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  • Current Geostrategy in the South Caucasus

    The Power and Interest News Report- PINR
    Dec 15 2006


    ''Current Geostrategy in the South Caucasus''


    In recent months, relations between Georgia and Russia have
    deteriorated. The clash between these two states is only a symptom of
    the broader strategic positioning of the West and Russia in and
    around the South Caucasus. In this scenario, at regional and global
    levels, countries and organizations are involved in a struggle for
    power and energy security. Considering these two issues, what is the
    current situation in the South Caucasus and what can be expected in
    the future?

    Affecting the region are the political-military and security policies
    of the actors involved. These actors include Georgia, Armenia, and
    Azerbaijan, and their "frozen" conflicts of Abkhazia, South Ossetia
    and Nagorno-Karabakh. Additionally, the leverage of regional powers,
    such as Turkey and Iran, and of global powers, such as the United
    States, Russia and China, is part of the power configuration in the
    region.

    In addition to countries, international organizations are also
    involved in this game. At the regional level, there is the Black Sea
    Economic Cooperation (B.S.E.C.), the Black Sea Force (BLACKSEAFOR)
    the Caspian Sea Force (CASFOR), the cooperation between Georgia,
    Ukraine, Azerbaijan and Moldova (G.U.A.M.) and the Collective
    Security Treaty Organization (C.S.T.O.) within the Commonwealth of
    Independent States (C.I.S.). At the global level, the North Atlantic
    Treaty Organization (N.A.T.O.) and the European Union also exercise
    political weight in the South Caucasus.

    Energy Security

    In addition to the power configuration is the issue of energy
    security. Energy security is high on the international agenda, as the
    United States, the European Union and N.A.T.O. have expressed their
    concern about threats to energy security. E.U. countries as a whole
    currently import 50 percent of their energy needs (the U.S. imports
    58 percent of its oil), and will import 70 percent by 2030.
    Furthermore, E.U. countries import 25 percent of their energy needs
    from Russia, which may rise to 40 percent in 2030 (another 45 percent
    comes from the Middle East). Besides this growing dependency, it has
    became clear that the energy instrument is an essential part of
    Russia's external and security policy after it used this to force
    Ukraine to pay a higher gas price at the end of 2005.

    The geopolitical importance of the South Caucasus is also based on
    the presence of energy resources. Stability in the Caucasus is a
    vital requirement for the uninterrupted transport of Caspian oil and
    gas. The Caspian Sea region (the South Caucasus and Central Asia)
    contains about 3-4 percent of the world's oil reserves and 4-6
    percent of the world's gas reserves. In itself, the Caucasian share
    of global oil and gas reserves is not considerable. However, in light
    of the uncertainty over the reliability of Persian Gulf supplies, as
    well as the possibility that Russia may use energy delivery as a
    power tool, the transport of Caspian and Central Asian (Kazakhstan
    and Turkmenistan) energy supplies to the West via the Caucasus has
    gained vital importance.

    The importance of the region has also grown as a result of energy
    policies by consumer states in the West that want to decrease their
    dependence on resources from Russia and the Middle East. A number of
    states and organizations are making efforts to end Russia's near
    monopoly on the transport of energy supplies in the Eurasian region
    by creating alternative pipeline routes to transport these supplies.
    Thus, the Atasu-Alashankou oil pipeline (China and Kazakhstan), the
    Baku-Tbilisi-Ceyhan (B.T.C.) and Baku-Tbilisi-Erzurum (B.T.E.)
    pipelines (Georgia, Azerbaijan, Turkey and Kazakhstan) and the
    Nabucco gas pipeline (European Union, Turkey, Bulgaria, Romania,
    Hungary and Austria) are operational, under construction or planned.

    Defrosting the Frozen Conflicts

    Washington wants a stable South Caucasus region for its investment in
    the energy sector, as well as for its geostrategic interests in the
    region. The separatist regions in Georgia -- Abkhazia and South
    Ossetia -- have become areas of the major players' interests in the
    region. With the exception of the tensions surrounding Tbilisi,
    Russia has not played a very neutral role in these conflicts. Russia
    has used the conflicts as political leverage with the West.

    The objectives are clear: the West and Russia have the aspiration of
    being the major player in the South Caucasus. Russia, however, is
    gradually being forced to retreat from this region. To counter this
    development, one of Russia's tactics is to slow down Western advances
    by keeping the so-called "frozen conflicts" active. This makes it
    harder for Georgia to attract Western investment and it is
    complicating its accession to N.A.T.O.

    The tensions are likely to continue if these global powers and their
    organizations cannot find consensus or "peaceful coexistence." In
    these circumstances, a solution to the frozen conflicts is rather
    unthinkable. If that is the case, disputes -- harmful to the economic
    development of the South Caucasus -- are likely to continue until the
    time that these countries are consolidated into Western structures.

    Concerning the Nagorno-Karabakh conflict between Armenia and
    Azerbaijan, the outlook is similar to that of the Georgian regions.
    The main foreign actors in this conflict -- Russia, the United States
    and the European Union -- will have to find a compromise. At the
    moment, the United States is the party most interested in solving the
    conflict and is putting serious efforts into finding a settlement.
    Yet, political will and public support has to be created on both
    sides. It seems that political pressure is rising on Azerbaijan and
    Armenia. The United States -- perhaps more than Europe -- has the
    military, political and economic capacities, and, due to its
    investments, the will to force a breakthrough in the negotiations.
    Just like the Georgian separatist regions, the main condition for a
    solution is cooperation with and by Russia.

    Military Alliances as Guardians of Energy

    Matters of energy security tend to attract the attention of military
    organizations. For example, military organizations are at the center
    of the security of oil and gas pipelines against terrorist attacks.
    In G.U.A.M., increasing tensions between Georgia and Moldova with
    Russia has forced it to reconsider its energy security and to find an
    alternative to dependency on Russian oil and gas. In such an
    alternative scenario, Azerbaijan is to play a crucial role both as
    energy supplier and transit country for oil and gas from Central
    Asia. The sustainability of such a scenario is yet to be shown.
    Considering the current more pro-Russian government in Ukraine,
    however, G.U.A.M.'s energy security plans have become unlikely.

    The Russian armed forces are currently tasked with the protection of
    energy resources, such as off-shore platforms. Also, for the
    Russian-led C.S.T.O., energy security seems to be recognized as a
    task of growing importance. A recent exercise at a nuclear energy
    station in Armenia showed that the C.I.S. Anti-Terrorist Center is
    already involved in this. It is not unlikely that in the future the
    C.S.T.O. will take over energy security tasks and other
    responsibilities of the C.I.S. Anti-Terrorist Center. Therefore, the
    involvement of the C.S.T.O. in energy security, especially in the
    South Caucasus, specifically in Armenia, is likely to develop
    further. Moreover, regional maritime task forces -- CASFOR and
    BLACKSEAFOR -- could potentially be used for such operations around
    the Caucasus.

    According to Western and Russian sources, the West is also directly
    involved in energy security in the South Caucasus. Allegedly,
    military officers from Turkey, together with their colleagues from
    Azerbaijan and Georgia, have regularly carried out command staff
    exercises to practice the protection of the B.T.C. pipeline.
    Furthermore, in 2005 an agreement had supposedly been reached which
    arranged for the United States and N.A.T.O. to secure the B.T.C.
    pipeline. In the future, they would also safeguard the B.T.E. gas
    pipeline.

    In addition to this, military units of N.A.T.O. and the United States
    would also support and/or train Azeri and Georgian troops tasked with
    the protection of pipelines. Moreover, the United States is allegedly
    going to provide Azerbaijan three cutters and small submarines,
    intended to guard its oil fields. However, Georgian, N.A.T.O. and
    U.S. officials all deny any N.A.T.O. or U.S. involvement in pipeline
    security in Georgia and Azerbaijan and claim that these two states
    have their own dedicated units for pipeline protection. Nevertheless,
    statements by leading N.A.T.O. officials, dedicated meetings, and
    other activities indicate that N.A.T.O. is increasingly interested in
    the South Caucasus and its energy resources in particular.

    Considering that the United States and N.A.T.O. are likely to be
    involved in energy security in the South Caucasus, as is Russia with
    the C.S.T.O., this could lead to rivalry. In the worst case, even a
    local arms race between their regional allies -- with Iran and
    Armenia on the Russian side versus Azerbaijan and Georgia on the
    Western side -- should not be ruled out.

    U.S.-Russian Competition in the Caucasus and the Caspian Sea

    The geostrategic importance of the South Caucasus and the Caspian
    region as a corridor from Europe to Central Asia, as a bridgehead to
    control and pressure Iran, and also because of the energy resources
    and the war on terrorism, are the main reasons for the U.S. presence
    in the region. The United States, with its heavy military involvement
    in Iraq and Afghanistan, and following the switch of Uzbekistan to
    the Russian camp, is apt to seek strong points in the Caucasian area
    in support of its global geostrategy.

    The recent involvement of the United States might upset the
    precarious power balance in these regions, which has evolved after
    the disintegration of the Soviet Union. This is especially true now
    that Iran and Russia, the greatest powers in the region, feel
    threatened. Russia regards the South Caucasus as its traditional
    backyard of influence and counters increasing involvement in the area
    by the West. The United States has chosen Azerbaijan as its most
    important ally in the Caspian basin and has developed a program of
    intense military cooperation. Russian military analysts argue that
    the situation is reminiscent to the U.S.-Georgian Train and Equip
    Program, which since its start in 2002 has provided Georgia with a
    capable, well-trained and equipped army. Russian analysts fear that
    this soon will be the case with Azerbaijan as well, thus depriving
    Russia of all its means of influencing Azerbaijan.

    U.S. military cooperation in the South Caucasus and the Caspian seems
    to evolve smoothly. Although the United States gives the impression
    of being reluctant to make its military presence and activities
    public, it is clear that it is effectively defending its interests in
    the region, including its energy security. In addition to U.S.
    military support, Azerbaijan's increasing defense budget will also
    contribute to strengthening its military power. The question remains
    whether the United States will be able to convince other states, such
    as Kazakhstan, to join this military cooperation.

    Russia has shown it is seriously interested in preserving its
    regional authority with its Caspian Flotilla. Yet with a growing U.S.
    presence, it will need to form alliances. A Russian-led CASFOR
    maritime force, including other littoral states in addition to Iran,
    still seems far in the future. A cause of potential conflict is the
    unclear legal status of the Caspian. So far, the littoral states have
    not reached an agreement on dividing the Caspian Sea. Near armed
    clashes have already occurred between Azerbaijan and Iran over
    disputed oil fields. Tensions are likely to continue as long as the
    legal situation of the Caspian Sea remains in dispute. Because of the
    geostrategic and economic interests at stake, and an apparent failure
    to come to a consensus from both sides, the competition between
    Russia and the United States in the Caucasus and the Caspian Sea is
    likely to be prolonged in the years ahead.

    A Comprehensive Role for the E.U. in Conflict Resolution

    The separatist areas of Abkhazia and South Ossetia form a hindrance
    for further integration of Georgia into the Western architecture.
    Although Georgia is eager to see the Russian peacekeepers withdrawn,
    conversely Russia is keen to continue its presence to maintain
    influence in Georgia. Nor will Russia accept its forces to be
    replaced by those of N.A.T.O. in the separatist areas, which is
    another objective of the Georgian government.

    Recent statements by the European Union display a more active policy
    in the South Caucasus. The European Union has the reputation of an
    "honest broker" and as having a wide scope of instruments for
    achieving peace and stability. Conversion of statements into an
    active security policy could be established by forming a military
    mission to be deployed in Abkhazia and South Ossetia, not to replace
    the Russian peacekeepers, but as an additional asset to promote
    stability and reconstruction. Such a mission would be beneficial for
    the stature of the European Union, to prove that it is capable of
    conducting crisis management missions. Furthermore, this would adhere
    to the call of the Georgian government to introduce Western
    peacekeepers in the disputed areas.

    Russia may oppose a competitive peacekeeping force, but it will have
    a difficult time openly disapproving of such an E.U. mission since it
    wants to maintain good relations with the European body and also
    because it has no grounds to feel threatened by E.U. peacekeepers. A
    possible E.U. military mission to the separatist areas should be part
    of a larger E.U. operation, using its social and economic instruments
    as well for stability and reconstruction. Such an approach would
    strengthen a normal economic build-up and thus be detrimental toward
    the largely illegal economic structures of the current leadership of
    Abkhazia and South Ossetia. With such an encompassing program, the
    separatist regions could gradually develop into stable societies,
    which would also be beneficial for their position toward the Georgian
    government.

    Likewise, taking into account the fact that the O.S.C.E.'s long-time
    negotiations to reach a settlement on Nagorno-Karabakh have been in
    vain, the European Union could also pursue an encompassing action
    program on this conflict. Here, as well, the deployment of an E.U.
    military mission, together with social and economic measures to
    encourage development of state and society, could bring a political
    solution closer. Moreover, a stabilized South Caucasus would also be
    advantageous for structural energy supplies from Central Asia via the
    South Caucasus to Europe. Therefore, political and economic
    objectives could be united.

    A Joint Effort of N.A.T.O. and the E.U. in the South Caucasus

    Moving past their reluctant attitude in the 1990s, in the 21st
    century the alliance and the union have started to pursue a much more
    active policy toward the South Caucasus. The reasons for the change
    in attitude of N.A.T.O. and the E.U. are found in a corresponding
    U.S. agenda, which even earlier started to follow a proactive course
    in this region. For the European countries, the issue of energy
    security has resulted in more attention for the South Caucasus due to
    rising prices, increasing scarcity and uncertainty of energy
    deliveries. Although the entrance of Georgia into N.A.T.O. -- and
    subsequently Azerbaijan and perhaps Armenia as well -- might still
    take some years, it is probable that the relationship between
    N.A.T.O. and the South Caucasian states will further deepen, with
    Georgia taking the lead. Similarly, increased ties between the South
    Caucasian states and the E.U. can also be expected, although
    membership of the E.U. for them seems further away than that of
    N.A.T.O., due to the enlargement fatigue within the E.U.

    Although formally denied, there is reason to believe that N.A.T.O.
    has, or will have, a role in pipeline security in the South Caucasus,
    for clear geostrategic reasons. The E.U. is also likely to build up
    its activities in the South Caucasus, especially in energy
    infrastructure, economic development, rule of law, and probably also
    conflict solution -- for which it has a more independent reputation
    than does N.A.T.O. Consequently, N.A.T.O. and the E.U. will share an
    upcoming long-lasting involvement in the region, which, by
    establishing a labor division in their best fields of expertise, may
    be able to bring security and prosperity to the South Caucasus.

    Synergy of Military and Energy Instruments of Security Policy

    Considering that the military power of the U.S., N.A.T.O., Russia and
    the C.S.T.O. and the regional maritime task forces are assigned to
    energy security in this region, the conclusion seems valid that in
    the near future the combination of military and energy will
    constitute the major instruments of power in the South Caucasus.
    Because of the growing importance of energy resources, a further
    intertwining of these two policy tools can be expected, not only
    around the South Caucasus, but elsewhere in the world as well. This
    is in contrast with the thinking that the military instrument has
    been replaced by the economic (energy) instrument. Therefore,
    countries and organizations will need to have a well-considered
    build-up and coordination of their military and energy instruments in
    order to conduct a successful security policy.

    Report Drafted By:
    Dr. Marcel de Haas



    The Power and Interest News Report (PINR) is an independent
    organization that utilizes open source intelligence to provide
    conflict analysis services in the context of international relations.
    PINR approaches a subject based upon the powers and interests
    involved, leaving the moral judgments to the reader. This report may
    not be reproduced, reprinted or broadcast without the written
    permission of [email protected]. All comments should be directed to
    [email protected].
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