Seven years after the collapse of the Soviet Union, profound changes are coming to light within the geopolitical framework of Eurasia. In particular, a huge effort is being made to alter transport networks to meet the new requirements arising from independence.
The projects involve, in the first place, Russia itself, which is being forced to come to terms with the reduction in the size of its territory but is endeavouring to retain its role as the bridge linking Europe and Asia. Some of the projects, however, are designed to break down the de facto monopoly which Russia used to have over the export networks of some of the former Soviet republics. The European programme, Via Baltika, seeks to integrate the three Baltic States with Poland and Finland without passing through either Russia (Kaliningrad, St Petersburg) or Belarus.
The stakes are higher in southern Russia due to the fact that independence for the eight new states (seven of which are landlocked) has coincided with the “rediscovery” of hydrocarbons in the Caspian Sea (1). It was not long before specifically political and strategic issues could be detected in the background to technical discussions on the best route and the best mode of transport (road, rail, pipeline, etc.). So much so that there is talk of a new “Great Game” that is attracting multinationals and Western states into an area (Central Asia, the Caspian and the Caucasus) which was for many years regarded as Russia’s private domain.
It all began with the realisation of what was lacking: in 1990-91, when the Europeans wanted to deliver food aid to the warring Soviet republics of the Caucasus and Central Asia, they found it impossible to do so without using the Russian transport network, which is notoriously slow and unreliable. Of the eight states which acquired their independence in 1991, Georgia is the only one which is not landlocked.
Providing these eight countries with a credible alternative to the Russian monopoly over the existing main export routes is currently the aim of the Transport Corridor Europe-Caucasus-Asia (Traceca) programme, launched by the European Union in 1993 and subsequently expanded to include Ukraine and Mongolia. The original programme only covers the traditional modes of transport: ports and the road and rail networks, so there has been a major addition covering pipelines (Inogate), along with an air corridor project (Southern Ring Air Route), which makes the whole programme a real “Eurasian Corridor”.
Although it was not in on the initial stages, the United States quickly lent its support to the range of projects, getting involved in their implementation and responding to calls for tender, resolved to cast aside its misgivings about the undemocratic nature of some of the new states. At the end of 1996, in order to increase the drawing power of the programme by relating it back to the past, the route was renamed “the 21st Century Silk Road” (although the original Silk Road never ran so far north).
The initial objective of the West is clear: consolidation of the eight new sovereign states means that they are offered a choice when selecting economic partners and are given access to the world market. The reopening of some of the frontier crossings in the south has had limited impact since in most cases they only provide access to regions which are either disputed or do not provide a large enough market (Xinjiang, Afghanistan, Northern Iran, Eastern Turkey). From the point of view of the West, the Transcaucasian route offers the double advantage of avoiding Russia and Iran and increasing the crucial role of the United States’ main ally in the region, Turkey.
When Traceca entered its operational phase in 1994-95, Transcaucasia was almost entirely cut off from Russia because the two main transport routes were blocked, one by the fighting in Abkhazia, the other by the effects of the conflict in Chechnya. Armenia is closed off on two sides, from both the Azeris and the Turks, and the route which could link Azerbaijan and Turkey is made impassable as a result of the fighting in Nagorno-Karabakh.
The role of Iran
The cumulative effect of the various border closures and the economic crises is leading to a collapse in North-South trade and Russia is finding that its role as the main trading partner of the three Transcaucasian states is in jeopardy. The Europeans and the Americans are fully intent on taking advantage of this period to try to bring about a profound geopolitical realignment. Zbigniew Brzezinski, President Jimmy Carter’s former adviser, remarked somewhat cynically that Russia must be weakened - for its own good. Strengthening the sovereignty of the newly-independent states and providing access to their natural resources for multinational companies will hasten the time when Moscow will abandon its neo-imperial approach for good, which will finally turn the country into a responsible partner worthy of playing its regional role on the world stage.
Although hampered by its own recession and by the power struggles currently taking place in the Kremlin, Russia is attempting to respond. Not only are the major Russian oil companies seeking to join all the exploration consortia which will have them, but Moscow is actively coming up with its own transport solutions. The desire to reopen the Baku-Novorossiysk pipeline in 1997 was a determining factor in the conclusion of the Chechnya adventure and in the negotiation of a financial agreement with Grozny for the transit of crude oil.
So at the ceremony on 12 November 1997 to celebrate the first oil brought out of Baku by a consortium of Azerbaijani and Western companies, the Azerbaijan International Operating Company (AIOC), Boris Nemtsov (then minister for fuel ) and Sergei Kiriyenko (then energy minister) took care to emphasise that the Russian route is and will remain the most competitive.
At the same time, in order to frustrate the idea of a single Eurasian Corridor, Russia is stepping up the number of proposals to expand the geographical scale. In addition to the completion of the North Kazakhstan-Novorossiysk pipeline, it is negotiating with Ankara a considerable increase in supplies of Russian gas (plans are for either a direct pipeline running under the Black Sea or a route via Georgia or Armenia). It is also exploring with Greece the idea of a Balkan pipeline which would avoid the Bosphorus and reviving several projects to provide access to the eastern shore of the Caspian via Iran. Aside from oil, Moscow is also seeking to strengthen its role as a Eurasian bridge by developing rail links with China or by reviving the Trans-Siberian Railway.
However, this expansion is beset by a double handicap. The first is economic: having inadequate funding of its own, Russia is in practice obliged to call on foreign partners, often Westerners, for all these projects. Moreover, Russian transport undertakings are at present a long way from reaching the technical standards of the major international companies, as Russian shipping well demonstrates.
Competition is strong these days. In order to break down the Russian monopoly over the transport of Kazakh oil, the United States proposes to build a pipeline under the Caspian Sea to join up with the Caucasian route. Similarly, Gazprom, Total and the Malaysian company, Petronas, announced in 1997 the conclusion of an agreement to develop a deposit of Iranian gas, some of which could be supplied to Turkey.
Although critical of that agreement since it is in breach of the Iran Sanctions Act which it adopted in 1996 (see the articles by Alain Gresh in this issue), the United States is reluctant to confront Russia and France head on. But it seems to have succeeded, by making attractive offers of credit, in dissuading Malaysia from being involved, and it has proposed that in return Malaysia should take part in a project in Turkmenistan, whose president visited Washington in April 1998. The purpose of that visit - which followed visits by the heads of state of Azerbaijan, Georgia, Kyrgyzia and Kazakhstan all in the space of less than a year - was to win over Saparmurad Nyazov to the Caucasian Corridor project, in breach of agreements he has signed with Iran and Russia.
For the rest, the Iranian option, regarded by many as the best from the financial point of view, is no longer taboo and the American oil lobby is commenting constructively on the changes taking place in Iran. During the debate in Congress on the “Silk Road Strategy Act”, an act which is designed to set out American strategy in the whole of that region, there was some criticism of the boycott and it was proposed that there should be more flexibility, at least in the case of projects which involved not just Iran, but also United States’ allies such as Turkey.
There might be some advantages in a turnaround like this: after all, the Iranian route is the shortest way of reaching the Turkish oil terminal of Ceyhan on the Mediterranean, and the involvement of American firms would naturally make it possible to avoid (what Washington fears) a rapprochement between Russia, Iran and Armenia, which has become one of Teheran’s favoured partners since the closure of Nagorno-Karabakh.
The struggle over transport routes is linked to the struggle over the exploitation of resources. No holds are barred: destabilisation of partners, arguments over credit and dumping practices, outbidding for projects where it is not always possible to distinguish realistic proposals from bluff, etc.
Russia must also take account of another handicap, which is more fundamental because it concerns the overall strategy Moscow has been pursuing in this region since 1991. For several years now, the Kremlin has been relying on its traditional domination without realising the scale of the changes which have been taking place. Both in its bilateral relations and within the Commonwealth of Independent States (CIS), it has been pursuing a policy which unwisely combines pressure with promises.
On the economic level, whilst many Russian industries are pulling out of the former republics in the south, transferring their allegiances to Western trading partners who are regarded as more promising, the authorities have too frequently used tariffs and transit quotas as a means of exerting pressure on the states of Central Asia. Russia has not hesitated on occasions to resort to destabilising measures, as can be seen from the fact that the oil talks with Azerbaijan and Georgia have been going on at the same time as various conflicts and political events have been taking place in Transcaucasia. Pressure by Gazprom, which is proposing to recoup the debts of clients like Moldova or Ukraine by transferring strategic assets such as gas supply networks or companies providing sensitive materials, is resented as being an attack on the sovereignty of those countries.
Russia has been slow to realise the scale of the changes which have already taken place: since 1995-96 several states have begun a return to economic growth. They know how to gain support in the West and intend to use it to consolidate their sovereignty and renegotiate their relationship with their former controlling power. They do not want to go down the path of supranational links with Moscow, and the union between Russia and Belarus has served more as a warning than an attraction.
The frameworks for discussion provided by Traceca (which includes an important element of tariff and customs integration that is the precursor to a sort of free trade area), together with oil contracts, have prompted the political expression of these misgivings. After their initial meetings to discuss contracts for the supply of hydrocarbons from Central Asia to Moldova in order to break the quasi-monopoly of Moscow in this crucial area, the leaders have now gone well beyond purely technical discussions. From the topic of opening up landlocked states, they have moved on to discuss decoupling.
In October 1997, in the margins of the meetings of the Council of Europe and the Organisation for Security and Cooperation in Europe (OSCE), four countries, Georgia, Ukraine, Azerbaijan and Moldova created an informal association called GUAM (from the initials of the signatories). This was not a chance event since all four countries are having to deal with separatist movements with which Russia is deeply involved (Trans-Dniester, Crimea, Abkhazia and South Ossetia, and Nagorno-Karabakh).
At the summit of the CIS meeting in the Moldovan capital, Chisinau, in October 1997, those dissident countries spoke out strongly in favour of a complete revision of the rules under which the CIS operates, which they regarded as ineffective and useless. This movement continued in January 1998 at the summit of Central Asian Presidents, which in addition to the future of the region and of the CIS, discussed transport projects that would make it possible to circumvent Russia.
In Moscow, reactions have been varied. Some people talk of a Western plot - and it is noted that the criticism has coincided with the organisation of manoeuvres by the North Atlantic Treaty Organisation in Ukraine and Kazakhstan and with scepticism expressed by American officials as to whether there is any point in any form of economic integration around Russia. Others, however, emphasise the need to turn the crisis to advantage by taking relations between the twelve members of the CIS back to square one and reconstructing them on sound footings, promoting their economies and giving full respect to their sovereignties.
Much uncertainty remains and the outcome of this Great Game is not yet settled, but work has begun under Traceca, and there is no doubt that different ways will be found. But most of the projects are still at the stage of protocols of intent. In the meantime, although the cliques which in most of the countries in the area control the energy and export sectors are already reaping advantages, that is not the case for the majority of the population.
Many observers see in this a major risk which could upset a fair number of calculations. Social tensions are mounting and, in states where any local conflict could degenerate into ethnic or regional skirmishes, the powers involved in the Great Game bear greater than ever responsibility.