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GEOPOLITICS OF THE CASPIAN SEA REGION: A RUSSIAN PERSPECTIVE Syed Adnan Ali Shah * Introduction The Caspian Sea Region has generated much interest and has assumed greater importance in world politics since the implosion of the Soviet Union, when the number of stake-holder claimants increased as sovereign nation-states, all equally interested in the region’s vast endowments of rich hydrocarbon resources. The Caspian-Caucasus region will most likely emerge as the world’s biggest energy-producing region, second only to the Persian Gulf in importance, and could become a major supplier of energy resources to Europe and Asia in the foreseeable future. Thus, a major political and diplomatic battle is being waged by interested countries for the exploitation and utlilisation of the potential resources, and over the egress routes, to connect them with the consumer markets of Europe and Asia. Russia, the United States, China, Turkey, Georgia and Iran are some of the countries putting proposals together as to which routes for pipelines best suit the interest of the region and the world energy markets. The proposals over feasible pipeline routes have become embroiled with other related geopolitical factors. These include some historical regional conflicts, such as: between Armenia and Azerbaijan over Nagorno-Karabagh, secession movements of Abkhazia and Ossetia in Georgia, Chehcen liberation movement in Russia, Turkey’s enduring conflict with the Kurds, and Iran’s continuing confrontation with the United States. However, Russia remains a major determining factor in any future economic and political discourse over the Caucasus-Caspian region. The current geo-political situation in the Caspian Sea Region is a huge subject, given the number of interests that converge upon it, and add to its volatility. These interests revolve around the offshore and onshore hydrocarbon resources of the Caspian Sea Basin, which in turn have intensified the controversy regarding the legal status of the Caspian Sea and the related jurisdictional issues, and has further complicated the existing political and ethnic conflicts raging in the region. The region has witnessed conflicting foreign policy approaches by the regional countries, and the role of extra-regional, major powers, like the US and the EU. However, the study isolates itself for the task of investigating the Russian perspective. The reason lies in the fact that the Caspian Sea region remained under Russian domination and control for nearly two centuries, till the implosion of the Soviet Union in 1990, when several independent states emerged. However, the newly-independent Central Asian States still remain dependent on Russia for their political, economic and security survival. From a Russian point of view, the Caspian Sea is of particular importance due to a host of national interests that must be defended at any cost. These include: the geo-strategic and political interests, like the control over Caucasus and Central Asian countries, thereby ensuring the security of its Russian heartland; and economic interests, like the access to, and control of the oil and gas reserves of Caucasian and Central Asian countries. The study assesses perceived major interests of Russia at stake, and the policies that result from those perceived interests. Russian National Interests and Technical Issues Affecting the Caspian Sea The Caspian Sea is an inland water body surrounded by five countries; Iran, Azerbaijan, Kazakhstan, Turkmenistan, and Russia. The region has suddenly found itself in the midst of one of the greatest geopolitical struggles over oil and gas resources. Oil is evidently the key factor. However, Russia intends to exclude outside powers from exercising a dominant political and economic influence in the Caspian Region via the Caucasus and Central Asia. Since the newly-independent countries of Caucasus and Central Asia are land-locked and have to depend upon either Russia or Iran for the egress routes for trade of their oil and gas through existing pipelines, like the Atyrau (Kazakhstan)-Samara (Russia) oil pipeline, Baku (Azerbaijan)-Novorossiisk (Russia) oil pipeline, Caspian Pipeline Consortium (CPC) carrying Kazakh oil to Novorossiisk, and Central Asia-Russia-Europe gas pipeline, carrying 3.5 tcf gas from Turkmenistan and Kazakhstan to Europe via Russia. Moreover, the Turkmenistan-Iran pipeline from the Turkmen port of Korpezhe to Kurt-Kui port in Iran, commissioned in December 1997, carries 283-350 bcf for export. The latter countries are, therefore, in an advantageous position to exert their influence. However, other critical issues also help shape the dynamics of relationships between Russia and the countries of the Caspian Basin and Central Asia, which are discussed below. Oil and Gas Potential Reserves There has been a great debate about the exact estimates of the hydrocarbon resources of the Caspian Sea region. Even though the estimated figures of oil and gas reserves of the Caspian Basin are conflicting, these vary from 253-270 billion barrels (bbl)1 of oil, and 328 trillion cubic feet (tcf)2of natural gas reserves to a conservative figure of 17.5-34 bbl of oil and 571-576 tcf of gas reserves.3 A comparative analysis of the potential possible oil resources of the Caspian Sea region and other oil producing regions shows that except for the Middle East, which has reserves of 676.9 bbl, in which Saudi Arabia accounts for only 261.5 bbl, the rest of the regions, like North America, North Sea, South and Central America, Africa, and the Russian Federation have potential oil reserves to the tune of 76.6; 16.3; 86.2; 70; and 48.6 bbl respectively.4 Moreover, recent discoveries, such as in Azerbaijan in 1999 of large gas deposits in the offshore Shah Deniz field, and the huge new oil discoveries made in the Spring of 2000 in the Kashagan oil field, off the coast of Kazakhstan, further point to the fact of huge reserves in the region. The great game of the 19th Century between Russia and Great Britain over the control of Central Asia seems to have re-surfaced over oil at the turn of the 20th Century. However, this time, the US has replaced Great Britain as the chief contender of power in the region. Russia, on its part, is keen to maintain its historical eminence in the Caspian Sea region. Russia’s interests in the hydrocarbon resources focus on acquiring preferential access to the Caspian Sea and Central Asian oil, to offset the oil output decline in its Western Siberian oilfields. Since oil production in the Russia’s large Western Siberian oil fields has peaked, and development of the Eastern Siberian reserves and the offshore Far Eastern Russian oil reserves incur enormous expenditures thereby making it unfeasible, therefore, the most favourable alternative for Russia would be to get oil from Azerbaijan and Central Asia, which are already connected to European Russia by oil and gas pipelines. Moreover, Russia is likely to see a huge increase in its oil and gas requirements in the decades ahead, due to its rapidly increasing domestic demands. The Caspian region’s oil and gas potential would provide the cheaper and more easily accessible source. Legal Status of the Caspian Sea A major contentious issue, which is holding back the countries of the region from benefiting from the rich oil and gas resources of the Caspian Basin, is the disputed legal status of the Caspian Sea, which to date remains undecided among the littoral states, with every country pursuing its own particular claims. It is evident that commercial benefits can only be realised if a consensus is reached over the demarcation of the Caspian Sea, which would then lead to the exploitation of the huge hydrocarbon resources, fisheries etc. by its littoral states. The Caspian Sea is the world’s largest inland body of water. It covers approximately 275,000 square miles (around 700 miles long and 170 miles wide), and is relatively shallow, with an average depth of only 86 feet below sea level. The only outlet to the outside world is through the Don River and the Volga canal through Russia to the Gulf of Finland in the Baltic Sea. In the pre-Soviet Union period, the Caspian Sea first remained the exclusive joint ownership of Iran and the Czarist Russia, based on the treaties dating back to the Golestan Pact of October 1813, and the Turkmanchai Pact of February 1828. The two pacts, which were the result of Iranian defeats in its wars with Russia, allowed Iran with commercial shipping rights in the Caspian Sea, but reserved the exclusive rights of sailing of military vessels for Russia. However, after the Bolshevik revolution of October 1917 in Russia, these treaties were renegotiated between the former Soviet Union and Iran. A new legal status was specified under the 1921 Treaty of Moscow, which was affirmed in 1935 and later superceded by the Protocol of 1940, which made the Caspian Sea a joint property of Russia and Iran and envisaged equal shipping rights for both parties. Moreover, the Protocol of 1940 earmarked a 10-nautical mile coastal zone exclusively for fishing purposes for both Russia and Iran. Apart from this arrangement, no common demarcation was determined for the Caspian Sea by the former USSR and Iran, as any agreement or contract. An informal demarcation was based on a 1964 Irano-Soviet ‘aerial agreement’ for the determination of the flight information zone, which was considered as the common and accepted demarcation by the two countries. This line connected together the confluence of Iranian and Soviet soil on both sides of the Caspian Sea from Astara to the port of Hossein-qoli.5 However, the regional political geography underwent an extensive transformation after the demise of the Soviet Union in 1991. The implosion of the Soviet Union witnessed the emergence of new states – Kazakhstan, Turkmenistan and Azerbaijan - bordering the Caspian Sea, which countries previously had been part of the Soviet Union. This led to new claimants to the ownership of the Caspian Sea. Caspian Sea thus emerged as a geographical entity, undefined and undemarcated among its littoral states, with each state having different stances, with regard to its future status. This has withheld the development and the utlilisation of the hydrocarbon resources of the Caspian Basin. Initially, Iran and Russia were of the opinion that the Caspian Sea is in fact a ‘special inner sea’ with no natural connection with any other ‘sea’, and as based on the earlier treaties between the Soviet Union and Iran. Moreover, according to Russian and Iranian viewpoints it did not fall under the 1982 UN Convention of the Law of the Sea. They, therefore, argued that the Caspian Sea should legally be treated as joint property by all the bordering states, and the mineral resources, marine life, and surface waters should be jointly shared and manned. However, Russia’s position changed with time. In November 1996, it proposed the division of the sea into sectors with each littoral state having an exclusive jurisdiction over an area that extended 45 miles out from its shorelines, and the area beyond to be jointly shared by all the littoral states. In 1998, Russia altered its position on the Caspian Sea’s legal status, when it signed a bilateral agreement with Kazakhstan, agreeing to divide the Caspian Sea bed along median lines between littoral states, while maintaining joint ownership of the surface waters and air space above the Caspian Sea. Currently, the Russian position is that until a new framework is developed in this regard, the Caspian Sea should be governed according to the 1921 and 1940 regional treaties between the Soviet Union and Iran. In the early years, after the collapse of the former Soviet Union, Iran’s attitude was that the former legal regime of the Caspian Sea, which was based on Iran-Soviet treaties of 1921 and 1940 remained in force. In its opinion, the Caspian Sea is shared by the littoral states and this status should remain unchanged even if the Soviet Union had disintegrated. Iran proposes that every littoral state take possession of 20 percent of the sea bed area, and jointly own surface waters. In fact, Iran’s national interest is better served if the Caspian Sea is divided on equal basis among the littoral states. This is because any proportionate division of the Caspian Sea leaves Iran with just 13 percent of the sea, whereas Russia, Kazakhstan and Azerbaijan would be left with 19 percent, 29 percent, and 21 percent respectively.6 Azerbaijan and Kazakhstan have argued that the Caspian Sea should be treated under Article 122 of the 1982 UN Convention on the Law of the Sea, which defines a semi-enclosed or enclosed sea as ‘a gulf, basin or sea surrounded by two or more states and connected to another sea or ocean by a narrow outlet, or consisting entirely or primarily of the terrritorial seas and exclusive economic zones of two or more coastal states.’7 They are of the opinion that the sea should be divided into sectors according to the median line principle, thereby giving each littoral state the right to exploit resources in its own jurisdiction. Azerbaijan and Kazakhstan positions are prompted by the fact that in their would-be envisaged respective sectors, huge deposits of the hydrocarbon resources are known to exist. Turkmenistan has been more guarded in its position, possibly because of its need to work with Iran on swap arrangements, and thus it continues to vacillate between the Russian and Iranian positions. Turkmenistan and Azerbaijan, meanwhile, have already quarreled over their boundary positions in the Caspian oilfield called Kyapaz by Azerbaijan and Serdar by Turkmenistan. Analysts say that Moscow’s decision to abandon its previous stand that the region is a lake is due to the realisation on her part that its own Northern Caspian sector has a huge hydrocarbon potential. Also Russia’s largest oil company, Lukoil, benefitted from the dispute as a foreign consortium, the Azerbaijan International Operating Consortium (AIOC) which is developing Azerbaijan’s oil fields, decided that giving some stake to a Russian company would stop Moscow’s objections about the legality of Caspian region’s development. Iran, also, has abandoned its previous position of working towards joint ownership of the Caspian Sea bed, and is currently proposing the division of the Caspian Sea into equal parts among the littoral states. However, the year 2002 has witnessed some major developments pertaining to finding a resolution of the legal status of the Caspian Sea. The recently-held meeting in Moscow, from January 23-24, between the officials of the five littoral states was aimed at reaching a consensus on this dispute, which would serve as a forerunner to the finalising of a maritime pact for the upcoming summit meeting of the presidents of the Caspian States – Azerbaijan, Kazakhstan, Turkmenistan, Iran, and Russia. Russia also offered to enlarge Iran’s share ‘from 14 percent to 16 percent’ of the maritime territory. It was also reported that Turkmenistan joined Russia, Azerbaijan, and Kazakhstan in accepting the principle of dividing the seabed by extending a median line from the land frontier. Although Iran is reportedly still opposed, but has signaled readiness to negotiate on how the line might be drawn, and the seabed carved up between itself and Azerbaijan.8 Moreover, during the Russian President, Vladimir Putin’s talks with his Azerbaijani counterpart, Heidar Aliyev, on January 26, both countries decided to forge a partnership and ‘to begin work on drawing a median line between Russia and Azerbaijan.’9 Russia’s interest in proposing a joint ownership of the territorial waters and airspace above the Caspian Sea stems from the fact that free navigation would provide it with the monopoly, to dominate the sea waters as it had done historically. Market and Oil Transportation Factors The Caspian-Caucasus region has the potential of becoming the largest supplier of oil and gas to Asia and Europe, surpassing any region outside the Persian Gulf. However, the biggest problem is that only two countries, Iran and Russia out of the five littoral states have direct access to the outside world through the sea. The three former Soviet states, Azerbaijan, Kazakhstan and Turkmenistan being landlocked ones have to depend on other neighbouring states for egress routes to transport their hydrocarbon resources to the outside world. These egress routes to the outside world have become the new vying factor particularly for the contiguous, regional countries who stand to derive lucrative benefits from pipelines running through their territories. The huge financial potential of the US, and its ambitions to preserve its superpower status also ensures continued US involvement in the Caspian region. Ethnic and Political Conflicts within the Caspian Sea Region The disintegration of the Soviet Union, while it led to the emergence of newly-independent states of Central Asia, Caucasus, and Baltics along earlier historical boundaries, it could not reverse the demographic alterations made under Soviet policy. This led to the rise of ethnicity and the region got mired in secessionist movements, which forms the current day scenario as the backdrop to the larger issue under discussion. For example, the dispute between Armenia and Azerbaijan over the Armenian majority enclave of Nagorno-Karabagh which forms part of Azerbaijan; the secessionist movements of Abkhazia and Ossetia in Georgia; the Chechen freedom movement in Russia, and so forth. The spillover effects of these secessionist movements threaten other countries of the Caucasus and the Caspian regions as well. Iran fears that ties between its Azeri population and their ethnic kin in Azerbaijan (in the northwest), and its Turkmen population and their ethnic kin in Turkmenistan (in the northeast) could pose an irredentist threat to Iran’s territorial integrity. Russia, the successor state of the Soviet Union has a vital stake in the newly-independent states of Central Asia, Caucasus, and the Baltic. Since, all these states have remained part of the Soviet Union till 1991, their historical, political and economic ties, are deeply intertwined as can be seen in the internal political dynamics and foreign policy constraints of the newly-emergent states. Moreover, the increasing interest of the regional countries, as well as the involvement of great powers, like the US has once more turned the Caspian Sea region and the Central Asia into a hot bed of international politics. Russia cannot remain aloof from these developments, and is striving to maintain its preeminence in its former territories. Russia’s Interests in the Caspian Region The countries of Central Asia and the Caucasus Region remained an integral part of Russia’s concerns for nearly two centuries. During the Soviet Union period, Russia, through use of force knit these countries, with their diverse ethnic, religious and cultural backgrounds into its Soviet fabric for the next seventy years. The acquisition of this vast region into the Soviet empire was largely due to Russia’s expansionist policy, in order to mitigate external threats to the Russian heartland. In the process, Russia was able to exploit and benefit from the varied and vast natural resources of this region. When the Soviet Union disintegrated in December 1991, which led to the establishment of eight new-independent states in Russia’s south, their economic importance remained for the wellbeing of Russia, the successor of the former Soviet Union. Initially, the Russian foreign policy remained focussed on its immediate domestic problems and its initial emphasis on the ‘Look West Policy’. In this period, Russia neglected the regions of Central Asia and the Caucasus. Mid-1992 onwards, Russian foreign policy objectives began to include the Caspian Sea Region and Central Asia in its particular concerns. Four major reasons could be attributed to this shift in policy: 1. The first was the realisation that the security of Russia and eight new states on its southern rim were interdependent. The permeable borders of the newly independent states, and the waves of ethnic separatists, revolutionaries, and simple drug smugglers and criminals that poured into the Federation from its southern rim all exposed Russia’s glaring need for security. ‘Three-fourths of the Europe’s heroin supplies comes from Central Asia, and they all first have to pass through Russia.’10 Moreover, the Commonwealth of Independent States on Russia’s southern border have almost no independent defense capabilities, The local officer cadres are virtually all Russian, (with the exception of Armenia) thereby leaving the states incapable of organising any sort of effective armed forces. Consequently if there were ever an outside aggression through the ‘Southern Tier’, as Defence Minister Grachev once complained, ‘the Moscow military district would become virtually the front line.’11 Moreover, the reemergence of communist and nationalist forces throughout Russia, particularly in the Russian Duma, are disillusioned with the West and emphasise closer relations with the ex-Soviet Republics. 2. The second cause is the growing concern over the security of the large number of ethnic Russians, nearly twelve million Russians living in Central Asia and Caucasus in 1992. 3. The third cause for the shift of the policy was the increasing anxiety in Moscow over the perceived Muslim or pan-Turkic threat. 4. Finally, the main motive for Moscow’s determination to regain its influence in the Caspian reflected the rising pressures upon the Russian government from the economic elites and business oligarch in Moscow, to secure the interests of Russian financial groups in any possible energy deal in the area.12 Russia, therefore, regarded the Caucasus and Central Asia as an area of exclusive sphere of influence, and that ‘all the geopolitical space of the former USSR constitutes the sphere of vital interests of Russia.’ The statement emphasised what, in essence, amounts to a Russian version of the Monroe Doctrine. Any regional and international actors in the Caspian are warned that ‘Moscow will vigorously oppose all attempts build up the political or military influence of third countries in the states adjoining Russia.’ 13 However, Russia found itself pitted against the Central Asian and Caucasus countries on the one hand, and external regional players like Iran and Turkey, and big powers like the US on the other hand. The Central Asian-Caucasus countries want to get rid of the stranglehold of Russia. The game has assumed serious dimension and intensity with the discovery of hydrocarbon reserves in the Caspian Sea Basin and the surrounding region, thereby giving the US and other external powers the hope of perpetual supply of hydrocarbons in the next few decades. Regional countries, like Iran and Turkey, are interested in the laying of pipelines through their territories which, apart from bringing them together economically and politically in the shape of a regional grouping, may fetch them transit duties. However, Russia is adamant in maintaining its presence in the region and to maintain its economic, political and military control over them and to make certain that the ex-Soviet states do not slip out of its hands. Russia-Azerbaijan Relations Among the entire Caspian Sea littoral states, Azerbaijan retains the most important strategic position. Zbigniew Brzezinski, former National Security Advisor of US President Carter, and author of a recently published book, The Grand Chessboard, described Azerbaijan as ‘the vitally important "cork" controlling access to the "bottle" that contains the riches of the Caspian Sea Basin and Central Asia.’14 Azerbaijan has 3.5-12.5 bbl and 11 tcf of proven oil and gas reserves respectively, and it is believed that it contains 36-45 bbl and 45 tcf of possible oil and gas reserves.15 Therefore, apart from becoming a potential producer and supplier of hydrocarbons to the world, Azerbaijan could develop as a central producer of oil and natural gas, and a nucleus for the east-west (Baku-Ceyhan-Supsa) pipeline route important to the US and Western oil companies. This sort of a central role eventually leads to economic wellbeing and independence of Azerbaijan from the total Russian domination. On the other hand, Russia views the control of pipeline routes as an important tool for strengthening its influence in the Caspian Sea region, as well as for the lucrative benefits it has to offer. Therefore, to forestall building of any pipeline route which bypasses its territory, Russia is continuously trying to influence Azerbaijan’s domestic and external policies. Moreover, Russia has consistently used the Nagorno-Karabagh conflict between Azerbaijan and Armenia to bring pressure on the former to toe Russia’s line. Moscow supplied Armenia with planes, tanks and advanced weaponry to fight against Azerbaijan. Thus, each time Azerbaijan’s government attempted to forge its own relations with Iran, Turkey or the United States, Russia was quick to respond with political or military pressures, either by supporting a pro-Russian coup, or by supplying and arming the Armenian forces. In February 1995, Russia created a regional air defence command in Armenia for the Caspian Region which was jointly run by the Russian and Armenian forces. The situation further deteriorated when Russia deployed S-300 surface-to-air missiles in Armenia in January 1999. Azerbaijan responded in February 1999 by asking for the deployment of US or NATO (specifically Turkish) forces on its soil to forestall any agression by either Armenia or Russia. Moreover, There were reports indicating that the mission of guarding the proposed Baku-Ceyhan or Baku-Supsa pipelines - from Baku, Azerbaijan, to the ports of Ceyhan (Turkey) and Supsa (Georgia) and passing through Georgian territory - would be assigned to the US Air Force base at Incirlik, Turkey.16 As observed by Mr. Timothy L. Thomas, a US scholar in his article, ‘this increased US and NATO attention towards the region and prompted one Russian General to claim that the greatest threat to Russia is not China or Islamist, but the possibility of Desert Storm II starting on the shores of Caspian over economic issues.’17 Another source of controversy between Russia and Azerbaijan was the fate of the Gabala radar station built by the Soviet military, to track the launching of any Intercontinental Ballistic missiles by any country in the Southern Hemisphere. After the Soviet collapse, Azerbaijan allowed Russia to continue using the station, which it considered a key part of Russia’s early warning system, but the station’s dubious legal status has been a sore point in their bilateral relations since the demise of the Soviet Union in 1991. Another contentious issue between Azerbaijan and Russia is the status of the Caspian Sea and the jurisdiction of the littoral states. However, since 1996, Moscow has made a grand turnabout and has shown willingness to divide the sea, but only if the surface waters remain jointly owned. Finally, Russia and Azerbaijan’s positions on pipeline routes continue to differ. Currently, Azeri oil and gas flows through Russian pipelines, like the Baku-Novorossiik, Northern Route, and Baku-Novorossiisk, Chechnya bypass with link to Makhachkala in Dagestan, Russia. However, Azerbaijan continues to find more alternative routes for the transportation of its crude oil to the outside world. The reasons being that; firstly, Azerbaijan wants to get rid of Russia’s dictating policies over oil and gas transportation through the above-mentioned routes; and secondly The above-mentioned pipelines are old and their carriage capacity is less (100,000 and 120,000 bbl/d respectively) Therefore, Azerbaijan continues to favour various pipeline routes, like the Baku-Ceyhan (main export pipeline), upgradation of the existing Baku-Supsa (AIOU’s ‘Early Oil’ western route), and building a pipeline through Iran from Baku to Tabriz. These attempts by Azerbaijan are effectively blocked by Russia, by keeping the Nagorno-Karabagh dispute simmering between Azerbaijan and Armenia, and by extending military and political support to the latter to stand up to Azerbaijan. Russia is thus successful in blocking any attempt to build the pipeline through any regional country which avoids traversing the Russian territory. Russia, in turn wants Azerbaijan to transport oil through its Novorossisk pipeline route to the Russian port of Black Sea, which could give it a considerable say over Azerbaijan’s economic and political future. Following the post-September 11 terrorist attacks in the US, followed by increasing US military presence in the Central Asian region, and offers of provision of airbases by Georgia to the US, Russia has intensified its efforts to sustain its influence in the strategically important Caspian Sea region. Following the January 23-24, 2002, meeting held in Moscow and organised by Russia to discuss the legal status of the Caspian Sea, among the Caspian Sea littoral states, the Russian President Vladimir Putin and his Azeri counterpart, Heidar Aliyev, held talks on January 26, 2002, and agreed to forge a ‘strategic partnership’ as an agreement over a long-stalled deal on dividing sectors of the Caspian Sea by ‘drawing a median line between Russia and Azerbaijan’.18 Azerbaijan also renegotiated an agreement to rent out Gabala radar station to Russia, who would pay $7 million in annual rent, and to share the radar-based information received by the Gabala radar station with Azerbaijan.19 Azeri President Aliyev also asked the Russian Foreign Minister, Igor Ivanov to play a ‘decisive’ role in the settlement of Nagorno-Karabagh’ dispute between Azerbaijan and Armenia. Russia-Georgia Relations Any pipeline, if it is to avoid Russia and Iran, has to pass through either Georgia or Armenia. Since the present state of war between Azerbaijan and Armenia over Nagorno Karabagh makes it impossible for any oil pipeline to traverse through Armenian territory in the near future, Georgia seems to be the only remaining option for an egress route for the Baku-Ceyhan ‘Main Export Pipeline’ from Baku in Azerbaijan, to the port of Ceyhan in Turkey via Georgian territory. Initially, after attaining independence, Georgia refused to join the CIS despite insistence from Russia, and instead preferred to pursue an independent national policy under President Gumsakhurdia. This antagonised Russia, who in turn overtly provided military support to the Abkhaz rebels when they declared independence from Georgia in July 1992. The nature of Russia’s involvement was clearly manifested in official statements of the time. The Russian Deputy Foreign Minister, Boris Pastukhov, delivered an ultimatum in August 1992 to Georgia’s government by saying that ‘we will not let you (Gerogia) win the war in Abkhazia’.20 Russia’s pressure finally paid off, when Shevardnadze, former foreign minister of the Soviet Union, replaced President Gumsakhardia. Under his rule, Georgia joined the CIS, and also granted Russia military rights to bases in Georgia. Russia has also kept the Abkhazian conflict simmering to ensure Georgia’s continued dependence upon its good offices. To date, a 1500-strong contingent of the Russian peacekeeping forces remains stationed in Southern Abkhazia. However, despite its troubled internal situation, Georgia is aggressively campaigning for a pipeline route through its territory, either to carry Azeri oil directly to Turkey, and upgrade the existing pipeline to Supsa, the Georgian seaport on the Black Sea. However, Russia is still opposed to Georgia’s desire for a pipeline route for Azerbaijan’s oil through its territory, either to the Ceyhan port of Turkey, or its efforts to upgrade its existing pipeline to Supsa, like the Baku-Supsa, AIOC ‘Early Oil’ western route, and Gardabani (Azerbaijan)-Batumi (Georgia), and Khashuri-Batumi Pipeline. Russia wants Azerbaijan’s oil to be exported through Russian territory to the port of Novorrossisk. The assassination attempt on Shevardnadze’s life and resumption of fighting in Abkhazia in May 1998 were believed to be the Russian efforts to prevent a Baku-Supsa pipeline from materialising. Georgia believes that Russia wants instability in Georgia, so that Georgia is not selected as the route for Azeri oil exports.21 Russia has been able to extract numerous concessions from Georgia by exploiting the Abkahzian dispute. These include rights to a number of military bases in Georgia; stationing of a Russian peacekeeping force to maintain ceasefire between the Georgian armed forces and Abkahzian rebels; a Russian naval presence along Gerogia’s extensive Black Sea coast; stationing of Russian troops on the border with Turkey. It is worth noting that the Russian naval presence along Georgia’s Black Sea Coast has virtually given Russia a guaranteed stake vis-à-vis its economic interests with regard to any future pipeline that traverses through the Georgian territory. Russia-Kazakhstan Relations Among the entire Caspian Sea’s littoral states, Kazakhstan is believed to have the largest hydrocarbon resources. Figures point to proven reserves of 10-17.6 bbl of oil and 65-70 tcf of natural gas, with a possible reserves of 102-110 bbl and and153-158 tcf of oil and gas deposits respectively. Kazakhstan’s dependence on Russia is extremely great owing to a large number of ethnic Russians constituting approximately 35% of the total Kazakhstan’s population and mainly concentrated in the northern and western provinces of Karaganda and Semipalatinsk bordering Russia. Moreover, the northern and western part of Kazakhstan are the major agricultural area, and also contains much of the Kazakhstan’s oil. Moreover, these ethnic Russians exercise much influence over Kazakhstan’s foreign and domestic policies. Since Kazakhstan’s economy is dependent on skilled Russian personnel, and most of Kazakhstan’s grain comes from the north, and 55% of its imports comes from Russia, therefore the recent decision to move the capital from Almaty to Akmola, closer to the Russian part of the population was the most obvious sign of such ethnic policy considerations.22 Any policy which tends to alienate ethnic Russians would increase the possible threat of their secession from Kazakhstan to Russia, and thus the Kazakh government lives in a constant anxiety over this possible threat. Hence, any Kazakh government is faced with the daunting task of carefully balancing Kazakh and Russian interests in its domestic and external policies. Therefore, after attaining independence in December 1991, Kazakhstan became the first country to sign the Treaty of Friendship, Cooperation, and Mutual Assistance in May 1992, under which it gave Russia joint rights to Kazakhstan’s military bases, test sites, and other military infrastructure within Kazakhstan. Although Kazakhstan has tried to move away from the Russian sphere, it has faced strong opposition from Moscow. The fact that Kazakhstan’s oil export routes are solely through Russia – Atyrau-Samara oilpipeline, Caspian Pipeline Consortium (CPC) – make it possible for the latter to exert enough influence to extract benefits from the former. Although Kazakhstan has tried to find alternative routes which bypass Russian territory, like the Kazakhstan-China pipeline; Kazakhstan-Turkmenistan-Iran pipeline; South Pipeline (Central Asia Oil Pipeline) passing through Afghanistan to Gwadar in Pakistan; and Trans-Caspian (Kazakhstan Twin Pipelines), but all these efforts were dashed, either due to ethnic-political disputes raging within the region through which these pipelines were supposed to pass, or due to either Russian or US manipulation. For example, when in 1994, Kazakhstan tried to make an independent deal with Western companies regarding its Tengiz field, Russia demanded upwards of 20 percent of the Chevron revenues and 15 percent of the British-Italian deal, and in pursuit of its goal temporarily cut off most of Kazakhstan’s oil flow.23 Also on February 10, 1995, Russia threatened to block export of Karaganchak oil and gas, and to purchase the field’s output at cheaper rates compared to world prices, unless Gazprom was included in the projects.’24 Moreover, Moscow halted payment for coal, mined in Kazakhstan’s Karaganda region, which it used to acquire on credit, thereby obstructing capital flow to the new state. Russia also reduced Kazakhstan’s fuel supplies when Kazakhstan was considering a trans-Caspian pipeline to avoid total dependence for its oil exports upon Russia. Under intense pressure from Russia, Kazakhstan signed a deal with it in 1998, for the division of Caspian Sea bed into territorial sectors along the median lines, while maintaining joint use of the surface sea waters. Russia-Turkmenistan Relations Geographically, Turkmenistan is not contiguous with Russia. Russia, therefore, relies on economic measures to impose its will on Turkmenistan, which is politically the most stable country of the Commonwealth of Independent States. The stability is attributed to the Turkmen President, Supar Murad Niazov, who is a virtual dictator, having banned all political parties and suspended democratic institutions. Russia has no military presence in Turkmenistan as well, due to the policy of neutrality practiced by it. However, Moscow’s economic interests are often in direct conflict with Turkmenistan. Turkmenistan is entirely dependent on Russia’s state-owned gas giant, Gazprom, for its gas exports, except for a small pipeline it runs to Iran. This gives Gazprom enormous leverage over the country, which from time to time makes unusual demands to the Turkmen government. Since 75%-80% of its total export and foreign exchange earnings come from export of oil and gas, this has made Turkmenistan very vulnerable to Russian pressures. Turkmenistan is looking for alternative routes to decrease its dependence over Russia, and has proposed pipelines to the Arabian Sea via Pakistan and Afghanistan, another pipeline to the Persian Gulf via Iran, and a trans-Caspian pipeline via Azerbaijan to the ports of Supsa or Ceyhan. So far, these remain proposals. Hence dependence over Russia for pipeline routes continues. On the Caspian Sea status, Turkmenistan’s position is ambivalent. Moreover, its dispute with Azerbaijan over the possession of several oil fields in Caspian sea also remains unsettled to date. Russia-Turkey Relations In 1991, when the Soviet Union was disintegrated and new states emerged, Turkey found an opportunity to resuscitate its old historical, ethnic, religious, cultural and linguistic ties with all the Central Asian States, except Tajikistan, in the name of pan-Turkism. Turkey’s interests are to establish strong political and economic ties with the Caucasus and Central Asian states, as well as secure transit revenues and access to oil and gas fields. Turkey aims at developing the Caspian and Central Asian markets for her goods, and in the long run to become a major investor in the region. Moreover, Turkey’s major preoccupation is to reduce its dependence upon Arab-Middle Eastern oil.25 Russia feels threatened by the pan-Turkism promoted by Turkey in the region of the Caucasus and Central Asia, despite the former’s close historical, political and economic relations with Central Asian and Caucasian states. Presently, conflicting national interests keeps Russia and Turkey on opposite sides. In the Nagorno-Karabagh dispute between Armenian and Azerbaijan, Russia supports Armenia, while Turkey supports Azerbaijan. Turkey’s promise to send in its troops to help the Azeri armed forces in the wake of any Armenian attack on the Azerbaijan’s enclave of Nakhichevan, elicited a powerful counter-threat from Russia, as a warning by the commander of CIS joint forces, Marshal Shaposhnikov, who stated that ‘Turkish intervention could lead to another world war.’26 Another point of major differences between Russia and Turkey is over the proposed pipelines for carrying Caspian Basin oil and gas to the outside world. While Russia prefers the Novorossisk route, Turkey favours Baku-Ceyhan pipeline route. However, in view of the financial cost of the Baku-Ceyhan pipeline, and the coupled with ongoing territorial disputes in the region, the pipelines are to traverse, like the fighting in Nagorno-Karabagh, Abkhazia and the Kurdistan areas in northern Turkey. Presently, it raises questions of the viability of Ceyhan pipeline route in the current conditions of conflicts and instability. However, since Turkey is not geographically contiguous to the Caspian Sea region, and its pan-Turkism has not evoked much enthusiasm in the Turkish-speaking Central Asian countries and Azerbaijan, its role is limited as compared to that of Russia. Russia-Iran Relations Russia-Iran relations are marked by the syndrome of cooperation at one moment and competition at the next. While mutuality of interests exist in many fields relating to Caspian Sea’s geopolitics, there are some fields in which there is a competition between the two countries. Russia and Iran are the only two regional countries bordering the Caspian Sea which have direct outlets to the seas, and which could provide economical transit routes for the oil and gas pipelines from the Caspian Sea Basin and Central Asian States to the outside consumer markets. Moreover, both countries have well-established oil and gas sectors, and both rely on the export of their own oil and gas, which is a major contributor to their GDP. Both countries view Washington and the West with suspicion, which has increased since NATO’s involvement in the Balkans. There is an informal understanding or mutuality of interest among Russia, Armenia, and Iran to thwart any attempt made by the US, Turkey and Azerbaijan aimed at laying any oil and gas pipeline which does not include them. Thus to counterbalance Azerbaijan, Iran has improved its relations with Armenia, which serves to counterbalance not only Azerbaijan’s influence but that of Turkey as well, even though Armenia is predominantly a Christian and Azerbaijan a Muslim country. Moreover, under the Primakov Doctrine (named after former Russian Prime Minister, Primakov), Russia’s current policy is aimed at strengthening Tehran as part of the global balance strategy, which is aimed at creating a ‘Eurasian counterbalance to the Euro-Atlantic zone’.27 Iran’s interests in the Caspian Sea region are to have an access to the Caspian and Central Asian oil by providing the most favourable and cost-effective transit routes for the world consumer markets through the Persian Gulf. This would benefit Iran economically by earning foreign exchange through transit duties. Moreover, it would also help Iran to establish close political, economic and trade ties with the region. Thus a combination of oil and gas transit and trade routes could establish Iran as a regional power in the Central Asian and Caspian region, and would strengthen Iran’s position in the Gulf vis-à-vis Saudi Arabia and Iraq. Lastly, and importantly is the pan-Islamic drive pursued by Iran in the newly-independent Muslim states, as per the Iranian model of the Islamic revolution, or a cleric-dominated governance. Although Russia and Iran are generally aligned together against perceived Western interests in the Caspian Sea region, but misperception based on conflicting interests in the Trans-Caucasus and Central Asia does exist. Apart from countering Islamic movements in predominantly Muslim Central Asian states, by providing physical, military and economic assistance to the governments of the Central Asian states, Russia has successfully thwarted attempts by the Caucasus and Central Asian states’s efforts at building any pipeline through Iran. These Russian efforts, coupled with strong opposition from the US has made the possibility of any future pipeline route through Iran difficult, if not impossible in the near future. Major differences exist with regard to the legal status of the Caspian Sea following the demise of the Soviet Union, with which Iran had earlier signed its various treaties vis-à-vis the Caspian Sea resources and its use. Russia has left Iran in the lurch by switching from an earlier position of joint ownership of the Caspian Sea bed to the demarcation of the Sea bed into sectors proportionate to the size of their coast bordering the Caspian Sea. However, Iran’s dependence on Russia’s military hardware and their cooperation in peaceful nuclear energy sector is another reason for Iran’s policy of avoiding a direct confrontation with Russia on matters relating to Caspian Sea’s geopolitics. Russia-China Relations China and Russia are the two major powers immediately bordering the Central Asian states. Although both remained adversaries during much of the Cold War era, but the post-Cold war era witnessed a fostering of bilateral relations between Russia and China from friendly relations to a ‘strategic partnership’. However, the post-Cold War era witnessed a much weaker Russia, being reduced from a super power to the level of a regional power and a burgeoning China, maintaining a rapid pace of development through market reforms initiated by Deng Xiaoping in the 1980s. The mutual interests of China and Russia converge in Central Asia, and are based on common and political interests and threat perceptions with regard to the region. This helped them in establishing the Shanghai-5 in April 1996, during a summit meeting held in Shanghai, and attended by the Russian and Chinese Presidents apart from three Central Asian head of states (later named as Shanghai Cooperation Organisation in June 2001). The relations further improved from friendly to a ‘strategic partnership’ by the signing of the ‘Treaty of Good Neighbourliness, Friendship and Cooperation’ between the Russian President Vladimir Putin and his Chinese counterpart, Jiang Zemin in July 2001. Both, Russian and Chinese foreign policies are driven by the consideration of keeping the US away from gaining a foothold in Central Asia. Both are also concerned about Muslim radical movements in their territories and around their borders in Central Asia and Caucasus. While China is concerned about the Uighurs in its Xinjiang province, Russia remains mired in Chechnya, and its spill-over effects into the neighbouring Dagestan and other Russian territory. Moreover, the constant threat of a Muslim insurrection in Central Asia looms ever larger, with radical Islamic movements being waged in Uzbekistan and previously in Tajikistan. Russia, therefore, finds its options limited and to counter the instability in Central Asia, it has to bring in China as a partner. The recent institutionalisation of the Shanghai Cooperation Organisation demonstrates that Moscow and Beijing hope to be the decision-makers in Central Asia, possibly with the exclusion of Turkey, Iran and the United States.28 Apart from that the Chinese experts predict that China will have to import 100 million tons a year of oil by the year 2010, and other minerals like iron, steel, aluminum, sulphur etc., to maintain its economic development. They believe that Russia would be the main source of these imports, either through its Siberian oil fields or transporting Central Asian oil, especially Kazakh oil through pipelines leading from Irkutsk in Russia to China. Apart from that Chinese dependence on Russian military hardware is another important reason which holds back China from interfering in Russia’s ‘near abroad’. Between 1991-1996, Russia sold weapons to China worth an estimated $1 billion per year, which doubled to $2 billion during 1996-2001. It is also reported that the two had signed a military sales package in 1999 that between 2000 and 2004, Russia would sell weapons to China to the tune of $20 billion.29 Although China is expanding its relations with Kazakhstan, it only accounts for 7.4 percent of its exports to Kazakhstan, compared to Russia’s 44%.30 Kazakhstan and China also signed an agreement in September 1997 to build a pipeline from Atyubinsk (Kazakhstan) to Xinjiang (China), carrying 0.4-0.8 mbl of oil to China’s western provinces, but the feasibility study on the project was halted in September 1997, when Kazakhstan expressed its inability to supply oil during the next ten years. As regards a pipeline from Turkmenistan to China, it has to go through at least one other state, and hence this could hinder the smooth construction of the pipeline. However, China has signed an agreement with Kyrgyzstan in the year 2001 for the revival of old ‘Silk Route’, which could ultimately be extended to other countries, thereby linking China with Europe. Presently, China has maintained a policy of caution towards Central Asia, but the interests of China and Russia will likely come into conflict, since China cannot ignore either the huge hydrocarbon potential of the region, or the vast market this region has for the Chinese goods. Russia, on the other hand, remains concerned about the growing Chinese economic and military power, and the future possible incursion of the Chinese into the underpopulated regions of Russian Far East and Siberia.31 A recent statement by Russian Duma’s parliamentarian, Vladimir Koptev Dvornikov, is worth mentioning, who expressed appreciation of Russian President Putin’s policy, which takes into account that ‘in the 21st century, Russia’s main and dangerous competitor will be China, as it will project its (demographic and economic) pressures on the Russian border.’ He further added that Putin’s visionary policy will be ‘to allow Russia to withstand Chinese pressure by developing an alliance with Japan, while relying on already established ties with the West and NATO.’32 Moreover, Russia may like to equip India with the military hardware to stand up to China, to counter China. Russia and the US Russia views the US as the biggest contender to its deep-seated political influence in the Caucasus and Central Asian region. Oil is evidently the key factor. As the world’s leading oil importer, the US has a persistent interest and stake in the control of the world’s major oil-producing regions. The United States has an interest in Caspian and Central Asian oil reaching the world market and in investment opportunities for the US oil companies. To acquire an economic and political foothold in the Caucasus and Central Asian regions has been and remains a major foreign policy objective for the US. However, in pursuit of its interests, the US interests come in direct confrontation with the Russian aspirations and objectives. The US policy towards Russia has been oscillating between strengthening Russia to become more democratic internally, and containing any Russian moves to regain the kind of competitive military strength it had during its Soviet Union days. Despite its massive domestic problems, Russia remains a strong contender to the sole super power’s unilateralism and current domination in international affairs, particularly manifested in the coalition the US led for the war against terrorism in Afghanistan. For the US, the Caspian Sea region is of vital importance, in terms of its potential as an alternative energy resource. Although US imposed sanctions on Azerbaijan in 1992, under Section 709 of the Freedom Support Act, owing to the human rights abuses committed by the latter in Nagorno-Karabagh, following the formation of Azerbaijan International Operating Company (AIOC) led by the American oil company, Amoco (now British Petroleum) the US policy towards Azerbaijan began to change, with regard to protecting the economic interests of American business and for securing access to the oil and gas resources of the Caspian Sea region. The AIOC desire to build the Baku-Ceyhan pipeline was in consonance with the US interests, since it wanted to have an oil pipeline that bypasses Russian territory. The Baku-Ceyhan trade route could also become the conduit for Kazakhstan and Turkmenistan oil, in the near future. Russia, on its part, is apprehensive of the US policy regarding pipelines that bypass its territory, and wants future pipeline route to traverse its territory, thereby guaranteeing Russian hold over the lucrative possibilities of region’s oil and gas resources. The US would also want the Caucasus and the Central Asian States to be politically stable and economically viable, so that they could act independently of Russia, and become more in line with US economic and political interests. However, both Russia and US continue to cooperate on some areas of mutual interest, such as: the containment of Muslim extremism/militancy, terrorism, check on nuclear proliferation, control of small arms and drug trafficking, stability of the region, protection of foreign investment, and so forth. Russian Foreign Policy: Future Directions in the Caspian Region American oil conglomerates are striving to push Russia from the zone of its traditional influence and domination in the Caspian region, aiming to capture the oil resources of the region. Even back in October 1992, Sergei Karaganov, a member of the Russian Presidential Council, introduced the term ‘post-imperial policy’ and declared that ‘Russia is compelled to play an active post-imperial role … Russia must return to its traditional role, bribe local princes, send troops to save someone, and so on. It is an ungrateful job, but it is our history and we partially ourselves led us to it.’ 33 Currently, two dominant thought processes dominate the foreign policy establishment in Russia. While, the first sees a reassertion of Russia’s status that existed in the Cold War period, but recast to align it under the imperatives of globalisation, the second line of the pragmatists believes in constructive engagement and cooperation with the Caspian region states, and other regions of the world for the reassertion of Russia’s more active role, and does not support pressure on its Southern neighbours as the means to make it a zone of Russia’s special interest. These pragmatists mainly comprise the economic elites, specially the oil tycoons of Russia and some members of the government. Russia, which is currently embroiled with host of domestic problems, finds its power seriously restricted for influencing the course of action in the Caspian Sea region, the Central Asia or any other part of the world. Any attempt by Russian political circles to disallow the participation of Western companies in developing Caspian resources would mean that these reserves would remain untapped for longer, and obstruct the development of the Central Asian states on the strength of their own resources, and thus be in a position to overcome their current economic crisis and take their societies towards socio-political modernisation. Russia would need to realise that any prolonged political or economic instability in the states of the Caspian region and of Central Asia, would have firstly a profound impact on Russia itself. Although, Russia has been successful in retaining its military presence through stationing of its armed forces in the Caspian and Central Asian states and securing access to some important military bases. Moreover, it has also secured the manning of the borders of these states with the neighbouring countries. However, Russia’s war in Chechnya has seriously damaged the reputation of Russian armed forces and the credibility of its foreign policy’s moves towards constructive engagement. It has demonstrated that Russian foreign policy still retains the underpinning of the use of force for the attainment of objectives better dealt with through diplomacy and negotiations. It does not necessarily guarantee satisfactory solutions to problems that Russia faces in volatile and unpredictable regions. However, Russia’s place in the Caspian region is ensured not only because it is one of its littoral states, but for reasons of history, and the fact that it offers an important transit route for Central Asian states. These countries also share interests in combating terrorism, drug-trafficking, crime and ‘threats of Islamic fundamentalism’. Moreover, Russia has the logistical and military resources to extend help in these areas. Given its recent pre-eminent role in the internal affairs of these countries when they were Soviet satellites in the recent past, Russia also has the benefit of more penetrating insights as how to convert these past linkages into constructive engagement in the future. References
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