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The growing importance of the Caspian countries and their constant changes

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In this series of articles, we intend to present an overview on the Caspian countries, their history, their changing politics and economy in order to offer a complete analysis on the late panorama in this part of the world.

As a macro approach, political and economic relations juxtapose when it comes to the development plans of the Caspian Five and their expectations. Geographically close and sharing a basin with abundant natural resources, some of those countries have maintained relations since before they became independent, the prime example being an agreement on the region signed in the early 20’s between the then called Persia and the former Soviet Union. The current five littoral nations – Iran, Russia, Kazakhstan, Turkmenistan and Azerbaijan – still struggle to tackle a solution for a fair division, while coping with external influences from Eurasian partners, the American pressure for businesses and omnipresence of the European Union.

Who moved my sea?

Russia is intrinsically connected to all the other Caspian countries, be that for its historical role as the most important player in this side of the world map or for its actual importance for being the region’s economic life belt. It is unarguably the member with the greatest incomes that also pushes the economies in the Balkans, and it physically controls the access routes to the said sea. One is in the country itself and one in the newly accessed Crimea, a ‘conquest’ that cost Russia many sanctions from the not-so-far West, nevertheless local relations in this occasion remained untouched.

Lately, the recession in the Russian economy also hit its Caspian partners, especially the independent former provinces, whose main economical sources are, not surprisingly, fossil fuels. The crisis was also responsible for Putin’s dream of a common currency in the Eurasian Economic Union (in which the only nation from the Caspian Sea is Kazakhstan) to disappear into thin gas.

Even so, the negotiations about the rights of exploitation for the countries in the area, which have lasted for more than a decade, made a clear progress in their last configuration, but show that the theme is still very sensitive for all of the members.

On the last meeting, in 2014, it was agreed that no nations apart from those that surround the sea would be allowed to have military forces there, under the pretext of maintaining regional security – and the message between these Cyrillic and Arabic lines is clear: keeping the American forces away from the Caspian waters. And although it was also settled that there would be a balance between those regional forces that does not show the slightest level of the complicity the referred countries will still be expected to cultivate before coming to the thorniest issue on the agenda that has already resulted in gunboat diplomacy.

The Achilles’ heel in the Caspian epic politics is how to divide the basin. Whereas Iran defends it must be equally divided into five parts, thus supporting the stance Caspian water plateau is a lake, Russia and the others support that it is a sea and the division should be proportional to the extension of the margin, by defining a total of 25 miles in the surface for exploitation and keeping an area for common use, which was supposed to relief tensions between the participant countries. As a third factor, it must be taken into account the difference in the legal status of the sea and lake. Whereas Iran strongly supports the lake solution, as mentioned before, the other Caspian countries argue that the Caspian is a sea. Accordingly, under this solution, the Caspian Common Force would need to observe the strictly defined rules of conduct under the UN Law of the Sea.

While the international community anxiously awaits a solution in the next meeting, expected to take place in 2015, the rich Caspian region remains untouchable for the countries who are not part of the Caspian Five and also for some of this group, since the agreement reached so far, in 2003, is trilateral (between Russia, Kazakhstan and Azerbaijan). Those resolutions, therefore, play a primordial role in the maintenance of a cooperative environment in the region.

A Vodka-Maotai tidal bore

The ex-Soviet republics, which had a previously shy importance to geopolitics, now gain recognition for the encounter of two distinct poles of influence – Russia and China.

Because of their political objectives, both nations share influence over the countries in Eurasia and, whilst Russia’s Look East policy aims to develop a common market and deepen its power in the area, China’s Go West counts greatly on the Silk Road Fund promises of an Economic belt through the funding of infrastructure in the same region, somewhat competing with funds cost by the US.

While the dual influence is beneficial for the region, once it foments local development in the main economic activities and physical integration, it is to say that both countries are willing to raise their controlling power, which might eventually have impacts in their relation.

The Casper Sea

Composed mostly of young nations, the Caspian region still has a long way to go both in diplomatic and democratic aspects. As a rich, yet discreet region, it counts with political regimes that are indisputably organized, but still making progress.

Both Turkmenistan and Azerbaijan rely on a traditional political system, which is characterized by a great conversion of roles in a strong leadership figure. That is to say that the government itself is prone to engage in a multiplicity of duties, such as keeping the local order, informing and communicating with the civilians, revealing high centralization of the available means in the administrative sphere.

The latest news in Kazakhstan, on the other hand, is not centered in communication. The country has anticipated elections on the verge of an economic crisis, choosing President Nursultan Nazarbaiev, locally referred as a ‘father’, with over 97% of votes, for a fifth successive term, against two opponents that actually supported the current government. Even though variety could be an option, it seems to not have been taken into consideration by the citizens, either because of great leadership performed by the president or an unexpressive opposition campaign.

Moreover, those countries are a pool of ethnicities, gathering many distinct peoples that have historically offered the governors extra difficulties in keeping a political unit. The main question is whether or not those governors will be able to deal with them all in an era where information flows faster and wilder than the waters in their sea.

Have we seen it oil?

To sum up, the promising Caspian region is full of opportunities for development in different aspects – economical, by the convergence of plenty of investment, political, because of the advances in international negotiations and, finally, humanitarian, with the exposition of the internal politics as a chance of putting the governmental system on the spot and making it better.

We will scrutinize all of them in the next weeks.

Luísa Monteiro is a bachelor in Social Communication and is currently taking a Master's degree in Communication and Politics at PUC São Paulo. Her researches are closely linked to the studies of internet as a democratic agora and her latest academic production correlates the (offline) social movements and their exposure on the net.

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Eastern Europe

Latvia developed new tasks for NATO soldiers

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Member of the Latvian Saemas’ national association “Everything for Latvia!” and Freedom”/LNNK Jānis Dombrava stated the need to attract NATO troops to resolve the migration crisis. This is reported by la.lv.  In his opinion, illegal migration from the Middle East to Europe may acquire the feature of an invasion. He believes that under the guise of refugees, foreign military and intelligence officers can enter the country. To his mind, in this case, the involvement of the alliance forces is more reasonable and effective than the actions of the European border agencies. Dombrava also noted that in the face of an increase in the flow of refugees, the government may even neglect the observance of human rights.

The Canadian-led battlegroup in Latvia at Camp Ādaži consists of approximately 1512 soldiers, as well as military equipment, including tanks and armoured fighting vehicles.

Though the main task of the battlegroup in Latvia is country’s defence in case of military aggression, Latvian officials unilaterally invented new tasks for NATO soldiers So, it is absolutely clear, that Latvian politicians are ready to allow NATO troops to resolve any problem even without legal basis. Such deification and complete trust could lead to the full substitution of NATO’s real tasks in Latvia.

It should be noted that NATO troops are very far from being ideal soldiers. Their inappropriate behaviour is very often in a centre of scandals. The recent incidents prove the existing problems within NATO contingents in the Baltic States.

They are not always ready to fulfill their tasks during military exercises and training. And in this situation Latvian politicians call to use them as border guards! It is nonsense! It seems as if it is time to narrow their tasks rather than to widen them. They are just guests for some time in the territory of the Baltic States. It could happen that they would decide who will enter Latvia and who will be forbidden to cross the border!

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Eastern Europe

Changes are Possible: Which Reforms does Ukraine Need Now?

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Photo: Robert Anasch/Unsplash

The past 16 months have tested our resilience to sudden, unexpected, and prolonged shocks. As for an individual, resilience for a country or economy is reflected in how well it has prepared for an uncertain future.

A look around the globe reveals how resilient countries have been to the COVID-19 pandemic. Some have done well, others less so. The costs of having done less well are almost always borne by the poor. It is for this reason the World Bank and the international community more broadly urge—and provide support to—countries to undertake economic and structural reforms, not just for today’s challenges but tomorrow’s.

One country where the dialogue on reform has been longstanding and intense is Ukraine. This is particularly true since the economic crisis of 2014-2015 in the wake of the Maidan Revolution, when the economy collapsed, and poverty skyrocketed. Many feared the COVID pandemic would have similar effects on the country.

The good news is that thanks to a sustained, even if often difficult, movement on reforms, Ukraine is better positioned to emerge from the pandemic than many expected. Our initial projection in the World Bank, for example, was that the economy would contract by nearly 8 percent in 2020; the actual decline was half that. Gross international reserves at end-2020 were US$10 billion higher than projected. Most important, there are far fewer poor than anticipated.

Let’s consider three reform areas which have contributed to these outcomes.

First, no area of the economy contributed more to the economic crisis of 2014-2015 than the banking sector. Powerful interests captured the largest banks, distorted the flow of capital, and strangled economic activity. Fortunately, Ukraine developed a framework to resolve and recapitalize banks and strengthen supervision. Privatbank was nationalized and is now earning profits. It is now being prepared for privatization.

Second, COVID halted and threatened to reverse a five-year trend in poverty reduction. Thanks to reforms of the social safety net, Ukraine is avoiding this reversal. A few years back, the government was spending some 4.7 percent of GDP on social programs with limited poverty impact. Nearly half these resources went to an energy subsidy that expanded to cover one-in-two of the country’s households.

Since 2018, the Government has been restructuring the system by reducing broad subsidies and targeting resources to the poor. This is working. Transfers going to the poorest one-fifth of the population are rising significantly—from just 37 percent in 2019 to 50 percent this year and are projected to reach 55 percent in 2023.

Third, the health system itself. Ukrainians live a decade less than their EU neighbors. Basic epidemiological vulnerabilities are exacerbated by a health delivery system centered around outdated hospitals and an excessive reliance on out-of-pocket spending. In 2017, Ukraine passed a landmark health financing law defining a package of primary care for all Ukrainians, free-of-charge. The law is transforming Ukraine’s constitutional commitment to free health care from an aspiration into specific critical services that are actually being delivered.

The performance of these sectors, which were on the “front line” during COVID, demonstrate the payoff of reforms. The job now is to tackle the outstanding challenges.

The first is to reduce the reach of the public sector in the economy. Ukraine has some 3,500 companies owned by the state—most of them loss-making—in sectors from machine building to hotels. Ukraine needs far fewer SOEs. Those that remain must be better managed.

Ukraine has demonstrated that progress can be made in this area. The first round of corporate governance reforms has been successfully implemented at state-owned banks. Naftogaz was unbundled in 2020. The electricity sector too is being gradually liberalized. Tariffs have increased and reforms are expected to support investment in aging electricity-producing and transmitting infrastructure. Investments in renewable energy are also surging.

But there are developments of concern, including a recent removal of the CEO of an SOE which raised concerns among Ukraine’s friends eager to see management independence of these enterprises. Management functions of SOE supervisory boards and their members need to remain free of interference.

The second challenge is to strengthen the rule of law. Over recent years, the country has established—and has committed to protect—new institutions to combat corruption. These need to be allowed to function professionally and independently. And they need to be supported by a judicial system defined by integrity and transparency. The move to re-establish an independent High Qualification Council is a welcome step in this direction.

Finally, we know change is possible because after nearly twenty years, Ukraine on July first opened its agricultural land market. Farmers are now free to sell their land which will help unleash the country’s greatest potential source of economic growth and employment.

Ukraine has demonstrated its ability to undertake tough reforms and, thanks to the COVID-19 pandemic, has seen the real-life benefits of these reforms. The World Bank looks forward to providing continued assistance as the country takes on new challenges on the way to closer European integration.

This article was first published in European Pravda via World Bank

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Eastern Europe

Liberal Development at Stake as LGBT+ Flags Burn in Georgia

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Photo: Protesters hold a banner depicting U.S. Ambassador to Georgia Kelly Degnan during a rally against Pride Week in Tbilisi, Georgia July 1, 2021. Credit: REUTERS/Irakli Gedenidze

Protests against Georgia’s LGBT+ Pride parade turned ugly in Tbilisi on July 5 when members of the community were hunted down and attacked, around 50 journalists beaten up and the offices of various organizations vandalized. Tensions continued the following day, despite a heavy police presence.

On the face of it, the Georgian state condemned the violence. President Salome Zourabichvili was among the first with a clear statement supporting freedom of expression, members of parliament did likewise and the Ministry of Internal Affairs condemned any form of violence.

But behind the scenes, another less tolerant message had been spread before the attacks. Anxiety about this year’s events had been rising as a result of statements by the government and clergy. Prime Minister Irakli Garibashvili suggested the march “poses a threat of civil strife.” The Georgian Orthodox Church meanwhile condemned the event, saying it, “contains signs of provocation, conflicts with socially recognized moral norms and aims to legalize grave sin.”

For many, these statements signified tacit approval for the abuse of peaceful demonstrators. Meanwhile, the near-complete absence of security at the outset of the five-day event was all too obvious in Tbilisi’s streets and caused a public outcry. Many alleged the government was less focused on public safety than on upcoming elections where will need support from socially conservative voters and the powerful clergy, in a country where more than 80% of the population is tied to the Georgian Orthodox Church.

The violence brought a joint statement of condemnation from Western embassies. “Violence is simply unacceptable and cannot be excused,” it said. The Pride event was not the first and had previously been used by anti-gay groups. Violence was widespread in 2013 — and the reality of attacks against sexual minorities in Georgia remains ever-present.

In a socially conservative country such as Georgia, antagonism to all things liberal can run deep. Resistance to non-traditional sexual and religious mores divides society. This in turn causes political tension and polarization and can drown out discussion of other problems the country is marred in. It very obviously damages the country’s reputation abroad, where the treatment of minorities is considered a key marker of democratic progress and readiness for further involvement in European institutions.

That is why this violence should also be seen from a broader perspective. It is a challenge to liberal ideas and ultimately to the liberal world order.

A country can be democratic, have a multiplicity of parties, active election campaigns, and other features characteristic of rule by popular consent. But democracies can also be ruled by illiberal methods, used for the preservation of political power, the denigration of opposing political forces, and most of all the use of religious and nationalist sentiments to raise or lower tensions.

It happens across Eurasia, and Georgia is no exception. These are hybrid democracies with nominally democratic rule. Armenia, Georgia, Kyrgyzstan, and others have increasingly more in common, despite geographic distance and cultural differences.

Hungary too has been treading this path. Its recent law banning the supposed propagation of LGBT+ materials in schools must be repealed, European Commission President Ursula von der Leyen said on July 7. “This legislation uses the protection of children . . . to discriminate against people because of their sexual orientation . . . It is a disgrace,” she said.

One of the defining features of illiberalism is agility in appropriating ideas on state governance and molding them to the illiberal agenda.

It is true that a mere 30 years since the collapse of the Soviet Union is not enough to have built a truly liberal democratic state. Generations born and raised in the Soviet period or in the troubled 1990s still dominate the political landscape. This means that a different worldview still prevails. It favors democratic development but is also violently nationalistic in opposing liberal state-building.

Georgia’s growing illiberalism has to be understood in the context of the Russian gravitational pull. Blaming all the internal problems of Russia’s neighbors has become mainstream thinking among opposition politicians, NGOs, and sometimes even government figures. Exaggeration is commonplace, but when looking at the illiberal challenge from a long-term perspective, it becomes clear where Russia has succeeded in its illiberal goals. It is determined to stop Georgia from joining NATO and the EU. Partly as a result, the process drags on and this causes friction across society. Belief in the ultimate success of the liberal agenda is meanwhile undermined and alternatives are sought. Hybrid illiberal governments are the most plausible development. The next stage could well be a total abandonment of Euro-Atlantic aspirations.

Indeed what seemed irrevocable now seems probable, if not real. Pushback against Georgia’s Euro-Atlantic choice is growing stronger. Protesters in front of the parliament in central Tbilisi violently brought tore the EU flag. Twice.

The message of anti-liberal groups has also been evolving. There has been significant growth in their messaging. The anti-pride sentiment is evolving into a wider resistance to the Western way of life and Georgia’s Western foreign policy path, perhaps because it is easily attacked and misrepresented.

To deal with this, Western support is important, but much depends on Georgian governments and the population at large. A pushback against radicalism and anti-liberalism should come in the guise of time and resources for the development of stronger and currently faltering institutions. Urgency in addressing these problems has never been higher — internal and foreign challenges converge and present a fundamental challenge to what Georgia has been pursuing since the days of Eduard Shevardnadze – the Western path to development.

Author’s note: first published at cepa

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