Regional Cooperation in the South Caucasus

Good Neighbours or Distant Relatives?

Tracey German

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781138270978
• eBook ISBN:
  9781317069126
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The South Caucasus region, comprising the former Soviet states of Armenia, Azerbaijan and Georgia occupies a key strategic location, squeezed between the Black and Caspian Seas, Iran, Russia and Turkey. Since the disintegration of the Soviet Union in 1991, the region has become an arena of geopolitical confrontation with regional powers such as Russia, Turkey and Iran vying for influence in the face of growing Western involvement. The Russian military intervention in Georgia in 2008 not only raised questions about Moscow's intentions towards its 'Near Abroad' and the future direction of its foreign policy, it also demonstrated that ostensibly local separatist disputes have serious ramifications for regional relations and the wider international community. In this book, German explores the extent of regional cooperation in the South Caucasus, analyses the reasons for the relative lack of regional cooperation and assesses the potential for deeper cooperation in the future.

Chapter 1
Introducing the South Caucasus

In a speech to the United Nations General Assembly in September 2010, Georgian President Mikhel Saakashvili called for a ‘united Caucasus’, derived from a common market, shared interests, and political and economic interdependence.¹ This aspiration, modelled on the example of the European Union (EU), constitutes the latest in a series of proposals intended to promote a united approach to regional challenges in the South Caucasus, few of which have been successfully implemented. Despite the fact that genuine regional cooperation and possible future integration could greatly increase the stability and security of the region, Saakashvili’s appeal is likely to remain an aspiration rather than a reality, hindered by the geopolitical realities of the region. The South Caucasus, comprising the states of Armenia, Azerbaijan and Georgia, occupies a key strategic location, squeezed between the Black and Caspian Seas, Iran, Russia and Turkey. It constitutes a vital land bridge between Asia and Europe, physically linking the Caspian Sea region and Central Asia with the Black Sea and Western Europe, and is an important transport and communications corridor, particularly as a transit route for hydrocarbons from the landlocked Caspian Sea region to international markets. The stability of the South Caucasus is threatened by its geopolitical significance, as well as numerous transnational security challenges, including unresolved conflicts, organised crime, trafficking and migration. The scale and scope of these transnational problems require a co-ordinated regional response: deeply divided by conflict and the competing interests of regional powers, the South Caucasus would benefit from greater cross-border collaboration. However, regional cooperation is not as well developed as it could be, hampering economic development and further destabilising the area.

Conflicting dynamics complicate relations between states and serve to undermine efforts, both internal and external, to establish a sense of regional identity and advance inter-state cooperation. Any understanding of the South Caucasus as a ‘region’ has tended to be defined by the actions of those from outside the area and, on the whole, regional cooperation initiatives are promoted by external actors seeking stability in the region, rather than being internally generated by the three South Caucasus states. There is no regional institutional structure and regional cooperation remains at a very low level. This book explores the extent of regional cooperation between the three South Caucasus states, analyses the reasons for the relative lack of regional cooperation and assesses the potential for deeper cooperation in the future, taking into account internal and external challenges to enhanced collaboration. Focusing predominantly on the state-level, the book analyses the different strategic orientations of the three states and assesses how their differing foreign policy outlooks influence the level of cooperation. It examines their relations with each other, as well as relations between them and the principal external actors in the South Caucasus (the regional powers of Russia, Turkey and Iran, together with actors from beyond the wider region such as the EU). It is impossible to examine the South Caucasus without taking into account the fundamental role of external actors, both the regional powers of Russia, Turkey and Iran, as well as Western organisations such as the EU and NATO. With each South Caucasus state allying with a different power, the region has become polarised, the dividing lines in the region more acute and the reasons for cross-border cooperation have dwindled. There are a few examples of genuine regional cooperation between the three states, but they tend to be in areas considered to be less contentious and less high-profile, notably the environment and border management. This book analyses the reasons for the relative lack of regional cooperation and considers the potential for deeper cooperation in the future. It also assesses the security challenges that the region faces, demonstrating the range of common challenges, as well as the fundamental reasons for the divisions across the region. How true is the Caucasian proverb ‘better a good neighbour than a distant relative’?

The South Caucasus

The South Caucasus, known as the Transcaucasus during the Soviet era, contains three sovereign states, the Republic of Armenia, the Republic of Azerbaijan and Georgia, which used to be part of the Soviet Union, but are now independent. A small region in terms of territory and population (the combined populations of the three states total approximately 16.4 million), it contains myriad ethnic groups, the result of its location and historical legacy, and is playing an increasingly important role within the international arena. The Caucasus Mountains have consistently represented frontier territory, squeezed between different empires including the Russian, Ottoman and Persian, thus the area has seen high levels of migration and has been ruled by different powers at different times, all of whom have left their mark in terms of culture, language and religion. Whilst there are significant differences between the three countries in terms of their post-Soviet political, economic and cultural development, all three have struggled to cope with the dual political and economic transformation necessitated by the break-up of the USSR.

Armenia is a land-locked republic located in the south-west Caucasus, bordering Azerbaijan, the Azeri enclave of Nakhichevan, Georgia, Iran and Turkey. It gained independence from the Soviet Union in September 1991 and is a parliamentary democracy with a strong presidency. The government’s official aim is to build a Western-style parliamentary democracy. However, the president retains a disproportionate amount of power in comparison to the legislature and judiciary, despite the introduction of a new constitution in 2005, which increased the power of the legislature and the independence of the judiciary. There has been some criticism of elections by international observers and, in 2008, disputed presidential elections led to mass protests and the imposition of a state of emergency. It is the most ethnically homogenous of the three South Caucasus states: 93 per cent of its population of 2.9 million are ethnic Armenians, with the remaining seven per cent comprising Azerbaijanis, Russians and Yezidi Kurds. A Christian country with its own church, the Armenian Apostolic Church, it claims to be the first nation to have adopted Christianity as a state religion, in 301. The Armenian Church is a key influence on the development of the state, as is the Armenian diaspora. Armenia has a substantial diaspora, one of the largest in the world, thought to number approximately seven million, compared to a population of just over three million, meaning that only one-third of the total Armenian population lives within the country’s borders. Russia, the US, France and Iran all have sizeable Armenian minorities.

Armenia is still officially at war with Azerbaijan over the majority Armenian-populated enclave of Nagorno-Karabakh, which is internationally recognised as being Azerbaijan’s territory. Violence erupted at the end of the Soviet era over demands for autonomy, violence which soon developed into full-blown civil war between Azerbaijan and the enclave, supported by Armenia. The war lasted from 1992 to 1994, resulting in a definitive defeat for Azeri government forces. At least 20,000 people were killed during the fighting. Nagorno-Karabakh has no international recognition as an independent state, but has existed as a de facto one since 1994 and is closely dependent upon Armenia. Its state institutions are technically separate from Armenia proper, but political links are intimate. Although it is nearly two decades since a cease-fire agreement was signed in 1994, the stalemate has brought no real peace or stability and there are fears that the conflict could be easily reignited. The disputed territory is a graphic illustration of the impact of the complex level of ethnic diversity in the Caucasus region, resulting from its status as a borderland, squeezed between empires, that has seen high levels of migration over the centuries. The Nagorno-Karabakh conflict dominates the domestic and foreign policies of both Armenia and Azerbaijan. Key posts within the Armenian political system are held by politicians from Nagorno-Karabakh, including the presidency: two presidents, Robert Kocharyan and Serzh Sargasyan, both came from the enclave.

Azerbaijan, in the south-east Caucasus, borders Russia, Georgia, Armenia and Iran. It lies on the western side of the Caspian Sea and is the most populous of the three South Caucasus states with a population of 8.3 million, of whom 90 per cent are ethnic Azerbaijani, three percent Dagestani, 2.5 per cent Russian and 2.3 per cent Armenian. It is officially a secular state. According to official figures, around 95 per cent of the population is Muslim, of which the majority are Shia and 15–30 per cent Sunni. Azerbaijan gained independence from the USSR in October 1991. There was considerable volatility during the initial years of independence with coups deposing President Ayaz Mutalibov in 1992 and his successor, the pan-Turkic President Abulfaz Elchibey, in 1993. Heydar Aliyev, the former first secretary of the Azerbaijani Communist Party (1969–1981), member of the Soviet Politburo and head of the KGB in Azerbaijan, was elected president in 1993, which heralded the beginning of a period of stability and continuity in the country. He remained in power until shortly before his death in 2003 and was succeeded by his son Ilham Aliyev, who won the presidential elections amid claims of widespread vote-rigging and violent protests. Despite being the first Muslim country in the world to give women the vote (in 1918), Azerbaijan has very little experience of genuine democracy. A presidential republic, the regime is dominated by the president, who appoints the prime minister and the cabinet, and has control over government appointments and policy decisions. There is little effective political opposition and any dissent is generally stifled.

Like Armenia, Azerbaijan’s foreign and domestic policies are dominated by the Nagorno-Karabakh issue. It lost over 14 per cent of its territory (Nagorno-Karabakh and the broad Lachin security corridor that connects Nagorno-Karabakh with Armenia) as a result of the Armenian victory and is keen to regain control of this. Another key influence on the development of Azerbaijan in the post-Soviet era are its substantial oil and gas reserves. In the nineteenth century, Azerbaijan (then part of the Russian Empire) was home to the development of the world’s first commercial oil industry and the territory of Georgia played a key transit role when the Rothschilds financed the construction of a Transcaucasian railway to carry oil from Baku to Georgia’s Black Sea port of Batum.² Completed in 1883, this rail link opened up the landlocked Caspian region and triggered a rush of investment. During the Soviet era, it was part of the Soviet network and oil from the republic generally flowed towards the centre of the Union. The early years of independence saw a rush of investment and in 1994 the government concluded its first international oil agreement, the so-called ‘contract of the century’, with a consortium of global oil companies. The US$8bn deal established the Azerbaijan International Operating Corporation to develop the Azeri, Chirag and Guneshli offshore fields. Azerbaijan’s giant offshore Shah Deniz field is thought to contain as much as one trillion cubic metres (Tcm) of natural gas and is expected to yield around 25 Bcm per year for export. Consequently Azerbaijan and the Caspian region plays a key role in enabling European countries to reduce their dependence on Russian hydrocarbons and, in the future, could also enable Asian countries to diversify and reduce their reliance on the Middle East.

Georgia borders Russia, Azerbaijan, Armenia, Turkey and the Black Sea. It is a multi-ethnic country that has witnessed demands from some of its ethnic minority groups for self-determination turn violent. 78 per cent of its population of 5.2 million are Georgians, 7 per cent Azerbaijani, 6.5 per cent Armenian, 2.5 per cent Russian, 1.6 per cent Abkhaz and 1.5 per cent Ossetian. The majority of the Georgian population (over 80 per cent) practices Orthodox Christianity and the Georgian Orthodox Church is an influential institution in the country, although church and state are completely independent from each other. Georgia became the first Soviet republic to vote for a non-communist government when it elected nationalist Zviad Gamsakhurdia to head the Supreme Soviet in 1990, as the USSR was slowly unravelling against the backdrop of Mikhail Gorbachev’s reformist policies, and declared its independence for the Soviet Union in April 1991. During the early post-Soviet period, Georgia’s newly established statehood was incredibly fragile, threatened by numerous factors including internal conflict between the centre and the separatist regions of Abkhazia and South Ossetia, Russian pressure, pervasive corruption and a lack of effective central power. Struggling with the impact of the dual political and economic transformation, inter-ethnic strife and challenges to its internal and external sovereignty, the Georgian state teetered on the brink of failure during the 1990s. Nevertheless, President Eduard Shevardnadze kept it from total collapse. Shevardnadze was Soviet Foreign Minister during the perestroika era and is widely credited as being one of the principal architects of the end of the Cold War. He become Georgian President in 1992, elected unopposed after the removal of Zviad Gamsakhurdia, the country’s first post-communist leader. His experience on the international stage bolstered Georgia’s transition and helped it to garner support.

A multi-party democracy, Georgia was established as a presidential republic with the adoption of a new constitution in 1995 and parliament is relatively weak.³ In November 2003 parliamentary and presidential elections triggered popular protests against alleged vote-rigging in favour of the Shevardnadze regime at the expense of Mikhel Saakashvili. The bloodless ‘Rose Revolution’ led to the dramatic departure of Shevardnadze, affirmed Georgian statehood and was a defining moment in the country’s democratic development with the non-violent transfer of political power. Saakashvili swept to power on the back of the peaceful uprising and his inauguration in 2004 cemented Georgia’s move away from the Russian sphere of influence, strengthening an increasingly close relationship with Washington. Saakashvili has come to dominate Georgian politics in much the same way that his predecessor did and his personality determines much of the country’s policy-direction, partly because the country is a presidential republic. A US-educated lawyer, he was first elected to parliament in 1995 and has consistently campaigned against corruption and cronyism.⁴ Buoyed by his political success in both the presidential and parliamentary elections held in early 2004, Saakashvili vowed to tackle many of the country’s seemingly intractable problems, notably crime, widespread corruption, cronyism, economic stagnation and separatism. He made significant headway on some issues, tackling corruption at the grassroots level, but there are still many challenges to Georgian security, particularly the secessionist territories. Following wars of independence in South Ossetia and Abkhazia in the early 1990s, both existed as de facto independent states for over a decade. Efforts to restore central Georgian control over South Ossetia in August 2008 triggered a Russian military invasion, jeopardising security across the unstable Caucasus region. Having secured the two regions militarily, Moscow took its political support one step further, formally recognising the independence of both Georgia’s separatist regions at the end of August 2008.

The Russian military intervention in Georgia in 2008 demonstrated that ostensibly local separatist disputes have serious ramifications for regional relations and the wider international community. Since the disintegration of the Soviet Union in 1991 the South Caucasus has become an arena of geopolitical rivalry, with regional powers such as Russia, Turkey and Iran vying for influence in the face of growing Western involvement. A whole series of issues have greatly elevated the strategic importance of the South Caucasus in recent years, but it is the region’s role as a key transit route for the export of hydrocarbons from the landlocked Caspian Sea region that have really put it on the international map and tied it into the global economic system. There was a relative lack of Western interest in the South Caucasus region during the initial post-Soviet era. The area only began to grow in importance to the US and the West during the mid-1990s, identified as both a source of and key transit route for hydrocarbons from the Caspian Sea. The European Parliament’s 2004 Gahrton report recognised the region’s growing importance, stating that ‘due to its geographical location, the South Caucasus can play an increased role in strengthening international security; whereas if it is instead left out of the evolving networks of interdependence and cooperation, the susceptibility of the South Caucasus states to the danger of export of instability from neighbouring regions would increase’.⁵ The region is playing an important role in enabling European countries to reduce their dependence on Russian hydrocarbons and, in the future, could also enable Asian countries to diversify and reduce their reliance on the Middle East. Azerbaijan and Georgia might be small countries in terms of territory, but they are increasingly important as energy corridors. Whilst Georgia was the focus pre-2008, Azerbaijan has become the pivotal state in the region, holding the key to future European energy and thus economic security, Turkey’s desire to become a regional energy hub and Russia’s wish to maintain its dominance over the supply of natural gas to Europe. However, Armenia is excluded from the benefits of the region’s role as an energy corridor, undermining security in the South Caucasus.

Chapter Outline

A small region geographically, the South Caucasus is more divided than it is united, despite facing a range of common challenges. This book explores the extent of regional cooperation that exists between the three South Caucasus states. It is split into two sections: Part One focuses on internal aspects of cooperation between the South Caucasus states, whilst Part Two examines the external drivers of cross-border cooperation. Chapter 2 analyses the differing perspectives of what actually constitutes the South Caucasus region, exploring the variety of ways that a specific region can be defined, and the impact that differing concepts of the ‘region’ have on the dynamics of cooperation. What is a region? What differentiates one geographical area from another? And why should states in a specific area seek to cooperate and institutionalise that cooperation? It explores the literature on regions and regional initiatives, examining the South Caucasus through the prism of these concepts in order to assess whether a common regional identity exists and the impact of different regional cooperative frameworks. It then goes on to explore the emergence of the area as a discrete regional unit, tracing its historical development from imperial times to the contemporary era, and analyses the reasons for the dearth of successful internally driven regional initiatives. Chapter 3 clarifies the primary drivers of foreign policy behaviour in the South Caucasus, outlining the different views of the three states. It examines the principal drivers of foreign policy direction in each country, the state’s strategic orientation and key relationships, along...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Table of Contents
• List of Tables
• Key Abbreviations
• 1 Introducing the South Caucasus
• 2 Regions, Regional Systems and the South Caucasus
• 3 Disunited: Foreign Policy Positions of the South Caucasus States
• 4 Contemporary Security Challenges
• 5 Russia and the South Caucasus
• 6 Regional Powers: Turkey and Iran
• 7 European Security Organisations: the EU, NATO and the OSCE
• 8 Conclusions
• Bibliography
• Index