sentiments among a substantial segment of Turkey’s population who oppose the ban of the hijab in public institutions. In fact, internal pressure has caused the Turkish Prime Minister Recep Tayyip Erdogan to consider overturning the longstanding ban. And although Turkish Islam, similar to its Balkan neighbours, is Hanafi Sunni, the inflexibility of the government’s secularism, the most recent policy decisions regarding EU membership and cooperation with the United States, and the continuous PKK attacks, it may soon develop a more widely supported radical base through the demands of disgruntled Turks. Thus, while Turkey is a far cry from a radical Islamic republic, its government must take heed of its population’s desires, without conceding a reverse of its efforts to give the Kurds a better deal.

Alternatively, many analysts have labeled the North Caucasus, particularly Chechnya, Dagestan, and Ingushetia, as a breeding ground for tomorrow’s Islamic radicals. In part, the situation in the region could well support such statements, yet the rise of radicalism in this particular area has been a complex issue, with divergent factors influencing its continuous ups and downs.

Radical Islam originally emerged in Chechnya during the second war that has begun in 1999. During that time, Wahhabist groups entered Chechnya with finances and weapons to help the Chechen rebels resist the Russian attacks. Interestingly enough, Chechnya, where radicalism has been consistently suppressed by the efforts of the federal government and the pro-Kremlin regional authorities, is no longer the locus of separatist movement. Instead, Ingushetia and Dagestan have absorbed many of the radicals exiled from Chechnya.

One of the factors contributing to the popularity of radical Islam, such as Wahhabism, is the pressure and discrimination from the Russian government. Mosques have been consistently closed down not only in the North Caucasus but also in other parts of Russia. There are also reports that Russian authorities discriminate widely against people who appear to be Muslim. The Russian mistakes go much deeper than that, though — today’s youth in the North Caucasus have grown up in the midst of war, and have no employment opportunities due to destroyed infrastructure and a lack of investment in the region. The fundamentalist message, abetted by financial rewards, becomes lucrative in the face of repression by the Russian government and the lack of other opportunities within the region.

Similar to the Balkans, experts like Sergei Markedonov, the head of the ethnic relations department at Moscow’s Institute of Political and Military Analysis, argue that the collapse of communism has left a void that was quickly filled in by religious ideologies. The problem of addressing Islam in the North Caucasus, however, stems from the bifurcation of the religion into official state-sponsored Islam, the Salafi Islam, and independent jamaats, or local communities of Muslims, organized at an often basic level to share spiritual pursuits.

These communities rely exclusively on the members from their locality and on their appointed leaders. Normally, they emerge spontaneously, although recently their growth has been propped up by the now deceased Shamil Basayev, who devoted his last few years to harnessing such movements. Some of the jamaats, like Dagestan’s Sharia one and the Kabardino-Balkaria Yarmuk jamaat, have become quite influential, and thus more dangerous. The Yarmuk jamaat claimed responsibility for the October 2005 raid in Nalchik.

Jamaats, like the religious movements in Turkey and the Balkans, represent more than just a religious phenomenon — they provide a niche for the disenfranchised and unemployed to settle economic and territorial issues. Radical Islam serves as a conduit to resolve tensions that exist between the federal centre and the region, yet, if the Russian government does not take measures to restrain the spread of insurgent movements and the development of new jamaats through moderate policy toward Islam, it stands to lose the fragile political stability that the region is currently regaining.

The Balkans, Turkey and the North Caucasus have all recently experienced a revival of radicalism within their territories. Partially, this could be explained by the increasing dissatisfaction of its respective denizens with the inability of the secular governments to deal with pertinent political and economic crises and the lure of possibilities of radical Islam. Yet, although one could be inclined to assign the extremist trend to the global dissemination of Islamic ideas, the three territories discussed in this article are largely comparable due to their similar domestic situations. Thus, the efforts to curtail the spread of extremism should come from internal policies rather than foreign machinations. In order to maintain balance within their regions, the governments of these territories must address the demands of their populations or face a possibility of the disintegration of their secular states.

Freemasonry in Greece: Secret History Revealed

By Ioannis Michaletos

A topic insufficiently researched in Greece nowadays is the existence and historical progression of freemasonry in the country. Great debates occur whenever this theme is mentioned, with conspiracy theorists doing their best to blame all of the misfortunes of the Greek state on the existence of the lodges. This article will examine briefly the intriguing and little-known history of freemasonry in the Greek world, as it has unfolded over the past two centuries.

The Early Days: Venetian Influence and the Spirit of Revolution

The first Freemason’s Lodge in Greece was created in 1782 on Corfu. At the time, the island was still under Venetian rule, while most of the rest of Greece was occupied by the Ottomans. The Lodge’s name was “Beneficenza” and was under the direction of the Grand Lodge of Verona, based in Padova, Italy. During that period there were quite a few Greek people residing or studying in Northern Italy, and they were the ones who formed the nucleus of the first Greek lodge; soon they would spread the organizational structure of Freemasonry all around the Greek diaspora in Europe.

In 1790 in Vienna an organization similar in some respects to the Masons was formed by Greek merchants and intellectuals. It was called “Bon Cuisins,” and was presumably associated with the Greek pre-revolutionary intellectual Rigas Feraios, one of the leading figures in spreading revolutionary idea among those Greeks still under the Turkish occupation. This era was one of intellectual ferment, following the American and French revolutions, and thus offered an excellent environment for the dissemination of new ideas. This ideological development would ultimately lead to the dissolution of the world of empires and the emergence of the nation-state.

In the case of Greece, it seems that the lodges became veritable repositories of knowledge, where the information and ideals needed to start an uprising were collected and shared with a select few. Usually, these were Greeks of the diaspora who had the intellectual capacity, as well as the capital, to take the first decisive revolutionary actions.

After 1789, a series of Masonic lodges opened throughout the Heptanisa (“seven islands”) off of the western Greek coast, islands such as Corfu, Kefalonia, Lefkada, Ithaka, Zakinthos. At that time, these represented the only area in the Hellenic world in relative peace and prosperity, being as they were under Venetian control.

In 1810, one of the leading figures of Corfu, Dionysios Romas, merged together the two existing local lodges, Filogenia and Agathoergia and thus created the Grand Anatolian Lodge of Hellas and Corfu. After this event, Masonic lodges mushroomed across the Hellenic world so that already by 1812 the Greeks in Moscow were able to organize a formidable secret society. Under the auspices of Ioannis Kapodistrias, the then-Russian Foreign Minister, a Masonic lodge that encompassed the Greek elite of Tsarist Russia and played an important role towards creating the framework for the forthcoming Greek revolution was created.

Interestingly, it was named the “Phoenix Lodge. The ancient symbol of the Phoenix — the mythical bird that rises from its own ashes — is frequently encountered in Greek mysticism. Ioannis Kapodistrias would become the first head of state in Greece (1827-1831) and was the head of the Phoenix Lodge while still in Moscow. In fact, he even named the first Greek currency “phoenix,’ but after his assassination by a Greek clan chief, the famous “drachma’ was born.

The grandest Greek secret society of them all, the Philiki Etaireia (“Friendly Society”) used the phoenix as its symbol. Nowadays it is still one of the symbolic emblems of the Freemason Lodges in Greece. Lastly, during the Junta in Greece (1967-1974) the symbol of the regime was the Phoenix again; presumably this owed to the membership of some of its officers in certain Greek Masonic lodges.

One of the most important organizations in modern Greek history, the Philiki Etaireia was established on September 14, 1814 in Odessa; it is widely assumed to have been an offshoot of the Phoenix Lodge of Moscow. However, Kapodistrias himself would later voice his opposition to the organization. It was created in order to prepare the Greek populace to rise up against the Ottoman Empire. Its leaders were Nikolaos Skoufas, from the Arta province of Epiros, Emmanuel Ksanthos from Patmos in the Dodecanese, and Athanasios Tsakalov, also from Epirus.

These men had previous connections with secret societies. Ksanthos was a member of the Lodge of Lefkada, while Skoufas’ associate Konstantinos Rados was a devotee of the Italian “Charcoal-burners” Carbonarism movement, an equivalent to the Greek group which sought the unification of Italy. For his part, the much younger Tsakalov had been a founding member of Ellinoglwsso Xenodoxeio (the “Greek-speaking Hotel”), an unsuccessful precursor to the Etairia that was devoted to the same goal of an independent Greece.

It is worthwhile to note that the date of the society’s creation was that of the “Holy Cross,” which in the Greek Orthodox calendar has been associated with the miraculous victory of the Byzantine Empire against a combined Avar-Persian siege in 614 AD. According to hagiographic tradition, Constantinople was in dire danger of falling to the barbarians, until the patriarch of the city ran across the walls, armed with an icon of the Virgin Mary (the icon now resides in the Monastery of Dionysiou on Mt. Athos).

Considering the symbolism and importance of the day for the Greek nation, one can assume that the creators of the Philiki Etaireia chose it in order to highlight to their followers the historical role that this organization planned to play in the future. Indeed, the members of the organization were inevitably high-born and ambitious, and included many Phanariots living in Russia. They firmly believed in the mutual obligation to the Etairia’s secrecy, to the extent that those who revealed its secrets were murdered.

With such severity was the Filiki Etairia able to maintain its cohesion and, in less than seven years, to encompass the length and breadth of Greek populations in Europe, from Alexandria and Antioch to Budapest and Trieste. Most importantly, it created the intellectual foundations upon which a revolutionary uprising could be established.

Freemasonry in Greece after 1830: Philanthropy, Scandal and Schism

During the early years of independence in Greece, there was no notable activity among the Freemasons. Only in 1863, the year that the new Glücksburg royal dynasty came to Greece, was the Panellinio Lodge established in Athens, soon to be followed by numerous others in provisional Greek towns. In 1867, the Grand Orient Lodge of Italy accepted the autonomy of Greek Freemasons and the “Great Orient Lodge of Hellas” was created. The same organization has been known under this name since 1936.

The 19^th century saw the Freemasons in Greece engaged in continuous recruitment of new members, despite the fact that it never became fully accepted by Greek society. Freemasonry was often viewed as a heresy by the Orthodox Church, or as a manifestation of unwanted foreign influence in the political sphere. Nevertheless, various philanthropic initiatives were undertaken as a result of Masonic activity. Schools, hospitals, support during wartime, scholarships and so on were the legacy of Greek lodges. These factors explain why, in 1927, the Greek state recognized the Hellenic Lodge as a philanthropic association administered by the Ministry of Public Health.

Unfortunately, during the WWII occupation most of the Greek Masonic archives were destroyed by the Germans. The lodges stopped operating during this turbulent period. In the aftermath of the war, Freemasonry gradually regained its previous influence and spread further in Greek society. Today, a grand building in the centre of Athens attests to the economic affluence of the organization that has managed to retain its veil of secrecy right through the present day.

During the military dictatorship in Greece of 1967-1974, officers involved in the Junta were accused of being Freemasons, something that was decidely bad public relations for the Greek Grand Lodge. In 1980, a Greek journalist, Kostas Tsarouchas, revealed the names and ranks of numerous Greek Freemasons. This revelation created a certain havoc in the Athenian world, because a large number of politicians, judges, academics and other were said to be involved- precisely at a time when political passions in the country were running high, one year before the first socialist government of Andreas Papandreou took power.

Later, in 1993, the Grand Lodge of Greece was accused by the mother lodge of London of engaging in political activity, supposedly a no-no for Freemasons worldwide. Thus once again was the image of the Greek Lodge tarnished, and as a result a schism began that ultimately brought about the creation of several unrecognized Masonic Lodges in Greece.

However, it should be added that politics and Freemasonry do mix; it would be incomprehensible to expect otherwise from a class of people frequently involved in politics and who exercise political clout. The 1993 argument with the Grand Lodge in London happened, according to rumors, from the different opinions between the Greeks and the British over who had the right to initiate and take under its influence the newly emerging Masonic lodges of the Balkan states. If true, this would most certainly amount to an act of politics of the higher level. Moreover, the global Freemason movement has always been heavily influenced by its Anglo-Saxon members, and even nowadays the majority of the members worldwide are to be found in Britain, the USA, Canada and Australia. Obviously, the influence they exert is not only spiritual but political as well.

Greek Freemasonry: Some Conclusions

Even though it is difficult to keep track of developments in the Freemason world due to its secrecy, some interesting notes can be made so far as the Greek example is concerned. In our days numerous associations have been active within the Greek society such as the Rotary Club and the Junior Chamber International, and there has been a veritable mushrooming of esoteric societies and other forms of more or less secret fraternities. This proliferation of groups has weakened the traditional supremacy of the Freemasons in Greece.

On balance, the Greek Freemasonry movement has most historical significance in that it was the main procreator of the revolutionary organizations of the early 19th century, chief among them the Philiki Etairia. Similar societies both before and after have drawn from a rich tradition of esoteric customs, symbols and activities. These can be traced ultimately back to the pagan mystery cults of Greek Antiquity, and the later crypto-Christian groups (when Christians were still being persecuted by the Roman Empire). It can even be argued that the pyramidal, multi-leveled organizational hierarchy of the Philiki Etairia resembles somewhat the neo-Platonic conception of the universal organization of ideality and divinity as laid out by ancient authors such as Porphyry and Plotinus.

If all of these are indeed manifestations of the unique Greek passion for convoluted and complex organization, irrational rules and secrecy (the undoing of which would open onto time-honored themes of scandal and betrayal), then one can perceive a continuous historical tradition, in which Freemasonry becomes just one epoch’s manifestation of the seminal impulses and psyche of a people.

Looking to Chechnya for Answers: How Abkhazia and Georgia Can Learn from Russian Lessons

By Alisa Voznaya

The wars of independence in the de facto breakaway regions of Georgia’s Abkhazia and Russia’s Chechnya in the early 1990’s resulted in parallel discourses of defiance and searches for independence. Yet recently the paths of these Caucasian neighbors have begun to diverge dramatically. The Georgian government’s three-day military campaign in the Kodori Gorge in late July signified the desire to restore Georgian central authority, long rejected by an elected Abkhaz government. Alternatively, Russia’s President Vladimir Putin had recently held a meeting with his ministers to discuss the forthcoming normalization of relations with Chechnya.

Although both Russia and Georgia espouse the ideals of territorial integrity, which is the core issue behind objections to the secession of either Chechnya or Abkhazia, it appears that the Russian government, after years of empty resolutions, has found a feasible approach to assure Chechnya’s wavering loyalty to the center. The Georgian government, however, has begun to shift its operations from the political realm to the military one. The resolve to include and exclude Russia’s and Georgia’s respective secessionist regions is molding the diverging destinies of Chechnya and Abkhazia.

The two Caucasus republics share a similar history of Russian conquest and Soviet rule. Following the late 19^th-century Russian empire’s quest to acquire the Caucasus, both Abkhazia and Chechnya were subject to demographic manipulation, first through initial settlement by Russians in Chechnya and Russians and Georgians in Abkhazia, and later, through the political machinations of Joseph Stalin, who deported massive numbers of native Chechens following the Second World War.

Stalin also stripped Abkhazia of its Union Republic status, replacing it with the status of autonomy within the Union Republic of Georgia. The inevitable disintegration of the Soviet Union led to heightened tensions between the central and regional governments. Fearing that an independent Georgia would eliminate the autonomous status of Abkhazia, the Abkhaz citizens demanded the status of a Union Republic within the Soviet Union in 1989. The final dissolution of the USSR and the subsequent declaration of Georgian independence resulted in a statement of secession from the Abkhaz government in July 1992, which led to a brief but bloody war between Georgia and Abkhazia. Chechnya, a voice of secession amongst many regions in post-Soviet Russia, was the only territory to weather a war as a result. Russian territorial integrity was under threat following President Boris Yeltsin’s exclamations over the “parade of sovereignties” and the Russian government set to use Chechnya as an example of what would happen to defiant regions. Thus, both Abkhazia and Chechnya stepped into the post-Soviet era as challengers to their respective central governments.

However, the events of the past year indicate that the parallels between the two may be disappearing. Over the last two years, the Kremlin has been tightening its ties with the ruling government in Chechnya through Alu Alkhanov, a president who is widely believed to have been installed rather than elected in office in August 2004, and Ramzan Kadyrov, the prime minister, who is known for a shady past. Despite Kadyrov’s questionable background and Alkhanov’s controversial rise to power, the cooperative efforts to normalize Chechnya have been stepped up at an unprecedented rate, with investments to rebuild the Grozny airport, and with funding to reconstruct the homes destroyed during the two wars.

Unfortunately, out of the $2 billion dispensed for Chechen projects since 2000, only $350 million was spent as intended. However, on August 2, Russian media reported the plan of Putin’s ministers to see the completion of Chechnya’s reconstruction by 2010. The massive project will involve the infusion of five billion rubles, five times the amount issued in 2004, which will be used to repair roads, rebuild health clinics, hospitals and schools, and to revive agriculture.

Such increased confidence may come from the recent operations that have resulted in the deaths of the two most notorious Chechen rebel leaders, Shamil Basayev and Abdal-Khalim Sadulayev, who were the symbolic figures of Chechen rebel resistance. In its hopes that the elimination of the movement’s leaders will lead to a possible dissolution of the movement itself, the Russian Federal Security Service has called on illegal armed formations in the North Caucasus to lay down their arms in exchange for amnesty. So far, almost a hundred rebels have surrendered, among them the brother of the current leader of the resistance movement, Doku Umarov.

There is good reason to believe that Chechnya is indeed on a path to reconstruction and stabilization. Not only has the republic received assured support from the federal center, it has also received foreign offers of investment. In fact, the Chinese State Development Bank signed an agreement with Alkhanov to establish a system for financing investment in Chechnya, particularly in housing construction and infrastructure, automobile production, and the oil industry. The influx of investment from foreign sources signifies Chechnya’s first step towards economic autonomy. During the past decade, Chechnya has been heavily reliant upon federal subsidies. Hopefully, with the improvement of the political situation, and a decreased risk of terrorist insurgencies, other investors will take notice of Chechnya.

While Chechnya was experiencing rejuvenated interest from its federal authority, however, Abkhazia was witnessed a progression from stagnating relations to military engagement. The latest events at the Kodori Gorge indicate that the Georgian government is eager to reassert control over Abkhazia. The matter is intensified by the fact that the Abkhaz government is supported politically and militarily by Russia, which sees potential for its own gains within the region.

Upon a declaration of its independence, which was not officially recognized by any country in the world, Abkhazia nevertheless received strong support from Russia, which supplied significant military and financial aid to the separatist side. In fact, the continued presence of CIS peacekeepers, primarily made up of Russian troops in Abkhazia was used as one of the provocations for the Kodori operation. The Georgian government then displayed its military might before the potential protectors of the Abkhaz region.

Things took a turn for the worse for Abkhazia after its Foreign Minister, Sergei Shamba, announced in early June that Abkhaz authorities will never abandon the objective of creating an independent state in response to Georgia’s plan to make Georgia a federal state, which would offer broad autonomy and provide aid to develop Abkhazia’s economy.

Following this exchange, Georgia’s President Mikheil Saakashvili reshuffled his cabinet on July 21, removing the state minister for conflict resolution, Giorgi Khaindrava. Khaindrava was the top official dealing with Abkhazia and South Ossetia. This dismissal was preceded by the unexpected appointment in early June of Irakli Alasania, President Saakashvili’s special representative for the Abkhaz conflict, as Georgia’s new ambassador to the UN. It was largely due to Alasania’s efforts that the Abkhaz and Georgian sides agreed earlier this year to resume sessions, suspended in January 2002, of the Coordinating Council established under UN auspices. With the two remaining “doves” ousted from government, Georgia, under the direction of Defence Minister Irakli Okruashvili, began its preparations for military operations.Recent events may elucidate the ongoing conflict, yet they are incapable of highlighting the underlying causes of such cool relations between Abkhazia and Georgia. It is true that Georgia does not possess the same luxury of installing its own leaders, as Russia does in Chechnya, who could then implement reform under the guise of autonomous reconstruction. Yet the efforts to stabilize and improve the political and economic situation in Abkhazia have been overshadowed by the drive for the ever-elusive territorial integrity.

Unfortunately, Georgia has taken few steps to improve the economic prosperity of the breakaway region. The continued impoverishment of Abkhazia and its loss of economic opportunities mainly originated with Georgia’s reluctance to provide incentives to resolve the lack of economic progress. Often, the Georgian government uses the ongoing conflict as an excuse for its failure to solve economic problems.

However, unlike Russia and Chechnya, it is Georgia that stands to lose more from ignoring potential economic opportunities in Abkhazia. Georgia loses customs revenues from goods imported to Abkhazia which are then smuggled into Georgia. Furthermore, the strong potential for the Abkhaz per capita income, from mass tourism and high-quality agriculture, may be capable of outstripping the Georgian per capita income in the future. Thus, in a purely economic way, Georgia is hurting its own economic potential more than it is hurting the Abkhaz economy.

Yet, it would be unfair to lay all the blame on the Georgian government, however belligerent it has been in the last few months. The continued claims for sovereignty from Abkhazia are strengthened by the solid support provided by the Russian government. Practical support, in the form of pensions, railway infrastructure, and the provision of Russian passports to over 80 percent of Abkhaz residents, is enhanced by a growing economic dependency.

The Abkhaz economy is tied directly to the Russian economy and its trade is conducted in Russian rubles. Russia claims to act only as an arbitrator between the two factions, yet, its territorial interests are exposed through the amount of assistance it continues to provide to Abkhazia. Evidently, the Georgian leadership then not only faces the secessionist leadership, but also the Russian state, which has lately been reasserting its dominance in the CIS space. The internationalization of the internal conflict has decreased the negotiation space between the central and the regional leaderships.

Despite the similarity between their original goals and motives, Abkhazia and Chechnya are moving further apart in their dialogues with their respective governments. The deaths of two Chechen rebel leaders, compounded by a strong cooperation between the regional government and the federal center has provided Chechnya with an opportunity to rebuild its shattered territory. The economic boost, both from the Russian government and foreign investors, also works as an incentive for citizens of Chechnya who have been impoverished by the consequences of the two wars.

Alternatively, Abkhazia, supported by the meddling Russian Federation, still cannot agree on a feasible solution of its rights with the aggravated Georgian government. Unable to look past the argument of territorial integrity, Georgia continues to isolate Abkhazia. Of course, Georgia has less financial ability to offer the same kind of incentives to Abkhazia as does oil-rich Russia. Nevertheless, actions like the recent invasion into the Kodori Gorge hardly promote a spirit of cooperation between regions. The lack of economic integration only promotes the groomed closeness between Abkhazia and Russia. It would be a shame to see Abkhazia go through the same tragedy of violence and destitution as Chechnya before the Georgian government realizes that the way to negotiation is through incentives and not force.

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Kazakhstan native Alisa Voznaya is an analyst of political and security developments in the Caucasus and Central Asia. Alisa, who is part Russian, Ukrainian and Armenian is currently undertaking an M.Phil in Russian and East European Studies at Oxford University, and is associate editor there of St Antony College’s International Review. Alisa also holds a BA in Political Science from Simon Fraser University. She plans to continue working within academia while also working with news agencies reporting on Russia and the North Caucasus.

Economic Growth, Strategic Importance Predicted for Azerbaijan with Oil Production Increase

By Christopher Deliso

The coveted Caucasus nation of Azerbaijan is enjoying increased oil revenues on the back of rising prices and larger production, along with some of the political advantages that come with it. According to respected economic forecaster the Economist Intelligence Unit, Azerbaijan is set in 2006 for an astonishing 27.5 percent growth in GDP, following a just slightly lower growth result (24 percent) registered in 2005. A recent article from the Power & Interest News Report added, “Baku expects 2006 oil revenues of $650 million or more, a figure that is predicted to reach $15 billion annually and reach $160 billion by 2025.”

This surge is helping towards financial independence as well. Azerbaijan plans to repay all of the $150 million it owes the IMF next year, the Azeri APA News Agency stated recently.

On August 8, Russia’s Interfax reported that oil exports from Azerbaijan from January- July 2006 had registered a year-on-year increase of 65.3 percent, amounting to 11,085 million tons. The exploitation of the Caspian Azeri-Chirag-Gunashli oil fields has helped to shape a leading role for Azerbaijan, with the creation of the 1,768-kilometer-long BTC oil pipeline, which stretches from the Caspian Sea to Turkey’s Mediterranean port of Ceyhan, via Georgia (the first 443 kilometers of the pipeline lies in Azerbaijan). By 2008, the pipeline is envisioned to reach its daily capacity of 1 million barrels. The pipeline commenced operations in May, with an inauguration ceremony held in Ceyhan on July 13- to coincide with the arrival of the first pumped oil in Italy, PINR noted.

The pipeline, which cost $4 billion (over a billion more than had been originally planned) was financed by a consortium of 15 international commercial banks (led by ABN Amro, Citigroup, Mizuho and Societe Generale), export credit agencies and political risk insurance companies, as well as the International Finance Corporation (IFC) and European Bank of Reconstruction and Development (EBRD). The leading stakeholder, with 30.1 percent, is British Petroleum. Other major players involved include state oil company SOCAR, Unocal, Chevron, Statoil of Norway, Turkey’s national oil company and Italy’s Eni SpA.

In the early 1990’s, the BTC pipeline was purposefully envisioned by the Clinton administration to bypass Iran- even though it meant taking a longer and costlier route, westward through Georgia. Now that the Bush administration is taking a hard line with Teheran over its nuclear program, the decision to keep Iran out of the pipeline seems to have justified itself for the project’s Western sponsors.

Indeed, Azerbaijan’s priceless location between east and west and on the energy resource-rich Caspian has won it many a suitor among international oil companies and governments. Part of this has had to do with the West’s antipathy to reliance on Russian energy exports; now, other proposed pipeline projects, Baku is set to benefit from the larger political machinations involving the US, EU, China and Russia.

“The BTC is now a serious option for numerous Caspian oilfields seeking an exit to market,” says Scottish oil and gas industry consultant Paddy Docherty, recently surveyed by Balkanalysis.com. “With the South Caucasus Pipeline due to add a sizeable gas export capacity, Azerbaijan is very well placed to become the key regional oil & gas entrepôt as well as a major producer. Politically, this bolsters the country against regional rivals, and guarantees the continuing interest and support of outside powers such as the US.”

As the recent PINR report notes, other oil and gas projects intended to subvert Russian influence are in development. “The Nabucco pipeline, a major part of the European Union’s diversification strategy, will carry natural gas from Azerbaijan, Turkmenistan and Iran to Austria and Western Europe. Construction is slated to begin in 2008 and conclude in 2011; Nabucco is expected to achieve a maximum transport of 30 billion cubic meters of gas per year.”

The construction of the BTC pipeline, meant to solve certain geopolitical problems, has only increased others. The question of possible new interconnections to the pipeline, the direction of oil flow and the security of the pipeline through certain areas of low-intensity conflicts are all hypotheticals that have numerous possible outcomes- with greater or lesser advantages for various parties.

“With the BTC now in operation, Caspian exports have been transformed at the strategic level,” says Paddy Docherty. “Since it offers new options for crude exports from elsewhere in the region, through connecting pipelines across the Caspian, the export dilemma for neighboring producers becomes more complex, especially Kazakhstan.”

Enormous Kazakhstan, on the other side of the Caspian from Azerbaijan, anticipates its annual oil output at 100-110 million tons by 2010, and 150-160 million tons by 2015 and thereafter, reported the Jamestown Foundation on August 3. Its Kashagan oilfields, three in number, were discovered in 2000 and 2001. They are believed to hold between 9-13 billion barrels of oil, according to the US Energy Information Administration.

The West has several potential pipeline ideas for moving Kazakh oil into Europe. One, the Constanta-Trieste route, would contact the Romanian Black Sea port of Constanta with Italy’s Adriatic port of Trieste, via Serbia, Croatia, and Slovenia. Along with the other potential Balkan pipelines (AMBO, Bourgas-Alexandroupolis) and the Turkish Samsun-Ceyhan project, “these projects rely largely on Kazakhstani oil arriving from Novorossiysk and other Russian Black Sea ports and heading for the open seas,” states the Jamestown report.

How exactly will Azerbaijan, as a transit route to the West, be affected by high-stakes politicking over the Kashagan development and export routes? “One of the big questions is over the exit of Kashagan output when it begins production in 2008,” says Docherty. “Since a link to the BTC is a possibility, the issue has the potential to lead to a US-Chinese struggle over access to this crude: will it go east or west?”

The Kashagan fields are operated today by a largely Western consortium, led by Eni SpA, Total, Shell and ExxonMobil. So it would seem that Azerbaijan’s future profits, in terms of transit revenues from Kazakh crude, are decided. However, despite the Western composition of the consortium, Docherty believes, “that doesn’t necessarily mean that they’ll sell it west. Oil companies are interested in profits not national loyalties, and in any case the decision for large projects such as a new pipeline involves the highest level of government.”

Indeed, as the Scottish analyst reminds, a pipeline linking Kazakhstan to China has been substantially finished. It was constructed by joining existing lines with new pieces, and built by KazMunaiGaz and CNPC. “This doesn’t mean it’ll carry Kashagan output, but of course the former has a small interest in Kashagan… the question of how Kashagan production will get out has not been settled, and it seems that it could still go either way. Since full production won’t be reached until 2016, there’s still some time to settle it.”

With important issues such as this one still up in the air, Azerbaijan is taking steps to improve its energy sector elsewhere as well. The country plans to improve its power generating capacity with several new stations. Together with Iranian experts, a commission recently met in Tabriz to plan for building two 36-megawatt hydroelectric power stations on the Araks River. According to a press release from JSC Azerenerji electricity company, this project involves a dual agreement: “under the terms of agreement, Azerbaijan will build the first station in Ordubad province, while Iran will build the second in Maraza province.”

The country also plans to repay, in kind, its close ally Turkey for electricity supply given in the 1990’s to the vulnerable Azeri province of Nakhchivan — isolated within the territory of Armenia. The construction of new power plants in this enclave, aided by growing natural gas supply, will enable Nakhchivan to pay the debt back in electrical energy, APA recently reported.

Another new investment in this strategic though economically needy area of the country has been announced. According to the Trend News Agency on August 8th, China’s fourth-largest auto maker, Lifan, plans to begin construction next month on a car factory in Nakchivan- an enclave of Azerbaijan that is not territorially contiguous with the rest of the country, but actually isolated within Armenia. The Chinese investment will help to improve the local economy of an Azeri island which is for that very reason of strategic value to Baku.

Chechen Refugees Choose Resettlement over Integration

By Ana Toklikishvili*

Almost 4,000 Chechens who fled from their country following the outbreak of war in 1999 have been granted prima facie refugee status by the Georgian government. As of April 2004, the Ministry of Refugees and Accommodation has registered 3,856 Chechen refugees. However, since then the number seems to have decreased to 2.600. Aside from hosting these refugees, most of who reside in the Pankisi Valley of north-central Georgia, there are currently 16 individually recognized refugees and 22 asylum-seekers in Georgia. The latest statistics will become known by the end of September this year, as the 2006 re-registration exercise is already nearing completion.

The refugees from Chechnya in the Pankisi Valley have been the neighbors of the local population there for more than six years. During this time, these refugees have continually competed for the meager social services available; this dynamic has led to the development of a tense situation between the various communities living in the Pankisi Gorge. In 2002, the Bush Administration claimed that the Gorge was hosting small numbers of al Qaeda fighters from across the border, and in fact used this claim as partial justification for sending American military trainers for the Georgian army.

Although the increase in the number of refugees has become more and more widely recognized as a pressing issue in Georgian society in recent years, the issue remains beyond the Georgian government’s agenda, especially considering the emerging political situation, reflected by the tense relationship with Russia and still unresolved conflicts in Abkhazia and the Tskhinvali region. Aside from this, the Georgian government has made a priority of alleviating the plight of some 220,000 internally displaced persons, and 50,000 returnees to the Gali District. However, the relatively cool attitude of the government in regards to the problem, and the rushed pace of life nowadays, have not deterred a slew of local civil society organizations and individuals from working to solve this crisis, and so to assist these refugees in seeking durable solutions to their precarious current status.

Today, there are three accepted durable solutions being considered: integration, resettlement, and repatriation. The one solution that is most often cited when talking about the Chechen refuges in Georgia is the first, “integration.’ Last year the United Nations Association of Georgia (UNAG) decided to respond to this persistent problem by introducing a project that applies the durable solution of integrating these refugees directly into Georgian society. The project focused on issues of compliance with local and international legal frameworks, fostering effective cooperation with NGOs and governmental agencies alike, and also stressed the need to overcome ethnic and religious prejudices. Indeed, a prerequisite for the success of this initiative is the involvement of the Georgian government, the NGO sector in the country and other international institutions.

During September-October 2005 a survey was conducted, with the goal of finding out the level of public awareness regarding integration issues among Chechen refugees residing in the Pankisi Valley. A total of 201 respondents holding refugee status, including 110 Kists and 91 Chechens were questioned. The survey revealed a rather low level of awareness on integration issues among refugees in the Pankisi Gorge.

After being informed about the essence of integration, only a relatively small numbers of Chechens expressed their support for this solution, since they felt skeptical and disappointed about ongoing governmental initiatives. The majority of Chechen and Kist refugees would instead welcome resettlement to a third country. Yet if integration is mandated as the only lasting solution, both ethnic groups would be willing to acquire a legal status, which would provide for the right to temporarily live and work in Georgia. Interestingly, Kists would prefer the Pankisi Valley as a place of residence, whereas Chechens would primarily rather live in other regions of Georgia, especially in Tbilisi.

In a continued effort to support refugees, embrace their plight and make them feel that they are an integral part of Georgian society, Georgia responded to a worldwide call from the UN General Assembly of 2000 to commemorate World Refugee Day on June 20. This year “Hope” was the theme chosen for World Refugee Day, in order to pay tribute to the unwavering hope of the world’s refugees and displaced persons, who have overcome enormous loss and hardship to start anew.

Such events have been taking place for five years now in Georgia and will continue for the years ahead, until we have to host the refugees. On June 19, Chechen refugees from Duisi Public Center enjoyed an opportunity to exhibit and sell flat handicrafts in Shardin Street in Tbilisi. The event was organized by UNHCR and its partner, the Norwegian Refugee Council (NRC). The Minister of Refugees and Accommodation, Giorgi Kheviashvili and the Resident Representative of UNHCR, Naveed Hussein attended the event. The Day was marked in the Tskhinvali region of South Ossetia as well. The day was celebrated through a series of artistic and cultural events taking place on the ruins of the ancient Duisi outdoor amphitheatre, surrounded by beautiful mountainous scenery. Most of the performances were done by children, either dancers from the ballroom dancing troupe who came from the nearby village of Akhmeta, either singers from local choirs, or refugee children reciting poems in Georgian or performing national dances and theatrical plays. The ceremony was closed by the awarding of prizes to the winners of sports competitions which had taken place during the previous days.

The Minister of Refugees and Accommodation, together with the Resident Representative of UNHCR, warmly greeted refugees and guests before stressing the importance of celebrating this day together with refugees. “The meaning of celebrating such a day is that many people, who had to flee their country and cannot return to their homelands due to religious, political and other reasons, need all the support we can give to them” commented Naveed Hussein.

In the meantime, the UNHCR continues to render every effort to bring the plight of the refugees to the attention of the local as well as international community. The UNHCR also tries to persuade the Ministry of Refugees and Accommodation to become more positive regarding refugee status determination and assigning procedures, where the issue remains open. Neither does the government voice its future plans with regards to refugees. Probably this is part of still unfolding national and international politics.

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*Ana Toklikishvili is presently the Public Information Officer at the United Nations Association of Georgia. Her three years of professional experience in the field of communications and public relations have included work with the World Bank Georgia Country Office and the BTC Co.-Cultural Heritage Project (Center for Archeological Studies). Ana holds a master’s degree in Public Administration from the Georgian Institute of Public Affairs, and a BA in English Language and Literature from Tbilisi State University

Interview: Scott Taylor on the Rise of Azerbaijan

In another exclusive interview with Balkanalysis.com director Christopher Deliso, Canadian journalist and publisher Scott Taylor shares his insights on the current situation in the strategic Caucasus republic of Azerbaijan, from where he recently reported.

Christopher Deliso: We understand that you have just returned from your first trip to Azerbaijan. So, how is it that you went there? How long did you stay?

Scott Taylor: The trip came about as the result of an invitation from the Azeri embassy in Ottawa. They were aware of my extensive coverage of the Middle East –Iraq in particular, and they felt I might wish to broaden my scope a little. By happenstance I had some previous business arrangements lined up in Turkey at that juncture, so I was “in the neighborhood’ anyway so to speak. I was able to spend a week in Azerbaijan, met a lot of senior officials and generals and managed to get outside of Baku on one field trip into the south.

CD: Did you have some older, pre-existing idea about visiting the Caucasus? Or was this something out of the blue? How do you see Azerbaijan as fitting into the general network of places which you more regularly cover?

ST: To be honest, before going I had no real in-depth appreciation for the complex strategic, economic and political issues that envelop this former Soviet Republic. However, the Azeris are actually a Turkic people, and therefore historically connected to my old friends –the Turkmen of Iraq. So in reality, this was a natural extension of my journalistic “trap-line’ as opposed to a leap into a totally unrelated theatre.

CD: For readers to get some background on your trip, we add the link to your long article that appeared last week in the Canadian press, but we would still like to get any extra stories you may have left out of this piece here. Azerbaijan today is, like some of the Balkan countries you have covered in the past, not a war zone but a site of a frozen conflict. You spoke with refugees and regular people- so to what degree did you get the sense that the conflict is still close to the surface?

ST: Our field trip included visits to the refugee camps, and we were able to see firsthand a tiny fraction of the nearly 800,000 Azeris who were displaced during the Armenian offensives into Nagorno-Karabakh from 1992-1994. As long as there is no effort made to permanently resettle these people, they are being used as political pawns to keep international pressure on the Armenians to withdraw from the occupied territories.

However, as it has been over a dozen years and no one has made any real attempt to enforce the UN Resolutions (which call upon Armenia to pull out their troops), the Azeris have upped the ante. Azerbaijan’s army has sat in trenches surrounding Nagorno-Karabakh all this time, but now, as the oil boom kicks in and the economy starts to explode, the Azeris are starting to pump money into military hardware. I’m not sure how close the army is to mounting an offensive, but given the huge disparity in relative economies and population, this military buildup is bound to alarm the Armenians. As of next year, the Azeris will be spending as much simply on defense as the entire Armenian national budget!

CD: In your article, you spoke about the latest peace proposals from the Minsk Group about Nagorno-Karabakh. There have been many peace proposals over the years, so many that one gets the sense that few believe in even the possibility of a breakthrough plan anymore. What about this time? Did you sense any popularity or expectations among the people?

ST: After 12 years of ceasefire and zero progress towards a settlement, the expectation of a negotiated agreement is about zilch. The Nagorno-Karabakh issue was a tremendous blow to Azeri nationalist pride, and now that their country is expanding their economy so quickly, the young people want to see some results militarily. It is a dangerous combination when you fuel injured pride with huge oil profits being used to bolster a one-sided regional arms race.

CD: How important is an initial Armenian troop pullout for the Azeri side, as a show of good faith in advance of any final solution?

ST: I think the very first step to any resolution is the pullout of Armenian troops from at least the seven occupied Azeri provinces which surround the Nagorno-Karabakh region. After Armenian troops had secured the disputed territory in 1992 and expelled the 40,000 ethnic Azeris, they continued to clear a large buffer zone. In the process of establishing this occupied defensive perimeter, approximately 800,000 Azeris were ethnically cleansed out of areas in which they constituted the overwhelming majority. So even if a final resolution on the status of Nagorno-Karabakh remains elusive, the Azeris want those seven occupied provinces returned immediately.

CD: From the people you spoke with in, specifically, the government, what was their sense that a real breakthrough on the Nagorno-Karabakh issue might be in the offing? What would it take?

ST: I think that a military option is something which the Azeri government is trying desperately to add to the bargaining equation. Their military commanders warn of losing their patience and top politicians brag about their huge new defence budget. Foreign diplomats based in Baku are not alarmed at this stage as they see the Azeri arms buildup as mostly bluff. “When they start buying helicopter gunships we’ll know they [the Azeris] are getting serious” is what one US spokesman explained to me.

However, now that the government has signed that huge “Deal of the Century’ oil contract with British Petroleum, and opened the strategically important Baku-Tbilisi-Ceyhan pipeline, I think the political worm is turning in favour of the Azeris. It may be the hollow threat of renewed military action which causes Azerbaijan’s new found strategic “friends’ to exert the necessary pressure on Armenia to begin a withdrawal.

CD: You mention the cult of personality of the former leader, Haydar Aliyev. Is this something that could be compared with, say, Tito in Yugoslavia? To what extent do you think that it is something spontaneously sustained, from the hearts of the people, or to what extent do you see it as a ploy of Aliyev’s son (the current ruler) to retain power? Or is it none of the above?

ST: I think it is more in the Azeris’ desire to create a Kemal Ataturk figure as a national symbol, who would stand above day-to-day politics and corruption. Once such individuals are immortalized in such a mythical manner, their legend only continues to grow. For Ilham Aliyev it is both a blessing and a curse, as he will always rule in his father’s “larger-than-life’ shadow.

CD: There is also a tight bond between the Azeris and their “big brothers” in Turkey. To what extent did you notice this? Turkey has not opened the border with Armenia because of the unresolved Nagorno-Karabakh issue. Would Turkey come to the direct military assistance of Baku in case of new fighting?

ST: During the heavy fighting in 1992-1994 there were Turkish advisors on the ground assisting the Azeris. In the early stages of that fighting, Azerbaijan got thumped pretty good by a Russian-backed Armenian defence force. However, by 1994 the regrouped Azeris (with Turkish help) had begun to turn the tide.

Azerbaijan’s army is rapidly trying to bring itself up to NATO standard, and the Turks have been instrumental in overseeing this transition. I think the only time that Turkey would intervene directly against Armenia would be if the isolated Azeri province of Netchevan was threatened. This tiny region is administered by Baku, is populated entirely by ethnic Azeris, borders on Turkey but sits surrounded by Armenian-controlled territory. In 1992-1994, the Turks made it clear to Armenia that this was a no-go zone- or else “big brother’ Turkey would jump into the fray with both feet.

CD: One of the things that comes across in your article is the whole “Star Wars’ nature of the lifestyle for expatriate oil workers/mercenaries/etc. Share with us some colorful stories about the characters you encountered. Who are these people? I imagine that most of those men must have had some form of previous military training?

ST: Chris, I don’t scare easily, but some of these characters were downright frightening. Most of the oil workers are former British soldiers…. mostly special forces or paras, and invariably they had seen real combat in either the Falklands, Northern Ireland or in either of the last two rounds of the Gulf Wars.

There were also a number of serving SAS types frequenting the Baku bars, and one quickly knows enough not to ask them why they’re in town. Although I suppose that some of them are also keenly interested in keeping an eye on Azerbaijan’s southern neighbor, Iran.

Such individuals naturally attract the attentions of certain classes of women anxious to, er, milk their own share of the oil boom. In some of the ex-pat bars you could find a bizarre collection of these “ladies’ from all over the former Soviet Republics of Central Asia. Alcohol is a huge part of the oil workers’ routine, and between that and the hard living they’ve endured, these guys age fast. Some of them in their mid-forties looked at least 70….but still frightening, mind you.

CD: Russian President Vladimir Putin has stated that Kosovo independence for the Albanians would mean universal principles for self-determination across the board- including in places like the Caucasus. Did you get any sense of Russian involvement or potential involvement in the Nagorno-Karabakh issue on behalf of Armenia, if Kosovo becomes independent and they are able to push the precedent?

ST: The Russians are not too pleased with Azerbaijan for selling off shared Caspian Sea oil rights to BP, and for opening the BTC pipeline. This now constitutes a conduit whereby the Central Asian petroleum resources do not have to transit to Europe via Russia. Consequently, Russia’s support for Armenia is not entirely selfless. Furthermore, as the US-allied Georgians continue to push local Russian military bases out, Armenia offers a solution to Moscow for maintaining a military footprint on this strategic fault-line.

CD: That said, in a world where sudden new challenges in the Middle East are now manifesting, has the danger of future conflict in Azerbaijan (or around it) now been heightened or lessened? Is it a case of the country wanting to be on its best behavior to keep the West happy, or is it perhaps an “anything goes’ situation, now that everyone is so preoccupied with Iran and Lebanon?

ST: The Iran issue is the most pressing one, in that approximately 17 million ethnic Azeris live inside the Iranian border. The territory of Azerbaijan was originally divided by Tsarist Russia and Persia back in 1828. The 8.5 million Azeris residing in the independent former Soviet Republic are just the tip of a big iceberg. I have been told that the CIA is hoping to use Azerbaijan’s newfound prosperity and freedoms to incite Azeri nationalism south of their border. Constituting one-third of Iran’s population, any separatist movement on the part of the Azeris would deeply destabilize the Tehran regime. Not that America ever plays such games, of course…

CD: Finally, considering that you were visiting Azerbaijan as part of a press junket, do you feel that you were presented with the real situation completely? Are there aspects of the Armenian issue that may have been overlooked, or that you might like to put caveats around until you can see the situation from their point of view?

ST: It is never possible to see a “complete’ picture from only one vantage point. Unlike many of our media colleagues who thump their chests and claim to “know’ an issue, I always present my findings as what they are…..one piece of the puzzle. I look forward to getting more acquainted with the Armenian side of the conflict, and I can’t wait to actually visit the disputed territory of Nagorno-Karabakh to see things for myself in the near future.

The North Caucasus Knot: Adygeya’s and Ingushetia’s Struggle for Autonomy

By Alisa Voznaya*

On the eve of the G8 Summit in St. Petersburg, Russian authorities hailed the operation that lay to rest Russia’s most infamous terrorist, Shamil Basayev, as the beginning of the end of uncertainty in the North Caucasus. With slow but steady economic growth registered in Chechnya and Dagestan, and a continued display of support for the pro-Kremlin leaders in those republics, one could finally envision stability within a formerly volatile and unpredictable region.

However, the Russian Federation is far from declaring the North Caucasus a non-problematic district. Recent events in Adygeya and Ingushetia, two of the smallest republics in the North Caucasus, demonstrate that much work is to be done to normalize the region. In early April of this year, Khazret Sovmen, Adygeya’s president since 2002, issued an emotional resignation during a heated session of parliament. It was quickly retracted after a conversation with the Kremlin.

However, the dark underbelly of the Adygeyan internal conflict has been brought to light. Dmitrii Kozak, Vladimir Putin’s envoy to the Southern Federal Okrug (District), which incorporates the North Caucasus, has recently made formal proposals to the Russian president’s office to unify Krasnodar Krai (a large federal unit in the Southern Federal Okrug that envelops Adygeya) with the Republic of Adygeya. Sovmen’s reaction in parliament was a protest against such plans.

There is good reason for suggesting an amalgamation of the two regions. Adygeya is entirely surrounded by the territory of the Krasnodar Krai, and some 68 percent of its population are ethnic Russians (versus 22 percent ethnic Adyges) who are open to the idea of unification. Further, a history of peaceful co-existence already exists.

However, the rationale behind the merger is first and foremost economic, or so the Russian officials say. Krasnodar has largely been touted as an economic success story, with a well-developed Black Sea coast tourism industry and fertile soil, despite the fact that regional variation is stark; other less fortunate districts are impoverished and suffer from high unemployment. Adygeya, by contrast, is the fifteenth-most subsidised federal unit with 58.1 percent of its internal budget coming direct from Moscow’s coffers.

If Adygeya were to be absorbed into Krasnodar Krai, it would cease to function as an independent administrative unit and would most likely act as an autonomous oblast within the Krai, very much like the previous arrangement prior to the 1991 declaration of independence by Adygeya. Yet this is unlikely to happen, at least not in the near future. Sovmen’s resignation incited instant support from the two major Adygei/Cherkess organizations (Cherkess Congress and Adyge Khase), and the Adyge population warn that ethnic conflict would be inevitable if the merger were to become reality.

Their opponents, the Union of Slavs of Adygeya (SSA), argue for the merger on the basis of political factors, including alleged discrimination against ethnic Slavs. Despite the fact that the Adyges make up less than a third of the population, the SSA argues, the titular nationality has taken control over policy, the economy and culture in the republic.

The Slavic nationalists have certainly taken this issue seriously and brought a draft law before Adygeya’s lower chamber of parliament in February on referenda that would, if enacted, have constituted the legal basis for a republic-wide vote on the merger, in which the Slav majority could easily force a victory. This law was voted down this time, but there is no telling whether it will not make a new appearance in the near future. However, whether or not threats of ethnic conflict and ill internal relations from the Adygei organizations are substantiated, the federal centre is hardly interested in taking a risk of destabilizing another part of the North Caucasus.

Although Adygeya may have withstood forces from both within and without in the most recent attempt to merge it with Krasnodar Krai, its battle for autonomy may not yet be over. The new Adygei parliament, elected on March 12, has only one chamber, unlike the previous legislative body. This means that it could be much easier to push through the referendum law. Additionally, Sovmen’s open threat to resign may have undermined his future negotiations with the Kremlin, which often dislikes independent regional political figures and prefers to install its supporters in regional positions of power. Thus, the prospect of Adygei autonomy is still under threat.

Whilst the leaders of Adygeya face a controversial internal and external threat of absorption, another North Caucasian republic has come under the spotlight of threatened autonomy in recent months. Ingushetia, a small republic wedged between North Ossetia and Chechnya, has recently experienced a surge of violence and continued territorial pressure from its two neighbours. In recent years the Chechen conflict has spilled over into Ingushetia, with many terrorist attacks having been planned from this republic. In fact, it is widely believed that Ingush rebels were responsible for the execution of the Beslan siege in 2004.

As recently as May, Dukvakha Abdurakhmanov, the speaker of the lower house of the Chechen parliament and a close associate of Chechen Prime Minister Ramzan Kadyrov, advocated a reunification of the two republics. Amicably split in 1992, following the collapse of the USSR, the proposition was met with a wave of approval in Chechnya and an overwhelmingly negative response from the Ingush. Ingushetia, the most mono-ethnic territory of Russia, with 77 percent of population being native Ingush, is currently a home to close to 100,000 Chechens- that is, 20 percent of the population. However, 99 percent of the Chechens claim that they will return to Chechnya as soon as the situation stabilizes there. Thus, Ingushetia has assumed a pivotal, yet vulnerable position, serving as a haven for displaced Chechens who not only want to return to their homes in Chechnya, but who also want to see the reunification of the two republics.

Alternatively, relations with North Ossetia have been sour since the renewed Ingush claims for Prigorodny Raion, a district that was a part of Ingushetia prior to the Chechen and Ingush Soviet-era deportation in 1944, when it was transferred to North Ossetia. The continued clash, albeit bloodless this time, with North Ossetia regarding the disputed territory has resulted in numerous failed attempts at diplomacy. In fact, legal approaches have accomplished little in reclaiming the territory, with the issue of borders of Ingushetia and North Ossetia dragged out in postponed federal legislation on municipal government. Due to its small size and proximity to conflicting territories, Ingushetia has become extremely vulnerable to external pressures from its larger neighbours.

In order to retain its autonomy and to negotiate its borders peacefully, the Ingush government has appealed to the federal government in Moscow. Yet Ingushetia also has often felt politically abandoned by the Russian government. The reason for feeling ostracized from the center may stem from the recent proposals by both Chechen officials and the presidential envoy to the region, Dmitrii Kozak, to reunify Chechnya and Ingushetia, despite vehement protests, both from the Ingush government and opposition.

Additionally, the federal government and Kozak specifically failed to obtain the much-needed signature of then-president of North Ossetia, Aleksandr Dzasokhov, for “urgent joint actions on the normalisation of the Ossetian-Ingush conflict of October-November 1992″ during the 2005 negotiations.

One might speculate that such a turn of events stems from the regional importance of North Ossetia as a republic that could potentially (though this is not discussed publicly) merge with the self-proclaimed republic of South Ossetia within Georgia. Many South Ossetians have resettled in North Ossetia since the beginning of the conflict with Georgia, thus creating further ties between the two regions. The Russian federal government supports Ossetian independence, which could result in the expansion of Russian borders. It thus usually abstains from making any hasty decisions regarding the dispute between North Ossetia and Ingushetia.

In June, the Ingush parliament adopted an appeal to the Russian president, prime minister and the presidential envoy to resolve the dispute with Ingushetia by awarding Prigorodny Raion to Ingushetia. The sheer failure of the federal government to have dealt with the problem of territorial jurisdiction demonstrates unwillingness or an inherent inability to resolve disputes among its federation members. Unfortunately, the more time passes before a solution is discovered, the likelihood of instability increases in Ingushetia.

Ironically, the federal government employs contradictory approaches to deal with the problem of autonomy in both Adygeya and Ingushetia. In Adygeya, the federal center, through the machinations of the presidential envoy, invokes sentiment for Slav reunification within Adygeya and Krasnodar Krai. In fact, the merger is still an active policy. In Ingushetia, on the other hand, the federal government attempts to abstain from intra-regional affairs, thus, removing the objective force in settling regional conflict. Although Ingushetia, with a population that closely relates to its Chechen neighbours, could potentially profit economically from a merger with Chechnya, a reunification would mean that the Ingush would have to stop lobbying for border reconsideration with North Ossetia and Prigorodny Raion.

Why does the government employ such varying methods in addressing the issue of North Caucasian autonomy? Securing Adygeya within the borders of a prosperous and politically stable region like the Krasnodar Krai would limit the possibility of conflict within Adygeya itself. Additionally, the large Slav majority in Adygeya could merge with its neighbours in the Krai.

Ingushetia, however, offers little prospect of immediate policy success. It is an impoverished and volatile region, whose negotiations with North Ossetia have dragged on for over a decade with no resolution, as neither party is willing to budge. Its proximity to Chechnya has been largely a negative factor, with a registered decline in economic and political terms having been witnessed. Nevertheless, it is Ingushetia that requires the most active federal involvement to solve its pressing problems.

At this moment, the likelihood of Adygei sovereignty is quite feasible, whereas Ingushetia remains much more of a question mark. However, it is in the interest of the Russian federal government to maintain the autonomous rights of the two republics, at least for now. The central priority in the North Caucasus is stabilization and regional mergers evidently hinder this process, as nationals begin to concentrate on issues of ethnicity and border redrawing, as opposed economic and political reform. To regain and retain stability in the region, the Russian government might want to reconsider its policy of territorial negotiation.

…

Kazakhstan native Alisa Voznaya is an analyst of political and security developments in the Caucasus and Central Asia. Alisa, who is part Russian, Ukrainian and Armenian is currently undertaking an M.Phil in Russian and East European Studies at Oxford University, and is associate editor there of St Antony College’s International Review. Alisa also holds a BA in Political Science from Simon Fraser University. She plans to continue working within academia while also working with news agencies reporting on Russia and the North Caucasus.

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