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CIAO DATE: 2/00
Pursuing a Silk Road Strategy
March 19, 1998, Washington, D.C.
I want to thank you for inviting me to speak to you today about a region of the world in which I believe the United States has enormous stakes. The Caspian Basin and the countries of Central Asia and the South Caucus which surround it, are an area of vital political, economic, and social importance for the United States.
Our window of opportunity to influence events there is very narrow. I strongly believe that the US must assume a more consistent and pro–active policy immediately; if we do not act soon, we may find that e are too late to take advantage of a unique opportunity.
The countries of the South Caucus and Central Asia—Armenia, Azerbaijan, Georgia, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan—are at historic crossroads in their history: they are independent, they are at the juncture of many of today’s major world forces, they are rich in natural resources, and they are looking to the Unites States for support.
The stakes there for the United States are enormous. I will briefly highlight those which I view as the most significant, and focus primarily on the measure I think we will need to implement to insure that we are able to achieve our goals in the region. These goals are straightforward: to insure that the nations around the Caspian Basin and of the South Caucus become strong, independent, economically viable and politically sovereign states.
What is at stake in the region?
First of all, these countries are a major force in containing the spread northward of anti–western extremist fundamentalism from Iran and other nations. Though Iranian activity in the region has been less blatant than elsewhere in the world, the Iranians ARE working very hard to bring the region into their sphere of influence and economic control. Other fundamentalist activity, perhaps even more threatening because of its extreme anti–western, anti–secular tenor, is being financed by other countries.
Secondly, the Caspian Sea basin contains oil and gas reserves which, potentially, could rank third in the world after the Middle East and Russia and exceed four trillion dollars in value. Investment in this region could ultimately reduce US dependence on oil imports from the volatile Persian Gulf. Recent events in that region have demonstrated once again the dangers of relying so much on this one region of the world for our vital energy resources.
Thirdly, strong market economies near Russia and China can only help to positively influence these two countries on their rocky path towards freedom.
Fourthly, these countries, some of them nuclear capable ones, are also at the forefront of stemming the flow southward of proliferation of weapons of mass destruction.
Finally, this region offers us a historic opportunity to spread freedom and democratic ideals. After years of fighting communism in this region, the doors are open to promote institutions of democratic government and to create the conditions for the growth of pluralistic societies, including religious tolerance.
In my view, the single best way to consolidate our goals in the region is to promote regional cooperation and policies which will strengthen the sovereignty of each nation. Each of these countries has its own individual needs; however, many of the problems in the region overlap and are shared, and a number of common approaches and solutions can apply. As you know, I have introduced legislation which provides and over–arching policy towards the region and authorizes assistance in a whole gamut of areas. I would like to cover some of those which I believe are the most crucial to achieving the goals I have just mentioned:
East–West pipeline routes, preferably through Turkey: The “ticket” to true independence, economic wealth, and sovereignty for these countries lies in their natural energy resources. Where and how this oil and gas flows out of the landlocked Caspian is a question crucial to determining into which sphere of influence these countries will fall, and whether they will be successful in maintaining their sovereignty. In my view, the route through Azerbaijan—whether it be multiple pipelines with some going through Russia and some through Georgia, or the other major export line to Turkey—is one of the most important means of insuring the cementing of a Silk Road Corridor of Freedom. It will help tie the region together, linking the countries of Central Asia to the Caucus and the Western market, and giving them all a stake in making regional cooperation work.
While I understand there is a significant cost attached to the Baku–Ceyhan pipeline, we are examining just what steps Congress could take to make this a viable route. On the other hand, routes through Iran will result in the loss of a joint economic stake and cohesion in the Caspian. Thus the countries on the Eastern Caspian will find themselves inexorably drawn into an eastern and southern sphere and could eventually become hostages to Iran, much in the same way they were economic hostages to the former Soviet Union.
A route eastward through Afghanistan is another important option, though it can only become reality when a solution is found to the conflict that rages there.
Conflict resolution: The US must play an increasingly active role in the conflict resolution in the region. The boundaries of the Soviet Republics were intentionally drawn to prevent succession by the various national communities of the former USSR, and not with an eye towards possible independence. As a result, the countries in the South Caucasus and Central Asia Are fraught with ethnic tensions which so serious dangers to the stability in the region. A glaring example of this is the case over Nagorno–Karabagh.
Peace in this important transit corridor is absolutely necessary. The US role in the Minsk Group is an example of the type of pro–active role we should be playing. Hopefully, once the elections in Armenia are final, there will be some progress on this crucial issue. Recent efforts by the Administration to become active in resolving the Abkhaz situation in Georgia are also to be encouraged. In addition, the US should also take a more proactive role in seeking a solution to the Afghan fighting.
Policy vis–à–vis Russia: The US should also be actively involved in persuading Russia to play a more positive role in the region. To date, much of what Russia has done has not been positive; in fact, Russian actions and rhetoric indicate that the Russians do not really accept the notion of the independence and sovereignty of these countries. Indeed, Russia has been active in maintaining instability in the region in order to disrupt outside influences, and impeding the regional cooperation which the Presidents of these countries are trying to achieve.
There are many recent examples of this, which range from petty to the more dramatic, such as supplying the Nagorno–Karabagh with one billion dollars worth of weapons further fueling this conflict. Another of the more outrageous examples of lack of cooperation concerns the suspected perpetrator of the 1995 assassination attempt on Shevardnadze, Igor Giorgadze. He remains under Russian care despite repeated demands from Georgia that he be extradited. The Russians claim that they cannot locate him, however, even we here in Congress could direct them to some of the places which Mr. Giorgadze often visits in Moscow—among them places such as the gym belonging to the Ministry of Defense of the Russian Federation.
Russia has clear and natural economic and commercial stakes in the region should be encouraged to recognize these interests. Involving Russia in the economic development and success of the region will also help the Russian economy prosper. This will serve to stabilize the region and the interests in the region. At the moment however, Russia is blurring the distinction between influence in the region and the interest in the region. Recent statements by President Yeltsin referring to a “pipeline war” and references to western countries’ efforts to “bypass Russia and infringe on its national interests” are not helpful. Nor was Yeltsin’s call late last year on Russian security organs to find “ways and means” to “counterbalance” (read undermine) US “intervention” in the region.
Promoting regional cooperation: As I mentioned earlier, regional cooperation is also key to helping the region flourish economically as well as to maintaining regional stability. These countries need to work together to solve their most pressing problems: regional conflict, ethnic strife, water and energy distribution, compatible infrastructure development, ecological and environmental clean–up, trade agreements, etc.
Some countries are more visionary in their understanding of the importance of regional cooperation than others. It is important that we convey the message that not cooperating and/or using leverage against each other will ultimately result in a net loss to everyone. Most of the countries in the region have come to this realization and we are beginning to see initiatives in this regard. For example, the Presidents of Azerbaijan, Georgia, Moldova and Ukraine met and stressed the importance of mutual cooperation in establishing Eurasian, Trans–Caucasus transportation corridor and in fostering cooperation and stability in the region. Kyrgyzsran also has taken on the role of mediator and is working to help solve regional disagreements as well as fostering regional cooperation on issues such as water distribution.
Such cooperation and interdependence lies at the heart of maintaining long term regional stability and making the east–west axis successful.
Sovereign borders and indigenous border guards: We should continue and accelerate our assistance to these countries in building up their own border guards and customs officers. Securing one’s own borders is an important symbol of ones status as a sovereign nation. Yet, the borders of a number of these countries are controlled by Russian border guards who take advantage of the situation to further the negative policies directed by Moscow. Georgia is a case in point: there the border guards create obstacles to freight traffic through the country and abuse the sovereignty of Georgian waters. Hopefully, current negotiations between Georgia and Russia will be successful and result in Georgia Taking control of its waters by July 1 of this year.
The United States has training and assistance programs ongoing, they should be amplified and accelerated. Well trained indigenous border guards will also play an important role in stemming the proliferation of nuclear weapons and technology through these countries. All of them have stated grave concerns about illegal shipments over their territory which they are unable to monitor and control effectively.
Creating a favorable business climate: Economic independence and prosperity are also sine qua nons for the successful development of these fledgling nations. Foreign investment in all sectors of the economy is extremely important in getting these economies off the ground; but getting this investment requires a favorable climate for business. Seventy years of Communist rule left in its train economies that are strangers to the practices and standards expected by western investors.
The US should continue to work actively to promote the reforms necessary to establish a consistent framework within which foreign investors can work. It is essential that these nations understand the importance of—and implement—basic principles such as the rule of law, consistent tax laws, fair business practices, and a fundamental understanding of commercial terms and frameworks.
At the same time, in order to develop the physical infrastructure necessary for regional cooperation among the countries in the South Caucasus and Central Asia, and to encourage closer economic relations between those countries, we also should be providing positive incentives for international private investments and increased trade.
The US should be encouraging the activities of the Export–Import Bank to complete the review process for eligibility for financing; we need to authorize provision of insurance, reinsurance, financing, or other assistance by OPIC as well as TDA to all these countries.
Democratization and independent media: Finally, but not least, the US should be working to strengthen democracy, tolerance, and the development of civil society in the region. We need to promote the conditions which lead to growth of pluralistic societies, including religious tolerance. Assistance in democracy building, for the development of NGOs, the development of independent media and international exchanges in all spheres will help move this agenda forward.
Conclusion
The foregoing are just some of the policies I believe we should be pursuing in order to achieve our vital strategic, economic and political objectives in the region. Finally, I’d like to re–iterate the point I made earlier abut pipelines. The independence of the region could well depend on the successful construction of pipelines on an east–west axis through non–Russian as well as non–Iranian territory. Both Russian and Iranian rhetoric on this issue shows clearly that these countries see the connection between pipelines free of Russian and Iranian control and their domination over the region. And it is no coincidence that we are seeing a rapprochement between these two countries.
Time is the essence of here. We have the opportunity to help these countries rebuild themselves from the ground up and to encourage them to continue their strong independent stance. What we do in this area—promoting peace, open and sovereign governments, economic prosperity and communication with the West—is strongly in the interests of the United States as well as countries of this region.
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