By Judy Dempsey

New York Times
April 29 2009

BERLIN -- For several months, the leaders of Turkey and Armenia have
defied the nationalists of both countries by holding secret talks in
Switzerland in a bid to end a conflict in a highly volatile region
on the fringes of Europe.

Nearly a century after the Ottoman Empire's massacre of about one
million Armenian Christians in 1915, Turkey's president, Abdullah
Gul, and his Armenian counterpart, Serzh Sargsyan, have reached a
breakthrough in their immensely delicate negotiations.

Last week, they agreed to a road map that could lead to the resumption
of diplomatic relations and the reopening of the borders. If the
agreement succeeds, it will have huge significance for the region. "The
southern Caucasus could finally become stable and attractive for
investors," said Suat Kiniklioglu, a Turkish legislator and spokesman
for the Parliament's Foreign Affairs Committee.

If so, the powers that will dominate in the region will be neither
the United States nor the E.U., which have done little to encourage
this peace process.

Instead, it will be Turkey and Russia -- two former empires -- that
are attempting to re-establish their influence in a region rich in
gas and oil and an important transit route to Europe.

The biggest winner could be Recep Tayyip Erdogan, the Turkish prime
minister and leader of the pro-Islamist Justice and Development
Party. Since coming to power in 2003, Mr. Erdogan has forged ahead
with reforms designed to prepare Turkey for E.U. membership.

He has radically curtailed the influence of the military, which
had hindered reforms, fearing it would lose its political role. The
generals supported a vigorous pro-United States foreign policy at the
expense of relations with their neighbors. That undervalued Turkey's
strategic role in a region sandwiched between Europe and Central Asia.

Mr. Erdogan changed all that. He devised a "Neighborhood Policy" in
which Turkey's national interests would increasingly be defined by
its relations with its neighbors -- Bulgaria and Syria, Azerbaijan
and Georgia, Iraq and Iran. And Armenia, the thorniest of all.

"The decision to seek normalization with Armenia is a Turkish
initiative," said Richard Giragosian, director of the Armenian Center
for National and International Studies, based in Yerevan. "It is not
a plan to please the U.S. or appease the E.U. It is about Turkey's
national interests."

The United States has long called for the resumption of ties between
Turkey and Armenia. But successive U.S. presidents have come under
pressure from the powerful Armenian diaspora and nationalists who
insisted Turkey first recognize that the 1915 massacre of Armenians
was a genocide before restoring ties.

But under the influence of the army, successive Turkish governments
have made it a focal point of national pride not to admit to
genocide, even making it a crime to speak of the Armenian massacre
as such. Mr. Erdogan already had to take a very big step to agree to
establish a special historical commission with Armenia so that this
issue will not derail the diplomatic efforts.

The E.U. has played no constructive role as Turkey's accession talks
with Brussels have become bogged down in recriminations. France and
Germany are staunchly opposed to Turkey joining the E.U. despite
Turkey's strategic role in this part of Europe, and its reforms. As
a result, "The E.U. is less and less popular here, which is very
frustrating for a leadership that is serious about reforms," said Suat
Kiniklioglu, a Turkish legislator and spokesman for the Parliament's
Foreign Affairs Committee.

So with the United States and the E.U. relegated to the sidelines,
Mr. Erdogan has embarked on a strategy that reflects Turkey's national
interests but one that carries risks.

Domestically, Mr. Erdogan has to deal with fiery nationalists and
a dangerously disgruntled military, which oppose a rapprochement
with Armenia.

In the region, Turkey could spoil its relations with Azerbaijan,
a country linguistically and economically close to Turkey and rich
in oil and gas.

Turkey supported Azerbaijan during the 1992 war in Nagorno-Karabakh
-- an ethnic Armenian enclave within Azerbaijan. Since a cease-fire
agreement in 1994, ethnic Armenian forces have occupied at least
one-eighth of Azerbaijan while Turkey has sealed its borders with
Armenia, making Armenia dependent on Russia for its economic survival.

With Turkey's shift in foreign policy, Azerbaijan is becoming
nervous. It fears that Turkey and Armenia would normalize relations
without resolving the Nagorno-Karabakh conflict.

"There is now a great opportunity to link the normalization of
relations between Turkey and Armenia to ending the conflict in
Nagorno-Karabakh," said Leila Alieva, director of the National
Committee on Azerbaijan's Integration in Europe. "If there is no
linkage, the momentum could be lost, and it could change the direction
of Azerbaijan's foreign policy." Indeed, if Azerbaijan felt betrayed
by the Turkish-Armenian rapprochement, it could turn to Russia,
said Ms. Alieva.

Russia, which during the Nagorno-Karabakh war had supported Armenia
and even now controls Armenia's telecommunications, energy and rail
networks, has already moved to set itself up as a peacemaker. With
Turkey's support, it has begun to negotiate a pullout of Armenian
forces from occupied territories of Azerbaijan that could allow the
return of Azeri refugees.

The rewards are big. Azerbaijan would regain control of most of
its territory and Russia would be in a stronger position to seek an
energy deal with Azerbaijan -- even though Azerbaijan is negotiating
with the E.U. to supply gas to Europe's Nabucco pipeline. Russia
too could become the guarantor of any peace agreement by sending
Russian peacekeeping troops to Karabakh, bolstering its influence in
the region.

Finally, a normalization of relations between Armenia and Turkey
would also weaken Georgia, which Russia invaded last August. Once
the borders are reopened, Armenia could become a new transit route
for energy and other goods, thus marginalizing Georgia, which is
Russia's aim, according to Richard Giragosian.

For the United States and Europe, the result of this entire process
could be ambiguous. The volatile southern Caucasus, a breeding ground
for corruption, drug and human trafficking and miserable governance,
could become much more peaceful and prosperous.

But unless Europe and the United States embrace the big changes
taking place in Turkey, they could lose much influence, as Turkey
and Russia, the new regional superpowers, return to their historic
spheres of influence.