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HANGING TOGETHER: THE CAUCASUS
The Economist
U.S. Edition
February 10, 2007
The implications of a diplomatic shift in an important oil-rich region
WHEN God was parcelling out land to the peoples of the earth, the
Georgians arrived late. But their explanation-that they had been
drinking in his honour-so delighted God that, according to a Georgian
creation myth, he granted them the world's choicest spot. The gods have
indeed favoured Georgia this winter, bestowing a mild one when a harsh
one might have been disastrous. But the Georgians owe thanks also to
an earthly benefactor: their neighbour Azerbaijan, whose oil-fuelled
foreign policy is transforming the volatile but vital Caucasus.
Since the revolution of 2003 that swept Mikhail Saakashvili to
Georgia's presidency, his yen to join NATO and the European Union has
infuriated the Kremlin. Last autumn, the Russians imposed postal and
aviation blockades, alongside the existing embargoes on Georgia's
water, wine and fruit. Then, with winter approaching, they doubled
the price for Russian gas-in theory for commercial reasons, but with
the real aim of taming Mr Saakashvili.
Yet, for all Mr Saakashvili's high-profile rambunctiousness, the
most important country in the Caucasus is Azerbaijan. With around 8m
people, most of them Shia Muslims, it has the biggest population. It
also has oil and gas, which a consortium led by BP is extracting from
the Caspian Sea and pumping through new pipelines across Georgia
to Turkey and beyond. All the Caucasian economies are now picking
up, after collapsing with the Soviet Union-even corrupt Armenia's,
dependent though it mostly is on remittances. But the growth created
by Azerbaijan's second oil boom (the first was 100 years ago) was
the highest in the world last year: 34.5% , says the finance minister.
Azerbaijan's president is Ilham Aliev, who inherited the job from
Heidar, his strongman father. The younger Aliev seemed also to
have inherited the Caucasian skill of diplomatic balance, eschewing
Georgian-style pyrotechnics. But that careful equilibrium appeared
to change in December, when the Russians tried to hike the price of
the gas that, despite its own reserves, Azerbaijan was itself still
importing. The idea was apparently to stop Azerbaijan helping the
Georgians with cheaper supplies.
"Commercial blackmail," said Mr Aliev. Azerbaijan stopped importing
Russian gas altogether-and, thanks to the warm weather, gas from
Azerbaijan seems set to help Georgia through the winter. Elmar
Mammadyarov, Azerbaijan's foreign minister, says his country is
merely "taking responsibility as a regional leader." Mr Saakashvili
is more exuberant: "a geopolitical coup", he says of the new gas
arrangements. The truth is, Mr Aliev now needs Mr Saakashvili too.
Azerbaijan's future, and Mr Aliev's power, rest on the new pipelines,
which have bound their two countries together, and bound both of them
to the West. In a few years they may also carry Kazakh oil from the
other side of Caspian, and-perhaps-gas from Turkmenistan. That would
undo Russia's grip on the supply of Central Asian gas to Europe,
and is as unpopular an idea in Moscow as it is welcome elsewhere.
Two things undermine the hope that the fractious Caucasians have
finally learned to hang together, to their own benefit and that of
Western energy consumers.
One is domestic politics. Russia's diplomatic power may be waning, but
its political model remains popular. Armen Darbinian, a former Armenian
prime minister, quips that his and other post-Soviet countries have
become "one-and-a-half party states": a party of power, plus others
that are basically decorative. In Azerbaijan, opposition activists
are regularly harassed and locked up. Like Russia, Georgia, Armenia
and Azerbaijan will all hold presidential polls next year. Mr Aliev
will surely win his; the whisper in Baku is that his wife will take
over next. But another whisper is that, in the absence of democracy,
Islamism is on the rise-encouraged, say some, by Iran to the south.
The Islamists, says Ali Kerimli, a disgruntled oppositionist, curry
favour with their complaint that "the West sells democracy for oil."
Others say the threat is fanciful. The call to prayer rings across the
boutiques and restaurants of downtown Baku, but there are actually
more hijabs on the streets of London, says Ilgar Ibrahimoglu, an
imam. All the same, things may change if too much of the oil money
goes into nepotistic contracts and vanity projects, and too little
on diversifying the economy and easing the grinding poverty in which
many Azerbaijanis still live.
The other big Caucasian danger is war. Russian support for South
Ossetia and Abkhazia, two enclaves that broke away from Georgia in
the 1990s (see map), is one of Mr Saakashvili's main gripes.
Azerbaijan also lost a secessionist conflict over Nagorno Karabakh,
a part of Soviet Azerbaijan mostly populated by Armenians. Mr Aliev
periodically makes dark threats about retaking Azerbaijan's lost
territory by force, though a flare-up in Georgia currently looks
likelier.
Mr Saakashvili says Russia's economic embargo "achieved the opposite
of what was intended", and that Georgia has found new markets.
Suitably cheered, he this week hosted Mr Aliev and Turkey's Recep
Tayyip Erdogan, shaking hands on a new railway that will link the
Caucasus to Europe-but miss out Armenia. Vartan Oskanian, Armenia's
foreign minister, complains that there is an existing railway across
Armenian-controlled territory that could be used instead. The railway,
like the pipelines, symbolises what the countries of the Caucasus
can achieve together, but also how far apart they remain.
The Economist
U.S. Edition
February 10, 2007
The implications of a diplomatic shift in an important oil-rich region
WHEN God was parcelling out land to the peoples of the earth, the
Georgians arrived late. But their explanation-that they had been
drinking in his honour-so delighted God that, according to a Georgian
creation myth, he granted them the world's choicest spot. The gods have
indeed favoured Georgia this winter, bestowing a mild one when a harsh
one might have been disastrous. But the Georgians owe thanks also to
an earthly benefactor: their neighbour Azerbaijan, whose oil-fuelled
foreign policy is transforming the volatile but vital Caucasus.
Since the revolution of 2003 that swept Mikhail Saakashvili to
Georgia's presidency, his yen to join NATO and the European Union has
infuriated the Kremlin. Last autumn, the Russians imposed postal and
aviation blockades, alongside the existing embargoes on Georgia's
water, wine and fruit. Then, with winter approaching, they doubled
the price for Russian gas-in theory for commercial reasons, but with
the real aim of taming Mr Saakashvili.
Yet, for all Mr Saakashvili's high-profile rambunctiousness, the
most important country in the Caucasus is Azerbaijan. With around 8m
people, most of them Shia Muslims, it has the biggest population. It
also has oil and gas, which a consortium led by BP is extracting from
the Caspian Sea and pumping through new pipelines across Georgia
to Turkey and beyond. All the Caucasian economies are now picking
up, after collapsing with the Soviet Union-even corrupt Armenia's,
dependent though it mostly is on remittances. But the growth created
by Azerbaijan's second oil boom (the first was 100 years ago) was
the highest in the world last year: 34.5% , says the finance minister.
Azerbaijan's president is Ilham Aliev, who inherited the job from
Heidar, his strongman father. The younger Aliev seemed also to
have inherited the Caucasian skill of diplomatic balance, eschewing
Georgian-style pyrotechnics. But that careful equilibrium appeared
to change in December, when the Russians tried to hike the price of
the gas that, despite its own reserves, Azerbaijan was itself still
importing. The idea was apparently to stop Azerbaijan helping the
Georgians with cheaper supplies.
"Commercial blackmail," said Mr Aliev. Azerbaijan stopped importing
Russian gas altogether-and, thanks to the warm weather, gas from
Azerbaijan seems set to help Georgia through the winter. Elmar
Mammadyarov, Azerbaijan's foreign minister, says his country is
merely "taking responsibility as a regional leader." Mr Saakashvili
is more exuberant: "a geopolitical coup", he says of the new gas
arrangements. The truth is, Mr Aliev now needs Mr Saakashvili too.
Azerbaijan's future, and Mr Aliev's power, rest on the new pipelines,
which have bound their two countries together, and bound both of them
to the West. In a few years they may also carry Kazakh oil from the
other side of Caspian, and-perhaps-gas from Turkmenistan. That would
undo Russia's grip on the supply of Central Asian gas to Europe,
and is as unpopular an idea in Moscow as it is welcome elsewhere.
Two things undermine the hope that the fractious Caucasians have
finally learned to hang together, to their own benefit and that of
Western energy consumers.
One is domestic politics. Russia's diplomatic power may be waning, but
its political model remains popular. Armen Darbinian, a former Armenian
prime minister, quips that his and other post-Soviet countries have
become "one-and-a-half party states": a party of power, plus others
that are basically decorative. In Azerbaijan, opposition activists
are regularly harassed and locked up. Like Russia, Georgia, Armenia
and Azerbaijan will all hold presidential polls next year. Mr Aliev
will surely win his; the whisper in Baku is that his wife will take
over next. But another whisper is that, in the absence of democracy,
Islamism is on the rise-encouraged, say some, by Iran to the south.
The Islamists, says Ali Kerimli, a disgruntled oppositionist, curry
favour with their complaint that "the West sells democracy for oil."
Others say the threat is fanciful. The call to prayer rings across the
boutiques and restaurants of downtown Baku, but there are actually
more hijabs on the streets of London, says Ilgar Ibrahimoglu, an
imam. All the same, things may change if too much of the oil money
goes into nepotistic contracts and vanity projects, and too little
on diversifying the economy and easing the grinding poverty in which
many Azerbaijanis still live.
The other big Caucasian danger is war. Russian support for South
Ossetia and Abkhazia, two enclaves that broke away from Georgia in
the 1990s (see map), is one of Mr Saakashvili's main gripes.
Azerbaijan also lost a secessionist conflict over Nagorno Karabakh,
a part of Soviet Azerbaijan mostly populated by Armenians. Mr Aliev
periodically makes dark threats about retaking Azerbaijan's lost
territory by force, though a flare-up in Georgia currently looks
likelier.
Mr Saakashvili says Russia's economic embargo "achieved the opposite
of what was intended", and that Georgia has found new markets.
Suitably cheered, he this week hosted Mr Aliev and Turkey's Recep
Tayyip Erdogan, shaking hands on a new railway that will link the
Caucasus to Europe-but miss out Armenia. Vartan Oskanian, Armenia's
foreign minister, complains that there is an existing railway across
Armenian-controlled territory that could be used instead. The railway,
like the pipelines, symbolises what the countries of the Caucasus
can achieve together, but also how far apart they remain.