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Potential for Development of Caspian States Cooperation

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In 2020-2021, it is expected to implement new economic projects in the Caspian sea and form a geo-economic strategy for the integration of the Caspian States.

Today, the multilevel system of cooperation needs an effective and modern mechanism of business and trade and economic cooperation. Its balanced and internationally recognized legal framework has already been established. The Convention on the legal status of the Caspian Sea is ratified now by all countries except Iran.

Azerbaijan has friendly relations with all Caspian countries and can act as a key link in the issue of integration. Baku demonstrates its readiness to connect the South with the North, and the East with the West, that will make the Caspian region as open as possible for economic cooperation with third countries.

There is a great potential for further development of the cooperation between Kazakhstan and Azerbaijan in the fields of transport and transit transportation, information and communication technologies, energy, industry and agriculture. Both countries are implementing large-scale infrastructure projects to benefit from location of two countries on shortest route passing through the East-West International Corridor. At the same time, joint efforts are implemented in order to widely apply multimodal transportation in the Caspian basin.

An important component of any economic projects in the region is to ensure the safety of their implementation. Among all the Caspian States, Russia is the only country that is able to achieve this by building a constructive dialogue with Tehran, as well as monitoring the implementation of treaty obligations by the Caspian five countries.

Currently, Russia is seeking to involve the coastal States in joint economic projects and to ensure investments of the Gulf States in the Caspian region.

On November 8, 2017, the Russian government approved the Strategy for the development of seaports of the Caspian Sea, road and rail trips to them until 2030. The strategy is aimed at creating a sustainable transport and logistics corridor, developing trade and tourism primarily with Iran, India and the Gulf States. It provides for the development of the Caspian ports of Astrakhan, Olya and Makhachkala and the construction of a deep-water port in Kaspiysk until 2025.

The Russian government is also promoting a new project to expand internal transit links between the Caspian and Black Seas – the Eurasia channel. Guided by security and economic motives, the project aims to compete with other East-West transport corridors, promote the development of economic relations between Russia and countries such as Kazakhstan, India, Iran, Pakistan, China and Vietnam, as well as strengthen the position of the Caspian countries in trade between China and the West.

There is a geopolitical struggle between the leading players in the world, and soon it is the Black sea and Caspian regions that can become the arena of struggle. the Caspian countries should understand as soon as possible that only taking into account each other’s national interests, they can come to the most optimal decisions on issues on which there are disagreements.

There are hotbeds of instability in the immediate vicinity of the Caspian Sea, so it is necessary to realize the responsibility of all Caspian States.

The Caspian region has always been the intersection point of the geopolitical and economic interests of many leading states, political and business circles, various ethnic and religious groups. And recently it has become one of the key regions of global politics. First of all, because of its natural resources. Together with the Gulf countries, it forms the so-called energy ellipse, in which about 70% of the world’s oil reserves and 40% of natural gas are concentrated. For the Caspian littoral countries this, of course, is a geostrategic advantage and one of the most important areas of cooperation.

But the modern economy is not only oil and gas production. Digital technologies, clean energy, environmental management, free movement of goods and services are the factors that make any country strong and competitive today.

The five Caspian states should not be left out of these trends. Not only the raw material component should determine the economic profile of states. In the 21st century the Caspian region should be associated with optimal transport infrastructure, high-tech and safe production, incentive measures for investors, unique tourism products.

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Eastern Europe

Caspian: Status, Challenges, Prospects

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An Analysis into the Legal Classification, Security and Environmental Concerns, Geopolitics and Energy Flow Impact of the Caspian Plateau

How has the world’s largest inland body of (salty) water escaped the economic and political notice for so long? And it is for a resource-rich area of a unique locality that connects Europe and Asia in more than just geography. Simply, the Caspian Basin is an underrated and underexplored topic with scarce literature on its geomorphology, mineral deposits and marine biota, its legal disputes, pipeline diplomacy,environmental concerns and overall geopolitical and geo-economic interplays.

As the former Minister of the Canadian government and Secretary General of the OECD – Honorable Donald J Johnston – states in the foreword, Caspian – Status, Challenges, Prospects“is a fitting title for a book that masterfully gives an objective, comprehensive overview of the region. The authors have compiled an analysis of Caspian’s legal classification, security and environmental concerns, geopolitical scenarios, and energy flow impacts as they affect the world’s largest continental landmass – Eurasia.”

From comprehensive but content intensive insights on Caspian littoral states Azerbaijan, Kazakhstan, Iran, Russiaand Turkmenistan, to external actors like Turkey, EU, China and the United States, readers are presented how separate actors and factors interact in this unique theater. The book elaborates on the legal classification of the Caspian plateau including the recent ‘Convention on Legal Status of the Caspian,’ to the numerous territorial and environmental security concerns.

Prof. Anis H. Bajrektarevic and his co-authors present Caspian as the most recent, fresh and novel way, in one stop-shop offering broad analysis on the Caspian region. It is a single volume book for which extensive information is exceptionally rare to find elsewhere. Following the read, authors are confident that a new expanse of scholarly conversation and actions of practitioners will unfold, not only focused on Caspian’s unique geography, but its overall socio-economic, politico-security and environmental scene.

Welcoming the book, following words of endorsements have been said:

The Caspian basin and adjacent Central Asian region (all being OSCE member states, apart from Iran) have, since the early Middle ages, acted as a crossroads between different civilizations and geopolitical spaces. In an increasingly interconnected world, growing geopolitical competition, economic interdependence and the emergence of new global challenges, particularly those related to water, energy and the climate emergency, have highlighted the relevance of this region, making it of increasing interest to researchers and academics. This book presents a thorough analytical compendium of historical factors, political dynamics, economic trends, legal frameworks and geopolitical interests which underpin, but also affect, the stability and development of this complex, diverse and strategically significant region.

Amb. Lamberto Zanier,Secretary-General, Organization for Security and Cooperation in Europe (2011-2017)  OSCE High Commissioner on National Minorities (2017-2020)

A thoughtful, comprehensive and balanced analysis of the complex interplay between geopolitics and geo-economics in Central Eurasia, and pivotal energy plateau – that of Caspian. We finally have an all-in reader that was otherwise chronically missing in international literature, which will hopefully reverse the trend of underreporting on such a prime world’s spot.   

Hence, this is a must-read book for those wondering about the future of one of the most dynamic and most promising regions of the world and what it could entail for both reginal and external players. 
Andrey Kortunov Director General, Russian International Affairs Council

Although of pivotal geopolitical and geo-economic importance, Caspian energy plateau represents one of the most underreported subjects in the western literature. Interdisciplinary research on the topic is simply missing.  

Therefore, this book of professor Bajrektarevic and his team – unbiased, multidisciplinary, accurate and timely – is a much-needed and long-awaited reader: A must read for scholars and practitioners, be it from Eurasia or beyond.

It is truly a remarkable piece of work!  

Authors were able to tackle a challenging subject with a passion, knowledge and precision, and turn it into a compelling, comprehensive yet concise read which I highly recommend.   

Former Minister of Foreign Affairs, Republic of Kazakhstan Erzhan Kazykhanov, Ambassador Embassy of Kazakhstan, Washington dc, USA 

ARTNeT secretariat is pleased to see how our initial invitation to Prof. Anis H. Bajrektarevic to present at the ARTNeT Seminar Series in 2015 evolved. The talk was initially published as a working paper for ARTNeT (AWP 149). Now Prof. Bajrektarevic, in collaboration with another two co-authors, offers a comprehensive study on a nexus of legal, security, and environmental issues all emanating from and linked to energy cooperation (or lack thereof) in the subregion. This volume’s value extends beyond the education of readers on the Caspian Basin’s legal status (e.g., is it a sea or a lake?). It is just as relevant for those who want a more in-depth understanding of an interplay of economic, security, and political interest of players in the region and outside. With the global institutions increasingly less capable of dealing with rising geopolitics and geo-economic tensions, more clarity – even if only about some aspects of those problematic issues – should be appreciated. This volume offers such clarity.   

Mia Mikic, Director UN Economic and Social Commission for Asia and the Pacific (UN ESCAP) ARTNeT coordinator

It is my honor to reflect on this work on Caspian. Comprehensive and content rich, this book of professor Anis H. Bajrektarevic and his co-authors brings up comprehensively all the useful information on Caspian, with the geographical and historical background and cultural, economic as well as security aspects related to it.

Authors’ novel and unbiased approach shall certainly help decision makers in their bettered understanding of the region that has centuries-long history of peace and cordial neighbourly relations. Long needed and timely coming, I warmly recommend this reader to those who want to know, but more importantly to all those who want to understand, this pivotal region of the world.

Ali Asghar Soltanieh Former Ambassador of Islamic Republic of Iran to United Nations and other International Organizations in Geneva & Vienna

The book by Professor Bajrektarevic and his co-authors embodies a wide-ranging overview of the intertwined interests pursued by the young democracies of the Caspian basin, battling with inherited land and water disputes, and their interplay with regional and global powers. Apparently, supporting political independence of the formers and promoting their integration into the latter’s markets requires adequate analyses, timely outreach policies and consistent engagement. In this sense the publication serves as one of the scarce handbooks to understand diverse interests of stakeholders, dynamically changing security architecture of the region and emerging opportunities of cooperation around the Caspian Sea.

Ambassador GalibIsrafilov Permanent Representative to the UN Vienna and to the OSCE Embassy of Azerbaijan to Austria

Caspian: Status, Challenges, Prospects

An Analysis into the Legal Classification, Security and Environmental Concerns, Geopolitics and Energy Flow Impact of the Caspian Plateau

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Eastern Europe

As Georgians Fight Each Other, Russia Gleefully Looks On

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Earlier today, the leader of Georgia’s major opposition party – United National Movement (UNM) – was detained at his party headquarters by government security forces, the most recent escalation in a drawn-out political crisis. This could well be the beginning of a new troubled period in the country’s internal dynamics, with repercussions for the country’s foreign policy.

The optics favor the opposition. Images of armed and armored police storming UNM’s headquarters was damaging to the ruling party, Georgian Dream (GD). Western diplomats expressed grave concern over the events and their repercussions. Protests have been called, and will likely be covered closely in Western media.

What comes next, however, is not clear.

Much will depend on what long-term vision for the country the opposition can articulate in the aftermath of the most recent events. It was not that long ago that UNM was declining as a political force in Georgian politics. There is a real opportunity here. But the burden is on the opposition to make a play for the loyalty of voters beyond its circle of already-convinced supporters.

Appealing to ordinary Georgian voters is ultimately the key to resolving the crisis. Beyond the intra-party clashes about the legitimacy of the most recent elections, there is a growing chasm between political elites and the challenges faced by people in their daily lives. And tackling these challenges successfully will not be easy.

Both the ruling party and the opposition have been facing declining support from the public at large. Long-term economic problems, which have been greatly exacerbated by the pandemic, have not been credibly addressed by either side. Instead of solutions, both sides have engaged in political theatrics. For many voters, the current crisis is more about a struggle for political power, rather than about democracy and the economic development of the country. No wonder that most people consider their social and economic human rights to have been violated for decades no matter which party is in power. These attitudes help explain high abstention rates during the most recent election. Despite remarkable successes in the early years after the Rose Revolution, Georgia has lacked a long-term policy for reimagining its fragile economy since its independence and the disastrous conflicts of the 1990s.

None of this, however, should minimize the threats to Georgian struggling democracy. Today’s arrests reinforce a longstanding trend in Georgian politics: the belief that the ruling party always stands above the law. This was the case with Eduard Shevardnadze, Mikheil Saakashvili, and is now the case with the current government. For less politically engaged citizens, plus ça change: Georgian political elites for the last 30 years have all ended up behaving the same way, they say. That kind of cynicism is especially toxic to the establishment of healthy democratic norms.

The crisis also has a broader, regional dimension. The South Caucasus features two small and extremely fragile democracies – Armenia and Georgia. The former took a major hit last year, with its dependence on Moscow growing following Yerevan’s defeat in the Second Karabakh War. Today, Russia is much better positioned to roll back any reformist agenda Armenians may want to enact. Armenia’s current Prime Minister Nikol Pashinyan has been weakened, and easily staged protests are an easy way to keep him in line.

Georgia faces similar challenges. At a time when Washington and Brussels are patching things up after four years of Trump, and the Biden administration vigorously reiterates its support for NATO, Georgia’s woes are a boon for Moscow. Chaos at the top weakens Georgia’s international standing and undermines its hopes for NATO and EU membership. And internal deadlock not only makes Georgia seem like a basket-case but also makes a breakthrough on economic matters ever more unlikely. Without a serious course correction, international attention will inevitably drift away.

At the end of the day, democracy is about a lot more than finding an intra-party consensus or even securing a modus vivendi in a deeply polarized society. It is about moving beyond the push-and-pull of everyday politics and addressing the everyday needs of the people. No party has risen to the occasion yet. Georgia’s NATO and EU aspirations remain a touchstone for Georgian voters, and both parties lay claim to fully representing those aspirations. But only through credibly addressing Georgia’s internal economic problems can these aspirations ever be fully realized. The party that manages to articulate this fact would triumph.

Author’s note: first published in cepa.org

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Eastern Europe

A Fateful Step Towards Annexation

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It’s easy to lose sight of regional developments amid high political drama. The story of Alexei Navalny’s poisoning, flight to Germany, return, and arrest has dominated Russia coverage in the West. Specialists have also been focusing on the struggle over the Nord Stream 2 pipeline, and the fallout of the Nagorno-Karabakh War. Meanwhile, when in November of last year Georgia’s Russian-occupied region of Abkhazia signed a 46-point agreement to create a unified socio-economic space with Moscow, not many took note. While pitched as a move to alleviate the territory’s economic troubles, the program marks a huge step toward eventual annexation of Georgia’s region by Russia.

Multiple new provisions feature in the new document which were absent in the 2014 military agreement. The new pact creates various provisions for the sale of local real estate, among them a stipulation on dual citizenship allowing Russians to get Abkhaz passports. A whole range of laws will be introduced whereby Russian investors will be able to invest money into and buy majority shares in what still remains valuable in Abkhazia.

The latest agreement also proposes allowing the Russians to buy into Abkhazia’s energy sector. Additionally, the Abkhaz will make legislative and administrative amendments according to the Russian law in social, economic, health, and political spheres. There is also a stipulation on simplification of law procedures for Russian investors.

While this may end up giving a shot in the arm to a decrepit Abkhaz economy, the high level of harmonization with Russian laws lays the groundwork for a future merger with Russia. It is this dilemma between closer cooperation with Russia and deep fear of Russian intentions that will haunt the Abkhazian political class for the foreseeable future. Though officially the new “socio-economic” program does not involve a change in Abkhazia’s political status, Abkhaz elites fret they are heading down the path to eventual incorporation into Russia.

Criticism of the pact in Abkhazia forced the region’s leader Aslan Bzhania to forcefully deny that Abkhazia was losing any sovereignty. Instead, he emphasized the positive elements of the document, especially the re-opening of Sukhumi airport. Bzhania also cited Abkhazia’s chronic energy shortages and the acute need for Russian assistance as justification for the deal. Still, fears persist. After all, unlike South Ossetia, the other Russian-occupied region in Georgia, Abkhazia has never entertained the idea of merging with Russia.

But Russia is playing a long game. Pressure on Abkhazia has been building up gradually over the course of 2020. After the resignation of Moscow’s preferred client Raul Khajimba, Bzhania’s candidacy was regarded with suspicion by Kremlin officials. As a result, when he won, Bzhania had to make multiple visits to Moscow to kiss the ring, even as Russian funding continued to dry up amid the pandemic. The cost of resuming aid, it appears, was increasing economic harmonization and with the looming threat of eventual assimilation.

With Russian investments into the energy sector and land purchases, Abkhazia will slowly lose its last vestiges of de-facto independence. On an economic level, Abkhazia is far richer than South Ossetia. But controlling it has other virtues. Out of all the separatist regions Russia controls, Abkhazia is arguably the most strategically located. A passage from the North to the South Caucasus, the region is also famous for its harbors and military infrastructure. Control over it gives Russia capabilities to check NATO/EU expansion into the region.

Russian plans in Abkhazia should be also seen within the context of Russia’s push to solidify its presence in the South Caucasus, especially in the aftermath of events in Karabakh and Russia’s peacekeeping mission there. Economic inroads into Abkhazia also mean a further distancing of other potential players such as Tbilisi and the collective West.

Author’s note: first published in cepa.org

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