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Yossef Bodansky

Yossef Bodansky

Yossef Bodansky, the Director of Research at the International Strategic Studies Association (ISSA) and Senior Editor of Defense & Foreign Affairs publications (including the Global…

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The Great Competition Over Energy Shoves and Shapes the Emergence of the "New Caucasus"

The South Caucasus: Azerbaijan, Armenia, and Georgia - is at an historic "T" junction in the road. The next turn could result in a regional eruption of violence which would spread beyond the region and would most likely to involve all three major neighbors. It would disrupt the regional network of energy supplies to Europe. Or this next turn in the road could usher in the establishment of a new regional order -a "New Caucasus" -which would serve as a stabilizing buffer between Russia and Iran and Turkey as well as facilitate the rapid expansion of the flow of hydrocarbons to Europe via the Southern Corridor. A lot is in the balance: and it is far from clear which way the South Caucasus is going to turn.

Recent events have pushed the South Caucasus into this fateful moment of decision.

In the aftermath of the Russia-Georgia war of August 2008, Russia was recognized as the region's undisputed power. Both Turkey and Iran have since accelerated their strategic gravitation toward Russia. Theirs is a complex move, as both Ankara and Tehran feel compelled to ally themselves with Moscow as much out of the legacy of fear of Russia as out of recognition of the benefits in cooperation with Russia.

The ELI, mainly led by German Chancellor Angela Merkel with the active support of French Pres. Nicholas Sarkozy, has reached out to Russian Federation Pres. Dmitry Medvedev and Prime Minister Vladimir Putin in order to consolidate the "Eurasia Home" strategic partnership. Both Brussels and Moscow consider the "Eurasia Home" to be the key to Europe's long-term strategic stability, economic development, and demographic challenges (by replacing Muslim migration from North Africa with Christian migration from Eastern Europe). The "Eurasia Home" is considered the key to the joint building of a global geo-strategic and geo-economic bloc capable of withstanding both the LIS and the PRC. Ultimately, the emerging "Eurasia Home" is the realization of Halford Mackinder's pivot of the universe concept.

The three mini-states of the Southern Caucasus have a critical role in the strategic dynamic, even though they are but a speck on the map in these global mega-trends. The ELI is increasingly dependent on the flow of natural gas from the east, and this dependence will increase in the coming decades. The ELI also recognizes the Russian hegemony in the Greater Black Sea Basin (GBSB) through which the hydrocarbons should pass on the way to Europe. At the same time, the ELI has carved an economic niche with strategic importance through the mutual-dependence policy. The ELI invests both technology and funds in the modernization and expansion of energy production and transportation infrastructure in both Russia and Central Asia. Consequently, even though Russia dominates the hydrocarbons' transportation routes, the ELI has a critical influence on their production and transportation. Both Brussels and Moscow are confident that with the evolution and consolidation of the "Eurasia Home" there will emerge a balanced mutual-dependence in the energy security and other economic spheres.

The emerging "Eurasia Home" is adversely affected by Washington's rear-guard policies. This is part of the LIS desperate and largely futile effort to prevent the "Eurasia Home". A key facet of this policy has been to undermine the Russian posture in the GBSB and the Russian dominance over energy -mainly natural gas -supplies to the ELI. This effort peaked in 2008 when the Bush Administration goaded
Georgia into provoking Russia. The ensuing war consolidated Russia's hegemony in the GBSB. The other US venue has been the Nabucco natural gas pipeline: a major transportation system that is neither controlled nor influenced by Russia. Originally, the Bush Administration envisaged that natural gas from Turkmenistan and Azerbaijan would be pipelined via Georgia into the Nabucco pipeline in Turkey and on to the heart of Europe. Construction of new pipelines in Georgia is no longer a viable option in the aftermath of the Russian-Georgian war because of insurance costs in the absence of Russia's refusal to commit to not fighting Georgia under any circumstances.

However, the Obama Administration changed the US priorities. Russia is no longer the primary objective of US regional policy. The higher priority is to win over Turkey and Iran for a host of political reasons (first and foremost gaining Tehran's support for and assistance in expediting the US withdrawal from Iraq and Afghanistan). No less important for the Obama White House is the domestic political imperative to court the Armenian-American community because of their large contributions to politicians in key states. However, because of the absence of coherent geo-strategic and geo-economic vision there is no real US commitment to any policy. There is only the Obama Administration's willingness to pursue policies for as long as they are politically expedient. That such undertaking might have dire implications for the region matters not in Obama's Washington. The US willfully ignores the overall strategic dynamics as well as the positions and interests of either the EU or Russia.

The Obama Administration has immersed itself in new policies. Washington's primary objective is a "new" Nabucco fed by Iranian and Turkmenistani gas (the latter shipped via Iran). To go around the existing embargo and the threat of new sanctions, the US envisages a gas pipeline going from Iran to Armenia and then to Turkey. This way, it would be possible to pretend that the "new" Nabucco is fed with "Armenian gas". Hence the US pressure on Turkey to sign the open border protocols with Armenia and violate long-standing agreements with Azerbaijan over linkage between resolution of the Nagorno-Karabakh Conflict and normalization of relations with Armenia. The US is also encouraging Turkey to utilize the anticipated growing importance in the supply of gas to the EU in order to pressure EU to acquiesce to the accession of Turkey to the EU despite the objection of significant majority of Europeans. Meanwhile, emboldened by the US support, Armenia is reneging on understandings with Azerbaijan regarding the Nagorno-Karabakh Conflict. Armenia receives US support for a possible independence for Nagorno-Karabakh on the basis of the Kosovo precedent in the negotiations sponsored by the OSCE's Minsk Group. Although the US, Russia and France are the co-chairs of the Minsk Group, all undertakings must be taken only if agreed upon by the three co-chairs. Consequently, the US keeps stalling the Minsk Process and prevents Russia and France from pushing for the solution favored by the EU and RF.

However, both Turkey and Iran are most apprehensive about Washington's policies, despite the seeming benefits for themselves. Both capitals dread the looming regional conflicts and possible eruption of violence as a result of the growing destabilization of the South Caucasus. Hence, while not turning their back on the US initiatives both Ankara and Tehran gravitate toward Moscow and recognize Russian strategic dominance in the GBSB. The Iranian and Turkish relations with the Russians are complex because of the profound revival of historical sentiments in the three countries. This historical awareness, which has major influence on the daily policy formulation, stressed the long history of Russia's bitter wars with both Turkey and Iran as a result of which both countries lost both large territory and regional posture to the triumphant Russia. It will be impossible for either Russia or Iran and Turkey to overcome and ignore this legacy while striving to consolidate strategic cooperation on the basis of contemporary circumstances. While Turkey and Iran will continue to cooperate with Russia against the US-led West, they will continue to mistrust Russia as well.

And so the three mini-states of the South Caucasus -Azerbaijan, Armenia and Georgia -find themselves stuck between the huge blocs to their north (Russia) and south (Turkey-Iran). The three are under immense pressure to find a modus vivendi Because of the immense energy resources of Azerbaijan, the South Caucasus cannot be ignored by the rest of the world. But to get noticed, both Georgia and Armenia are poking fingers at Russia and the West respectively. The lingering separatist conflicts -Abkhazia, South Ossetia, Adjaria, and Nagorno-Karabakh -add to the regional tension and threat of eruption of war. If anybody needed a reminder, August 2008 proved anew how quickly a frozen conflict can evolve into a shooting war in the immediate vicinity of crucial energy arteries.

The three mini-states are encouraged by the EU to go along with "Eurasia Home". This means that they recognize Russian hegemony, and integrate their energy infrastructure into the Russian-dominated production and transportation system to the heart of Europe. The EU has recently formalized these preferences through the Eastern Partnership venue. Baku, Tbilisi, and Yerevan have been repeatedly assured that Brussels can help alleviate the mounting pressure from Moscow, Ankara, and Tehran. However, Baku, Tbilisi, and Yerevan are also seduced and coerced by Washington's residual policies. As well, there is the understandable apprehension and trepidation to say "no" to the mighty US. Hence, there emerges a vortex of conflicting policies and contradictory national interests in the South Caucasus. But both Brussels and Moscow cannot afford to let go of the vital energy resources and geo-strategic importance of the South Caucasus. Brussels and Moscow now pressure the three capitals to make up their mind and chose sides. And the big powers would not wait for long.

As logic would have it, Baku, Tbilisi, and Yerevan should have consolidated a bloc jointly deal with the major powers around them, as well as benefit from the growing wealth and importance of the South Caucasus. This is the essence of the "New Caucasus" vision of Azerbaijan Pres. IIham Aliyev. However, the three states remain immersed in their own respective short-term narrow interests and bickering, incapable of rising above the legacy of wars and carnage. With international pressure mounting, this inaction evolves into building tension between the three, particularly regarding the Nagorno-Karabakh Conflict. The smallest of sparks will flare-up the entire region.

And so, as they approach the 'T' in the road, the three mini-states of the South Caucasus have to choose rapidly in which direction they should turn.

The first option is accepting the imperative of regional cooperation in the context of a "New Caucasus" increasingly integrated into the "Eurasia Home" dominated by Brussels (actually Berlin) and Moscow. This is the best way to prevent crushing between Russia on the one hand and Iran and Turkey on the other. However, adopting this route will require the resolution of all secessionist conflicts -particularly Nagorno-Karabakh -in accordance with the EU's legal precedents set for Cyprus. In the case of Nagorno-Karabakh, this means recognizing the territorial integrity of Azerbaijan and ensuring internationally-guaranteed autonomy for the enclave's Armenian minority. Russia has already indicated privately that under such conditions, the Kremlin would accept a compromise which would, in effect, ensure the territorial integrity of Georgia. The emergence of a "New Caucasus" would facilitate the rapid development of the Southern Corridor: delivering the hydrocarbons of Central Asia and Azerbaijan via both Russia and Turkey (with the pipeline crossing Armenia).


The second option is for the three mini-states to continue acting separately while seeking to gain US support against their regional and global nemeses. Obama's Washington is the primary power encouraging the strategic-political individuality of the three capitals: Baku, Tbilisi, and Yerevan. This is a most dangerous option. With the South Caucasus under mounting pressure from Russia, Iran, and Turkey, as well as the EU, the aggregate impact of the explosive nature of the inherent individual contradictions cannot but spark an eruption sooner or later.

Even if Baku, Tbilisi, and Yerevan -through intended action or default inaction -elect to pursue the second option, this decision could not endure for long. Both Moscow and Brussels/Berlin are cognizant that the current bickering and feuds cannot continue, for they will solve no outstanding conflict and only engender crises which, in turn, would most likely spark a wider conflict which Europe and the world can ill afford. Rather than risk such an eruption, the great powers with vital interests in the South Caucasus and the GBSB are likely to impose their own solutions and suppress the causes of crises to the detriment of the independence, viability and self-interest of Azerbaijan, Armenia, and Georgia.

The great threat, however, is the sparked eruption of violence before the EU and the RF are capable of imposing their will and defusing the unruly South Caucasus.

Analysis. By Yossef Bodansky, Senior Editor, GIS.
This article was prepared by Defense & Foreign Affairs – Founded in 1972
Extract from Defense & Foreign Affairs Special Analysis
© 2009 Global Information System, ISSA

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