[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] A [/yt_dropcap]s most of the industrial world and major powers focus on the conflicts in the Middle East, the obstinate behavior of North Korea, and the deterioration in the relationship between Russia and the West, there exists a “frozen conflict” that has the possibility of affecting the Middle East, Europe, and every nation within the Caspian periphery.
It is the current crisis between Armenia and Azerbaijan over the Nagorno-Karabakh region and if it is not resolved or successfully mediated soon then the possibility is high that armed conflict between the two nations will occur; an action that serves the interests of no one on the geopolitical stage outside of the jingoistic goals of the two belligerents. The territorial dispute has gone on for decades and has cost tens of thousands of lives with charges of ethnic cleansing levelled by both sides.
The Caucasus was the ancient crossroads between former empires and their heirs: Russian (tsarist and modern), Ottoman (Turkey), Persian (Iran) and Armenia, the first country in history to recognize Christianity as the official religion of the state, decades before Theodosius did so in Byzantine empire. All four, whose control of the area waxed and waned over the centuries, believe they have historical precedent in controlling the area.
The beginning of the dispute can be traced to Stalin’s decision to carve out a large district, the Nakhichevan Autonomous Soviet Socialist Republic, and put it under the control of Soviet Azerbaijan, both to divide and rule and to placate Turkey, whose close ties with Azerbaijan convinced Stalin that the maneuver could be used to forge closer ties with the Turks. What Stalin could not foresee was the simmering discontent the region would foster over the next half century, the result being that most of those in the region were Armenian under Azerbaijani control.
Soviet control maintained a somewhat firm hand over the region until the first signs of the dissolution of the Soviet Union in the late 1980’s. The discontent assumed organized form from 1988 to 1992 as the Karabakh movement, a nationalist movement that began in the Nagorno-Karabakh Autonomous Oblast that advocated for the transfer of the majority Armenian-populated Nagorno-Karabakh region of neighboring Azerbaijan to the jurisdiction of Armenia. In 1988, the autonomous Nagorno-Karabakh region, comprised of a majority Armenian population, passed a referendum to join Soviet Armenia. This created enormous tension as Azerbaijan fiercely decried the legitimacy of the vote. This led to the intervention of Soviet troops in response to heavy interethnic conflict in the region between Azerbaijani troops and Armenian secessionists. On November 26, 1991, the Azerbaijan parliament revoked the autonomous status of the Nagorno-Karabakh Autonomous Oblast and attempted to divide the region and incorporate it piecemeal into five Azerbaijani districts, Shusha, Khojavend, Tartar, Goranboy, and Kalbajar. Because of this action, the Armenian population in the disputed region immediately declared their independence under the banner of the Nagorno-Karabakh Republic two weeks later on December 10th. Full scale fighting intensified in late 1992, and the conflict quickly escalated into a full-scale war in which 30,000 people were killed and over one million Azerbaijani refugees were displaced. Over a two-year period, a succession of Armenian victories put the disputed region firmly under Armenian control before a ceasefire was brokered by the Russians and successfully implemented in 1994. At the signing of the ceasefire, Armenian forces controlled almost 20% of Azerbaijani territory.
As a result of the war, most of the former autonomous oblast has since remained under the control of the ethnic Armenian forces of Nagorno-Karabakh. After the dissolution of the Soviet Union, the United Nations passed several resolutions recognizing the Nagorno-Karabakh region as part of the Republic of Azerbaijan. To this day, the Nagorno-Karabakh Republic is not officially recognized by any government outside of its own. Armenia does not recognize it because of the volatility in doing so would limit their flexibility in diplomatic negotiations; in addition, Russia, a key ally of Armenia, is resolute in not granting the area official recognition.
The ceasefire was violated hundreds of times over the last two decades until April of 2016, when heavy fighting took place along the Armenian-Azeri contact line in Nagorno-Karabakh resulting in hundreds of deaths. The clashes lasted four days and a larger conflict was avoided via the implementation of another ceasefire; however, the events highlighted the incendiary risk of a full-fledged war that has been omni-present for decades.
Compounding this problem is the labyrinthic array of alliances that rival the Byzantine foreign policy that was present in the area millennia ago. Azerbaijan has strengthened ties with Israel over the past few years. Trade exchanges, security agreements, and increased cooperation from agricultural projects to telecommunications have led to a symbiotic relationship between the two countries. Azerbaijan is Israel’s top partner in trade within the Muslim world, supplying Israel with millions of tons of oil every year, amounting to 40% of Israel’s oil being directly provided by Azerbaijan. Exports from both countries increased from a paltry $2M in the late nineties to almost half a billion at present time. In 2012, both countries signed an arms agreement totaling 1.6 billion dollars, in which the Israeli-run Aerospace Industries would provide drones, anti-aircraft and missile defense systems. After last year’s skirmish in April, Israeli media reported that Azerbaijan bought five billion dollars of Israeli weaponry, including advanced intelligence equipment. The Azerbaijanis have reportedly already put their newly acquired weapon systems to use, as the Armenians have protested to the Israeli government on the use of Israeli-bought suicide drones (the Israeli Harop) being used to seek and destroy Armenian targets.
But why this odd coupling? What are the reasons that these two countries, a Jewish state and the other being primarily dominated by Shia Muslims? There are shared mutual security concerns. Both nations view Iran as a existential threat, Israel for obvious reasons and Azerbaijan because of Iranian support for Armenia. Secondly, for Israel, the deterioration of its relationship with Turkey have forced the state to strengthen ties elsewhere within the geo-graphical vicinity. Azerbaijan shares a border with Iran, making it ideal for Israeli covert operations to have a point of access. Indeed, Iran has not failed to recognize this and has accused the Israelis of using Azerbaijan as a corridor to allow their operatives to kill their nuclear scientists, as well as provide continual ground-level Israeli spying. Additionally, most intelligence analysts have speculated that the Israelis could use Azerbaijani airfields to launch possible airstrikes against Iranian nuclear facilities, eliminating the need for long re-fueling endeavors and other logistical obstacles. Increased cooperation and shared security concerns over oil also addresses a continual worry for Azerbaijan, countering Iranian and Russian attempts to control oil export routes, especially considering the volatility of the Nagorno-Karabakh region in destabilizing their energy industries. Minor concerns for both countries are their cooperation against smaller threats such as the Hizb ut-Tahrir, whose pan-Islamic ideology threatens both states.
Both countries try to keep their relationship discreet; this was evident in a leaked 2009 cable in which Azerbaijan’s President Ilham Aliyev was quoted as saying that his country’s relationship with Israel was as like an iceberg: “nine-tenths of it below the surface.”
Outside of the aforementioned security concerns, within the political arena Baku hopes that allying itself with a democratic nation will remove or diminish western criticism of its one-party state over which President Ilham Aliyev presides. Attention from human rights organizations, including Amnesty International, and a ranking near the bottom on the Democracy Index have plagued his government for years, with continual accusations of harassing or killing dissenting journalists, restricting opposition parties, as well as vote tampering comprising the bulk of international criticism. Armenia is subject to much of the same criticisms – the recent Armenian election, won by President Serzh Sarksyan’s ruling Republican Party, was also tainted by vote-buying according to OSCE monitors; though not to a degree previously feared by international third party observers. Both countries have modified their constitutions to allow for long term rule, solidifying inherent power structures that allow both countries to continue their militant policies toward each other.
Turkey, whose relationship with Israel is rocky, nevertheless is the other member in the trifecta opposing Armenia. They are united by economic trade and a shared defense pact ratified by both countries seven years ago, promising military and political aid against an outside aggressor. Erdogan has made the Turkish position clear concerning their support for Azerbaijan in any conflict with Armenia, telling an Azerbaijani reporter that “we will support Azerbaijan to the end.” As Turkey is also a member of NATO, there is added incentive to Azerbaijan in signing the pact, certainly cognizant of NATO’s defense policy concerning its member states, indirectly linking certain military actions that might possibly be evoked in case of Armenian aggression in response to Turkish aid to Azerbaijan. In addition, Armenian insistence that Turkey recognize the Armenian genocide of 1915 is an ongoing issue that divides the two even further.
Georgia, while having somewhat cordial relations with Armenia, clearly supports Baku’s stance, so much so that previous Georgian President Mikheil Saakashvili commented in 2001 that “whoever opposes Azerbaijan” is Georgia’s “enemy.”
For Armenia, the options are limited but they include Russia, which has no desire to see their orthodox brethren subjected to Shia aggression. Ties between both countries run deep; both countries signed a defense pact in Yerevan, and there are several Russian staging bases within Armenia. Russia has also supplied Armenia with over one billion dollars in arms sales. Within Armenian infrastructure, Russian involvement has deep roots, with Russian companies controlling or owning almost all of Armenia’s railways and gas pipelines.
For Moscow, Azerbaijan is the prize and Armenia is the tool for achieving that. Azerbaijan’s geopolitical location and rich oil resources are what interest the Kremlin in addition to their suspicion of a Shia Muslim country on their periphery. While sympathetic to the Armenian cause concerning the disputed Nagorno-Karabakh region, the Russians have stated, however, that their mutual defense pact does not cover the disputed area and that it falls on Armenia alone to defend it if it is attacked. While the pact guarantees protective military aid for the sovereignty of Armenian territory, the Armenians know that they are alone in defending their interests in the disputed region as Russia does not recognize it as part of Armenia proper. Adding intractability to the situation is the fact that Russia has been selling arms to both Armenia (over one billion dollars’ worth) and Azerbaijani (four billion dollars) under the supposed justification that controlled parity ensures peace. In the previous conflicts that have flared up over the last year, casualties on both sides were primarily inflicted by purchased Russian weapons. Azerbaijan’s defense budget greatly exceeds Armenia’s entire national budget, and previous Armenian successes on the battlefield can no longer be taken for granted, with recent Azerbaijani spending on weapons that dwarfs Armenian expenditures in the same area. To counter this imbalance, a disturbing scenario has developed with the Armenian acquisition of the Iskander ballistic-missile systems from Russia last year. Armenia is the only foreign country to allowed to acquire the advanced Russian missile system, despite bids from much wealthier nations, indicating Russian interests in assisting Armenia to achieve parity in the face of increased Azerbaijani military spending. This was later echoed by the Armenian President Serzh Sargsyan, who argued the missiles were necessary to address the growing surplus of offensive weapons procured by Azerbaijan, a strategic argument that has the backing of Moscow (a paradoxical position as Moscow has sold Tos-1A Buratino thermobaric heavy rocket artillery systems, a weapon that can reduce a city block to rubble) to Azerbaijan. The Iskander-M missile has a range of five hundred kilometers (putting it well within reach of Azerbaijani oil facilities) and is considered highly accurate. Outside of being equipped with conventional warheads, it can also be adapted to carry nuclear warheads. While this nuclear capability may seem at first glance to be an improbable scenario, there is enough circumstantial evidence to be of concern, suggesting that the Armenians are more interested in acquiring tactical superiority that will make the increases of Azerbaijani conventional weaponry redundant. At a press conference on April 29 in Armenia, MP Hrant Bagratyan, a former prime minister, claimed that Armenia has nuclear weapons, later adding that they also “have the ability to create nuclear weapons” when asked to clarify his original comment. While most of the intelligence community considers his comment to be nothing but bluster, recent arrests of Armenians in Georgia trying to sell enriched uranium, as well as recent comments by both military and civilian leaders in Armenia either claiming to have a nuclear weapon or the capability in developing them, have not put their neighbors at ease.
Iran has cordial, friendly relations with Armenia, to the extent that Iran tolerates and bestows special recognition to the Christian Armenian population present in northern Iran. The ties between the two countries run deep, during the Iran-Iraq war, a significant number of Armenians died fighting for Iran. Iran even allows them to be represented by choosing their own delegates in parliamentary elections. The coinciding interests of both Armenia and Iran result in a rarely observed phenomena within the arena of international relations, an Islamic Republic working with a Christian orthodox Armenia concerning shared geo-political interests as well as economic endeavors, such as the construction of a hydro-electric plant on their shared border. In addition, Armenia is providing Iran with electricity in exchange for natural gas imports; with the lessening of international sanctions, Iran also views Armenia as an outlet to Eurasian markets, as Armenia is the sole Eurasian Economic Union member that borders Iran.
There are large numbers of Iranians of Azerbaijani descent (more so than the entire population of Azerbaijan); as Iran has conflicting interests with Azerbaijan, there is always an ever-present Iranian fear of a possible Azeri insurrectionist movement within Iran. While not problematic to the degree that some speculate, there have been problems in the past with separatist movements, and Iran casts a watchful eye on its second largest minority. Iran considers the working relationship between Israel and Azerbaijan to be a major security threat on its Northern border. It serves Iranian interests to have a weakened Azerbaijan and supporting Armenian expansionist aims over the conflicted Nagorno-Karabakh strengthens their hand. Azeri off-shore operations have been subject to harassment by Iranian naval vessels, which have tried to disrupt Azeri attempts to mine the Caspian for oil; and the Azeri’s have accused Iran of training operatives, arresting several within the Azerbaijan border on charges of terrorism. Disagreement with Turkey over its strategic initiatives in both war-torn Syria and Iraq has led to disputes between Ankara and Tehran, which adds even more baggage to the labyrinthic relations between all the aforementioned countries.
Armenia also has strong ties with Greece, both in their historical past within their shared Eastern Orthodox faith, as well as mutual co-existence throughout the centuries under both the Byzantine and Ottoman empires. They have signed bilateral treaties of cooperation, and Greece is one of Armenia’s military partners; Greece trains much of the Armenian officer corps. The fact that Greece has had a historically difficult relationship with Turkey certainly isn’t lost on Armenia and like most multi partner alliances, this relationship is useful leverage to Yerevan.
Internal turmoil in both countries, fueled by economic woes, can also accelerate the path to conflict. Azerbaijan’s currency has plummeted for several years (though it has shown recent signs of strengthening through an enlarging tourist trade); Baku is heavily dependent on petroleum and natural gas exports and falling prices have continued unabated for several years. Azeri’s have been keeping most of their savings in foreign currency, exasperating the situation. Armenia isn’t much better. Dire economic conditions in both countries could tempt the leadership on either side to engage in small scale military endeavors to shift attention away from criticism of the government’s record on repressive measures taken on dissent (opposition parties, the press, etc.), as well as shift attention away from their struggling economies. Patriotism is strong in both countries among the general populace, and serves as a ready distraction by the governments of both countries to keep internal criticism low.
The repercussions that could result from an emerging conflict could be devastating not only to the surrounding area, but could deeply affect Europe as well. The Azerbaijani Defense Ministry releases almost daily reports of Armenian violations of the current ceasefire, for example: On March 23rd the Azerbaijani Defense Ministry claimed that Armenia violated the current ceasefire along the line of contact between Azerbaijani and Armenian troops 126 times in a 24 hour period; on March 30th, there were 146 violations, April 3rd 110 violations, etc. Armenia makes similar claims against Azerbaijan violations, stating similar numbers.
There are two major export routes that the Caspian region uses to export oil/gas to Europe and it is primarily Azerbaijan, which some analysts state sits on a potentially exploitable two trillion cubic meters of gas, which can provide a substantial European need. It is a symbiotic relationship for both Europe, which desires to move away from dependence on Russian gas, and Baku, where a substantial part of its revenue (20%) is derived from its energy sector. In addition to the established routes in existence, Baku is currently building what is referred to as the Southern Gas Corridor, a proposed 3,500-kilometre-long network of three gas pipelines from Azerbaijan’s Caspian Sea basin that will enable Europe to offset Russian price fixing and using its supply of gas to Europe as a foreign policy tool. Russia supplies over one-third of the EU’s crude oil needs and Russian pipeline dominance is expected to continue for at least two full decades if measures are not taken to diversify the EU’s energy needs. European hope that existing and proposed Caspian oil/gas pipelines will alleviate them from relying on fickle Russian gas policy to meet their crucial energy needs could be dashed by a conflict between Armenia and Azerbaijan, even more so considering previous statements out of Yerevan that said pipelines would be a legitimate military target if a conflict ensues. The best-case scenario in such a conflict is that Azerbaijan would likely shut down the pipelines down to avoid spillage due to leaks caused by targeting. This would be devastating, as the Baku-Ceyhan pipeline ships over one billion barrels of oil per day, supplying Turkey as well as Israel. In addition, the ongoing construction of the Southern Gas Corridor, in which a predicted ten billion cubic meters of gas could be shipped into European markets, could also be targeted in a conflict between the two countries. The economic repercussions that would happen if an emerging conflict would arise are enormous; just the mere possibility of such a conflict make emerging pipeline projects risky financial endeavors, and damaging hostility can cause a spike in the global oil market. With long term plans to add more pipelines reducing European need for Russian gas, the greater the impact if conflict arises in the future. It should be noted that it would be against Russian economic interests if the Azerbaijani-supplied Southern Gas Corridor is completed, further complicating the issue, given Russian support for Armenia.
Russian interests are best explained by Maksim Shevchenko, who has on two separate occasions been a member of the Public Chamber, a group of advisors under Putin: “If a new war erupts between Armenia and Azerbaijan in Nagorno-Karabakh, Russia, Georgia and Turkey will be involved in it.” The Russians fear that a war between the two countries (or an emerging civil war in either country) could descend into chaos and will provide the right fertilization for radical terrorism as an emerging vacuum would result from chaotic instability, citing examples in both Syria and Iraq as a horrifying template. Claiming that the West has little interest on the region, it is up to Russia, Turkey, and Iran to put pressure on both Armenia and Azerbaijan to reconcile their differences over the disputed region. Shevchenko stressed that the Russia-Turkey-Iran format, consisting of three countries with a shared disdain for Western influence in the region, is ideal for a Nagorno-Karabakh settlement. Criticizing Armenian support for joining the EU, Shevchenko, echoing Russian political sentiment, believes that such aspirations only make the problem worse, and will create more conflict with the addition of other countries who do not understand the instability of the Caucus region to begin with.
For the United States, their decade-long support for nations in the Caspian region Georgia, Armenia, and Azerbaijan to achieve autonomy and provide a bulwark against Russian expansion could be thwarted. Reducing reliance on Russian gas delivery weakens Russian leverage, so it serves Western interests to foster Caspian energy resource distribution to Western markets. Conflict could destabilize the entire area and lead to Russian intervention and an increased military presence within the Southern Caucus region. A protracted conflict could also lead to millions of refugees, straining the capabilities of surrounding countries like Georgia to handle the sudden influx. Of secondary concern would be the alliance entanglements that would involve both Turkey (a NATO member) and Russia.
According to the International Energy Agency, 95% of the global economy is affected by the actions of half a dozen states in the Middle East which are facing internal crisis, terrorism, corruption and a host of destabilizing scenarios; adding more convoluted problem scenarios inherent within the Caspian region and surrounding countries is problematic at best and catastrophic at worse, especially considering the close relationships that Israel, Iran, and Turkey have with Azerbaijan and Armenia.
So what can be done? What can bring peace to the region or at least a sustainable stability?
Past attempts have only been moderately successful. The Organization for Security and Cooperation in Europe (OSCE) created the Minsk group in an attempt to create a peaceful resolution to the frozen conflict through negotiation, but, like the Russian attempts, nothing permanent has resulted in anything other than ceasefires. Neither the Russians nor the Minsk group have been able to de-escalate the tension between the two countries whose hatred of each other displays a depth past their respective leaderships all the way down to the community level.
The United States is limited both by geography and currently poor relationship with Russia, Turkey, and Iran. Its diplomatic initiatives would be limited to coercion, economic packaging which includes assistance and financial investments, etc., and in the same economic stratus could curtail those activities in order to exert direct pressure on either Baku or Yerevan by withdrawing economic assistance or establishing sanctions. In this regard, the United States could be joined by the EU in discouraging economic assistance and halting projects that both countries (especially Azerbaijan) need to boost their economies if there is no collective push by bother countries to mediate their differences peacefully. Putting a halt to outside projects that benefit both nations could certainly be used as substantial leverage to bring both parties back to the table.
Both the United States and the EU should encourage Russian mediation, as past experiences have shown some success in Moscow’s attempts to broker peace by dealing directly with the military leadership of both Armenia and Azerbaijan. However, Russia’s options are limited as well as both Baku and Yerevan express deep hesitation in accepting any semblance of Russian peace-keeping forces in the disputed region, as it would insinuate a return to the subservient roles that both countries played within the Soviet Union.
All of the major powers that are influential in this region – Russia, Turkey, Iran, the EU, and the United States – must work directly together to produce a clear schematic of how disastrous a conflict would be to both nations. Ideas that would defuse the situation must include how to deal with the sole main issue that divides the two nations so deeply, the Nagorno-Karabakh region. Various solutions have been discussed, from the obvious return of the territories surrounding Nagorno-Karabakh to Azerbaijani control to awarding a limited autonomy that will allow for self-governance to a degree while still allowing for an Azerbaijani influence, somewhat like the status of Hong Kong in China. International security guarantees by Russia and the EU in addition to international peacekeeping forces along any disputed borders are also another option.
There are two specific actions that the United States could enact that will affect the two countries separately. The U.S. could threaten to pull out of the Minsk peace process and take the matter to the United Nations. Armenia would fear such an action because of past rulings where the Security Council has expressed support for Azerbaijan’s territorial claim to the disputed region. In turn, however, Azerbaijan would likely dissuade the Americans from doing this, as the Azeri’s use American involvement as a counter to Russian influence in the region, specifically in regards to the close relationship between Yerevan and Moscow. Both proposed actions come with large risks as a diminished American role in mediation in the Caucus region will be seized by Moscow as legitimately ceding the area to the Russian sphere of control.
Recent joint Russian and Turkish cooperation concerning their respective roles in the Syrian conflict gives both countries a progressive familiarity with each other and this current working relationship may yet be successful in brokering a lasting peace between their secondary allies in Baku and Yerevan. Additionally, Moscow must stop their practice of selling weapons to both sides under the bizarre notion that it achieves “parity.”
Certain steps must be taken as a resolution is being worked on. International observers must be allowed in greater numbers as well as increased and better communication on a tactical level between the military leadership of both countries, not only to minimize the chances of an incendiary spark that could ignite a conflict, but also as a step toward working to a solution by adhering to third party observation as a common denominator in solving almost daily disputes. A proposed UN Security Council resolution condemning any future substantial military action could also be used to award coveted legitimacy to the nation pressing its case.
The OSCE must realize that simply managing the current dispute between the two countries isn’t acceptable and that a resolution and the long-term commitments that come with it must be the primary goal. This includes everything from daily mediation to post-settlement security issues as well as addressing the multiple issues that come with such a resolution, such as community displacement from the previous fighting and the possibility of their eventual return. The alternative to failure would be an additional conflict (the other being the Ukrainian crisis) that the OSCE would have to manage.
In the past both Armenia and Azerbaijan have been malleable when international attention has been acutely focused on their disputes; and their belligerency toward each other manifests itself physically when international attention wanes. Vigorous attention by the major powers affecting both countries should be sharp and focused. Both countries must be convinced that their future lies in economic integration within the Caspian periphery and that open conflict will achieve nothing beneficial to either country. Armenia must understand that they stand alone in lacking international allies concerning their claim; their worsening economy and a lack of energy-producing integration projects that their Caspian neighbors have begun in their own countries only highlight their isolation. Azerbaijan must understand that procuring offensive weapons at great expense in anticipation of achieving their goals militarily will not remove the problem and in turn, will destroy the economic projects both recently created and planned to bring prosperity to their nation. There will always be violence unless both sides procure a peace agreeable to both. There is everything to gain and everything to lose.
Years ago, the late Meir Dagan, former Director of the Mossad, visited Azerbaijan. Knowing his love for chess, his Azeri hosts took him to a local high school chess club where he lost every game. His hosts were embarrassed that their honored guest was humiliated and were not expecting this outcome as Dagan fancied himself a good player. While unsettling within the narrow confines of diplomatic protocol, the current chess game being played over the disputed Nagorno-Karabakh region is far, far riskier.
Quality of Life in Latvia is not a priority
Four presidents, 14 governments and eight Seimas have changed in Latvia over the past 20 years. The country joined the European Union and NATO, and then switched to the euro. But have Latvians become better off? Has their quality of life improved? Statistics shows that the general well-being of population remains very low. Political turbulence only worsens the situation.
Thus, according to Numbeo.com portal, one of the largest databases on the cost of living and quality of life worldwide, Lithuania and Latvia are the worst Nordic countries for quality of life.
Quality of Life Index by Country 2019
The leaders of the rating are Denmark, Finland and Iceland. Latvia
showed the lowest result, the quality of life index here is 149.15 points. In
Lithuania, the result is slightly higher – 156.36 points.
Numbeo experts took into account the purchasing power of the population, safety, health care, the cost of living and some other factors.
It is noted that the world ranking of countries for the quality of life is led by Denmark, Switzerland and Finland. Estonia took 11th place, Lithuania – 29th, and Latvia – 34th.
The more so, experts said that the proportion of shadow economy in Latvia rose by 2.2 percentage point last year to 24.2 percent.
The shadow economy proportion in Latvia has risen for the past two years in a row.
EU-SILC survey gives another frightening indicator. According to eurostat.ec.europa.eu, Latvia, as well as Estonia and Lithuania are top three EU countries in terms of poverty risk among pensioners.
Political and economic short-sightedness has lead to the state when the Baltic States have become the first battlefield in case of war between NATO and Russia.
The United States is preparing for the use of nuclear weapons in Europe along with non-nuclear countries, said Vladimir Ermakov, director of the Department for Non-Proliferation and Arms Control of the Russian Foreign Ministry. Experts point out that military airfields in the Baltic States and Poland have already been prepared to receive NATO aircraft that can carry tactical nuclear weapons. If take his words seriously, this means the end of the Baltic States’ existence.
The behavior of the authorities guaranteed Latvia, Lithuania and Estonia the status of the first battlefield, despite the fact that in the event of war, economy would be completely destroyed and population would disappear.
How the Caspian Sea joins the Black Sea
In the development of international cooperation and the deepening of industrial cooperation, the leading role belongs to the formation of a network of international transport corridors. It has a special place in solving transport problems associated with the expansion of interstate transportation, economic, cultural and other ties, with the creation of an international transport infrastructure that has common technical parameters and ensures the use of a single transportation technology as the basis for the integration of national transport systems into the global transport system.
Developing corridors are to play a system-forming role in the economic and social development of the territories along which they pass. Their creation is directly related to projects for the development of sectors of the economy and social sphere.
If a modern transport corridor connects the Caspian Sea and Black Sea, it will lead to uninterrupted cargo transportation between Asia and Europe. New opportunities for the regional states will be opened up. This was confirmed by the first meeting of the foreign ministers of Azerbaijan, Romania, Georgia and Turkmenistan, held in mid-March 2019 in Bucharest.
According to its results, a political declaration was signed. The document reflects the determination of the four states to implement the project of an international freight route between two seas by joint forces.
As expected, the corridor between the two seas will have a real impact on the standard of living in the participating countries and cause a sharp surge in business activity in neighboring regions.
The idea of the project is to make full use of the geographical proximity of Romania, Georgia, Azerbaijan and Turkmenistan, as well as the capabilities of the ports of Constanta in Romania, Poti in Georgia, Baku in Azerbaijan and Turkmenbashi in Turkmenistan.
New transport route will allow establishing a direct connection between the port of Constanta and the Danube River, and then the rivers and canals on the European continent, that will open access to Central and Northern Europe.
In general, the Caspian-Black Sea region is becoming links of a single Eurasian transport network.
The main question is how to direct the necessary volumes of cargo along this route, which would make its work profitable and profitable. To meet these challenges, in the near future four countries have planned to create an expert working group, optimize working procedures, harmonize tariffs, identify remaining infrastructure and legal constraints, and jointly promote the project at the international level, including in the course of interaction with the European Union. But it will not be easy for them to achieve all these ambitious goals.
The closest allies of Azerbaijan, Turkey and Russia, support all the projects aimed at strengthening economic cooperation between Baku and other countries of the Caspian-Black Sea region. Moscow and Ankara are lobbying for the creation of a transport corridor between the two seas.
Azerbaijan once again demonstrates that it is becoming one of the most important transport hubs of Eurasia – a transit hub in which the East and the West are tightly tied.
This country is interested in East and West, not conflicting with each other, but driven forward by the single energy of partnership.
China’s changing interests in South Caucasus
On April25-28,“Second Belt and Road Forum for International Cooperation” took place in the capital city of China. From South Caucasus region only Azerbaijan leader Aliyev was in the list of 36 top-Level attendees (Diplomat, April 27).As the Azerbaijan was participating first forum in 2017 on ministerial level, visit of President in second forum demonstrates intention of both sides for close cooperation within the framework BRI.
Despite fact that China’s strong ambition to enter European market through BRI makes Georgia one of the most important players in the region (it has FTA both with China and EU) its high-level officials did not attend the forum (Emerging-Europe, January 3, 2018).
Generally, South Caucasus region was not in the Chinese focus when the BRI project was unveiled in 2013.Its attitude to the region has changed afterwards. Being part of the Central Asia-West Asia Economic Corridor, South Caucasus has strategic importance for China. At the same time, transportation projects such as Baku-Tbilisi-Kars railway and Anaklia Deep-Sea Port has increased significance of the region.
From geopolitical point of view stability in Azerbaijan and Georgia’s political problems with Russia creates ground for Chinese presence in Caucasus. It is clear that having political problems with West Russia is not willing to confront China. Therefore, using these opportunities and establishing good relations both with Georgia and Azerbaijan China is able to avoid its biggest rival in Eurasia and use shortest way to European markets (Trend.az, April 10).
Importance of South Caucasus countries within the BRI framework is not same. Armenia has less potential for BRI. It does not have enough transportation infrastructure and its borders with Azerbaijan and Turkey closed. Armenia has a potential to become a corridor to markets of Eurasian Economic Union (EEU) and Iran. However, it does not have borders with the members of EEU and railway project between Armenia and Iran is not viable due its high costs ($3.2 billion) and less importance in commercial means (Vestnikkavkaza, August 25, 2018).Also, China has borders with two biggest members of EEU and could easily reach EEU markets through them.
In the case of Georgia, China is the biggest foreign investor. China’s Hualing Group controls Kutaisi free industrial zone (FIZ), owns Basis Bank, hotels, wine export enterprise. It also constructs “Tbilisi Sea New City” near Tbilisi Sea in which company has already invested around 150 million dollars (hualing.ge).Another Chinese company CEFC Energy owns 75% of Poti FIZ (Cbw.ge, March 20).
Unlike the Georgia, mostly state-owned Chinese companies have invested in Azerbaijan. One of these companies CTIEC Group constructed biggest cement factory in Azerbaijan in 2014.China also has a great interest on Baku International Sea Trade Port as it is one of the main ports within BRI. Based on intergovernmental grant agreement China transferred $2 million worth equipment to the port (Azernews, April 4, 2018).
Despite fact that Azerbaijan is China’s key trade partner in the South Caucasus (it accounts 43 percent of China’s trade turnover in the region) it has massive investments in Georgia (Azernews, April 25). It mostly related to political orientation of these countries. Georgia follows more western orientation that made it more attractive for China while Azerbaijan implements balanced strategy and it does not want to feel China’s pressure. Besides, Azerbaijan is not in need of financial assistance like Armenia and Georgia as it has enough financial reserves.
However, recent developments of Sino-Azeri economic relations within the framework of the Second Belt and Road Forum creates new perspectives for China’s presence in South Caucasus. During the forum 10 agreements worth of 821 million USD has been signed (Azvision.az, April 24). These contracts cover different economic spheres of non-oil sector including the construction of a tire factory in the Sumgayit chemical-industrial park, the creation of a 300-hectare greenhouse complex in the Kurdamir region of Azerbaijan, and the construction of agrological industrial parks in the Guba, Goychay and Khachmaz regions (Turan.az April 24).If we take in account that Chinese investors have invested800 million USD in the economy of Azerbaijan since independence, obtained agreements in the forum worth of same amount shows China’s growing interest in Azerbaijan.
Nevertheless, it does not mean that China’s preference of Georgia has changed. Within the BRI project both Azerbaijan and Georgia are of geopolitical importance for China. It is in China’s interest to boost bilateral relations with both of countries. It is apparent that China already has considerable investments in Georgia and now it is time to deepen cooperation with Azerbaijan. At the same time Azerbaijan is not going to cross limits of its balanced policy. Chinese companies that signed agreements in second forum are government affiliated companies as well. It again shows that Azerbaijan is willing to deepen cooperation without creating room for pressure in its domestic economy.
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