US GRANTS ASSISTANCE TO ARMENIAN RURAL AREAS

ITAR-TASS, Russia
Dec 13 2006

YEREVAN, December 12 (Itar-Tass) — The U.S. government has transferred
the first tranche of financial aid to Armenian rural areas within the
framework of the Challenges of the Millennium programme. The tranche
amounted to 882,000 U.S. dollars

Late in May, Armenia will receive another 507,000 U.S. dollars,
representatives of the U.S. same-named governmental corporation said
on Tuesday.

Armenia is one of 19 countries, which the U.S. government has chosen
for the programme that envisages non-repayable assignment of 236
million U.S. dollars within five years for the implementation of
projects of the republican authorities.

The Armenian government chose to develop rural territories and to
reduce poverty. Some 750,000 villagers will receive the assistance.

The programme envisages that 146 million U.S. dollars will be assigned
for restoring irrigation facilities, and 67 million U.S.

dollars – for reconstructing 943 kilometers of rural roads, head of
the programme management council Ara Ovsepian said.

In his words, the programme will be implemented under the public
control.

The U.S Temporary Charge d’Affaires in Armenia Anthony Godfrey believes
that the programme is an extraordinary chance for Armenia.

It will help to reduce poverty and increase incomes of rural residents.

The government of Armenia must do its best to continue democratic
reforms and provide for fair management in order to continue receiving
the funding, the diplomat said.

With this in mind, he pointed out the importance of free and fair
elections of the Armenian parliament in 2007 and presidential elections
in 2008.

The Challenges of the Millennium Corporation is optimistic regarding
the forthcoming in 2007 and 2008 elections, which will show progress
in the electoral process, a corporation representative said.

TIGRAN TOROSYAN: REVOLUTIONARY CHANGES TAKE PLACE IN ARMENIA’S HUMAN RIGHTS SPHERE

ARKA News Agency, Armenia
Dec 12 2006

YEREVAN, December 12. /ARKA/. Revolutionary changes have taken place
in Armenia’s human rights sphere over the last few years, Speaker of
the RA Parliament Tigran Torosyan stated at the seminar "Human rights
and Armenian reality".

He pointed out that Armenia’s citizens have the right to apply to the
European Court of Human Rights. "Constitutional amendments adopted
a year ago allowed citizens to apply to the Constitution Court to
defend their rights," he said.

Torosyan pointed that the RA Ombudsman has all powers to "carry out
this important and honorable mission."

In his turn, RA Ombudsman Armen Harutyunyan stressed that human
rights are considered a fundamental value all over the world and
are the guidelines of the activities of any organizations and any
society. "From this point of view we can say that Armenia, which
is on the way of democratization, has no alternative but ensure and
protect the rights of all its citizens," he said.

The seminar was held under the motto "Poverty reduction". The seminar
was organized by the RA Ombudsman’s office in cooperation with the
UN and OSCE offices in Armenia, and the British Council.

ACBA-CREDIT AGRICOLE BANK ANNOUNCES OPEN-HOUSE DAY IN ARMENIA

ARKA News Agency, Armenia
Dec 12 2006

YEREVAN, December 12. /ARKA/. ACBA-Credit Agricole Bank announces an
open-house day in Armenia, the bank’s press office reports.

The bank will present its new services such as deposits, loans for
repair, mortgage loans, ACBA Shopping plastic cards, preferential
credit cards and Gift cards on this very day – December 8.

ACBA-Credit Agricole Bank was established in 1995 as part of EU TACIS
program and registered in 1996.

Credit Agricole, a French banking group, bought 28% of the bank’s
stakes in September 2006 and became the bank’s biggest shareholder.

ARMENIA BEGINS IMPLEMENTATION OF INTERNATIONAL CONVENTIONS

ARKA News Agency, Armenia
Dec 12 2006

YEREVAN, December 12. /ARKA/. Armenia has begun implementation of
signed international conventions, UN Resident Coordinator in Armenia
Consuelo Vidal reported at the seminar discussion on the topic "Human
Rights and the Armenian Reality" dedicated to the poverty reduction
issue in Armenia.

She pointed out that Armenia signed a number of important international
agreements, particularly the convention on political and civil rights,
UN social and cultural convention, the convention against tortures
and other cruel inhumane or humiliating manners of treatment,
the convention on eradication of discrimination against women,
the convention against racial discrimination and the convention on
children’s rights protection. "All these documents create a necessary
legislative fundament for implementing the activity within the
frameworks of human rights protection in the country," she said.

Vidal reported that different criteria by which the poverty reduction
activity is implemented in Armenia are rather positive. However,
it should be remembered that there are still many people living on
the verge of poverty despite all the achievements in the country.

"The rights of this vulnerable group are not observed, such as their
right for education and a high state of welfare," she said and added
that when man’s urgent needs are not satisfied and her or she lives
in poverty, they cannot protect their rights.

The UN coordinator believes that the government must ensure human
rights protection. The UNO first of all urges the country’s authorities
to continue its work and create such an environment that would promote
human rights protection and combat against poverty. "We are ready to
give necessary support and assistance with this process," she said.

The seminar discussion on the topic "Human Rights and the Armenian
Reality", dedicated to the international day of human rights, was
held in Armenia on December 9 under the motto "Poverty Reduction".

The activity was organized by the Armenian Ombudsman’s office in
association with the UNO Office in Armenia, OSCE and the British
Councils. The participants particularly were Armenian Ombudsman Armen
Harutunyan, Speaker of the Armenian parliament Tigran Sargsyan, OSCE
Chairman Vladimir Pryakhin, Chairman of the Armenian Constitutional
Court Gagik Harutunyan and representatives of a number of NGOs.

December 10 has been marked as Human Rights Day since 1950.

EBRD: FURTHER STRENGTHENING OF AMD THREATENS COMPETITIVENESS OF REPUBLIC’S ECONOMY

ARKA News Agency, Armenia
Dec 12 2006

YEREVAN, December 12. /ARKA/. Today presenting the EBRD Transition
Report for 2006 an expert of the European Bank for Reconstruction
and Development Alexander Cirmiciu said that further strengthening
of AMD threatened the competitiveness of the republic’s economy,
however it could happen in case of absence of growth of the commercial
production", Cirmiciu emphasized.

At the he added that EBRD hoped for inflow of private investments into
the republic, which would enable to secure growth of the production.

In 11 months of 2006, AMD strengthen by 21,99% against USD – from AMD
450,19 for $1 at the beginning of the year to AMD 369,05 for $1 by the
end of November. During first 12 days of December AMD strengthened
against USD by 0,94%. Today average nominal exchange rate makes AMD
365,62 for $1.

During the period between 2003 and 2005, in Armenia USD has devaluated
20,92%. In 2003, the average exchange rate of the USD was equal to
AMD 578,77, in 2004 – AMD 533,45, and in 2005 – AMD 457,69.

OSCE READY FOR FURTHER ASSISTANCE TO ARMENIA’S DEMOCRATIZATION

ARKA News Agency, Armenia
Dec 12 2006

YEREVAN, December 12. /ARKA/. The OSCE is ready to render further
assistance to the development of democracy and civil society in
Armenia as well as to the implantation of the OSCE’s principles and
values in the country, Head of the OSCE office in Armenia Vladimir
Pryakhin stated at the seminar "Human rights and Armenian reality"
He pointed out that in the 2006 the OSCE has rendered assistance to
the RA Ombudsman and has been involved in reforming the country’s
judicial system and dealing with gender problems in the country.

"Our office is closely cooperating with the Armenian Embassy and with
representatives of civil society," he said.

In this context, Pryakhin stressed that human rights protection is
not the responsibility of an individual government or public structure.

"This requires the entire public’s hard work, which will contribute to
the issue being in the center of the authorities’ constant attention,"
he said.

NATIONALISM AND THE KURDISH QUESTION
By R. D. Gastil

Kurdish Aspect, CO
Dec 12 2006

Iranian Civilization and American Foreign Policy

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Nationalism has always been with us. But the modern version
of nationalism grew out of eighteenth century thinking. This
movement led to many of the countries or countries-in-waiting
that exist today. It is characteristic of nationalism that it may
both strengthen and tear apart a polity. Spanish nationalism made
possible the establishment of the present Spanish state, but it has
also led to the increasing threat of the dismemberment of that state
as its subdivisions, beginning with Catalonia, are granted increasing
political power. In Africa, new nations developing nationalisms on the
basis of political subdivisions established by colonial masters, are
threatened by nationalist movements that would further subdivide the
continent. There is no reason for the international community to reject
such movements out of hand. Each must be judged on its own merits,
no matter how difficult "merits" may be to establish in such matters.

In the Iranian region the nationalist ideology produced many of
the regional nationalisms that exist today, including Iranian and
Turkish nationalism. The modern emergence of Turkey and Iran bares
some similarity. Turkey is the remainder of the Ottoman Empire after
the rest of it was whittled away before and during World War I. For
a time, Turkey also represented the only sovereign state left over
after the great Turkish diaspora dating back to well before Genghis
Khan. Recently, new Turkish states have emerged in Central Asia and
the Caucasus after the Soviet collapse. Iran is the renamed successor
to the Persian Empire (with many names) that went through several
advances and retreats after its emergence at the beginning of the
classic period in the West. Its most recent territorial losses were
around Herat and in the Caucasus. Although descended from great
empires, both polities appear to have settled on the modern nation
state as the best alternative for now.

During World War I Turkey embarked on an extreme nationalist policy
that granted nothing to minorities. On the west, the Greeks were
largely driven out of the country. To the east, the Armenians were
driven out and killed in massive numbers in an attempt to create
an ethnically pure Turkey. Fortunately, the Armenians have at last
achieved a truly independent state of their own in the Caucasus after
the collapse of the Soviet Empire. Their attacks on the Armenians
combined with their treatment of their large Kurdish minority, has
been a major stumbling block on Turkey’s road to membership in the
European Union.

Iraq was one of several states carved out of the Ottoman Empire by
the victorious Allies at the end of the War. Before 1920, few people
understood that they were supposed to belong to an Iraq nationality,
although there were several nationalities in the area of Iraq. The
Kurds felt that they had been promised a state of their own, but
the international community and local interests in the end denied
Kurdish claims. The Kurdish people were divided up among Syria,
Turkey (the largest number), Iran (the second largest number),
and the new state of Iraq. Both Turkey and Iran have struggled to
keep their Kurdish subjects down. Eastern Anatolia has been plagued
by a Kurdish insurgency for years. In part, this is a response to a
Turkish state that until recently denied the existence of Kurds. They
labeled them "Mountain Turks". Kurds were not allowed schools or
broadcasts in their own language. The Iranians have been faced with
occasional flareups of Kurdish nationalism. After World War II, the
Russians sponsored a Mahabad Republic among the Kurds until the Shah
and the Americans forced them to abandon the project. More recently,
the Islamist state brutally put down Kurdish revolts. Nevertheless,
in the Kurdish provinces of Iraq regional states and the international
community has come closest to recognizing an entity that has achieved
something very close to independence. One should not romanticize the
Kurds or their achievements. The long term unity of even this small
area and the "democracy" they have achieved are doubtful. Yet it is
certainly true that they have demonstrated far more than most peoples
in such situations that they really would like to manage their own
affairs and may be capable of it.

For more on this, consider a short paper placing Kurdish
self-determination in the context of a more general argument. I
expanded the question of self-determination in my Freedom in the World:
Political Rights and Civil Liberties: 1978, especially pages 180-215.

In spite of vigorous efforts to promote their own rights of
self-determination as absolute, the leaders of Turkey, Iran, and
Syria have sometimes been unwilling to grant these rights to others.

In particular, the leaders appear to fear that if an independent
Kurdish state finally emerges in Iraq, this will encourage
independence movements in their states that they will be unwilling
to abide. However, if these states allow Kurds a reasonable level of
communal self-expression and fairly divide power in such a way that
their Kurds do not feel dispossessed, there should be little danger.

There is now, after all, an independent Azerbaijan next to Iran’s
Azerbaijan, and there seems to be little danger that this will
lead to an insurrection in Tabriz. It would help the reputation of
all three nations were they to see their way clear to welcoming an
Iraqi Kurdistan into the community of nations, should events lead to
this result. The United States and the world community should not
be reluctant to work with them on developing this opportunity in
their midst.

From: Emil Lazarian | Ararat NewsPress

TURKEY ASSAILS EU’S DECISION TO PARTIALLY SUSPEND ENTRY TALKS
By Katrin Bennhold

International Herald Tribune, France
Dec 12 2006

BRUSSELS: Turkey reacted angrily Tuesday to a decision by the European
Union to impose a partial freeze on membership talks and said relations
were going through a difficult test.

The decision on Turkey set the scene for a European summit meeting
Thursday where EU enlargement will figure prominently. The next phase
of expansion takes place Jan. 1, with the entry of Romania and Bulgaria
increasing the size of the bloc to 27 members.

EU foreign ministers agreed Monday to punish Turkey for refusing to
open its ports and airports to Cyprus, an EU member. They suspended
talks on 8 of the 35 issues under negotiation ahead of the possible
accession of the mainly Muslim country more than a decade from now.

The decision is expected to be endorsed by EU leaders at their summit
talks on Thursday.

"This decision is unfair to Turkey," Prime Minister Recep Tayyip
Erdogan said in a televised speech. "Let us not forget that our
friends in the EU also have promises they have not fulfilled."

He said that relations between Turkey and the EU were "going through
a serious test, despite all our efforts."

Turks are bitter that they are being punished for not trading with
Cyprus at a time when the EU has not fulfilled a two-year-old pledge
to end a trade embargo on the Turkish Cypriot north of the island.

They point out that Turkish Cyriots backed a United Nations plan to
unify the island in 2004, while Greek Cypriots in the south rejected
it. But the Greek part of the island still became a member of the EU
and now has veto power over Turkish accession.

Egeman Bagis, Erdogan’s chief foreign policy adviser, said the
Cyprus dispute was being used as a smokescreen in the debate
over whether Turkey should join the EU. "Some countries in the EU
unfortunately want to keep it as a Christian club," he said in a
telephone interview. "Some countries are using Cyprus – and Cyprus
is happy to be used."

The focus on Cyprus was also criticized from a different direction.

"The Cyprus issue has distracted from the fundamental issues,"
said Joost Lagendijk of the Netherlands, chairman of the EU’s Joint
Parliamentary Committee with Turkey.

"Human rights, minority rights, women’s rights, freedom of speech –
those are the issues that go to the heart of Turkey’s compatibility
with the European Union," he said.

A report by the European Commission last month that criticized Turkey’s
refusal to trade with Cyprus also faulted Ankara for backsliding on
many promised reforms. Turkey’s limitation of the rights of Kurds and
other minorities was sharply condemned, as were continuing reports
of cases of torture and limits on freedom of expression.

Erdogan’s government has still not scrapped Article 301 of the
penal code, which has allowed the prosecution of Turkish writers and
academics for insulting "Turkishness." A writer, Ipek Calislar, and
a publisher, Fatih Tas, are scheduled to be tried under the measure
next week.

The fact that the EU’s decision Monday did not mention human rights
violations was criticized by an Armenian lobby group. "The silence of
the member countries on other Turkish violations are a lapse that
seriously endangers European integration," a statement from the
European Armenian Federation for Justice and Democracy said.

Naif Bezwan, a Kurdish researcher at Osnabruck University in Germany,
said: "Of course it’s unacceptable that Turkey does not recognize
a member of the very Union it wants to join, but when it comes to
Turkey’s compatibility with the EU the main issue is how Turkey deals
with religious and national minorities."

Lagendijk said he hoped that a pledge Monday by EU foreign ministers
to seek an end to the economic isolation of the Turkish part of Cyprus
over the next six months would refocus the negotiations on economic
and political reforms.

"You would hardly find anyone in Turkey siding with the EU on Cyprus,"
he said, "but you’ll find a lot of people calling for our support on
human rights and political reforms."

Erdogan on Tuesday vowed to press ahead with reforms.

"Our reform process will continue with the same decisiveness," he said.

But Bagis, his adviser, said some damage had already been done. Ahead
of presidential and legislative elections in Turkey next year, the
mood has turned more nationalistic, and the EU’s demand on Cyprus is
one reason why support for EU membership has fallen sharply over the
last two years, analysts say.

RUSSIAN INVESTMENTS IN ARMENIA: THEIR ECONOMIC BACKGROUND AND POSSIBLE POLITICAL IMPACT
Haroutiun Khachatrian

Central Asia-Caucasus Analyst, DC
Dec 12 2006

The recent takeover of the Armenian telecom operator, ArmenTel, by the
Russian company Vympelcom, the possible passage of the Iran-Armenian
gas pipeline to a company controlled by Russia, and the possible
accession of Armenian railroads by Russian railroads renewed the
discussion about the role of Russia in the Armenian economy.

Pro-western politicians claim the excessive penetration of Russian
capital into Armenian economy will lead to the country’s dependence
on Russia, which, in turn, may have political consequences. However,
there is no indication that Russian investments in the Armenian
economy pursue goals other than making profit.

BACKGROUND: Russia is the largest source country of investments in the
economy of Armenia, (US$405 million between 1996 and 2005) which is
significant for this small country. As a result, a significant part
of the country’s economic assets are controlled by Russians, both
by the government and state-owned companies, and by private Russian
companies. The bulk of the former group of assets came from the 2002
debt-for-equity swap, whereby Armenia repaid its US$97 million dollar
debt to Russia accumulated during the crisis of 1990s.

The state-controlled Russian companies are especially strong in
the energy and power industry. In particular, more than half of
the electricity-producing capacities of Armenia are controlled by
Interengo, a subsidiary of RAO UES. Among this company’s assets in
Armenia are four blocks of the Hrazdan Thermal Power Plant (TPP), the
largest power plant in the country, and Armenia’s energy distribution
network. Another Russian state-controlled giant, Gazprom, owns 45%
of Armrosgazprom, Armenian gas network operator (with another 45%
belonging to the Armenian government and 10%, to another Russian-
and Gazprom-associated company, Itera).

Recently Gazprom declared its decision to increase its stake in
Armrosgazprom to 58 percent, by buying a new issue of shares. This
stake will be increased even more when the declared sale of the
fifth block of the Hrazdan TPP to Gazprom is completed. Among
non-governmental Russian companies, Vympelcom is by far the largest
single investor in Armenia, as it took 90 percent of the ArmenTel
shares of its previous owner, Greece OTE for some Euros 482 million
or US$616 million dollars, equivalent to more than 10 percent of
Armenia’s projected GDP this year. Another large private investor
is the Russian aluminum giant Rusal, which owns Armenal, a large
foil-producing factory. Rusal in recent years invested 80 million
dollars to modernize it.

The Russian leadership looks interested in activating this process,
as seen, in particular, from the statement by president Vladimir
Putin, who told his Armenian counterpart Robert Kocharyan on October
30 that he regretted that in recent years Russia "occupied a shameful
third place" among foreign investors in Armenia. Not surprisingly,
in recent years an increasing number of concerns have been expressed
in Armenia about "selling the country to Russians," or about Armenia
"becoming an appendix to Russia," etc. Concerns are expressed that the
penetration of Russian capital may keep Armenia far from approaching
the West, and that Armenia may fall out of the prevailing trend
for the South Caucasus region which is westward. The government,
of course, says this process is beneficial to Armenia. As for the
Armenian population, it is neutral if not positive, given the absence
of significant anti-Russian sentiments among Armenians.

IMPLICATIONS: The facts show that, at least for the time being, Russian
investments in Armenia have had a mostly positive impact with the
goals pursued appearing to be purely economic. Whereas in the 1990s,
there were cases of politically motivated competition among Russian
and western investors for Armenian assets, no such cases are known
to have taken place in the past six years. Moreover, Russian funds
have often been the only available investments in Armenian assets,
with no competitors. This was the case, in particular, with the fifth
block of the Hrazdan TPP, which was founded back in Soviet times but
has remained unfinished as the Armenian government failed to find
interested investors. Under the deal agreed in April 2006, Gazprom
not only pledged to invest US$150 million to finalize this block,
but also promised to keep gas prices stable at US$110 per 1000 cubic
meters for three years to come (meanwhile, most other CIS buyers will
pay twice as much in 2007). The political context of these investments,
if any, is not obvious.

On the one hand, the Russian government does not conceal its
interest in acquiring assets in Armenia, just as Is the case in other
countries. However, the real influence of the political factor in these
deals is mostly overestimated. The ArmenTel deal is good evidence,
as in this case, two out of the four companies participating in the
tender were Russian ones, and reportedly, the Armenian government
would prefer to see MTS, a company close to the Russian government,
as the winner. However, the tender was won by Vympelcom, whose largest
shareholder is Telenor of Norway. In addition, the Armenian government
used the sale as an opportunity to get rid of the ArmenTel monopoly
on many communication services, which strongly hindered development
of the IT and telecom sectors in Armenia.

Finally, it is not obvious that these deals will make Armenia even
more dependent of Russia than it already is. In fact, the opposite
may be true. For example, Armenia has long been dependent on supplies
of Russian gas, and this is, of course, a leverage of political
pressure. However, as Russia has spent money to acquire large energy
consuming assets in Armenia, it would be less inclined to stop gas
supplies to Armenia as that would harm its own economic interests as
well. As for the problem of ownership of the Iran-Armenia gas pipeline,
its value seems highly overestimated. This is a 40 km long pipeline
connecting the Iranian-Armenian border with Armenia’s existing gas
distribution network, owned by ArmRosgazprom. It cannot serve as
a transit route due to its small diameter, as Russia reportedly
purposefully prevented the construction of a larger pipeline. Even
if this fragment is given to Russia (in fact, to ArmRosgazprom,
a subsidiary of Gazprom, which works according to Armenian laws),
the valve of this pipeline is controlled by Iran rather than by
Russia. Aside from satisfaction that no Armenia does not transit
Iranian gas, it will not be great enhancement of Russia’s influence
in this sector.

CONCLUSIONS: For the time being and for an foreseeable future, the
large Russian investments look beneficial for the Armenian economy
and have no visible political impact in terms of Armenia’s attitude
to the West. They do not prevent Armenia from continuing advanced
market reforms and establishing closer ties with the USA and the EU,
in particular, through the recently signed Action Plan of Armenia in
the European Neighborhood Policy.

AUTHOR’S BIO: Haroutiun Khachatrian is an analyst on political and
economic issues based in Yerevan, Armenia.

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From: Emil Lazarian | Ararat NewsPress

NEEDED: A U.S. BLACK SEA STRATEGY
Ariel Cohen and Conway Irwin

Central Asia-Caucasus Analyst, DC
Dec 12 2006

U.S. interests in the Black Sea area-energy transit, security,
counter-terrorism, proliferation of weapons of mass destruction,
and the trafficking of drugs, weapons, and people-have taken
on particular significance since 9/11. The Black Sea basin is a
strategic region bordering the Greater Middle East and a key transit
route for Caspian oil. Confronted with developments in the region,
the U.S. needs a comprehensive regional policy to protect American
interests and security.

BACKGROUND: The Wider Black Sea region is a patchwork of overlapping
political areas and spheres of influence. Bulgaria and Romania are
NATO members and soon-to-be EU members. Ukraine is caught between
the West and Russia. Georgia leans toward the West, but borders on
Russia’s soft underbelly. Turkey vacillates between East and West,
pulled in different directions by national interests and national
pride. Russia, in a more pronounced way, it staking its own course.

The Black Sea’s six littoral states (Bulgaria, Romania, Ukraine,
Russia, Georgia, and Turkey) and several additional countries in
the wider region are beginning to tentatively construct a regional
identity just as foreign powers and outside forces are searching for
footholds in their vicinity. The region is geopolitically significant
precisely because it is a nexus of cultures, international trade
(legal and illicit), ideas, and influences.

Oil and gas from Central Asia and the Middle East move along Black
Sea shipping lanes and pipelines to Europe and other points west.

These same shipping lanes are used for smuggling of narcotics, persons
(including terrorists), conventional weapons, and components for
weapons of mass destruction (WMDs).

The Black Sea region can be a launching platform for military,
reconstruction, and stabilization operations in Afghanistan, Iraq,
and possibly Iran and for the protection of energy shipping lanes
between the Caspian region and Western markets. It is also Europe’s
new southeastern border. Thus, both the European Union and the U.S.

have strong interests in safeguarding the movement of some goods,
preventing the movement of others, and maintaining a presence in the
Black Sea region.

Turkey and Russia are key powers uneasy about the U.S. presence in
the Black Sea basin. Turkey desires stability in the Black Sea, but
the moderate Islamist AK Party government in Ankara does not see eye
to eye with its Western partners over how to achieve this. Turkey’s
perception of the United States was profoundly changed by the Iraq
war. Long an ally of the West and an EU aspirant, Turkey has recently
distanced itself from the U.S. and NATO.

In response to its real or perceived grievances with the U.S. and the
EU, Turkey is seeking a stronger position from which it can pursue
its own ends without interference. Turkey’s most recent National
Security Policy Document emphasizes the importance of Turkey using its
geopolitical position to become a hub for energy storage and transit
between suppliers in Russia, the Middle East, and Central Asia and
markets in the West.

Russia, even more than Turkey, has been increasingly moving away from
the West and is focused on maintaining regional hegemony. The Kremlin
has been using Russia’s recently acquired economic might, by virtue
of the high price of oil and unprecedented demand for natural gas, to
pursue its foreign policy goals. One of those goals is to become the
world’s primary supplier of energy resources. Òhat requires a tight
grip on purchasing and transporting of the oil and gas resources of
the former Soviet Union.

IMPLICATIONS: Russia has turned a generous profit as the middleman
between cheap Central Asian oil and gas and energy-hungry economies
in the West. By selling Central Asian oil and gas at a premium abroad,
Russia has earned windfall profits and undertaken obligations to supply
countries such as the EU and China well beyond its own abilities to
produce. Russia also supplies two thirds of Turkey’s natural gas and
roughly 40 percent of the EU’s-a position that may be in jeopardy
if the pipelines through Turkey are built using non-Russian sources
of supply.

Further complicating regional security in the wider Black Sea
region are the unresolved conflicts in the region: South Ossetia
and Abkhazia in Georgia and Transnistria in Moldova, as well
as the Armenian-Azerbaijani conflict. These conflicts raise two
primary concerns. First, they threaten the territorial integrity
of internationally recognized states. Implications for separatists
in Chechnya, Daghestan, Kurdistan, Khouzistan, Baluchistan, and
even Xinjiang are easy to imagine, to say the least. Second, the
local governments of the secessionist regions operate according to
their own "laws", not those of the central governments, resulting in
insufficient oversight and crime prevention. These lawless enclaves
have become breeding grounds for international smuggling and other
illicit activities. Until the conflicts are resolved, ruling elites in
these statelets will frustrate efforts to establish a lasting peace,
which is a precondition for stability, security, and economic growth
in the broader region.

Because the U.S. does not have a free rein in the Black Sea region,
it is essential that the countries in the region develop their own
intraregional capabilities in maritime security, counterterrorism,
disaster preparedness, and other aspects of securing their waterways
and coastlines. However, the Black Sea littoral states are operating
according to their own distinct agendas, and there is no consensus
about how to achieve common security goals. Tensions over status
within the region, conflicting allegiances, and varying perceptions
of what constitutes stability are preventing these states from finding
mutually acceptable ways to combat their common problems.

U.S. presence currently has the support of Bulgaria and Romania, but
U.S. relations with Russia, Turkey, and Ukraine are on shaky ground.

Neither Turkey nor Russia supported U.S. operations in Iraq, and
relations with both countries have taken a downturn ever since.

Ukraine has adopted a more pro-Russian stance since Prime Minister
Viktor Yanukovich took office. Georgia is under severe economic
and political pressure from Russia and preoccupied with internal
conflicts and is thus ill-equipped to act as a strong U.S. ally. This
tangled web of interests and alliances and the recent rapprochement
of Russia and Turkey, which has anti-American implications, may hamper
U.S. activities in the area.

CONCLUSIONS: To maintain a presence in the region, the United States
needs a realistic strategy to enhance the security and stability of
the Black Sea region. This specifically involves coordinating U.S.

and EU policies in the region, especially with regards to the European
Neighborhood Policy. It also involves increasing NATO cooperation
with non-NATO countries through Partnership for Peace by offering
technical and training assistance in security areas, and strengthen
bilateral military ties with Ukraine.

Other elements could include sponsoring trilateral military exchanges
and consultations between Bulgaria, Romania, and Turkey to assuage
Turkish concerns about losing its dominant position in the Black Sea
basin to the growing influence of the U.S. America can contribute to
existing regional security structures either as a participant or as an
observer. This could include providing crucial technical intelligence
capabilities, airlift, and other specialty capacities.

These structures could also be included in NATO military and disaster
preparedness exercises to improve interoperability.

A stable Black Sea region must include urging Russia to lift sanctions
against Georgia and pushing for renewed multilateral talks over the
resolution of the region’s "frozen conflicts", particularly acute
in the case of Georgia. This includes promoting the replacement
of Russian/CIS peacekeepers in Abkhazia and South Ossetia with
international peacekeeping forces – under the EU or UN umbrella,
or otherwise constituted.

Even with all of the current U.S. foreign policy concerns (e.g.,
Iraq, Afghanistan, Iran, and North Korea), the U.S. would be unwise
to concentrate on these crises to the exclusion of all others.

Shoring up alliances and improving relations with states in strategic
areas bordering on main theaters of operation, such as the Greater
Middle East, is of utmost importance in developing future geopolitical
arrangements, enhancing strategic stability, and assuring military
egress and re-supply.

Given the current state of U.S. relations with Turkey and Russia,
the only way for the U.S. to maintain and strengthen its footholds
in the Black Sea is to develop cooperation across a broad spectrum
of issues of common interest and mutual concern. The U.S. needs to
learn to tread lightly, offering support where possible and backing
off where necessary. This is not an impossible balance to achieve. If
successful, it could be used as a model for cementing U.S. presence
in other strategic areas, such as Central Asia. It is time for the
U.S. to launch a coordinated policy effort in the Wider Black Sea
region to gain support for addressing some of the most pressing issues
of the decade: the rise of Iran, WMD proliferation, cooperation in
the global war on terrorism, and energy security.

AUTHORS’ BIO: Ariel Cohen, Ph.D., is Senior Research Fellow in Russian
and Eurasian Studies and International Energy Security at The Heritage
Foundation. Conway Irwin is an energy writer with Argus Media.

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