Our window of opportunity to influence events there is very narrow. The US must assume a more consistent and pro-active policy immediately; if we do not act soon, we may find that we are too late to take advantage of a unique opportunity.
The countries of the South Caucasus and Central Asia — Armenia, Azerbaijan, Georgia, Kazakstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — are at a 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 United States for support.
The stakes in the Caspian are enormous for the United States. I will briefly highlight those which I view as the most significant, and focus primarily on the measures, I think we 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 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 Iranian extremism. Though Iranian activity in the region has been less blatant than elsewhere in the world, they are working very hard to bring the region into their sphere of influence and economic control.
- Secondly, the Caspian Sea basin contains proven oil and gas reserves which, potentially, could rank third in the world after the Middle East and Russia and exceed 4 trillion dollars in value. Investment in this region could ultimately reduce US dependence on oil imports from the volatile Persian Gulf and could provide regional supplies as an alternative to Iranian sources.
- 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, many 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.
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 solutions and approaches can apply. I have legislation which provides an 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 outlined:
1) 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. In my view, the route through Azerbaijan — whether it be multiple pipelines with some going through Russia and some through Georgia, or the major export pipeline 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 Caucasus and the Western market, and giving them all a stake in making regional cooperation work.
While I understand there is significant cost attached to the Baku-Ceyhan pipeline, I believe it is high time we seriously examine just what steps need to be taken in order to make this route work.
Specifically, 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 will eventually become economic hostages to Iran, much in the same way that they were economic hostages to the former Soviet Union.
2) Conflict resolution: The US must play an increasingly active role in conflict resolution in the region. The boundaries of the Soviet republics were intentionally drawn to prevent secession 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 pose serious dangers to the stability in the region. A glaring example of this, is the case of conflict over Nagorno-Karabkh. 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. The same goes for the recent efforts by the Administration to become active in resolving the Abkhaz situation in Georgia.
3) Policy vis a vis Russia: The US should also be actively involved in persuading Russia to play a more positive role in the region. Present 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 has thus been impeding regional cooperation which the Presidents of these countries are trying to achieve.
There are countless examples to illustrate this, I will cite just one: the case of Georgia, a transit route for goods such as Uzbek cotton and Kazak oil, from the Caspian Basin to the Black Sea and westward. Russian border troops continue to throw their weight around in Georgia, creating obstacles to freight traffic through the country which is now primarily destined for the Georgian port of Poti: inspecting everything that goes through, intentionally creating backlogs of trucks and cargo containers; and finally damaging cargo with careless inspections. All of this creates untold problems for Georgia and serves to damage the image of Georgia as a transit country.
Russia has clear and natural economic and commercial stakes in the region and 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. At the moment, however, Russia is blurring the distinction between influence in the region and interest in the region. Recent statements by President Yeltsin calling on Russian security organs to find "ways and means" to "counterbalance" (read undermine) US "intervention" in the region are clear examples of the type of disruptive statements and activities in which Russia is engaging.
4) 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.
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 ethnic tensions between Uzbekistan and Kyrgyzstan were solved by the sheer will of the leaders of these countries. In another example, just this month the Presidents of Azerbaijan, Georgia, Moldova and Ukraine met and stressed the importance of mutual cooperation in establishing a Eurasian, Trans-Caucasus transportation corridor and in fostering cooperation and stability in the region. Kyrgyzstan 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.
5) 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 one’s status as a sovereign nation. Yet, the borders of a number of these countries are controlled by Russian border guards who, as I mentioned earlier in the example of Georgia, take advantage of the situation to further the negative policies directed by Moscow. 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.
6) 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 actively be encouraging the activities of the Export-Import Bank to complete review processes for financing eligibility; we need to authorize provision of insurance, reinsurance, financing, or other assistance by OPIC as well as TDA to all these countries.
7) 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 the 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.
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 about pipelines. The independence of the region could indeed 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 an intense rapprochement between these two countries.
Time is of an essence here. We have the opportunity to help these countries rebuild themselves from the ground up and to encourage them to continue their strong independent stances, especially in relation to Iran and the spread of extremist, anti-western fundamentalism, which is one of the most clear and present dangers facing the United States today.
The window of opportunity has been closed even further by the recent investment by the French company Total, the Russian company Gazprom and the Malaysian company Petronas of over 2 billion dollars in the Iranian South Pars offshore gas field. It is vital that the Administration hold strong on implementing existing sanctions and on discouraging our allies from following the despicable example of Total. If the floodgates open through Iran, the eastern Caspian will certainly fall into the eastern sphere of dominance and the South Caucasus will lose out on its opportunity to prosper as producers of oil and as a pivotal transit point from East to West.