Session Two: Impact Of The Corridor On Regional Security—Including Regional Conflicts

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

Roger Fisher (Moderator): As we discuss issues of security as related to the Eurasian Corridor, I have suggested that people relate one aspect of those conflicts to the Corridor or to obstacles to achieving the opportunities that we have heard about, and then some suggestions for how to go forward. I take it that no one here is suggesting that we have a Versailles Treaty for the countries of the region. Therefore the question is what are the obstacles and then what are the processes for dealing with them in a step by step or less than full picture approach. Let me turn right away to the first presenter, Derek Boothby, former Director for Europe at the United Nations.

Derek Boothby: Thank you very much indeed. I have been the Director of the Europe Division in the Department of Political Affairs until early this year and I have been involved in Georgia and Abkhazia for four and a half years. I have also been involved in the Balkans and I think there are certain lessons that can bear fruit, though other parallels are not applicable. I would like to talk about the intergovernmental efforts used to assist in Georgia–Abkhazia. In trying to find a solution one has to identify what it is that each party fears the most. What is it that they are really keen to obtain in the negotiations? And from that we can try to decide what are the sticks and carrots that can move the negotiations along.

In our efforts, the UN has a special representative who is from Romania and speaks fluent Russian and has had a lot of experience in the UN. We have about 106 military observers and we are increasing them to 130 as mandated by the UN Security Council. The UN would not provide a UN peace-keeping force in Abkhazia so the force that is there is Russian, about 1,300 Russian soldiers. We sought to work with the Georgian side and, of course, you can not figure out what is going on without figuring out Russian interests. And we have had protracted difficulties for several years not only between the Georgians and the Abkhaz, but also with the Russians. The Russians have quite clearly taken the view that this is still in their backyard and they do not want Western interference. They have been trying very hard to find a protocol which would satisfy the Georgians and the Abkhaz. But every time they found something for the Abkhaz it would upset the Georgians and vice versa. At the moment, the situation is unstable and tense. It is not beyond possibility that conflict will break out again. And yet both President Shevardnadze and the Abkhaz see that it is not in their interest to have conflict break out. Stability and security is in their interest and the international community has to find a way forward.

One region of concern is Gali region. When the Abkhaz won the war against the Georgians, they had rather surprised themselves by winning the Gali area since it had never been predominantly Abkhaz. There are approximately 50,000 Georgians that have returned to the area, and they do not feel secure because they do not have the protection of the Georgian authorities and they have no protection from the peace keeping force. It is basically an area of criminality. If the Abkhaz surrendered the Gali region to the Georgians, they would then fear that they would have to fall back on their line of defense. If that were to happen, then they could be overtaken in a matter of hours, not even days. Therefore, their main concern is the survival of the Abkhaz. The main concern of the Georgians is to do something to help the return of some of the refugees of the Gali region.

In the longer term, there has to be a constitutional solution to the problem. The Abkhaz want to be regarded as an equal nation with Georgia. They want a confederal solution. The UN is against this solution—and we have told them so—because confederal means that Abkhazia would be recognized as a state, and the Security Council has never accepted this. Georgia has offered extensive autonomy, but that is not enough for the Abkhaz. Soon the inter-governmental side, things are working in a halting, stumbling way. But time is not really on our side.

I wonder if there might not be a plan to take the Gali region and put it under some kind of international administration which would provide the policing and law and order of the Gali region. This plan would hopefully provide some stability for the returning refugees. At the same time, it would tell the Abkhaz that the region is not exactly under Georgian authority, it is under an international authority, a transition administration, which will allow the Abkhaz to feel a little more secure. I am not suggesting a Cyprus situation. No one wants that. We do not want an international administration forever, but an administration in the Gali region that would at the same time offer some assurance from the Georgians to the Abkhaz of their survival. I am aware that this is not a straight forward answer, but it is an effort at moving things forward. Thank you.

Moderator: Thank you Derek. Allen Collinsworth is from the Institute for East West Studies.

Allen Collinsworth: Today, I am here representing the Institute for East West Studies as we are looking to develop a center to service and study Central Asia. We believe that its energy resources, delicate security balance and geographic position will increasingly shape international politics well into the 21st century. I am also working for Goldman Sachs’ Investment Banking Division, researching emerging markets, so the perspective I am taking today is an economic one. And agreeing with Ambassador Japaridze, I think that economics is largely driving security in the area. In Central Asia perhaps and in other regions, the distinction between economics and security is increasingly difficult to discern as there exists a dialectic between economics and security. To understand security one must understand the economic motivations, because economics will dictate control in the region. Alternative corridors to world markets are perceived as lifelines to economic viability, hence true sovereignty for Central Asian countries. The control of oil development and its distribution will continue to be a source of conflict and cooperation, especially as the rules of the game are being established. So Central Asian countries, by allying themselves with business partners, determine who their diplomatic allies are, conversely, who their competitors are. And both actors have close links with government.

According to an analysis performed in Petroleum International Weekly, over 90% of oil and gas reserves are in the hands of state controlled entities as well as 70% of production. To understand security is to understand how governments do business. Western oil executives whose traditional focus has been on bottom line earnings and shareholder value must now understand the security risks before investing, such as building a pipeline in Chechnya.

I would like to touch briefly on American and Russian policy and how their approach will influence how policy is formed and will perhaps ameliorate some of the issues we are considering today. One of the many foreign policy challenges that the US is facing today in the post-Cold War era is how to best access oil reserves. And to do this corporations will be used as primary actors. Looking at Russia, US policy makers are becoming increasingly concerned over the possible reemergence of a new Russian Empire. They realize that ready access to rich oil and gas resources of the region could fuel such an expansion. A new Russian Empire would conceivably seek to control the pipelines of the region and limit US access. Furthermore, the radical Islamic regime in Iran could move to turn Central Asian into its strategic realm. As a result, the US has an overarching interest in encouraging the economic prosperity of the Southern Caucasus and Central Asia. Economic growth would secure the sovereignty of these countries, would be effective in countering the Iranian influence and it would provide new markets for US goods and services. Without broad based economic development, the NIS will remain susceptible to political instability. To promote the success of a new Silk Road carrying oil and natural gas reserves, the US has been a consistent provider of assistance in Central Asia through the Freedom Support Act. And we recently introduced the Silk Road Act, for which we developed several other alternative names—Senator Brownback’s Corridor of Freedom and now perhaps better renamed by Ambassador Japaridze as the Corridor of Hope.

It is in Russia’s commercial interest to have the northern route be the sole export route for oil and to monopolize the control of exports. Russia delayed access to its pipeline for Kazakh oil produced by Chevron for years. It is likely that in such a case, where they were likely to retain a monopoly, they would continue to do so in the future. But if Russia cannot keep oil flowing north, they are determined to stop it from flowing West. The western route is planned to pass through Nagorno Karabakh and Georgia. Forging ethnic rivalries and political uncertainty is a good way to create delays. The unraveling Caspian Pipeline Consortium (CPC) project is seen by Kazakstan as the most economic route. When and if completed, it will not support Kazakstan’s projected output. The discussion of other pipeline projects are proceeding in parallel with work on the CPC. Russia is wary of rich southern neighbors with close western ties and may act to prevent this. Alternatively, they concede that it is an advantage to have wealthy trading partners on its borders and they should be encouraged in this thinking.

In closing, the strength of the region will be a function of the ability of the business community and the governments of the world to fashion a way to get the riches out of Kazakstan by another route, instead of through the former Soviet Union. For Russia, controlling export markets is being spearheaded by oil interest and government concerns. The most active players from America are private sector oil firms, with its government lulling the region towards democratic and Anglo-capitalist behavior through diplomacy and incentive based assistance schemes. Thank you.

Moderator: Our next speaker is Galib Mammad, who is the Executive Director of the US–Azerbaijan Chamber of Commerce.

Galib Mammad: Thanks for inviting me and thanks to Rusudan for your persistence and energy. Today I would like to speak mostly as a typical Azerbaijani. My opinion will not reflect the opinion of any particular corporation, organization, or government. Eurasia has long been at the center of global power in world affairs. The collapse of the Soviet Union has created a vacuum of power in this portion of the world. For the last few years, the region has been going through a process of identification and accommodation of new and in most cases conflicting interests. The sooner these interests are boxed and labeled, the easier it will be to solve the regional conflicts and to determine the future of emerging democracies. A balance of power with an equilibrium of multiple interests will be a guarantor of regional security. In contrast, the reinstatement of a single power will threaten the independence of emerging countries and create a shield between eastern and western parts of Eurasia. The accommodation of conflicting interests in a region with a significant internal diversity will require the skill and consistent stewardship of emerging democracies and fair cooperation among regional powers.

I will focus on Azerbaijan and its relationship with immediate regional powers, three of them being Russia, Turkey, and Iran. Azerbaijan is a relatively small country with 7.5 million citizens. But because of geography, abundant natural resources and political circumstances, Azerbaijan will be at the very center of international politics and diplomacy for years to come. A sweeping statement, of course, but it is not intended for the sole purpose of boasting my national pride. The reason a small country like Azerbaijan is important has a lot to do with geography. All of our neighbors maintain a strong interest in what happens to Azerbaijan. Russia claims the Caucasus as her legitimate sphere of influence. She has concerns about security on her southern border and the possible spread of Islamic fundamentalism and the potential alliance of Turkey and numerous new republics. Russia also has economic interests and claims regarding the energy resources of the Caspian. Needless to say, Russia would like to see pipelines to transport these resources to Russia. Much of what happens in Russia will have a significant impact on Azerbaijan as well as on other republics on it periphery.

We still have to answer one major question. Which way will the Russians go? I think that the Russians will first have to answer that question and present the answer to its immediate neighbors and the international community. Russia’s fate will depend on how internal politics will form in that country and shape its future. Once Russia regains its economic strength, it will regain political and military strength as well. Russians will have to make a historic choice as to whether they will become a European democracy or an evil empire again. Making that historic choice will require a significant change in Russia’s mentality. Russia’s slow pace towards making that choice is best examined by looking at its record of its past actions towards Azerbaijan and the Caucasus. One Russia requests and gets a deal with the state oil company in Azerbaijan, the other Russia questions the status of the Caspian Sea and the legitimacy of oil contracts. One Russia claims it is the mediator of conflicts, the other Russia is the major shipper of arms to Armenia and the Nagorno–Karabakh. One Russia urges the conflicting sides to sign the recent OSCE proposal on peaceful resolution, the other Russia signs a long term military pact with one side of this conflict, namely, Armenia.

Azerbaijan will have to create a balance between Russia the good guy and Russia the bad guy until there is a new identity to Russia. Ignoring Russian interests in the region will have fatal costs for Azerbaijan or any other regional country. Russia can easily attempt to manipulate ethnic factions and groups within Azerbaijan and could then dismember the country into just groupings and parts. Russia can use its leverage over Armenia and can start the war again between Armenia and Azerbaijan. Russian can join the efforts of Iran and other states and create obstacles to the development of natural resources. Azerbaijan will need to gain additional time and will need to create an infrastructure to secure the success and longevity of its independence.

Iran also has great concerns over what happens in Azerbaijan. A strong, politically independent, secular, pro-Western and pro-American Azerbaijan is not in the interests of Iran. By developing its energy resources and emerging as a strong petroleum country, Azerbaijan will become a competitor to Iran. A recovered, developed, pragmatic and tolerant Azerbaijan may also be seen as attractive to some 20 million Azerbaijanis living in Iran and will ultimately threaten Iran’s territorial integrity. Azerbaijan’s emerging alliance with the United States, Turkey and Israel will significantly decrease Iranian influence in the region. But Iran is a powerful neighbor that can not be ignored easily. By isolating Iran, Azerbaijan will be cultivating a strategic alliance between that country and Russia which would ultimately threaten Azerbaijan’s identity as an independent country. It would also bring about enhanced rapprochement between Iran and Armenia, which has happened in the last few years. Cooperation with Iran should be pursued, but in most cases it will serve the purpose of creating a balance in the relationship between the two countries for reasons mentioned above. It will not grow into a strategic partnership, at least not at the present time. If Azerbaijan considers extremist Russian nationalism as a threat to its independence, the same measurement should apply to Iran as well. One of the obstacles to Azerbaijan’s cooperation with Iran is the US sanctions on Iran. Sanctions are the worst policy a nation can pursue, especially if the sanctions are unilateral. The same applies to US congressional sanctions on Azerbaijan. The US sanctions on Iran and Azerbaijan resemble the meaningless efforts of one man shooting at his own feet over and over again, with or without the knowledge that one day it may cause gangrene and the amputation of both legs.

Turkey in some ways sees Azerbaijan and the new Central Asian republics as its natural allies in a loose confederation of secular Muslim republics. A friendly Azerbaijan opens the gate to Central Asia and lessens security concerns on its eastern flank. Turkey also wants a new oil pipeline to transit through Turkey to the Mediterranean for reasons known to us. Besides the economic and political interests, strong cultural and linguistic ties link Azerbaijan to Turkey. Further development of these ties will depend on the triumph of the principle of equality rather than seniority. Some in Ankara as well as anywhere else in the region will have to recognize that Azerbaijan has just lost its big brother. We would prefer being an orphan than having another big brother. This doesn’t mean that we would prefer an orphanage over a family. We would prefer to have brothers, but brothers with equal rights.

As the Executive Director of the US–Azerbaijan Chamber of Commerce, I arranged a seminar last March. We called it “Caucasus: Choosing Conciliation over Confrontation” and we invited the national security advisors to the Presidents of Armenia and Azerbaijan. For the first time, these two chief negotiators appeared in public together. We also had an official from the Georgian Embassy. And the title of the seminar speaks to the strong faith I have as an Azerbaijani. Can the Caucasus choose conciliation over confrontation? It is a rhetorical question, and then there is the question of means. The record of the past few years shows that commercial interests can consolidate political interests and drive them towards agreement. Azerbaijan has an enormous economic potential which can be utilized for the benefit of Azerbaijan and any other country seeking to benefit from it. Economic incentives can create avenues of cooperation. The development of Azerbaijan’s energy resources and the transportation of crude oil to world markets can be the backbone of regional cooperation. Multiple routes of pipelines can channel the entire region through multiple routes of cooperation. Vision, respect for each other’s sovereign rights and a willingness to cooperate will secure a future full of promise. Cooperation will override the history of rivalry in Azerbaijan. Thank you very much.

Moderator: I now have the dubious duty of introducing my self as the next presenter.

Roger Fisher: I am not an expert on the geography or interests of the area. Over the past few years I have been working on the Georgian–Abkhazia problem. The problem is both security at the individual level, people want order and to feel safe, and security at the group level, people being concerned about civil war. There is also economic security and creating enough security for an investor to put money in a pipeline and to build things of that kind. Currently, one of the other issues is that there is a competition of whether to take the risk of going through an area where things could fall apart. There is a competition as to which is more secure or which is less secure. If that is the competition, then it is very different to make your country more secure just to protect a pipeline. It is fairly easy to make another area insecure by blowing up a pipeline. I think the oil companies should work on how to create incentives so that the royalties they get are not just for the oil that goes through their pipelines, but the total oil that goes through both pipelines, so that there is a shared interest in the maximum amount of oil going through each pipeline.

How do we go forward in this situation where there are so many parties, so many interests, so many concerns and each party who wants his solution first? There is a further impediment which is that governments find it very hard to negotiate these problems on a blank sheet of paper because their constituents do not want them to give in until they get something. What we did with the Georgian conflict is that we had half a dozen people from each country get together in their individual capacity to work together for a week in an effort to get them to understand each other’s concerns and fears. And then we asked them to make joint recommendations about electricity, medical supplies, the telephone, and they began to work together. There will not be security through military means. The best guarantee I know is when you take small steps and trust people on the other side and they jointly work with you. Peace has to be built piece by piece. The Corridor will not be just a great panacea created on some given day. It wouldn’t work that way. So my notion is that the problem of process is how do we go forward. I think that the best way is to get people who know the area, who have no negotiating authority, no commitment, to give their ideas for what should be done.

Let me step back into my moderating role. We have six discussants who have three minutes for comments. The first is Robin Bhatty from Columbia University

Robin Bhatty: Thank you. I want to respond to a couple of themes that have emerged from the previous remarks. In particular, I would like to concentrate a little on the portion of the corridor that runs through Azerbaijan and Georgia. That is the area I have the most experience with. This corridor is acutely self-destabilizing. What we have in both of these countries are somewhat still shaky central governments, both of which lost internal wars. The Eurasian corridor both in terms of the oil and gas pipelines and the transportation network is going to result in substantially increased revenues. And these will go directly to the central governments of Georgia and Azerbaijan.

The distribution of gains from this project is very important and needs to be kept in mind. It is going to strengthen central governments. This is not only to the extent of the normal Soviet proactive situation where the central government controls anything that generates revenue from raw materials, but in this case a lot of these revenues will be in the form of hard currency. This means that they will be relatively quickly convertible to any manner of good including military goods. This is not to say that either government plans to invest the proceeds in increasing the size of their armed forces, but they will be able to do so. Moreover, while it is possible to overstate the amount of revenue generated by these development projects, the budgets of these countries are so small that small amounts of money in absolute terms turn out to mean a great deal in regional terms. To give you an example, the Azerbaijani budget last year was somewhere in the neighborhood of $750 million. The bonus payment given to the government of Azerbaijan from signing a recent production sharing agreement is $75 million—one tenth of their total budget. It will go to finance approximately one half of the Azerbaijani budget deficit.

These are huge sums of money. When you look in terms of the military spending that these countries are already engaged in, the revenues that will be developed in the Eurasian Corridor (assuming that it comes to fruition in the way its backers assume) pose the possibility of significantly increasing the power of the two central governments of Georgia and Azerbaijan vis-à-vis the two separatist movements both of them confront. In Georgia, this is not that important because neither the Abkhaz nor the South Ossetians have significant offensive potential in either terrorist activity or conventional military activity. However, it is a factor in Azerbaijan. The Karabakh army is pound for pound one of the best armies in the former Soviet Union and it has significant offensive potential. Again, let me emphasize that I am not saying here that the threat of an oil-funded Azerbaijani super army is haunting the minds of Armenian and Karabakhi decision makers, nor am I saying that simply because somewhere down the road Azerbaijan is going to benefit tremendously from these revenues, that they are thinking in terms of a preventative war. I am not saying that for a second. But I am saying that the threat does exist and they are conscious of it. They are thoughtful people. Thank you very much.

Moderator: Thank you. I would now like to introduce the former Prime Minister of the Netherlands, Ruud Lubbers.

Ruud Lubbers: Thank you so much for the invitation to be here. When I came in this room I recalled a meeting during the beginning of the 1990s where countries came together to talk about the European Energy Charter. There was confusion because people would look for the flags of their countries to find their plaques, but sometimes the flags would not be there for the newly independent countries. The charter was signed by many of the countries at the meeting, and it was the first treaty that many of the new countries ever signed. Now I am listening here to the discussion of the Silk Road and I think that what happened to the European Energy Charter may be of relevance. This charter provides an investor protection agreement, and fundamentals such as transits, dispute settling mechanisms, and so on. Some people relate the agreement only to energy, but it also has some initiatives regarding the environment. It was in trouble in the beginning because our largest member who signed the Charter, the United States of America, did not like to be involved in something so concrete. I think the US is better at deregulation than regulation. They were scared that this European project would handicap rather than assist their companies. What has happened since then? Signed by 50 countries, we needed 30 countries to ratify the agreement for it to come into action. Three days ago, in mid-April, enough countries ratified the Charter. However, in this state the treaty is weak, not only because of the United States but because it is still open to ratification in Russia. The Duma is hesitant, because in order to sign this agreement they will have to give up some of their sovereignty. For Russia, the Charter is something positive but it also causes them some hesitation. Norway’s position is that they will ratify when the Russian Duma does, so we are waiting for that.

There are similar aspects of this story to the issues of the Silk Road. The character of the treaty there is one of investment protection and it can be broadened and put in a more political context, but that will require more effort. It was called the Corridor of Freedom. Yes, we count as essential stability and freedom. But at the same time one has to make sure that we do not confuse the two. We really need to find a way to combine independence by working together in a way that the states become interdependent. States then pool certain parts of their sovereignty together so that they are more effective. I am now speaking as a man of Western Europe. We think of ourselves in the Netherlands as a sovereign nation, but nevertheless we combine parts of our sovereignty with that of surrounding countries in the political union. Now you can do this in many ways, but the essential element is to realize that in the modern world to survive is not enough. To be independent one has to make decisions in areas where you have to pull together aspects of your sovereignty. And this is a guarantee for stability, peace, and freedom.

Why did all of this go slowly in the example of the Energy Charter? There are several reasons and I have mentioned one already. We are living in a world of deregulation and people are wary of things that bind them. Second, with all due respect to my friends in diplomacy, diplomats prefer bilateral agreements. But this can create confusion. I would like to make a plea for agreements to be created in a broader and longer term context. I am convinced that given the geographical position and the natural resources, energy might be a key initiative to tying together the countries of the Silk Road. And from there on they can profit from the provisions of the treaties. I do not exclude that some of these countries want to make arrangements for security affairs, from the standpoint that they are sovereign and independent. But they may need to discuss their needs of being sovereign at one time and secure at another time, though perhaps this is a notion more for the future. Let’s make use of the existing mechanisms at any rate. This is my plea. But most diplomats simply do not know or do not like to talk about it, because a fresh negotiation that is bilateral seems to be more rewarding. Thank you.

Moderator: Moving right along, the next speaker is Pauline Jones Luong, an Academy Scholar at Harvard University and an Assistant Professor at Yale University.

Pauline Jones Luong: I am going to take up the suggestion made by Roger Fisher. How do we move on from here? And in doing so I am going to unfortunately weigh in on the side of skepticism. I like the three part typology toward economic cooperation or oil pipelines or peace that Ambassador Shugarian set up in the first session. And I have to say that my remarks fit most comfortably in the third approach. I think that oil in particular and economic cooperation via this Eurasian Corridor will not necessarily create peace and security. In fact, it may be very destabilizing and may create more tension and conflict in the region. One of the ways this is likely to happen is through this problem of relative gains. If the states of the Eurasian Corridor see that the stakes of winning rather than settling conflicts are higher, they may indeed be reluctant to negotiate a settlement fearing that their current adversary may become a stronger adversary down the road due to revenues and gains from something like the Eurasian Corridor or pipeline and trade routes in general.

That being said, it is very important to look at other regional problems and domestic conflicts, not only in the Caucasus but in the area of Central Asia. To say that the Eurasian Corridor is something we want to think about in the future, it is more likely that we see it as a carrot to bring together parties rather than a stick. This in part contradicts my original statement only if you don’t first look at the corridor as a carrot to bring people and regions together that are themselves inherently volatile. I think this is what can cause domestic conflicts to spread into international ones. This makes it much easier to spread arms and drugs, which are big problems in Central Asia, especially in Afghanistan.

So how do we go about resolving these domestic and regional conflicts? There is a strong tendency among leaders in the region to look to the international community as a neutral mediator. I would caution them to discern which part of the international community they want to help them. The international community is multi-faceted and has its own interests in the resolution of conflicts. There is not a neutral mediator. I think we have seen this in the Azerbaijan–Armenian conflicts and we see it in parts of Central Asia as well. Looking toward these different actors and different interests, it is very dangerous to have the business community acting as a mediator or negotiator in conflicts since they often have—more so than governments—more specific ideas of how conflicts get resolved. They may be able to resolve conflicts in the short term that help their business interests, but that might blow up in the longer term. Countries need to think about short versus long term resolution for very important conflicts. In Central Asia, the governments are not only interested in being linked through the Eurasian Corridor, though they do see it as a long term benefit to their countries economically and politically. But they are also very interested in being linked to other parts of the world. Asia is definitely something that is becoming predominant in the eyes of Central Asian governments, because of energy interests and economic and ethnic ties. The Eurasian Corridor to the West may be come less of a priority than linking themselves to Asia. Thank you.

Moderator: Thank you. I would like to introduce Arthur Martirosyan, the Senior Program Manager of the Conflict Management Group.

Arthur Martirosyan: Thank you Roger. The most fundamental issue is the clash of two discourses. One is the clash of integration that is the leading discourse of the Eurasian Corridor, and the other discourse is that of ethno-nationalism that is flourishing in the North and South Caucasus. Ethno-nationalism is feeding the existing conflicts and threatens to create new poly-ethnic or multi-ethnic conflicts in the area. The role that the international community has played in promoting both discourses is very interesting. On one side there is integration. On the other there is the rhetoric of sovereignty and the nation state. And this rhetoric is not good for the resolution of some of the conflicts in the area. The stress is often on territorial integrity, and this feeds the fears of minorities in the region: if one ethnic group can afford to have an independent state then why can’t others. This is a catch 22. The only way to address this dilemma is by promoting direct dialogue between the parties engaged in conflicts in the area. As someone who has worked on the Georgia–South Ossetia project, direct political dialogue yields political results. And although the success has been limited, it has been really encouraging. In the way of recommendations, I would say that the West and the international community need to encourage direct dialogue between the parties in all of the conflicts in the South Caucasus. Thank you.

Moderator: Thank you. I would like to introduce Carol Saivetz, the Executive Director of the American Association for the Advancement of Slavic Studies.

Carol Saivetz: I would like to make two points that are linked in a way so that I can urge us against over-simplification. I was struck in the first session that there were these very vague references to Russia and Iran. I think we need to take a very close look at the outside powers. As I think about it, I like the idea that there is a good Russia and a bad Russia, but I am not sure that there are only two. There are clearly power struggles going on in Turkey, there is one in Iran, and there are differences in the United States between oil companies that want to jump in and be involved in projects involving Iran and US government policy against this. It also seems to me that in each of these four countries, there exist interests seeking either the success or failure of the Corridor. At the same time, each of their interests may contradict the interests of the others. That means that there really has to be a very nuanced approach to the question. We are looking internally and domestically and we need to look at the outside powers and the interrelationships among them as well. Roger asked us each to offer some kind of suggestion. One of my answers is that we need a multiplicity of dialogues between and among all of the actors.

The second issue is that we have talked around the issue of economic development, security, and political development. This needs to be very much more nuanced than we have discussed so far. We need to urge the governments to be careful in how they use the oil wealth that will be accrued to them. We need to make sure that the wealth is distributed throughout the society. Azerbaijan alone is dealing with millions of refugees from Nagorno–Karabakh who are starving while there are Mercedes–Benzes driving around on the streets. That is another issue and another potential source for instability further down the road. Thank you.

Moderator: Thank you. The last scheduled person to speak is Gela Sulikashvili, the Managing Director of Emerging Markets Consulting.

Gela Sulikashvili: Thank you. I would like to limit my remarks to the description of the security involvement of the Caucasus. I would like to look at this conflict from a Western point of view. After all, the concept of the Eurasian Corridor is supported by the West, meaning the United States and the European Union countries. I would like to agree with Ambassador Shugarian that the countries of the Caucasus have quite different attitudes towards security concerns. It is not easy to find a common denominator that will unite them in some kind of security environment. Even Russia, which is the closest regional power, finds this difficult. This also explains why Russia’s attitude is not stable in a sense. There is basically no security regime that satisfies all of the countries of the region. The CIS security treaty has largely failed to address these issues.

At the same time the European Union is enlarging and a new security environment is being created, basically the largest security region of Western Europe. But the area of the Caucasus is somewhat neglected. Once again, there is no concept of how the security problems of the region can be solved. There are several emerging schemes, but many of these schemes are concerned with ethnic issues and consequently they are not inclusive enough to address the security concerns of the region. The concept of the Eurasian Corridor is basically trying to bring closer to the European continent this area of the Caucasus, by creating transportation links and by creating and facilitating trade and exchange. Hopefully the next step will be the emergence of some kind of larger security system including the South Caucasus and maybe Central Asia. It is to be hoped that this arrangement will be able to address the concerns of the region.

Moderator: Thank you very much. Rusudan.

Gorgiladze: I would like to share with you my view of these issues, namely how I think certain attitudes exist. There are some pessimistic voices here and that is why we are here. To share our thoughts and ideas. The fact that I can see all of you here means that the solutions can exist. I would like to focus on some of the positive solutions. I see problems existing on two levels. One is on the ideological level of regional security in general. We need more concrete solutions. At the same time we need to focus on our common interests. Here we are progressing. My main attitude is that if there is a will then there will be a corridor.

Lubbers: One additional remark. I agree that dialogue between the parties involved is very important. You said that if there is a will there you can create something. It is also true that this will only be stabilized and secure for the future if you can find institutionalized forms of working together. So it is dialogue and institutional forms of working together. We need an institution that is multilateral. Thank you.

Japaridze: I would like to make some very brief comments. I appreciate what Prime Minister Lubbers has stated as the contradiction between the Corridor of Freedom and interdependence, and it is a delicate balance. In some dimensions, Russia still considers the Caucasus and Central Asia as the backyard of the Soviet Union. The main thing for me is whether people in the West consider us the backyard of Russia. This is important for our survival. For how long do we need to be considered the Former Soviet Union countries? In connection to the GUAM group [consisting of Georgia, Ukraine, Azerbaijan, and Moldova], its structure is not for security reasons, it is mainly for commercial and trade issues.

Abdimonunov: I agree with Prime Minister Lubbers. There already exists an organization called the Conference for Cooperation and Trust Building in Asia and it is working on the level of Deputy Foreign Ministers who agree to participate. The other level in which there is work is through the Central Asian Union which includes the three core republics Kyrgyzstan, Uzbekistan, and Kazakstan. Here we have not only the problem of oil and transportation, but of ethnic conflict as well. The other issue is water, because right now it is a much more expensive and precious commodity than oil in Central Asia, and that is what we are currently working on. The third level of cooperation is in attempting to establish a larger common market among countries like Turkey and Iran.

George Kolt: First I would like to thank the organizers of this session and I think it has really brought out the complexity of the issues involved. Just to illustrate that, I don’t think there is an idea that I have heard that I would disagree with. Unfortunately, they have been contradictory ideas. Let me pick up on one thing that was mentioned—the multiplicity of dialogues and the importance of institutions. We had just mentioned some that had been created but I don’t see them as fully functioning yet as real institutions dealing with concrete problems. So my question is if any of you have any concrete ideas of how to create institutions to deal with the problems of real life. And secondly, I would say that one possibility is to go and create an Eurasian Transportation Corridor (ETC) authority that would bring together states that deal with concrete issues. I know that there are a lot of bilateral agreements that are being made, but do you think the time has come to create such an authority? It would meet your call for institutions and going beyond some of the geostrategic issues that have been raised. Would you invite China to participate? Do you invite Russia to participate?

Saivetz: I think that I was about two stages behind the Prime Minster when I was talking about a multiplicity of dialogues. I was trying to point to the complexity and contradictions of all of the interests of the outside powers. If you push me, maybe the Port Authority model may not be such a bad idea where no one is surrendering a lot of sovereignty but you are dealing with very specific issues. It seems to me that you can begin to bring together those interests that are compatible through this multiplicity of dialogues. You can find the least common denominator and then build from there.

Lubbers: As I have already mentioned we already have one institution in place. That is the Energy Charter Treaty that I have already mentioned. We still need the ratification by the Duma, but if you do this, it opens a window to the North Caucasus. Translating that into regional cooperation according to the system of the Energy Charter Treaty, you get areas that still belong to Russia, but are de facto independent because they are included at the table. More basically, there are three areas for more specific institutions. First, energy and the charter treaty is already in place, work with it. Secondly, trade is very sensitive and you can make regional trade agreements based on consultation occurring. And third, security is the most difficult. I feel reluctant to talk about it because I feel the eyes of the US telling me not to talk about it because they provide security all over the place. So how far can the Silk Road go? Well, one of the signatories of the Energy Charter treaty was Mongolia; this should give us a sense of an answer. Thank you.

Molla–Zade: I would like to comment on the concept of two Russias or many Russias. I think that it is most important the Georgia and Azerbaijan should build their military institutions since they are strategically the weakest. Building does not mean they are starting a war. Instead they can be seen as building a balance. I do not believe that the policy of conciliation will work. There is imbalance in the region. When the countries in the region feel balance they will feel that peace is possible.

Alan Henrikson: Much of what has been said seems to me to be an implicit argument, partly explicit, for involvement by the United Nations on the micro and macro levels. Mr. Boothby suggested some kind of international presence which will be quite different from what Roger Fisher referred to as a military guarantee. What Mr. Boothby is proposing would involve an actual presence on the ground—that is the guarantee, not the threat, of NATO type air raids to protect the safe areas in Bosnia. There is actually a provision in the UN Charter to establish under the Trusteeship Council strategic territories on a transitional basis. It has never been used. On a somewhat broader level outside of the security area, one could have for the entire region something comparable to the Economic Commission for Europe or the UN Regional Economic Commission for Trans–Caucasia and Central Asia, which will provide a neutral international framework with an encompassing regional focus. There are many established patterns for this and I am surprised that it has not been emphasized more. The OSCE has also not been emphasized, but I think the UN would provide a better framework for the issues identified here.

Radu Florescu: We have only a single superpower left, the USA. These conferences do much to enlighten the academic world. But I would like to see our President and Congress a little more enlightened on what is even more complex than the Balkans. How can these meetings be more useful in regard to Congress and public opinion? The public does not really understand the area. It is unfortunate that oil still has such a heavy ring to it. I know this when I hear people question our presence in Bosnia when there is no oil in Bosnia. Since there is oil in the area, that is a point that will trigger some interest.

Moderator: Thank you to all of the participants. I would just like to conclude. When we look at decision making, it requires two things, forming some decisions to be made and then having people with authority to make them. I would tend to work for the multiplicity of dialogues idea. It will take this kind of process to solve some of the problems. We will have to get well meaning and able people to come together and to work together. This kind of a meeting can give the background for concerns, but we need another group to take this to another level of making suggestions.