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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.

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.

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.

Balkanalysis.com Presents: Spotlight on the Caucasus Week

Every day this week, Balkanalysis.com will publish a new article on the fascinating and complex region of the Caucasus. Topics will range from security to politics and economics, and cover the major countries of Azerbaijan, Georgia and Armenia, as well as cross-border issues in the North Caucasus and first-hand testimony of the situation on the ground.

The week kicks off tomorrow with an analysis of the political dynamic in the little-understood North Caucasus Russian republics of Adygeya and Ingushetia, by Kazakhstan native and Oxford scholar Alisa Voznaya.

On Wednesday, we present an exclusive interview with the venerable Canadian journalist and publisher, Scott Taylor, who offers his insights on Azerbaijan’s new militaristic confidence following a recent trip to Baku.

Thursday the series continues with a detailed overview of the refugee situation in Georgia, presented by Ana Toklikishvili, Public Information Officer at the United Nations Association of Georgia.

Friday, we present a short analysis on the Azeri oil industry- and what it might mean for the future of energy transit.
We hope that readers enjoy this special presentation, which features several different perspectives on one of the key regions in today’s world.

A Quiet Battle in the Caucasus: Georgia between Russia and NATO

By Christopher Deliso

Rising from the subtropical shores of the Black Sea to the majestic Caucasus mountains, Georgia is a rich and varied nation only now removing itself from the shadow of the Soviet Union. Indeed, for most of its long history Georgia has been the subject of attack and occupation by foreign countries — the Romans, Turks, Persians and Russians; it was also once a protectorate of Byzantium. Like everywhere in the Caucasus, it is home to a myriad of different peoples and languages, but this very fact, which makes Georgia an ethnographer’s dream, also makes it a security nightmare. Two major revolts and a civil war in the early 1990’s have left Georgia a weak and demoralized nation, and one that is seeking ardently to find balance between east and west. In the following analysis I show how the major economic and geostrategic factors that make Georgia so important have also made it an object of a new tug of war between Russia and NATO — one that has taken on greater urgency since the terrorist attacks in New York. Although it remains to be seen whether Georgia will be able to bargain the best deal for itself, one thing is certain — Georgia’s place in the Caucasus, and its relations with both Russia and the West, are entering a crucial new phase. Simply put, it’s make it or break it time for Georgia.

A NOTE ON SOURCES

Since this article utilizes a number of obscure and lengthy sources, I am using an endnote format (though initial links are provided). Information has been culled from Georgia’s Prime News Agency, Russian and other world media, the comprehensive reviews of Georgian military in 2000 collected in Army and Society in Georgia (published by the Center for Civic-Military Relations and Security Studies), and analysts like Stratfor.

THE CRITICAL FACTORS

Several specific factors have shaped Georgia’s relationships with Russia and the West. They are: the continuing Russian influence and military presence; Georgian governmental confusion and lack of clarity about policy; state financial weakness; corruption in government and organized crime in society; a failure to control borders; and, finally, Georgia’s strategic location for both parties. As we will see, these factors are all interrelated, and one cannot be detached from the others. The total situation is just as complex; we must approach it accordingly.

RUSSIAN INFLUENCE: THE PROBLEM OF MILITARY BASES

In many ways, Georgia’s difficulties stem from Russia’s confusion as to what its own priorities should be in the post-Soviet Caucasus. Yeltsin-administration advocates of a strong Russian military presence outside of Russia have largely been sacked, as Vladimir Putin seeks a more lithe and intelligence-oriented military. Among the victims of the purge was the “notorious” defense minister Pavel Grachev who “almost single-handedly shaped Russia’s position” in Caucasian affairs.1

Nevertheless, several Georgian bases remain in Russian hands. This is a major point of contention. On 22-23 December 2000 talks were held in Tbilisi over the fate of four Russian-held bases. It was agreed that the two countries would use the Vaziani base jointly, and would “transform the Gudauta base into a rehabilitation centre of the Russian peacekeeping troops.”2 An agreement on two other bases, in Batumi and Akhalkalaki, was put off until February 2001. In December 2000, Georgia did, however, take over seven military facilities from the Russians (in the regions of Tbilisi, Alekseevka, Marneuli, Manglisi, Kodjori and Kobuleti); the local press, however, dismissed their importance or usefulness.3

While some of the transitions went smoothly, the Russians stalled on exiting Gudauta in July, due to its strategic importance in the “breakaway republic” of Abkhazia (western Georgia). There are many reasons for Russian reticence. Georgian commentators aver:

“Some political and military-forces of Russia believe that the Georgian state-building project opposes Russian national interests. They have leverage to intervene in Georgia’s policy even in a forceful way. Particularly, there are poorly controlled Russian troops and some local political groups, which favor restoration of a Russian protectorate in various forms. Russian military-political circles may well find supporters in Georgian force agencies. Russia has enough influence on the Georgian power supply system to provoke social unrest in the country. Besides, Georgian terrorists may have found shelter in Russia.”4

RUSSIAN INFLUENCE ON THE GEORGIAN ECONOMY

Georgians lament the fact that their country, once the richest and most prosperous of Soviet nations, is now one of the poorest. After the Soviet breakup in 1992, Georgia’s economy, dominated by seasonal agriculture like fruit and tea and bolstered by Russian subsidies, went into steep decline.

“When the Soviet Union fell apart, not only did the subsidies disappear, so did Georgia’s unrestricted access to 400 million Soviet consumers, leaving it with an internal market of less than 6 million.”5

If this was a bad start, things would only get worse in the first few years of Georgian independence, when the country was torn apart by civil war and rebellions in the Abkhazian and Ossetian regions. This upset Georgia’s traditional trade routes and access to some of its major ports.

Economically, Russia’s great strength can be exerted in several ways. One of the least pleasant for Georgians has been the Russian tactic of cutting off the natural gas supply in the dead of winter, as it did on 1 January 2001. Georgian president Schevernadze did not appeal to Washington, or to the Russian gas company (Itera); rather, he appealed directly to Putin. And so “once it was clear to the world that Russia had made its point about who was truly in control, the gas once again flowed.”6

Despite this indignity, Russia is the major gas provider and Schevernadze “noted the need to consider” ITERA for the privatization of Georgia’s gas distribution network.7

A MAJOR HEADACHE FOR GEORGIA: ABKHAZIAN SEPARATISTS

Russia’s reluctance to surrender the Gudauta base has to do primarily with its location in Abkhazia, the fractious “republic” in the western tip of Georgia. With the help of “covert Russian aid,” Abkhaz separatists launched a rebellion in 1992 that destabilized the Georgian government’s control of the region and ensured a Russian presence.8 Abkhazia is both a major headache for the Georgians and a strategic concern for the Russians. Georgia would understandably like its territory back, particularly given that Abkhazia’s “capital” on the Black Sea coast, Sukhumi, is a valuable port and trade route. For Russia, the issue is security on its southern flank and the control of smuggling, which it fears will be lost by withdrawing:

“Abkhazia is the weakest link in Russia’s counter-terrorist, counter-narcotics program and a precarious ally. Russia’s withdrawal of forces and demobilization of its bases would create a security vacuum in Abkhazia, even if CIS peacekeepers remained on hand with minor coordination from Russia.”9

The Russians also fear a backlash from their Abkhazian suppliants if they withhold their “protection.” Besides a fear of enraging the Muslim Abkhaz people themselves, Russia fears that the hostile Chechens will penetrate northward from the Georgian front.

There is no question that Abkhazia is a “dangerous and lawless” place. On 10 December 2000, two UN observers in the Kodori Valley region were abducted, marking the third occasion of kidnapping since 1998.10 The porous and wild border is hard to police, and drug and weapons smuggling is rampant. While the Georgians have historically, and with good reason, taken affront at Russia’s support for Abkhazian separatism, unfavorable new developments — the presence of Chechens — will encourage Russia to maintain its military presence in Abkhazia for as long as possible.

In fact, the alleged Georgian position regarding the Chechens in Abkhazia, if it is true, would seem to border on the suicidal. It is alleged that these fighters are imported from Chechnya, through Georgia, to help the Georgian government fight the Russian-backed Abkhazians. The action has been heating up lately; Tbilisi’s Prime News reported on 18 September 2001 that “a unit of armed Chechen gunmen of up to 700 persons” was holed up in the area, ready to fight. As if to illustrate the suicidal nature of inviting Chechens to antagonize the Russians, the Georgian sources said, with enigmatic brevity, “the events may develop the way that Georgia will lose the Kodori Valley.”11

Three days later, the Abkhaz interior minister, Zurab Agumava, denied Russian reports that Chechens were being massed in west Georgia. The Georgian government officially denies such accusations, but the Russian reports were quite detailed:

“According to Interfax with reference to the Russian sources, (field commander Ruslan) Gelaev’s detachment of 300-400 persons in number is concentrated in the west of Georgia in the village of Muzhava and Muzhava Cross, and ‘Chechen gunmen are ready to give Georgian structures support in putting pressure upon Sukhumi.’ According to (the) Russian side, Chechen gunmen ‘expect to receive admission from Georgian government to settle in vacant regions of Abkhazia.’”12

A MAJOR HEADACHE FOR RUSSIA: CHECHEN SEPARATISTS

Tbilisi’s policy here would seem to be quite reckless, if one considers Russian animosity towards the Chechens. Although Georgia and Russia signed an agreement in January 2000 to fight terrorism, the acrimonious nature of the Abkhazia-Chechnya issue has forced both governments into a tense détente, in which neither side will make initial concessions. According to Russia, Georgia safeguards its vulnerabilities by allowing Chechen terrorists to find safety and even set up military bases in Georgia’s northern Pankisi Gorge. As Russia is by far the stronger power, they can and do intimidate Georgia, both economically (by turning off the gas symbolically) and militarily (by maintaining a presence and supporting the Abkhazians). By tolerating the presence of Chechens on its territory, Georgia has made a feeble attempt to use its leverage in the only way that has been available to it, but doing so it just reveals its weakness and potential foolhardiness. The prospects of another revolt (were the government to move forcibly against the Chechens) keep it from obeying Russia, but by doing so Georgia remains trapped. Having neither the economic nor military ability to extricate itself, it comes as no surprise, as we will see, that Georgia is looking to the West for help.

GETTING TO THE BOTTOM OF THE PANKISI GORGE

Across the immense and rugged Caucasus mountains lies the Pankisi Gorge, a Georgian region settled in the late 19th century by the Muslim Kisti group. Later the Kisti were joined by settlers from neighboring South Ossetia. This fractious population sparked Georgia’s first war in the early 1990’s, and as a result many Ossetians were forced to flee to “North Ossetia” across the Russian border. Nowadays there are few Georgians in the area, but about 8,000 Kisti. Since 1999, almost 8,000 Chechen refugees (rebel fighters, according to Moscow) have swollen the ranks of the Pankisi Gorge. Georgian commentators agree: “since not all of the refugees and their luggage were properly checked, a lot of arms might have been quite possibly smuggled into Georgia.”13

As with the Albanians in the Sar Planina mountains of Macedonia, Chechen rebels can easily navigate the inaccessible mountain passes and move freely between Russia and Georgia. The Pankisi Gorge is their prime staging-post. “Cross-border traffic increased substantially there in 1992, when the Georgian government was preoccupied with the problem of Abkhazia.” Georgian authorities lost control of the Gorge, and soon “…faced increasing Russian accusations that Chechen militants were able to set up their training and rehabilitation bases in the Gorge.” These charges have been confirmed by Tengiz Kitovani, former Georgian defense minister.14

In an attempt to improve the situation, the Georgian government sent 500 troops in November 2000 to patrol the Gorge. They set up checkpoints and bases across the Akhmeta district and Mtskheta-Mtianeti region. The government also exploded two roads to minimize evaders. But by and large it has avoided bearing down on the Pankisi Gorge with any real force: “the Georgian government fears that such an operation may turn the Gorge into a ’second Chechnya’ and cause immense problems to Georgia.”15

It is clear that the Georgians are, with reason, fearful of their “special guests” from the north. A Georgian citizen told me recently of atrocities committed by Chechens against Georgians (such as cutting off the ears of Georgian soldiers to wear as necklaces), and summarized Georgian feelings on the problem:

“The local population (in Pankisi) is not happy to have Chechen refugees in the Gorge. Christians do not want Muslims on their territory. Another issue is that Georgians are very poor now and it is especially difficult for the country, with 300,000 internally-displaced persons (from Abkhazia), to take care of foreign refugees. These refugees receive international assistance and humanitarian aid. The local population of the Gorge is not happy with this, as the economical situation is difficult for everybody and sometimes locals are poorer than the refugees are. But we cannot do anything. There are negotiations with Russia, Turkey and some other donor countries but unsuccessfully — nobody wants them. Nobody wants an additional headache.”16

MYSTERIOUS KIDNAPPINGS IN THE ‘WILD EAST’

Like Kodori Valley in Abkhazia, the Pankisi Gorge has been an epicenter for abductions. Two Red Cross workers and two Spanish businessmen were kidnapped in November 2000 and taken to the Pankisi Gorge, apparently by Chechens. Unlike more unfortunate victims in Chechnya itself, who were beheaded in 1997, the Pankisi prisoners were all later released. Further details behind the story, however, show that the whole affair may just have been part of the job description for businessmen in the Caucasus’ “Wild East”:

“… It is noteworthy that one of the two (abductees), Francisco Rodriguez, was involved in exports of timber and marble from Georgia. According to the newspaper, it is one of the most lucrative export businesses in Georgia nowadays and many criminal clans seek to control the field. Another hostage, Antonio Trinolios, was reported as a millionaire and owner of a network of jewelry shops in Spain. His interest in Georgia remains unclear, though one may assume that he might have been involved in export-import of jewelry in Georgia, another highly criminized [sic] sphere of Georgian life.”17

This report confirms the view that Georgian authorities are powerless to control the northern border, hampered by a lack of funds and the presence of rugged, inaccessible terrain. After an increase in violent crime, the exasperated locals were forced to take matters into their own hands:

“…Georgian residents of the Akhmeta district blocked all roads in the area in protest against (the) deteriorating crime situation in the region. They accused Chechen refugees of kidnapping and stealing cattle and demanded the authorities to take prompt measures to clamp down on crime. On the whole, after more than 7000 Chechen refugees were allowed shelter in Pankisi, the region actually turned into a hub of illegal drug and weapon trafficking.”18

This upsurge of crime following the imposition of refugees on a weak country follows almost exactly the parallel of Macedonia in 1999, when hundreds of thousands of Kosovar Albanians crippled the economy and strengthened criminal networks. As in Macedonia, one of the most devastating and most lucrative of such activities has been drug trafficking:

“Drugs (mainly heroin) are produced at special plants in Chechnya and then smuggled into Georgia through cross-border mountain routes. Drug dealers sometimes offer drugs for free, especially to youngsters in Georgian villages in order to make them addicts.”19

Georgian authorities, underpaid and understaffed, have not only failed to control the heroin trade — they also sometimes profit from it:

“Most of the drug dealers begin their usual route from Pankisi and move first to Akhmeta and then to Telavi. Their final destination is Tbilisi, the capital, and it seems that law enforcement authorities may have a share in this lucrative business.”20

We should also mention, however, that corruption is not limited to the local criminals and governments; there are allegations that foreign aid agencies and “humanitarian” organizations are just as corrupt.

LOOMING RUSSIAN THREATS

This inherent instability of Georgia’s northern border, and the threat Russia perceives in it, has led to strong reactions. In response to the Georgian failure to apprehend Chechen militants in Pankisi, Russia slapped a new visa requirement on Georgian civilians. Yet, at the same time, “it waived the visa for Abkhazia and Southern Ossetia, Georgia’s two rebellious minority provinces, thus indicating Moscow’s willingness to raise the issue of dismembering Georgia and creating new rump states out of these provinces.”21 In addition, Russia’s turning off of the gas in January 2001 was widely interpreted as a threat to Georgia regarding the Chechens.

In the aftermath of the September 11th terrorism in the US, Russian commentators have been able to make great political capital out of comparing Russian and American experiences of terrorism. Especially this comparison has been used to try and win support for Russian operations on Georgian territory, or at least to gain joint Russian-Georgian patrols (something which Tbilisi has rejected in the past) to flush out Chechen rebels from the Pankisi Gorge. Some pundits have been rather robust. As one Russian commentator bluntly stated, “if Russia now wipes out the Chechen militants in the Pankisi Gorge, not a single soul in the world will be able to reproach us.”

Georgia is quite clearly feeling the heat. A note of 18 September from the Russian foreign ministry to the Georgian government made dark reference to the fact that “despite the frequent appeals of the Russian side it has not received the hundreds of terrorists” hiding in the Pankisi Gorge. To the Georgians, “the document really looks like an ultimatum.” Russian newspaper Vremia Novostei implied that “considering the statements by American authorities who call for attack not just at terrorists, but also at those regimes which support them, the Russian note seems quite dangerous.”22 According to a recent report, Georgia’s commander of border troops, Valerii Chkhedze, invited Russian observers to join the OSCE and others to see for themselves whether there were Chechen fighters in the Pankisi area. The source worries that this might be encouraging new provocations from the Russians.23

AND SO, SINCE A TOTAL LACK OF CASH…

A major reason that Georgia is suffering from the “severely stressed” state it now finds itself in is the country’s major financial hardship. A decade of financial mismanagement, corruption, loss of Soviet markets and internecine strife have left Georgia in a very weak position. Even if it wanted to crack down on Chechens in Pankisi, the country would be unable to do so. The military review for 2000 revealed that “the state treasury owes the military their salary for several months.” In November 2000 the Georgian Ministry of Defense revealed for the first time the extent of the military’s financial difficulties:

“According to the MOD, servicemen were paid salary only five months in 2000 as the government cut down the state budget. In the words of Colonel Akia Barbakadze, the head of the logistical service of the armed forces, such products as meat, fish and milk have been long out of servicemen’s ration, while potatoes and cabbage have been in short supply. The servicemen’s menu is in fact limited to only bread, vegetable oil and macaroni.”24

After civil war, rebellions in Abkhazia and South Ossetia, and continuing unrest in the Kodori and Pankisi areas, the Georgian army may have become rich in military experience, but has also become exhausted and poor in material hardware. The Georgian defense budget was reduced by almost half (from $53.4 million to $21.3 million) between 1997 and 2000, and was again decreased by at the same rate (to about $10 million) by the end of 2000.25 This has affected the Georgian government’s ability to appease Moscow. After dismantling two checkpoints on the Chechen border, authorities announced that other cuts were likely, since the 2001 budget allocated only $4.5 million for frontier defense.26 Clearly, whatever failures can be assigned to Georgia in the Pankisi Gorge are, to a large extent, caused by the military’s sobering financial realities.

LEADS TO A DEMORALIZED ARMY

And so, the following unbelievable report attesting to Georgia’s beleaguered defense:

“The Autumn 2000 draft of the Georgian Army followed the usual scheme, with conscripts being captured in the streets and public places, and driven to drafting offices by force, the Kviris Palitra (No. 46) reported. Small wonder most of the Georgian recruits think only (of) how to avoid the service and get back home as soon as possible.”27

In America, where the military is just another well-paying employer offering good benefits and little dangers, the thought of “conscripts being captured in the streets” seems utterly ludicrous. But with the all-too-real possibility of seeing actual fighting, and the meager pay scale (even the “elite” soldiers of the State Guard Service make only $40 a month), it is not hard to see why young Georgian men avoid conscription at all costs. Frequent closings and cutbacks hamper the military’s ability to do its job, and occasional disasters (such as last week’s crash of a fighter plane on a training mission) are seen as being just part of the trend.

NATO MUST COME TO THE RESCUE

Given the country’s continuing economic hardships, and its tortured relationship with Russia, it is not hard to understand why the West has become Georgia’s most promising suitor. But if NATO is going to become Georgia’s knight in shining armor, it will come about because of a failure to rectify the many local problems, and primarily the relationship with Russia. Elements of that country’s leadership are clear in their hostility to an independent or even Western-leaning Georgia. But if Russia continues to bully its southern neighbor, it will have no one else to blame if Georgia chooses to flee to the West.

Under Schevernadze, pro-western tendencies have been in the ascendant. This has resulted in some significant modifications to Georgia’s foreign policy, and particularly in its attempts to appeal to American political sensibilities. So far, these overtures have not been entirely successful, and arguably reflect the confusion and lack of clear objective critics cite as endemic in Georgia’s own domestic policy.

Where Georgia has so far been most successful, and most offensive to the Russians, is in its budding partnership with NATO. The recent culmination of this relationship was in June 2001: NATO’s Georgian operations conducted under the auspices of its “Partnership for Peace” program. This was hailed by Georgia’s defense minister, who announced it as “the first NATO/Partner’s full-scale field exercise in the South Caucasus.”

These exercises were preceded by a planning meeting in Naples, Italy in November 2000. The costs here were levied out as with all programs conducted under the “Partnership for Peace” banner:

“…NATO pays 80% of their participation in PfP exercises, while partner countries have to pay only the rest, 20%. However, according to the newspaper, due to Georgia’s extremely hard economic and financial situation, a delegation of the Georgian MOD was unable to pay even 20% of the fee for participation in the Naples conference and the money was provided by the USA.”28

American assistance to the Georgian military has not been limited to NATO activities. During the year 2000, there were several other such events. 70 American instructors led a $3 million, two-month operation in mine clearing. “After the exercise, the USA handed over all the equipment to the Georgian army.” In addition, the US presented a gift to the Georgian Coast Guard, in the form of a patrol boat, on 12 December.29 During the year 2000 the US also provided the Georgian army with 3,000 uniforms and trained 80 Georgian cadets for free in American military academies. When we consider how the same training service was formerly provided by Russia- at a high cost, which has resulted in a $22 million debt currently owed it — it is not hard to see why Georgia would prefer the free training provided it by the US (and other countries, like Germany, Turkey, Greece and the UK).30

SCHEVERNADZE’S OVERTURES, PART ONE: THE MOTIVATIONS ARE CLEAR, THE RESULTS, LESS SO

President Schevernadze’s strategy with the West has been to emphasize apparent similarities between Georgian and Western experience, and then to play upon Georgia’s image as a weak and suppliant nation in need of help. This involves a lot of rhetoric about issues such as “human rights,” ethnic cleansing,” and “democracy,” followed by an attempt to link these abstract ideas to actual situations in Georgia where Western influence might help the country. Yet these “analogous” situations are frequently convoluted and not so analogous, which indicates a general confusion about what Georgia really wants or expects from the West. Two examples shall suffice.

First we have NATO’s Kosovo adventure of 1999. Georgia, under Schevernadze’s lead, was one of NATO’s most ardent cheerleaders here, despite the fact that both Georgia and Serbia are Orthodox countries. Georgia’s support seems, in the cynical view, as merely reactionary and opportunistic. On the one hand, it opposed the Russian position, and on the other, it sought to win some advantage through brazen worship of Clinton’s wags. Even then, columnists warned of the potential dangers Georgia was getting itself into by taking a strong pro-Kosovo position. But more remarkable was Schevernadze’s equation of the Kosovar Albanians with his own people in Abkhazia. This would at first seem to make no sense. After all, in Abkhazia the “oppressors” should have been the Orthodox Georgian republic, clamping down on the “breakaway republic” of Muslim Abkhazia — just as with “oppressive” Orthodox Yugoslavia, and its own fractious Muslim minority.

Schevernadze, however, made the case that the Georgians were, like the Kosovars, a persecuted and helpless minority. In neither case was the description entirely true, though it was more so in the case of the Georgians. Their president pointed to the “ethnic cleansing” of the Georgian population in Abkhazia, until recently 45% of the region’s population, before the war forced them to flee into central Georgia. The greatest resemblance between Georgian and Albanians (in Schevernadze’s view) was that both were minorities oppressed by large and powerful states. In other words, Schevernadze was subtly portraying Russia as the underlying enemy of Georgian statehood, insofar as it was supporting the Abkhaz revolt. This strategy has not been entirely successful, and partly because Georgia is guilty of playing the same game, by tolerating Chechen separatists threatening Russia on their other border. This has not stopped Schevernadze, however, from making the truly audacious request that NATO come in and stop the Abkhazians/Russians by force, like in Kosovo.

Fortunately, it will probably be the entire region’s anonymity that saves it, at least on this occasion. After all, no one in the West has the foggiest idea about Georgians and Abkhazians, let alone Ossetians, Azeris and Chechens; and whatever “ethnic cleansing” was committed in Abkhazia happened years ago. Since we know from Kosovo that righteous intervention can only gain momentum from sensationalist photos and TV footage, it does not seem likely that Georgia will win calls for intervention — especially now that the terrorism in New York has overshadowed it in the world media.

SCHEVERNADZE’S OVERTURES, PART TWO: CONFUSION ABOUNDS

This, the Georgian reaction to the events of 11 September, is the second example of Georgia’s troubled policy. Right away, the country offered its help to the US. Then, on 18 September, Schevernadze announced that Georgia was prepared to give up its territory and airspace to US troops attacking Afghanistan.31 On the same day, Schevernadze used the tragedy to indirectly advance his line on Abkhazia intervention, by proposing the creation of an international anti-terrorist coalition. While they were at it, the UN could also “convene a summit to debate the fight against terrorism, genocide, ethnic cleansing, nationalism, and separatism, xenophobia, fanaticism, and hatred.” The report also noted that Georgia has still not succeeded in getting the Abkhaz leadership condemned for “genocide and ethnic cleansing against its Georgian population.”32

TOO MANY EGGS FOR THE BASKET

But might he be waxing cynical? In aping what the Balkans wars have taught him to be “Western values,” Schevernadze is climbing an increasingly slippery slope by proposing such an all-encompassing “summit.” A man of his experience and stature must understand these rhetorical catchwords for what they are: that is, loaded phrases having to do with “humanitarian concerns” — and always, always only acted upon if it is in the direct concerns of the United States.

In trying to equate the concerns of Georgia with those of the US, Schevernadze risks not only antagonizing Russia, but also setting his own spokesmen up for some embarrassing misstatements. While Russia has scrambled to use the “terrorism in America” card to impress on the US the validity of fighting Chechens, so too has Georgia sought to stress its own Abkhaz “terrorists.” The Georgian foreign ministry also lambasted Russia’s efforts to publicize its own “terrorist” problem in Chechnya as “an attempt to fulfill Moscow’s political goals in the region by means of force.” This was in reference to the prospect of Russian troops in Pankisi, and it elicited the following memorable statement: “Georgia will not allow any foreign state to use its territory for military operations.” Apparently this official had forgotten about Georgia’s open invitation to the US forces only a few days before. The statement drew immediate criticism from Russians on Georgia’s alleged “double standards” on terrorism.

IMPLICATIONS FOR THE GEORGIAN-RUSSIAN-NATO RELATIONSHIP

The mutual animosity that has been fostered by Russia and Georgia, regarding the “terrorists” they allegedly unleash on one another, has been increasing now that the real terrorism in the US has brought such issues to the world’s undivided attention. And both sides are making the most of it, Georgia with its “ethnic cleansing”claims, and Russia with its Chechen “terrorists.” The latest reports seem to indicate a continuation of the same tensions; on 24 September the Georgian foreign ministry’s information officer, Kakha Sikharulidze, “criticized as “harsh violation of the mandate,” the Saturday travel of five (Russian) vehicles of the Georgian-Abkhazian conflict zone peacekeeping forces outside of the mandate territory (in Georgia’s Zugdidi region).”33

Schevernadze has announced that he will take up the Russian problem with President Bush when he visits Washington on 5 October.34 Most likely, the issues of NATO expansion in the Caucasus (Azerbaijan too has signed up to host exercises in November), and the potential oil and gas pipelines through Georgia will be on the table, as well as Georgia’s role in US retaliatory strikes. In contrast to Russia, which expects the US to finally see things their way on Chechnya, Schevernadze will probably try and placate Washington in whatever way he can, in order to get a reward and alleviate some of the pressure coming from everyone around — Russians, Abkhazians and Chechens alike. Schevernadze undoubtedly knows that these issues will not matter to the US unless the uncertain Baku-Ceyhan pipeline is ever constructed — and so, once again, the rhetoric of “human rights” will only become a useful weapon if and when a vested American economic interest materializes. Until then, Georgia will most likely continue to hide, intimidated by its neighbors, and wait for its Western prince to show up.

NOTES

Jaba Devdariani, “Would Russia rethink its military presence?” Central Asia and Caucasus Analyst, 15 August 2001

From Nevasimaya Gazeta, no. 242, 22 December, 2000 (in “Georgian Press Reports,” Army & Society in Georgia, November-December 2000, p. 13

From Droni, no. 151, December 2000, in “Georgian Press Reports,” Army & Society in Georgia, pp. 17-18

David Darchiashvili, “Some considerations about the role of the Georgian armed forces in Post-Schevernadze Georgian policy,” in Army & Society in Georgia, p. 2

“Russia tightens grip on Georgia,” Stratfor report, 22 January 2001

Ibid

Jaba Devdariani, “Would Russia rethink its military presence?” p. 2

“Russia still dragging its feet on Withdrawal from Abkhazia,” Stratfor report, 5 July 2001

“Russian Withdrawal Risks Warfare in Abkhazia,” Stratfor report, 31 October 2000

From Dilis Gazeti, no. 284 and 285, and Svobodnya Gruzia, no. 270, 11-14 December 2000, in “Georgian Press Reports,” Army & Society in Georgia, pp. 8-9)

“Jaba Ioseliani: Kodori Valley is in threat of war,” Prime News Agency, Tbilisi, 18 September 2001

Russian intelligence reports on Chechen gunmen on the Abkhazian border denied in Sukhumi,” Prime News Agency, Tbilisi, 21 September 2001

Irakli Aladashvili, “The Pankisi Gorge problem,” in Army and Society in Georgia, pp. 6-7

Ibid, pp. 7-9

Ibid, p. 8

Personal interview, 22 September 2001

From Dilis Gazeti, no. 284, 1 December 2000, in “Georgian Press Reports,” Army and Society in Georgia, p. 17

From collected Georgian newspaper sources, “Georgian Press Reports,” Army and Society in Georgia, p. 9

Irakli Aladashvili, “The Pankisi Gorge problem,” p. 7

Ibid, p. 8

Stephen Blank, “Is Georgia at risk?”, Central Asia and Caucasus Analyst, 28 March 2001

“Moscow expects Washington support in anti-Georgian campaign, Russian press claims,” Prime News Agency, Tbilisi, 19 September 2001

“Would Tbilisi condone a Russian strike against Chechens in Georgia?” RFE/RL Caucasus Report, 24 September 2001

Koba Liklikadze, “The lack of security and the lighthearted government,” in Army and Society in Georgia, p. 5

Ibid, pp. 5-6

From Droni no. 149, 21 December 2000, in “Georgian Press Reports,” Army and Society in Georgia, p. 9

In “Georgian Press Reports,” Army and Society in Georgia, p. 16

From Droni, no. 138, in “Georgian Press Reports,” Army and Society in Georgia, p. 16

From Droni, no. 129, 2 November 2000, in “Georgian Press Reports,” Army and Society in Georgia, pp. 12-14

Ibid, pp. 11-12

“Georgia ready to give its territory and airspace for American anti-terrorism operation,” Prime News Agency, Tbilisi, 18 September 2001

“Georgian President proposes antiterrorism coalition, UN summit,” RFE/RL Newsline, 19 September 2001

“Georgian foreign ministry criticizes Russian peacekeepers for violating the security zone borders,” Prime News Agency, Tbilisi, 24 September 2001

“President Schevernadze claims there are no barriers for his visit to the USA,” Prime News Agency, Tbilisi, 24 September 2001

US and Russia Play a Dangerous Game in the Caucasus

The terrorism in New York may have particularly dangerous effects for Russia, as it struggles to contain Chechen terrorism and control its Caspian territories. Russia is trying to equate the Chechen terrorism with the similar actions the US accuses bin Laden of having perpetrated in New York. However, it remains to be seen whether the US will enthusiastically back up Russia in the Caucasus, because there are far greater implications than merely the question of whether Chechnya is indicative of terrorism or ethnic rights. The US and the humanitarian organizations which it basically controls have been scathing in their criticisms of Russia’s operations in Chechnya. One would assume, therefore, that the fact that both the Chechens and Bin Laden are radical Islamic terror organizations would be enough to unite Washington and Moscow. But America-s verbal support for the Chechens has more to do with issues like oil and NATO expansion than it does with human rights.

According to a Stratfor intelligence report of August 29, the bomb that ripped open the Baku-Novorossiysk oil pipeline in the city of Achisu, on the Caspian Sea, has all the makings of further trouble for Russia: “the implications of a new Chechen strategy could be far-reaching. The Chechen capital of Grozny once housed the fourth-largest refinery network in the former Soviet Union; the Chechens know exactly where to hit oil infrastructure to maximize damage. That infrastructure is directly responsible for the petroleum revenues that fund more than half the Russian budget.”

It is obvious that Chechen separatists, and the rebels they have placed in neighboring Dagestan (where Achisu is located), have an eye on the oil revenues that come from the Caspian. If they could block Russia-s access to the coast, they could block not only whatever Russia claims in the Caspian itself, but effectively control the pipelines- and profit themselves.

While the many international oil companies involved also stand to be hurt by the same terrorism that affects Russia, there is a further reason that the US has not been particularly supportive of the Russian position. This has to do with the proposed Baku-Tbilisi-Ceyhan pipeline, which has not been built yet, but is being pushed by the US as a means to bypass Russia. Leading analysts, such as Alec Rasizade (Contemporary Review, July, 2001) reveal that there have been criticisms raised about the feasiblity of this pipeline, from the very people who would fund it. “The problem has long been that few in the oil industry believed that that the Baku-Ceyhan pipeline was commerically viable. They have repeatedly pointed out that if this pipeline was commerically viable, then it would have already been built.” According to Rasizade, the backers of the pipeline have made their case based on some “questionable assumptions,” including a possible over-estimate of the Caspian-s oil potential, the need to isolate Russia, and the ability of Turkey-s economy to stabilize. In reality, the Turkish economy has been steadily weakening and some key members of the “sponsor group” (Exxon-Mobil, Russia-s Lukoil, and Pennzoil), have backed out. These companies had a 23% share in the consortium, and their bailing out has “adversely affected investment confidence, especially for international credit agencies that are skittish about Caspian oil reserves and the throughput sufficiency of the project. The Baku-Ceyhan pipeline needs a daily throughput of 1 million barrels to be economically justified.”

We can see, therefore, how any terrorism that affects Russia-s ability to transfer oil would directly benefit those who support a plan such as Baku-Ceyhan, which would only be seen by oil companies as the best of a bad situation, were an easier and cheaper Russian alternative not available. This is part of what’s at stake if the US were to abandon its stance on Chechnya.

Another alternative is Iran, which also has potential pipeline routes cheaper than the Baku-Ceyhan route. Traditional bad relations with the US had taken any Iranian plan out of consideration, but, Rasizade affirms, this might change under the current administration, because Vice President Cheney “has been an outspoken advocate of ending economic sanctions against Iran┘ as chief executive of Halliburton, a giant oil-services company, he believed that the Clinton strategy was wrong.” One suspects that an Iranian pipeline will be looked at more favorably by the US, when we also consider that Iran has announced its support for US attacks against Afghanistan. This is another possibility for an American “reward” at the detriment of Russia.

Among the many supporters of American military intervention, we also must consider the case of Georgia, where Schevernadze recently announced that Georgia would be prepared to help the US in any way against the terrorists. NATO conducted exercises in Georgia in June, and was hailed by the Georgian defense minister as “the first NATO/Partner full-scale field exercises in the South Caucasus.” Now it has been announced by Azerbaijan that NATO exercises will soon be held, in November 2001, in that country. There is no doubt that NATO seeks to expand eastward at the expense of Russia, and perhaps may try to impose itself as the arbitrator of regional disputes, as it did in the Balkans. With Georgia blaming Russia for supporting Abkhazian separatists, and Russia blaming Georgia for not cracking down on Chechen terrorists in the Pankisi Gorge, an uneasy status quo is maintained. Will NATO eventually seek to disarm both rebels, to put both pipeline routes- Dagestan and Baku- under its jurisdiction?