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Advanced Research Workshop

 “South Caucasus: Making the Best Use of External Assistance for Stability Building and for Co-operation with NATO”

 September 21-23, 2003

Vilnius, Lithuania

Zeyno Baran

Director of International Security and Energy Programs

The Nixon Center

USA

Importance of the South Caucasus Region

The South Caucasus (Armenia, Azerbaijan, Georgia) is a strategically important region as the transit point from Europe, and is at the heart of America's evolving "Greater Middle East" vision, which considers weak or failing states as serious security risks as they can easily become terrorist breeding grounds.  While Afghanistan and Iraq are now clearly top of the policy agenda, anchoring this region into the Euro-Atlantic alliance is a major US goal for the next several yeas.

For this vision to succeed, the conflicts that have remained “frozen” for almost a decade have to be resolved. The status quo in Nagorno-Karabakh, Abkhazia and South Ossetia leads to human suffering and enormous loss of human potential and thwarts economic development. Radical Islamist or terrorist groups that want to transfer militants, drugs, arms, and weapons of mass destruction into Europe could also penetrate these gray zones.

South Caucasus is also significant for the completion of Europe as it expands eastwards. In May the European Union will have 25 members, but Europe’s enlargement will not end with this round. In addition to pivotal countries like Turkey and Ukraine, the South Caucasus also needs to be included in the greater Europe. If they left out, they would inevitably come back under Russian sphere of influence.

Russia’s relations with South Caucasus are especially important for the transportation of Caspian oil and gas to Western markets. This region will play increasingly important role for European energy needs. There is already an oil pipeline going from Baku to Tbilisi, and the Baku-Tbilisi-Ceyhan oil pipeline that is being built will tie Azerbaijan and Georgia to NATO ally Turkey.  A parallel gas line will be constructed shortly.  With continued US support for the East-West energy corridor, increasing amounts of Caspian oil and gas will reach Europe via Turkey, as well, via Black Sea pipelines through possibly Ukraine, Romania, and Greece into Europe. Caspian oil and gas can play an important role in increasing non-OPEC, non-Middle Eastern energy supplies to European and global markets.

Challenges Ahead

While pipelines will help tie South Caucasus to Europe, they are simply tools. This region’s long-term success will depend on how these three countries develop internally. Today they are in varying degrees trying to move away from Russian monopoly power, while establishing positive neighborly relations, but their success will depend to a large degree on their level of economic and democratic developments.

Government Legitimacy

The US has been actively engaged in South Caucasus and provided financial and technical assistance for over a decade, but so far the results are mixed. The future of this region will depend to a large degree on the October 15 presidential elections in Azerbaijan, followed by November 2 parliamentary and the 2005 presidential elections in Georgia. It will prove increasingly difficult for these countries to sustain high levels of U.S. attention after 2005 if their reforms have not progressed by then to the level of the Baltic states of today. Unfortunately, we are already seeing worrisome signs.

The US cares about democracy, not just in words or as an idealistic pursuit, but as an important element for long-term security and stability. The 2003 March parliamentary and May presidential elections in Armenia were highly contested with   thousands   protesting, and President Robert Kocharyan does not have much legitimacy.   A weak president without public support cannot make important reforms and make important concessions, like it is needed in Karabakh.

In Azerbaijan it is extremely important to have free and fair elections so that the next President can have legitimacy. There is no history of peaceful transition in Azerbaijan since 1991 and the October elections will hopefully be a turning point where a President will come to office after elections and hopefully also serve his full term.  Heider Aliyev ruled in Azerbaijan for over 30 years, and had experience and authority to manage various clan and tribal networks and established strong rule. Holding free and fair elections is almost a "must" for the incoming president as whoever takes office will have a tough time solidifying his power and control over the whole country and various clan and business interests. 

The elections and post-election developments in Azerbaijan will have an impact on other Muslim countries. This Muslim, democratic, secular, pro-Western, oil rich country's success or failure as a close US ally will be seen as a benchmark for prospects of democratization in the Islamic world, especially in oil-rich ones.

In the short term it will also have impact as a precedent for the Georgian elections, which are also very important for Georgia's future direction. It is important to appeal to Eduard Shevardnadze's quest for a positive historical legacy. Lithuanian President Rolandas Paksas’ recent visit was very timely in this regard. All concerned parties must discourage individual Georgian politicians from employing private armies or militia groups as tools of political influence, especially during an election. These militia groups have in the past led to disasters like Abkhazia.

Conflict Resolution

We cannot seriously start discussing conflict resolution in South Caucasus until after the elections are over in Azerbaijan and Georgia, which means early 2004. To make real progress, we may also need to wait for Russian President Vladimir Putin's presidential elections in March 2004. We also need to keep in mind that the status quo has its own stability and any serious attempt to resolve the conflicts will in the short term create domestic instability, as there are personal and criminal interests involved in these managed conflict zones. The South Caucasus governments have little legitimacy to make serious concessions.  This is why active US and NATO engagement is required to expand security and stability in the Caucasus.

These conflicts can only solved if there is a wider security umbrella.  The options for such an umbrella that confront Azerbaijan, Georgia, and Armenia are either Russia and the CIS or Europe/NATO and the United States.  Turkey can play a stabilizing role, should the countries of the South Caucasus continue to pursue a Western vector of development. The Baltic States can also play an important role by drawing on their historical experience in dealing with Russia and implementing democratic and market economic reforms.

Azerbaijan and Georgia both harbor ambitions to join NATO.  Aliyev publicly stated this aspiration for the first time in April 2003. Shevardnadze has talked about Georgia's aspirations for eventual NATO membership since 2001, and most recently stated that "NATO needs us because of our geo-strategic situation: our country provides exit to Azerbaijan and the Caspian Sea and from there to Central Asia and China."

Armenia's strategic aspirations seem a little less clear. Armenia has strengthened its security relations with NATO's Partnership for Peace program and with the United States during the past two years. However, Russia is gearing up the new Collective Security Treaty organization, which brings together Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. Armenia's historically close military cooperation with Russia may obstruct its NATO aspirations and prospects.

International Organizations

So far the UN and the OSCE were not able to produce significant results in the resolution of South Caucasus conflicts, and I think it is because of strong Russian presence in these organizations. As long as the peacekeeping operations and conflict management remains in Russian monopoly, it is hard to imagine the Kremlin wanting to change the status quo.

In Georgia, Russia seeks a "peace dividend" in Abkhazia, but only once Shevardnadze   is no longer president.   Many in Moscow still strongly dislike him because of his role in ending the Soviet empire and his subsequently strong support for Georgia's strategic orientation toward the United States and Europe.   The meeting between Presidents Putin and Shevardnadze at Sochi last spring, however, may indicate a growing desire in the Kremlin to pursue a peace dividend sooner rather than later. The Sochi discussions indicated that Moscow might view a peace dividend in Abkhazia as including continued Russian military presence in Georgia, ownership of the energy infrastructure and the opening of the strategic railway from Russia via Abkhazia and rest of Georgia to Armenia and perhaps Iran to establish a North-South corridor.

Other international organizations such as the EU, GUUAM (Georgia-Ukraine-Uzbekistan-Azerbaijan-Moldova organization) and BSEC (Black Sea Economic Cooperation), cannot handle Russia on hard security issues.  The EU does not want to upset Russia, and still has difficulty conceiving the South Caucasus countries as potential EU members. The EU is focused on the new members it will absorb, but it also needs to be engaged in wider security threats like proliferation and terrorism and interests like trade and energy.

Given that the NATO May 2004 summit will be in Turkey which has long experience with NATO and strong interests in the stability of the South Caucasus, it can be an invaluable ally. Close engagement with Turkey would also bring the Baltics, the Balkans and the Caucasus countries closer along the East-West axis. This secular, pro-American Muslim country's help in Iraq and ongoing assistance in Afghanistan is also essential for NATO as its concept of security is adapting to new challenges. Moreover, Turkey is the only regional power that can balance Russian and Iranian interests in the Caucasus in a pro-Western way.

Another security issue for the region is Iran, which is increasingly becoming a problem for the region's stability. Iran and Armenia have close relations, even though Azerbaijan is a Shiite Muslim country like Iran (when looking at this region, it is important to understand that there is no axis of “Muslim versus Christian”). Over time, with its access to the West via Turkey and Azerbaijan hindered, Armenia had to get closer to Iran. In case of serious tension between Azerbaijan and Iran, or pressure on Tehran from the U.S., Iran may try to enlist Armenia’s help.

Armenia is trapped in the Russian-Iranian axis; it is important to release the tension and avoid the creation of competing North-South and East-West axes. And opening the Turkish-Armenian border, the “last Cold War border,” would ensure exactly that. With such an opening, and Armenian-Turkish economic and political relations resuming, Russia would lose its strategic hold on South Caucasus and Iran’s ability to negatively influence the region would be reduced. While Turkey has made some positive statements about the border opening in the spirit of “bringing down the walls of old Europe,” Ankara cannot take this step until Karabakh is resolved. Any attempt to open the border without the resolution of Karabakh will be a waste of time.

Way Ahead

While this region is very important, the US is distracted with Iraq, Afghanistan and the ongoing war against terrorism and beginning 2004 Washington will focus on Presidential elections of Fall 2004. The South Caucasus countries need to engage the US and NATO soon, or the window of interest from Washington will close, thereby increasing the risk of resumption of conflict in the region.

Karabakh (and Abkhazia) can only be resolved with a legitimate and strong president (read: someone who will reform the economy, strengthen democracy and invest in human potential) in Azerbaijan and Georgia.  The South Caucasus has been in a transition for the last ten years; the period between 2003 and 2005, “the election period” will determine the future of this region. Armenia did not high points; the international community needs to make sure that the elections in Azerbaijan and Georgia are closer to European standards, instead of Central Asian ones.

It is not a given that the South Caucasus will see it in their interest to develop as a “region,” as was the case with the Baltic states. It is very possible that Azerbaijan and Georgia would continue and increase their East-West energy, transportation and communication cooperation via Turkey, Ukraine and other Black Sea countries, and leave Armenia behind. The Azerbaijani-Georgian-Turkish pipeline security cooperation has already created the foundations for close partnership and soon Kazakhstan will join this group as well. There is also GUUAM, which has Azerbaijan and Georgia as its member but not Armenia. For long-term stability, however, it is important to make sure Armenia is not left out of regional economic developments.

If this region continues to move towards deeper integration with the Euro-Atlantic alliance, it is inevitable that some in Russia will see this trend as a threat to its own national security interests. Therefore it is important to put South Caucasus into the bilateral US-Russia Dialogue and encourage the Kremlin to see stability and prosperity of South Caucasus to be in Russia’s interest as well. There was a Joint Declaration on Counter-Terrorism Cooperation the two presidents reached in May 2002 in Moscow, which included solution of Nagorno-Karabakh and Abkhazia as well, but the Russian side so far has not seen any incentive to really resolve them.

While Bush-Putin dialogue may be positive, we should not ignore Putin's upcoming elections.  Russia's military/industrial complex is not happy with Putin's “accommodations” to the United States, and have started to take a stronger position in the Caucasus. I do not see the US pushing back at Russia until after Putin’s elections, but afterwards US direct involvement will be essential to start providing a new security umbrella in the South Caucasus—until their NATO membership. The conflicts can only be resolved under the security umbrella of a mutually trusted country or organization. To make sure the US gets closely engaged in the region after March 2004, the election and post-election period and reforms in South Caucasus need to show a positive trend and some key policy concepts need to be resolved.

First, the US has no strategy or rather no tools to prevent Russian energy sector expansion into the region as long as the region remains corrupt and market economy weak. Russia is reestablishing its control over the gas and electricity networks in Central Asia, the Caucasus, Ukraine, Moldova, Belarus and even the Baltic States. UES, Gazprom and Lukoil are in a much stronger position today and American and other Western companies simply cannot compete with them in this post-Soviet infrastructure, where all the Soviet countries were interlinked with Moscow at the center. In Yerevan Gazprom has already established monopoly on gas supplies to Armenia, and a few months ago it reached a similar deal in Georgia. While the Baltic states also have energy dependency on Russia, they nonetheless managed to move away from the Russian sphere of influence and can thus both help the South Caucasus with policies, but also keep US, EU and NATO aware and engaged in the potential risks of all these future NATO and EU members having their energy infrastructure under Russian monopoly. 

A second issue that needs to be clarified is “territorial integrity” concept and how it will be applied in South Caucasus. If there is a regional declaration of “commitment to territorial integrity” and a clear mechanism of enforcement, then:

• Russia will stop worrying about Chechnya eventually becoming independent;

• Iran will stop worrying about ethnic Azerbaijanis eventually breaking up their state and joining with the Republic of Azerbaijan;

• Turks will stop worrying about the Kurds creating an independent state in Iraq;

• Azerbaijan will have a stronger case in Nagorno-Karabakh. At the same time, Nagorno-Karabakh is different than the other three because Azerbaijan “lost” this land in a war. A more applicable solution may be “land for peace” for Nagorno-Karabakh, but with Armenia leaving the all other occupied territories. In turn, the Turkey-Armenia railway would also be opened up,

Such an approach can only work under very strong international enforcement. Otherwise, especially in case of the Azerbaijani/Armenian negotiations, it would be too risky a step for Armenia: Turkey can always close down the railways, but once Armenia leaves territory it got after war, the only way to get it back would be with war.

In both Abkhazia and Nagorno-Karabakh it is important to identify the minimum needs and maximum wants of key players, including interests of the criminal groups that like the status quo. Moreover, while confidence-building measures are very important, they will not get far unless they are backed by concrete steps.

A third and related issue would be Turkey’s continued move towards Europe. If Turkey starts accession talks with the EU, Armenia would feel much safer. Right now Russia is mistrusted by Georgia, Iran is mistrusted by Azerbaijan and Turkey is mistrusted by Armenia; once Turkey gets a clear EU prospect, Armenian distrust will decrease greatly and Turkey will have much greater ability to help with the region’s stability and security.

It is significant this meeting is held in Lithuania, which can above all help Georgia deal with Russian pressure and draw on experience of Lithuania and its neighbors in Latvia, Estonia, and Poland in transforming their societies. The spirit of freedom burned brightly for 70 years in the Baltics, and erupted into political freedom a decade ago, and is now resulting in the Baltics' full incorporation back into the European family.  The suffering and success of the Baltic States can be instructive for the states of the South Caucasus.  After all, it was Shevardnandze who resigned as Soviet Foreign Minister in disgust, following the Soviet Union's brutal attack on the Vilnius Television Tower.  But ironically, in November 2001, Georgians swarmed into the streets for the first and only time, protesting an attempt by certain Georgian ministers to shut down an independent TV station.  Shevardnadze responded by sacking those ministers, and avoiding violence.

It was significant that Lithuania declared its intention to lend support to Georgia in its ambition to join European and NATO structures of various levels. Georgia is the most eager and most advanced one of the three South Caucasus countries to join these organizations, but it is important to pull Armenia and Azerbaijan closer to this direction as well to have long-term security, stability and economy prosperity in Europe’s new borderlands.