Geopolitics of South Caucasus

By: Nika Chitadze. Ph.D. 

President of the George C. Marshall Alumni Union, Georgia - International and Security Research Center

Published by Partnership for Peace Consortium of Defense Academies and Security Studies Institutes. Garmisch-Partenkirchen, Germany. April, 2007

Introduction:

Over the centuries countries strive to gain geopolitical importance on the world map. Strategic location and resources is understood to bring development and prosperity.  However strategic location and Geopolitical importance also brings foreign interest that can both turn into supportive and destructive force for the region.

South Caucasus can serve as a perfect example of what geopolitical location can bring for the region: an opportunity for development and stabilization but also threat of insecurity and conflicts. 

Historically, Central Asia and the Caucasus have formed a strategic location on the Silk Road, through which people and goods have moved between Europe and Asia for thousands of years. However due to the region’s strategic location and internal resources, the south Caucasus has always been a target for foreign invasions.

Over the last century, the region was under the influence of Russia. Being part of Soviet Union, the region was structured and exploited in a way to match Russia’s interests. Now as the Soviet Union collapsed and South Caucasus countries gained independence, new independent countries try to seize their geopolitical importance and divert this instrument to gain security and development. The region has managed to quickly attract the attention of USA, EU and other international players. However, Russia still remains as the main influential neighbour. These countries’ most profound instincts, threat perceptions and strategic interests are still influenced by Russia. However west capital and interest is now associated with security and a chance of economic development. 

In this research, we will try to highlight important actors in the Caucasus region and draw the emphasis why the region has emerged as strategically important both for west and Russia. And finally what is the impact that the foreign interest has in the region.

Georgia, Armenia, and Azerbaijan, and their "frozen" conflicts of Abkhazia, South Ossetia and Nagorno-Karabakh comprise the south Caucasus. Additionally, the leverage of regional powers, such as Turkey and Iran, and of global powers, such as the United States, Russia and China, is part of the power configuration in the region.

International organizations are also involved in the game. At the regional level, there is the Black Sea Economic Cooperation (B.S.E.C.), the Black Sea Force (BLACKSEAFOR) the Caspian Sea Force (CASFOR), the cooperation between Georgia, Ukraine, Azerbaijan and Moldova (G.U.A.M.) and the Commonwealth of Independent States (C.I.S.). At the global level, the North Atlantic Treaty Organization (N.A.T.O.) and the European Union also exercise political weight in the South Caucasus.

About the region

South Caucasus has actively emerged in the world politics after 90es. The new geopolitical situation as it developed can be characterized as following

·         A process of Russia retreat from the Caucasus and Central Asia in the economic, political and military fields

·         An increasing involvement by the external actors

·         Increased competition between Russia and external state actors and foremost the USA

Former soviet south Caucasus countries have suffered after the collapse of Soviet Union due to the new political and economic environment to transfer and adjust. All of the region’s resources of raw materials, energy and markets was shaped in soviet style while capitalistic world sets different rules of the game. Transition period of economy, politics and mentality turned out to be very difficult on the ground of ongoing frozen conflicts and Russia’s gradual aggressive involvement in the region.

The south Caucasus requires enormous investments to rehabilitate, modernize, and increase their capital stocks.

The essential problem for the Armenia is to resolve its conflict with Azerbaijan over Karabakh and improve relations with Turkey in order to escape from economic isolation and fully realize its regional potential in terms of trade and resources of the region.

Georgia and Turkey are the main regional partners for Azerbaijan however conflict with Armenia creates insecurity for the state to fully benefit from its resources that is beneficial for hole region.  Azerbaijan possess great transit potential but it needs serious investment and secure environment to realize its potential.

Georgia shares the same fate as Azerbaijan, while the country itself doesn’t posses reserves of oil. It serves as a transit country and link to the central Asia.

The region can seriously benefit from Caspian energy reserves both politically and economically. However Caspian energy reserves may also turn into a threat to region due to the Russia’s aggressive involvement in the region to keep its political and economic monopoly and influence over the region and its resources and potential. 

The Caspian Pipeline Consortium and Blue stream are the main factors of Russia’s strategic interests. However the region, through the help of other international actors(mainly US) anaged to construct other important pipelines also : Baku-Supsa oil pipeline since 1999, Baku Tbilisi Ceyhan oil pipeline,  Baku Tbilisi Erzrum gas pipeline and Baku Batumi pipelines.

The energy resources of the Caspian region represent a great opportunity for the future development and stability of the region. Direct investments of the big companies keep a hope that big countries will secure their capital and  don’t sacrifice the region for instability and conflicts.

Energy security and South Caucasus

The key interest of the western world in region is their quest for energy security. The United States, the European Union and N.A.T.O. are concerned about energy security in a time when Russia is one of the influential importing country. Furthermore Russia with his energy policy in Ukraine and Georgia has proved to be not reliable partner. 

With this regard, international actors seek for alternative resources. South Caucasus is one of such. The Caspian Sea region (the South Caucasus and Central Asia) contains about 3-4 percent of the world’s oil reserves and 4-6 percent of the world’s gas reserves. While the Caucasian share of global oil is relatively low, uncertainty over the reliability of Persian Gulf and Russian supplies, makes Caucasus strategic place.

A number of states and organizations are making efforts to end Russia’s near monopoly on the transport of energy supplies in the Eurasian region by creating and supporting alternative pipeline routes. Such pipelines are: Atasu-Alashankou oil pipeline (China and Kazakhstan), the Baku-Tbilisi-Ceyhan (B.T.C.) and Baku-Tbilisi-Erzurum (B.T.E.) pipelines (Georgia, Azerbaijan, Turkey and Kazakhstan) and the Nabucco gas pipeline (European Union, Turkey, Bulgaria, Romania, Hungary and Austria) .

Energy projects have a strategic importance of Azerbaijan and Georgia. Azerbaijan’s leadership in oil and gas leads towards economic development while the BTC and BTE can serve a Georgia to get independent from the Russian resources.

 The US geostrategic interests in the region remain crucial factors in defining U.S policy towards the region and energy is central to the US policy for the South Caucasus. Furthermore US and west keeps supporting Georgia to serve it as a lasting example of the victory of democracy in the region.

Europeans tend to consider the South Caucasus from the economic energy and transit perspective and has very newly formulated more compressive approach towards the region.

EU values the Caucasus as part of the  TRACECA (Transport corridor Europe Caucasus Asia program) for the development of a trade corridor from the Europe to Central Asia and the INOGATE (Oil and Gas Transport to Europe program) that is aimed at rehabilitating and modernizing regional gas, oil and refined products transportation systems

Conflict regulation perspectives in the Caucasus

International Actors in the region do influence the security situation of the Caucasus and try to effect frozen conflicts.

Stability in the Caucasus is a vital requirement for the uninterrupted transport of Caspian oil and gas. Washington wants a stable South Caucasus region for its investment in the energy sector, as well as for its geostrategic interests in the region. The separatist regions in Georgia -- Abkhazia and South Ossetia -- have become areas of the major players’ interests in the region. Russia has used the conflicts as political leverage with the West.

The objectives are clear: the West and Russia both have the aspiration to have influence over South Caucasus. However, Russia is loosing its strength in the region. To oppose its withdrawal from the region, Russia tries to keep the so-called "frozen conflicts" active.

These conflicts are harmful to the economic development of the South Caucasus however their resolution seems to be frozen until the time when Russia and west finds a consensus, or until the time that these countries are consolidated into Western structures.

The picture of Nagorno-Karabakh conflict between Armenia and Azerbaijan is the same. The regulation of this conflict also requires Russia, the United States and the European Union to find a compromise. In the region Azerbaijan possess the biggest geopolitical importance due to the oil and big investments. This incentive pushes the actors to be proactive in resolution of the conflict however just like the Georgian separatist regions; the main condition for a solution is cooperation with and by Russia. 

Why do U.S.-Russian Compete for Caucasus and the Caspian Sea

South Caucasus and the Caspian have the geostrategic importance of the region as a corridor from Europe to Central Asia, as a bridgehead to control and pressure Iran, and also because of the energy resources and the war on terrorism, are the main reasons for the U.S. presence in the region. The United States, with its heavy military involvement in Iraq and Afghanistan, and following the switch of Uzbekistan to the Russian camp, is apt to seek strong points in the Caucasian area in support of its global geo strategy.

The recent involvement of the United States might upset the precarious power balance in these regions, which has evolved after the disintegration of the Soviet Union. This is especially true now that Iran and Russia, the greatest powers in the region, feel threatened. Russia regards the South Caucasus as its traditional backyard of influence and counters increasing involvement in the area by the West. The United States has chosen Azerbaijan as its most important ally in the Caspian basin and has developed a program of intense military cooperation. Russian military analysts argue that the situation is reminiscent to the U.S. - Georgian Train and Equip Program, which since its start in 2002 has provided Georgia with a capable, well-trained and equipped army. Russian analysts fear that this soon will be the case with Azerbaijan as well, thus depriving Russia of all its means of influencing Azerbaijan.

U.S. military cooperation in the South Caucasus and the Caspian seems to evolve smoothly. Although the United States gives the impression of being reluctant to make its military presence and activities public, it is clear that it is effectively defending its interests in the region, including its energy security. In addition to U.S. military support, Azerbaijan’s increasing defense budget will also contribute to strengthening its military power. The question remains whether the United States will be able to convince other states, such as Kazakhstan, to join this military cooperation.

Russia is seriously interested in preserving its regional authority in Caucasus. But with a growing U.S. presence, it will need to form alliances. A Russian-led CASFOR maritime force, including other states in addition to Iran, still seems far in the future. A cause of potential conflict is the unclear legal status of the Caspian. So far, the littoral states have not reached an agreement on dividing the Caspian Sea. Near armed clashes have already occurred between Azerbaijan and Iran over disputed oil fields. Tensions are likely to continue as long as the legal situation of the Caspian Sea remains in dispute. Because of the geostrategic and economic interests at stake, and an apparent failure to come to a consensus from both sides, the competition between Russia and the United States in the Caucasus and the Caspian Sea is likely to be prolonged in the years ahead.

A Comprehensive Role for the E.U. in Conflict Resolution

The separatist areas of Abkhazia and South Ossetia form a hindrance for further integration of Georgia into the Western architecture. Although Georgia is eager to see the Russian peacekeepers withdrawn, conversely Russia is keen to continue its presence to maintain influence in Georgia. Nor will Russia accept its forces to be replaced by those of N.A.T.O. in the separatist areas, which is another objective of the Georgian government.

Recent statements by the European Union display a more active policy in the South Caucasus. Conversion of statements into an active security policy could be established by forming a military mission to be deployed in Abkhazia and South Ossetia, not to replace the Russian peacekeepers, but as an additional asset to promote stability and reconstruction. Such a mission would be beneficial for the stature of the European Union, to prove that it is capable of conducting crisis management missions. Furthermore, this would adhere to the call of the Georgian government to introduce Western peacekeepers in the disputed areas.

Russia may oppose a competitive peacekeeping force, but it will have a difficult time openly disapproving of such an E.U. mission since it wants to maintain good relations with the European body and also because it has no grounds to feel threatened by E.U. peacekeepers. A possible E.U. military mission to the separatist areas should be part of a larger E.U. operation, using its social and economic instruments as well for stability and reconstruction. Such an approach would strengthen a normal economic build-up and thus be detrimental toward the largely illegal economic structures of the current leadership of Abkhazia and South Ossetia. With such an encompassing program, the separatist regions could gradually develop into stable societies, which would also be beneficial for their position toward the Georgian government.

Likewise, taking into account the fact that the O.S.C.E.’s long-time negotiations to reach a settlement on Nagorno-Karabakh have been in vain, the European Union could also pursue an encompassing action program on this conflict. Here, as well, the deployment of an E.U. military mission, together with social and economic measures to encourage development of state and society, could bring a political solution closer. Moreover, a stabilized South Caucasus would also be advantageous for structural energy supplies from Central Asia via the South Caucasus to Europe. Therefore, political and economic objectives could be united.

A Joint Effort of N.A.T.O. and the E.U. in the South Caucasus

Moving past their reluctant attitude in the 1990s, in the 21st century the alliance and the union have started to pursue a much more active policy toward the South Caucasus. The reasons for the change in attitude of N.A.T.O. and the E.U. are found in a corresponding U.S. agenda, which even earlier started to follow a proactive course in this region. For the European countries, the issue of energy security has resulted in more attention for the South Caucasus due to rising prices, increasing scarcity and uncertainty of energy deliveries. Although the entrance of Georgia into N.A.T.O. -- and subsequently Azerbaijan and perhaps Armenia as well -- might still take some years, it is probable that the relationship between N.A.T.O. and the South Caucasian states will further deepen, with Georgia taking the lead. Similarly, increased ties between the South Caucasian states and the E.U. can also be expected, although membership of the E.U. for them seems further away than that of N.A.T.O., due to the enlargement fatigue within the E.U.

Although formally denied, there is reason to believe that N.A.T.O. has, or will have, a role in pipeline security in the South Caucasus, for clear geostrategic reasons. The E.U. is also likely to build up its activities in the South Caucasus, especially in energy infrastructure, economic development, rule of law, and probably also conflict solution -- for which it has a more independent reputation than does N.A.T.O. Consequently, N.A.T.O. and the E.U. will share an upcoming long-lasting involvement in the region, which, by establishing a labor division in their best fields of expertise, may be able to bring security and prosperity to the South Caucasus.

Considering that the military power of the U.S., N.A.T.O., Russia and the C.S.T.O. and the regional maritime task forces are assigned to energy security in this region, the conclusion seems valid that in the near future the combination of military and energy will constitute the major instruments of power in the South Caucasus. Because of the growing importance of energy resources, a further intertwining of these two policy tools can be expected, not only around the South Caucasus, but elsewhere in the world as well. This is in contrast with the thinking that the military instrument has been replaced by the economic (energy) instrument. Therefore, countries and organizations will need to have a well-considered build-up and coordination of their military and energy instruments in order to conduct a successful security policy.