Caspian and Caucasian regions

The News International, Pakistan
Oct 22 2004

Caspian and Caucasian regions

Dr Maqsudul Hasan Nuri

The 12th International Conference on “Central Asia and the Caucasus:
Looking into the future of energy systems” was organised by The
Institute for Political and International Studies, Tehran, from
October 12-13, 2004. Inaugurated by the Foreign Minister of Iran Mr
Kamal Karrazi, the moot was attended by 23 countries, including
Afghanistan, Algeria, Armenia, Azerbaijan, Georgia, India, Iran,
Italy, Kazakhstan, Pakistan, Russia, Switzerland, Tajikistan, UK and
USA. A number of journalists from Germany, Sweden and other countries
were invited to cover the event.

Albeit no consensus emerged from the conference as divergent
viewpoints were aired by countries, problems related to Caspian Sea
resources, geopolitics, energy transportation, regional integration,
trade in electrical energy, and energy systems were some of the major
themes on which opinions were expressed.

Caspian Sea, as the “biggest lake” and an “inland sea,” is endowed
with vast hydrocarbon and marine resources. Oil was discovered as far
back as the 1870s. Under the Bolshevik regime in then Soviet Union
Baku, the capital of Azerbaijan was the main source of oil. In the
Cold war, other players such as US oil company Chevron came into the
Caspian basin to exploit its resources. Hence the so- called “closed
sea” has turned into an “open sea.”

Problems bedevilling the Caspian and Caucasian region range from
radicalised Islam, lack of sustained development, issues of pipeline
routing, Western attempts to divide the regional powers, menace if
political corruption, ethnic divisions, US monopolistic and
self-centred role as sole superpower, drug trafficking,
militarisation of the region, ownership and jurisdictional disputes
over the continental and sea bed resources, and not the least,
pollution and environmental problems.

The question was raised by some Central Asian scholars that if Iran
was already sufficient in energy resources – the third largest
supplier of gas – why it was so serious in seeking nuclear energy. To
this the Iranians responded that in view of energy shortages and
non-renewable nature of oil and gas, diversification had become
necessary. Since it does not have “base load” of enough hydropower
like other CARs, it was added, so acquiring nuclear energy had become
a pressing necessity for future economic development. Hence Iran had
started a programme of alternative energy diversification by
developing coal, thermal and solar energy systems.

US branding of Iran as an “axis of evil” that is “raring to go for
nuclear weaponry,” ignore Iran’s cooperation in dispute-resolution
attempts in Chechnya, Tajikistan. Also, present pragmatic streaks in
its foreign policy are often overlooked.

Regarding questions about fecklessness of ECO and its dismal
performance, it was observed that other organisations in the region
such as GUUAM, Black Sea Cooperation Council, CICA and SCO are
equally slow in producing results. Hence ECO, a 10-member
organisation needs to be bolstered, given its area, population and
size of resources.

Chinese interests in the region were highlighted because of its
“elephant economy” nature like that of India. Since 1997, Xinjiang-
Kazakhistan pipeline project had faced difficulties in finances,
workers, transportation problems and the project was on and off for
quite sometime. After Russo-Japanese agreed to cooperate China got
disillusioned with Russian cooperation. And hence in August 2004 made
major Chinese investment in Kros Neka project – one such instance of
close Chinese-Iranian cooperation.

Landlocked countries such as Armenia, Afghanistan Kazakhstan and
others highlighted their concerns of being left out and had visions
of “corridor states” for transhipment of oil through pipelines. But
for this it was conceded that internal order for safe passage of oil
both in the Caucasus and in Afghanistan must improve.

Azerbaijan is a major supply of oil to the West through the
Baku-Ceyhan pipeline – a portion of which has lately become
operational. It was reasoned that globalisation per se was not a
negative phenomenon but it is its form and nature that is
questionable. Under the US it was taking a form of “take-all” and
“me-only” approach. Suggestions were offered on promoting tendencies
for benign globalisation. There was a need to stop crime syndicates,
oil lobbies, and other non-or anti national groups to mitigate
negative syndromes of globalisation.

Some concerns were raised about militarisation of the region,
notably, military cooperation between US and Azerbaijan. Also, US
forces were getting entrenched in some of the CARs, especially
Uzbekistan, Kyrgystan and Tajikistan. This is being countered by
Russia in Tajikistan. It was asserted that the Caspian Sea belonged
to the littoral states and Iran is not too pleased with outsider’s
intrusions. The security of the region is the primary responsibility
of the littoral states that need to forge collective security.

Georgia emphasised the need for hydroelectric, thermal and other
alternative forms of energies. There were 20 foreign countries
working on different schemes on energy in the country. Georgia could
act as safe corridor for passage of oil between north and south.

Security situation could be helped with the help of Russia and Iran –
former maritime owners of the Caspian Sea before the demise of the
Soviet Union. Problems of landlocked states, lack of connectivity to
the outside, US as main interloper and contender also came under
review. But then it was reasoned that a superpower has to be
dependent on its partners and allies such as Turkey, Georgia,
Uzbekistan and Pakistan in the realisation of its global objectives.

While for pipeline systems, the western route is preferred by the US
and the West, the northern route by Russia, southern by Iran, and the
southern-eastern by Kazakhstan and China. The southeastern route is
the shortest and cheapest but is nagged by unstable Afghanistan.
However a redeeming aspect is that if it matures at some stage and
transits through Afghanistan (conditional on return of normalcy) it
could reach highly populated South Asia – both Pakistan and India. It
would be a “win-win” game for all actors- producers and consumers.

Many scholars in the moot held the opinion that the US wants to
design a “regional order” on the pretext of democracy and development
but instead to ensure its lead and hegemony in the region. As a
superpower, it needs compliant allies: Georgia, Azerbaijan, Pakistan
and others. After the 9/11 events, anti-proliferation, anti-terrorism
and search for alternative sources of oil other than the Persian Gulf
have come out in the open. It wants to induce competition amongst
regional actors and thwart attempts at regional collaboration. Under
the mask of democracy and development, Central Asia and Caucasus, it
is employing ruthless exploitation of their resources in what is
described as the “New Great Game.” Albeit Russia and others are major
stakeholders in the region, they are hampered by requisite managerial
skills, funds and technical expertise. Caspian basin is not expected
to attract the kind of investment as the Persian Gulf did because of
its intrinsic limitations.

Today, the global economy is being increasingly affected by prospects
of energy and menace of violence and terrorism. Countries are either
exporters or importers of oil, a commodity that is going to remain
crucial for the foreseeable future in the absence of any other
alternative energy resource. Iran and Russia are main exporters of
energy but the new CARs pipeline structures are not reliable. The
present rise in oil prices is damaging the economies of many
countries like Japan.

Does the search for energy lead to cooperation or conflict: it is egg
and chicken question dilemma. Generally, conflicts abound where oil
is present – be it in the Caspian, Gulf, West Africa or Sudan. Will
this induce cooperation or conflict in the year’s ahead remains to be

Will hegemonic policies of the US help or hinder integration amongst
the regional actors? A lot depends upon Europe for it can make a dent
in the uni polar nature of the international system. Heretofore, its
policies towards the Caucasus and Caspian basin are not coherent.

The main suggestions that emerged out of the seminar area were a need
for greater harmonisation of legal and technical systems within the
Caspian basin countries. The Europeans could contribute to gas
supplying and undertaking major investments; besides, power stations
and supply stations need to be built up soon. Also, it is timely to
explore alternative sources of energy to reduce dependence on oil.
Databases have to be updated. Even Caspian Sea data is sometimes
confusing and exaggerated.

Protection of environment must go in tandem with economic
development, keeping in view the experiences of other developing
countries. Also, mismanagement, wastage, and corruption are some
lessons as faced by some oil producing countries need to be avoided.
Joint navigation, security of pipelines, establishing proper
database, and military and technical cooperation are required. There
was a common stance on linking the region through a uniform energy

Demilitarisation of the region should be done; jurisdictional
conflicts in the Caspian Sea have to be sorted out; safety related
conventions on shipping and fishing need to be legislated and
implemented in unison.

Only then Central Asia and Caucasian regions could realise their true
potential. Contrarily, failure could invite further outside
manipulation and interference that could lead to future intra and
inter- state conflicts and wars.

The writer is Senior Research Fellow IPRI. He recently participated
in the 12th International Conference on Central Asia and the
Caucasus, Tehran, Iran