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For Members Only: The Consequences of the Caspian Summit’s Foreign Military Ban

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Last September brought with it major changes to the hotly contested Caspian Sea region. These changes were revealed at the IV Caspian Summit held on September 29th in Astrakhan, Russia.

Of the greatest significance was the unanimous vote by the “Caspian 5” (Russia, Iran, Azerbaijan, Turkmenistan, and Kazakhstan) to no longer allow foreign military presence in the Caspian region and that all issues that were to arise would be solved between the littoral states only. The political declaration, according to an announcement by Vladimir Putin and signed by all five presidents “sets out a fundamental principle for guaranteeing stability and security, namely, that only the Caspian littoral states have the right to have their armed forces present on the Caspian.” [1]

Iran’s President Hassan Rouhani echoed this sentiment stating “there is consensus among all the Caspian Sea littoral states that they are capable of maintaining the security of the Caspian Sea and military forces of no foreign country must enter the sea.” [2]The five further agreed to expand cooperation on the Caspian Sea in terms of meteorology, natural disasters, and environmental protection. [3] The declaration also revealed clear formulations on the delimitation of the seabed with each country having exclusive sovereign rights to a 15 mile area. [4] This puts to rest an issue that had been contested since the breakup of the Soviet Union and the emergence of the new independent states. [5]Apart from being a unique body of water in terms of its bio and ecological resources, the Caspian Sea comes with a massive amount of oil and gas reserves, an estimated 18 billion tons with proved reserves of four billion tons. These numbers put the Caspian Sea directly behind the Persian Gulf in terms of the world’s largest oil and gas reserves. [6]

This declaration also outlined many other projects in the works for this region – a major one being the joint construction of a railroad that would encircle the Caspian Sea, connecting key Caspian ports and cutting transportation time in half. The five states also signed an emergency prevention and response agreement which called for joint efforts in responding to emergencies in the region. [7] Additionally, plans were revealed for a joint emergency response exercise to take place in 2016 that will test the capabilities and partnerships between the nations and develop procedures of notifying and coordinating rescue units. [8]

Disguised underneath these projects, exercises, cooperation, and initiatives is a very real threat to the United States and NATO. Russia and Iran have long felt threatened by the possibility of a foreign military presence in the Caspian Sea and Moscow was determined to find a way to ensure it would not lose any more influence in the global energy sector (this in light of Europe slowly but surely diversifying away from Russian gas after the Ukrainian crisis began). The best way to do this was to bring these nations into the fold of Kremlin interests, while making them feel their own interests were also being served. By strengthening relations in their own backyard Russia has been able to increase influence and gain back power in the region. Shutting NATO out of the region also significantly increases Kazakhstan, Azerbaijan, and Turkmenistan’s dependence on Moscow in many different aspects. [9] Another added bonus is that a clear alliance made up of Iran, Russia, Turkmenistan, and Azerbaijan, Ukraine (absent any ‘outsider presence’) would be comparatively easy to control. [10]

The effects of this agreement have already resulted in major changes to relations between Caspian nations and the United States. For years Azerbaijan has welcomed American-Azeri relations by stepping up logistical support for NATO operations in Afghanistan and even serving in Afghanistan as part of the ISAF, but relations have clearly cooled between the two nations. There were also serious talks between Kazakhstan and the United States for building a base on the border in Aktau that would cater to the needs of the United States and NATO troops, but since the signing of this declaration the project has been halted. Finally, the geopolitical shift in the region has resulted in the closing of the North route for NATO military equipment being sent to Afghanistan. [11]Prior to this Caspian Summit agreement the United States had played an active role in helping Azerbaijan, Turkmenistan, and Kazakhstan bolster their military defenses and develop their own navies. [12] The maintaining of close relations in this region was of great political and strategic importance to the United States, not only due to its vast oil and gas riches (originally outside of Russia’s control) but its strategic location that connects it with many regions of Western interest.

Other ways that Russia has benefited from this deal include: the creation of a rapid response force unfurling along the Caspian Sea coast as a means to extend influence over the Nagorno-Karabakh enclave and its troops in the Armenian Gyumri base; jumpstarting cooperation with Giorgi Margvelashvili, the new Georgian Prime Minister; maintaining the ability to block Georgian and Azerbaijan pipelines; improving relations with Turkmenistan; beginning plans for building a pipeline with Turkey (named the Turkish Stream) out to Europe, which will compete with the Trans-Anatolia Gas Pipeline project (sponsored not coincidentally by the US, EU, and Azerbaijan). [13]

The United States has another reason to worry about being blocked from the region – Chechnya. In Azerbaijan, jihadists from the Jamaat (Community) Group are already operating and maintaining connections with Chechen Islamists, the Caucasus Emirate, and Syria’s Islamic State: the attack on Eurovision in 2012 and the murder of several Shiite clerics all carry their hallmarks. This insurgency is threatening to turn the region into one of the most ungovernable locations in the world where neither aggressive use of military/intelligence force (counterterrorism operations courtesy of Russia) nor engaged economic assistance has helped the situation. With the United States not being able to join together with forces in the region this threat will not just remain present but will likely only continue to grow. [14]

Arguably, the signing of this agreement to ban foreign militaries has been the biggest game-changer to take place in the Caspian over the last 20 years. The West not being able to be involved in the region not only decreases energy development and security in the oil and gas-rich Caspian sea basin, but also wounds in several other respects: it reduces the ability to deter adversaries in the region against attacks; it weakens what were growing U.S. alliances; it allows Moscow to project its power over the other Caspian nations with little interference; it cuts off access to ports for deployments to the Middle East; it does not allow for responses to humanitarian crises in the region; and it does not allow for the U.S. to project its own power and reach as easily as it once did. All of these make the United States and NATO much weaker than before the Summit began. Round One in this heavyweight prize fight has clearly gone to the Russian bear.

 


[1]Dettoni, J. (2014). “Russia and Iran Lock NATO Out of Caspian Sea.” The Diplomat. Retrieved from http://thediplomat.com/2014/10/russia-and-iran-lock-nato-out-of-caspian-sea/

[2]Ibid.

[3]PressTV. (2014). “No foreign military force must enter Caspian region: Rouhani.” PressTV.ir. Retrieved from http://www.presstv.ir/detail/2014/09/29/380453/no-foreign-force-in-caspian-region/

[4]Belinksi,S. (2014). “Caspian Sea Could Be Key To Russian Control Of Eurasian Energy Markets.” Oilprice.com. Retrieved from http://oilprice.com/Energy/Energy-General/Caspian-Sea-Could-Be-Key-To-Russian-Control-Of-Eurasian-Energy-Markets.html

[5]PressTV. (2014). “No foreign military force must enter Caspian region: Rouhani.” PressTV.ir. Retrieved from http://www.presstv.ir/detail/2014/09/29/380453/no-foreign-force-in-caspian-region/

[6]TASS, (2014) “Real breakthrough reached at 4th Caspian Summit – Putin.” TASS Russian News Agency. Retrieved from http://tass.ru/en/russia/751856

[7]Ibid.

[8]Sputniknews. (2014). “Countries bordering the Caspian Sea will hold joint emergency exercises in 2016, Russian President Vladimir Putin said Monday.”   Sputniknews.com Retrieved from http://sputniknews.com/military/20140929/193422433.html

[9]Belinksi, S. (2014). “Caspian Sea Could Be Key To Russian Control Of Eurasian Energy Markets.” Oilprice.com. Retrieved from http://oilprice.com/Energy/Energy-General/Caspian-Sea-Could-Be-Key-To-Russian-Control-Of-Eurasian-Energy-Markets.html

[10]Ibid.

[11]Armanian, N. (2015). “Turning point in Eurasia: Azerbaijan distances itself from the USA and the EU.” TheFifthColumnews.com. Retrieved from http://thefifthcolumnnews.com/2015/06/turning-point-in-eurasia-azerbaijan-distances-itself-from-the-usa-and-the-eu/

[12]Ibid.

[13]Ibid.

[14]Cohen, A. (2012). “Anti-Terrorism Operation in North Caucuses Exposes Russia’s Vulnerabilities.” TheDailySignal.com. Retrieved from http://dailysignal.com/2012/10/23/anti-terrorism-operation-in-north-caucasus-exposes-russias-vulnerabilities/

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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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