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Energy and Security in Transcaucasia

Authored by Dr. Stephen J. Blank.

September 7, 1994

35 Pages

Brief Synopsis

One of the world's enduring regional conflicts is in Nagorno-Karabakh. This war pits local Armenians and their cousins from Armenia against Azerbaidzhan and has enmeshed Russia, Turkey and the Western allies (France, Great Britain, and the United States) in a complex series of regional relationships. The international stakes of this war involve the control over exploration for natural gas and oil and the transhipment of these commodities from Azerbaidzhan to the West. Energy resources represent Azerbaidzhan's primary means of economic modernization and are therefore vital to its economic and political freedom.

For Russia and Turkey the question is one of access to enormous amounts of desperately needed hard currency and control over a long-standing area of contention between them. More broadly, Russia's tactics in attempting to impose a peace settlement in the war and to establish control of a large share of the local energy economy represent a recrudescence of the imperial tendencies in Russian policy that are incompatible with democratic reform. Accordingly, this war is overlaid with international rivalries of great scope and of more than regional significance. Western policy here is a sign of U.S. and European intentions to preserve the post-Soviet status quo while Russian policy is no less illustrative of the direction of its political evolution.

The Strategic Studies Institute hopes that this study will clarify the links between energy and regional security and that it will enable our readers to assess regional trends and their importance for the United States, its allies, and the Commonwealth of Independent States.

SUMMARY

With the collapse of the Soviet Union, new states, regions, and security issues entered into international affairs. One of these regions is the Transcaucasus or Transcaucasia. It comprises Georgia, Armenia, and Azerbaidzhan and is a zone of centuries-old international rivalry between Turkey and its supporters and Russia and its friends. At stake today is the international economic life, and thus the politics, of Transcaucasia. This rivalry now engages Turkey, the United States, Great Britain, and France against Russia in the struggle to control (or at least leverage) Azerbaidzhan's energy exploration and pipeline programs. This competition interacts with the international effort to bring about peace in the Armenian-Azerbaidzhani war over Nagorno-Karabakh.

Thus, in Transcaucasia energy or economic issues and security are closely linked; almost indistinguishable. This study examines that linkage. It relates Russia's efforts to impose a peace on the area to its aim of securing a stake in the local energy economy. Russia's stated goal of 10-20 percent of the revenues from that energy is wildly disproportionate to its economic investment (which is nil). But Russian policies reflect its tactics and strategies for reintegrating the former Soviet space.

At the same time, this assessment of Russian and international efforts to gain influence is conducted in the context of Azerbaidzhan's efforts to escape unilateral dependence upon Russia by involving Western firms and governments, and Turkey's efforts to keep Russia from gaining hegemony over Transcaucasia. By tracing the complex international maneuvers of the parties, and relating energy and economics to defense and security issues, we can see the strategic issues and importance of the area in a clearer context.

What then becomes clear is that Russia seeks to coerce Azerbaidzhan, Georgia, and Armenia into a return to some form of economic-military-political union under its auspices, but is meeting considerable political opposition from Baku, Ankara, and the Western powers. This opposition recently led Russia to issue a demarche to Great Britain (significantly not to Azerbaidzhan) concerning its rights to veto anything having to do with the disposition of the energy resources of the Caspian Sea that borders Azerbaidzhan and Kazakhstan. This demarche validates Western reports of Russia's belief that it has a proprietary relationship to energy resources throughout the Commonwealth of Independent States (CIS) and of its efforts to "blackmail" (The Washington Post's word) the new republics into surrendering control over those resources to Russia. It also illustrates that Russia still believes in the diminished sovereignty of Transcaucasian and Central Asian states.

However, Russia's demarche and other actions also reflect its weakness when confronted by steadfast Western opposition to its neo-colonialist policies. The claims it makes on Azerbaidzhan and its Western supporters reflect that weakness and the fear that Western influence might supplant Russian influence in these borderlands. While the local situation is one of unresolved war and Russian efforts to impose a one-sided settlement, the great strength residing in the Western position (should the West seek to engage both Russia and the other CIS members in a comprehensive engagement) is also visible.

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