Development and General Significance of the Eurasian Corridor

Session One: Development and General Significance of the Eurasian Corridor

Future Prospects for the Eurasian Corridor
A series of round-table discussions
April 23, 1998

Strengthening Democratic Institutions Project
John F. Kennedy School of Government

Fiona Hill (Moderator): The first session this morning is looking at the development and general significance of the Eurasian Corridor. We are delighted today to have representatives from three of the countries that are heavily involved in the Eurasian Transportation Corridor. We welcome Tedo Japaridze, who is the Ambassador of Georgia to the United States as well as to Canada and Mexico; Ambassador Rouben Shugarian from Armenia; and from the other end of the Silk Road, across the Black Sea, Dan Enache from the Romanian Consulate. The presence of these representatives here today shows that this is not just a question for Central Asia and the Caucasus, but also for Europe, Asia and much further afield. Likewise, around the table, we have representatives from other countries, who are also from academia and politics, from Azerbaijan and Kazakstan. And we would also like them to make a few remarks in the course of the discussion.

The questions we would like to address in this session are: What are the general factors that contribute to the development of the Eurasian Corridor from the point of view of the individual states? What outside engagement has there been in the region apart from the European Union and the development of the transportation corridor? Has other international financial institution investment followed that of the EU? How do the countries of the region view the development of the Eurasian Corridor? Is this seen as the beginning of broad regional integration, as Rusudan has suggested, or do some people see it as an initiative simply to improve infrastructure and communications? What is the status of regional government plans to develop the corridor further? And then, finally, what are US interests in the development of the corridor? I would like to turn over the microphone in the order that people are listed in the program. So first I will hand it over to Ambassador Japaridze from Georgia. Thank you.

Tedo Japaridze: Thank you very much. This is a very exciting day for me and I hope also for all of you. It is always good to come to Harvard and to escape from Washington if you are an ambassador. First, I would like to start with a message from President Shevardadze, with whom I spoke this morning. He sent his best regards when I mentioned this conference, Rusudan Gorgiladze, and the activities. He considers himself one of the leaders who first started talking and thinking about the corridor. This was before 1993, as I remember, because I used to be his national security advisor when he came to Georgia in 1992. I can tell you that since then he has been thinking and talking about this. By the way, he is writing a book about the concept of the Eurasian Corridor and the Silk Road, and I hope that this book will come out in the near future. And so he sends his best and warmest wishes to Harvard University and the organizers of this conference. I very much appreciate this opportunity and would like to congratulate Rusudan, Ms. Hill, and Mr. Allison, whom I have known for quite a long time. And with Mr. Allison’s support, while he was in the Pentagon, countries like Georgia were put on the map. It is really an exciting idea to have this conference, and the timing is quite unique.

The Eurasian Corridor is not just the transportation of great amounts of cargo and oil, which in themselves offer a huge perspective and dynamic. But the Eurasian Corridor for us is something like the Suez and Panama Canals. The Eurasian Corridor is something like a bridge to the 21st century, which means that it is not only about the transportation of physical things like oil, cotton, and other materials from the region, but it is also about the transportation of ideas, information, and culture. And this is why the Eurasian Corridor has become our strategy for our children to live in a stable and prosperous region, and hopefully our generation will witness the implementation of this idea.

I have decided to communicate to you not the numbers and ideas connected to the Eurasian Corridor, but instead I would like to speak to you about my country, the region, transnational processes that are taking place around this idea which is very important for understanding what is going on in this region of the world. I will start very briefly with my own country, Georgia. Just a couple of years ago, as I remember, here at Harvard the former US Ambassador to Georgia, William Courtney, who is now at the White House, summed up progress made by Georgia in the following way. “Georgia is no longer a risk,” he said, and I think that this is very important, but I would like to say that this also applies to countries such as Armenia, Azerbaijan, and other Central Asian areas. So we are no longer risks, but opportunities. But back to my country of Georgia, this opportunity comes at a critical juncture of time and space in the new Eurasia. When one looks at a Soviet-era map of Eurasia, Georgia looks like a little territory with fixed borders surrounded by other little territories with fixed borders. On political maps, it looks like a southern appendage of an empire, a distant point on a north-south axis. The deep purple line that marked the end of Soviet space conditioned us to look northward for the center of gravity. But today, when one makes the same observation, one will see something very different. These people who are looking at the map will not see the deep purple ink. They will not see the Soviet Empire. They do not see Georgia as a kinder, Russian Florida. The Georgia they see is not an outpost. Rather it is a heartland, a verdant strip that stretches not North and South, but East and West. It is not the end of something, but a centerpiece; it is not a terminus, but a corridor that links much of the rest of Eurasia in diverse and wonderful ways. This Georgia, real Georgia, is one of the essential keys for unlocking the riches of Eurasia. Today, Georgia’s logical links to the outer world became rapidly evident with Turkey in the West, Iran and Armenia in the South, Azerbaijan, Uzbekistan and Kazakstan in the East, and Ukraine and Russia in the North. Georgia in this context can be seen as a classic crossroads.

The South Caucasus, and I would add Central Asia to this configuration, is no longer an extension of Russia’s strategic space. Today the South Caucasus and Central Asia are at the center of a new geopolitics that is profoundly different in its political, economic and military dimensions and hence its strategic implications, risks and opportunities. Where Moscow was once the imperial center of the republics that have now become the new states, today Moscow is a distant part of the latter’s periphery. At least I would like to think that. Meanwhile, the new states are rapidly building new relationships and new strategic possibilities in the East, South, and West, which are radicalizing their historically subordinate relationship to Russia. But there are some Western geostrategic analysts that still tend to view these borderlands through a Russian filter and to define their geopolitics in Russia’s terms of reference. This is not to say that one should ignore the importance of Russia. In the South Caucasus, Russia is an important regional actor, but Russia is not the only regional power with interests there. This is because Russia is losing its power to be the most important and powerful actor in the South Caucasus. Also, the interests of the South Caucasus are no longer strictly regional as they were in the Soviet era, for two reasons. First, the concept of the South Caucasus as a region has grown to include much of Central Asia in the East, much of the Black Sea arena in the West, and extends towards the Middle East. Second, the South Caucasus states now negotiate commercially and politically far beyond their regions. For example, in the United States, Japan, and Israel, it is becoming apparent that to think strategically about this region, one must think in terms of interacting and overlapping interests, not strictly in territorial terms.

This new interest will be symbolized by and embodied in the planned east–west Eurasian transport corridor, which will eventually link Central Asia to Europe via the South Caucasus. The plan spearheaded by the European Commission is to establish an alternative transportation outlet to Europe which will allow participating states to bypass the traditional and heavily overloaded route via Moscow. This many-sided project is clear in its objectives to support the political and economic independence of the newly independent states and to enhance their access to European and world markets and to enhance regional cooperation among the participating states. It will rehabilitate and expand highways, railroads, airports, and ports from the capital of Uzbekistan to the sea ports of the Black Sea. It will link the states of this new Silk Road with each other and the outer world via the most modern and sophisticated information and communication technologies. And it will establish policies and plans that will allow them all to work in concert. The Eurasian Corridor, which is intended specifically to offset Russia’s historic dominance in the South, will undoubtedly give birth to security relationships and alliances that seek to protect it. This will draw in a number of countries where the US currently has security relationships, for example Turkey; where it hopes to develop relationships, such as in Ukraine, Kazakstan, Uzbekistan, the South Caucasus countries; and where it still has adversarial relationships, such as Iran.

Secondly, the greater Central Asian region described above will interact and overlap with the emerging greater Black Sea region. And I appreciate the presence of the Romanian representative here today because Romania is a very dynamic and active partner. Like the east–west corridor, this grouping will serve as a check on Russia’s imperialist ambitions. But it will also work to attract Russian participation as a partner — sharing and benefiting in mutually-derived profits rather than having to own and dominate territory. It will center on commercial and security relationships in Turkey, Ukraine, and Georgia, and it may also include overlapping relationships and alliances, which may include Bulgaria, Iran, Romania, and Israel. Like the Eurasian Corridor, the Black Sea region is fertile soil for new geostrategic relationships.

The notion that the South Caucasus states will be locked in Russia’s economic web for the foreseeable future is dead. And with it the associated notion that Georgia, Azerbaijan and Armenia remain Russia’s strategic vassals. But, by reorienting economically North, East and South, the South Caucasus states now act and are acted upon in a way unknown so far in the 20th Century. More than anything else, the economic opportunities have been catalysts for new strategic attachments. The geostrategic focus in this region has been fundamentally changed because of energy, and I am not going to mention here well-known figures. The Caspian region is poised to become an oil- and gas-producing super power, second only to the Persian Gulf, and the largest non-OPEC reserve. Whenever the flow of energy in the OPEC market is interrupted, and there is always this chance due to instability in that region, then Caspian and Central Asian oil will take on new importance for the West, especially in countries that have increased demand and competition for energy from Asia. The Western interest in the future of this energy supply is clear. To extract Caspian oil successfully and to deliver it to the international market, energy companies will have to contend with the increasingly fluid and volatile environment of the Caspian, the Caucasus, and its bordering regions. The pipeline for oil raises important strategic questions because these routes require greater terrain and soil, and political interests are tied to this terrain. Ethnic turmoil in Chechnya and Afghanistan is a disincentive to pipeline construction and operation. US interests lie in helping to produce a stable environment allowing for the exploration, extraction, transportation and marketing of energy. It is impossible to think strategically about the South Caucasus without acknowledging that its stability is central to safeguarding the supply and transport of energy from the Caspian region and Central Asia.

Georgia’s luck in this respect is in its geography. This country is not rich in diamonds, oil or gold, at least not yet, but Georgia is rich in location. Our advantageous position between the Caspian and Black seas offers us an enormous opportunity to play a pivotal role in the commerce of the region. But how do we go about guaranteeing the security of Georgia? Let’s speak frankly. Georgia’s most constant source of worry comes from the North, Russia. You may expect people like me or from my country, which is a recent acquisition in the Soviet Empire, to gloat at our former master’s pain. This is not the case; nor can it ever be so because Russia’s stability is at the center of everybody’s interests. And nowhere is this stability desired more than by the people of the Caucasus. In my view, Russia’s leaders must focus their attention on the tension between their propensity to influence the Caucasus and the actual nature of their interests there. Today, they are more concerned with influence than interests, which one might expect from a colonial power that has lost its empire. But eventually, sooner rather than later, the Russian leaders must give interests greater priority than influence. By ultimately establishing a sound and viable interest in Georgia and elsewhere in the South Caucasus, they will learn to exercise a different kind of influence and a different kind of power. Russia’s interests will be served if Russia is sharing the wealth and prosperity that a successful Georgia, Armenia, or Azerbaijan will create. This is why we welcome Russian commercial interests of all kinds and why we try to shun Russian military interests. We hope that Russians will learn the lesson of America, that economic incentive is a good source of stability and will look with admiration upon cities like L.A. and Boston where Canadians, Japanese, and Saudis all own assets and thereby contribute to the commercial and financial stability of California or Massachusetts and the world. While Georgians will welcome Russians owning assets and contributing to the commercial life of our nation, we will never welcome their troops and tanks. It is in no one’s interest to disrupt Georgia’s building success. It is in everyone’s interests, particularly Russia’s, to participate fully in this success. In my opinion, prosperity is indivisible. If Georgia succeeds, it will carry others, including Russia. If Russia succeeds in its reforms, we too will benefit. Commercial success in either country will benefit the other. But if either of us fails, for whatever reasons, the negative effects will be widely felt and we can be certain that the foundations for success, which have been laid down on our peripheries, will be threatened. Security and stability are indivisible. All parts of the South Caucasus security equation are related.

Russian security is a key to keeping all of our nations healthy and prosperous. But it is not the only key as Georgia, Armenia, and Azerbaijan have a history of cooperation amongst themselves and the region. We need to revisit this history rapidly and aggressively because it is unlikely that any of us can prosper alone. This is why the conflicts in the region are so strong in what would otherwise be a strong Caucasian unit. Georgia, as well as other countries in the region, stands on the threshold of success. For us, this is more than creating more revenue by inviting more investors, although they are certainly important. Success for us is survival as a free and independent nation. We are convinced that our success and our survival is linked to our neighbors. We are convinced that the West can help play an important role in creating stability in the region. Without a firm Western commitment to stability in the Caucasus, there will be no security. Without security, there will be no peace. Without peace, there can be no future. Rusudan, at the end of her remarks, mentioned Senator Brownback who has called the Eurasian Corridor the “Corridor of Freedom.” In my opinion, this is a little premature because there are different and conflicting interests and a lot of undefined and unresolved problems. I would like to call this corridor the “Corridor of Hope,” which will hopefully preserve our freedom, our independence and our sovereignty.

Moderator: Thank you Ambassador Japaridze. I will now turn over the microphone to Ambassador Shugarian from Armenia.

Rouben Shugarian: Thank you very much. It is an honor and pleasure to be here at Harvard again. I would like to thank the organizers, and Rusudan Gorgiladze, for the wonderful conference we are having today. I would also like to share with you some of my views and the views of my country on the Eurasian Corridor. I couldn’t agree more with Tedo Japaridze, the Ambassador of Georgia. I could repeat his whole speech on behalf of Armenia. But I would like to do that from a different angle. If Georgia is a Russian Florida, then Armenia is the Bermuda Triangle. It was a blind alley for a long time because it was on the periphery. And we really want to turn from being this blind alley into a crossroads, not only linking East and West, but also South and North. From day one of its existence and its regained independence, the Armenian people and government welcomed the idea of regional cooperation. We acknowledged the fact that economic interdependence spurred cooperation among the people of the Eurasian Corridor, or the Silk Road as we call it. And the restoration of the historic relationships and traditional economic ties among these people is an important element in strengthening their independence, ensuring their statehood and encouraging a faster pace of economic and market reforms.

We also acknowledged the fact that the development of various forms of economic cooperation within the restored Eurasian Corridor is in the vital interest of the United States. It is much easier to deal with a predictable, interdependent group of countries than with what the international community is facing today regional conflicts, different levels of democratic and market reforms, a different pace of social reform, a different mentality, a different concept of unity. Presidents of these countries are invited to the United States. Treaties are signed here. Success stories are written. And sometimes simplified parallels are drawn for the countries of the Central Caucasus or for the countries of Central Asia. It would look like that if only they had taken the magic stick of the original cooperation and had restored the Silk road. This wonderful land of ours would be like the Baltic countries. But this is not as simple as that. Armenia and Georgia do not have Mexico and Canada as neighbors. Nor does Azerbaijan, nor anybody else. It is too soon to look for a comfortable predictability in the region. What we often say about Russia, applies to our region. It has not only an unpredictable future, but also an unpredictable past.

US interests in the Caucasus have become more focused and crystallized. The region was seen to have great economic potential if the Caspian oil resources were developed, if pipelines were built, if the Silk Road was restored, if regional cooperation between first Georgia, Armenia and Azerbaijan, and then the other countries could be developed. This, of course, echoed in all capitals of all of the aforementioned countries. Georgia was the most active and impatient for creating regional structures to solve global problems along with institutions to integrate the three states into a common Caucasian helm, hoping to initiate economic cooperation immediately. Azerbaijan held that nothing should be and could be accomplished before the Karabakh conflict is resolved. Armenia believed and believes that the states concerned should take concrete yet moderate steps that are achievable today.

By mainly working through organizations like the World Bank, the International Monetary Fund or the European Bank for Reconstruction and Development, and working through their joint programs, we might lay a foundation for these issues to be manageable tomorrow. When I say this, I mainly mean transportation, communication and energy programs. This can be done not only through monetary organizations, but also through funds created in this country or other countries. The best example is the Trans–Caucasus Enterprise Fund, which has never worked. But we hope that it will work in the future. We can establish joint institutions for private business promotion and we already have initiated, at least with Georgia, some programs to do private investment projects together in Armenia and Georgia.

The economic aspects of regional cooperation should not be predominant over the security and political aspects of cooperation. And these aspects are no less important, no less urgent in the present situation, in our troubled region, the region of hope as Ambassador Japaridze correctly named it, not the region of stability yet (because countries today are stable if taken separately, but not stable if they are taken as a unit or regionally). As for the aspects of regional cooperation, as far as the Eurasian Corridor is concerned, it should not be diminished to oil only as is often being done today. Oil is an important factor, but it is not the only factor in the region. And it is not the only reason that we speak about the Eurasian Corridor today. We cannot avoid speaking about the subject though. And the oil pipelines today, multiple, or not multiple, are mostly tied to the regional conflicts. I know that we will have a panel today that will address these issues more specifically. But I would like to sum up the existing concepts of pipelines and their connection to the Silk Road with the three approaches dominant in this country. The first approach is that oil pipelines do not bring peace, but peace brings the pipeline. In this case Armenia and Georgia are viewed as the most cost-effective and stable routes for the pipeline. The second approach is that the oil pipeline brings peace to the region and becomes the guarantor of regional stability. And the third approach is that the development of oil in the region is very sensitive to regional conflicts. In other words, oil not only fails to bring peace to the region, but sometimes can endanger it. That is why, while speaking about regional cooperation within the framework of the Silk Road, I worry about the importance of paying sufficient attention to security and political dialogue. They should not be over shadowed by economic aspects.

There is only one other point I would like to highlight in conclusion. And again, I would like to state that I agree with the aspects that were addressed in my friend and colleague’s presentation. One further aspect is that it would be prudent to remember that the Eurasian Corridor is not somewhere on another planet. It is a reality, and is in a territory that borders countries such as Turkey and Iran. It has a connection to China. So the interests of these countries, their communication, their infrastructure, their inevitable inclusion in and influence over what is going to be the Eurasian Corridor should be taken into consideration. Yes, dependence on Russia is in the past. Yes, dependence on other countries is also; if not in the past, it is not so much an issue as sometimes described here. I think we should be very attentive to what is actually happening not only in the actual chain of the Corridor but in the area.

Moderator: Thank you Ambassador Shugarian. I would like to turn the microphone over to Dan Enache from the Romanian Consulate. Afterwards, we would like to invite some comments from people from other states in the region. A lot of the issues raised in the opening presentations are meant to set the scene for issues we would like to raise in our other discussions today. I would like people to comment later on what has been presented in this panel.

Dan Enache: Thank you very much. I would first of all like to thank the organizers of this conference for inviting me here. It is a great honor for me to be at Harvard University. It is the first time in my life, and I hope that I will be here at least once again. The concept of the Eurasian Corridor is very new. Everybody wants to be in on it, including my country. That we are even invited here gives me the impression that we are finally there. As somebody was saying previously, ten years ago, no one could think that Romania could buy oil from Georgia. Now we see that the world is changing. This new reality makes us think of new opportunities, new possibilities, new developments created for many countries around the world.

What does Romania have to offer such a venture? In our opinion, if you look at a map, we are right in the middle of the corridor. From a geographical point of view, our country is on the other side of the Black Sea. Constanta is the largest port on the Black Sea, with the best facilities for oil. We have an oil terminal of 24 million tons at this moment. Romania, in fact, is the oldest country in Central Europe in the oil field. We are still the only country in Central Europe with its own oil reserves; although they are mostly exhausted. We still have 6 to 7 tons of oil per year. Romania has about 30 million tons worth of oil-refining capacity and a widespread network of pipelines. We have a market of 23 million people, which is the second largest in Europe. And it is the second-largest country in size, about the size of Oregon. As I said, the country has quite a tradition in the oil sector. A couple of months ago, we achieved an agreement between our government and the Italian group ENI to build a pipeline line from Constanta to Trieste. This project will start after the countries along the route join and sign this agreement. They include Croatia, Serbia, and Slovenia. This is a $1.2 billion contract and it is going to be realized between 2000 and 2002. This will be a 32 million ton pipeline, and this will increase the delivery of oil to Trieste and will save more money than using the traditional route.

There is a strong demand and willingness on behalf of the government and companies in Romania because it will help investments in the country and will help boost the economy.

During the second World War people would wait for the Americans to come rescue them. My grandfather used to say that he would watch the sky to see if the Americans were coming or not. They landed only in Greece. Nowadays the same feeling persists. You must know that among all of the other foreigners and Westerners, the Americans are the most beloved. We are, frankly speaking, waiting for the Americans to come.

Moderator: Thank you very much. I would like to invite some comments from the people around the table. Perhaps some of our colleagues from Azerbaijan or Kazakstan would like to add their thoughts to what has been said.

Jayhun Molla–Zade: If Georgia is Russia’s Florida and Armenia is the Bermuda Triangle, then Azerbaijan is Russia’s Texas. I think Azerbaijan is one of the states in the region very interested in building this Eurasian Transportation Corridor. It is strategically important, and Azerbaijan has a geostrategic position between Central Asia and the Caspian Sea, along with Georgia linking Central Asia and the Black Sea. But the other interest that we have is in the transportation of our oil and not just a role in transporting oil. Azerbaijan is very interested in exporting its resources. There was a lot of pessimism for many years as to whether there would be a lot of oil flowing out of the Caspian region. But today it is a reality. Azerbaijan has the great advantage of a northern route through Russia. The problem with having only one route is that there can be problems in the North Caucasus and political problems between Russia and Azerbaijan. Building and enlarging this pipeline is very important to us and will benefit surrounding areas.

I would like to make a few remarks on organizations and programs available to these countries. I think that it is important that Azerbaijan and Armenia make use of the OSCE suggestions. ₁ As long as the OSCE

Durinprograms remain unimplemented, Azerbaijan will not get involved in other international programs. Anyone who has even a relative understanding of international relations should understand how it is impossible for a country that has occupied territory to close its eyes to the situation and get involved in international programs. I think that the former President [of Armenia] realized this and was therefore anxious to start the first phase. The second panel is about security issues, and maybe I can elaborate on that later.

Azamat Abdimomunov: Kazakstan is very interested in the development of the Eurasian Corridor. I also think it is important to take into account the interests of other countries. I mean countries like China, Russia, Turkey, and Iran. One of the examples of this is that in a few days there will hopefully be an agreement between Russia and Kazakstan regarding the Caspian Sea. Our Prime Minister will be in Beijing in a few days to discuss the pipeline to China. Just yesterday we had a meeting of the ecology ministers of the five Central Asian countries on ecological disasters in the region. So we do not just focus on oil, but other important issues. Thank you.

Moderator: Thank you very much to everyone.

Endnotes

Note 1: A reference to the Minsk Group proposal for the resolution of the Nagorno-Karabakh conflict. Back.