Analytical Articles

IMPLICATIONS: The changes in Gazprom leadership affect not only Russia, but also strongly affect the countries of the Commonwealth of Independent States (CIS). Gazprom’s policies determine the energy situation in many of these countries; Itera was selling gas bought from Gazprom mainly to CIS countries and many believed it was acting as an agent of the Russian state - allowing the Kremlin to manipulate former Soviet republics with gas supply terms and use them to pressure those with whom the Kremlin was dissatisfied. Gas supplies have often been interrupted to Ukraine, Georgia, and Azerbaijan for reasons that were obviously political. With Gazprom totally under state control, chances that it will continue using Itera as middleman in its deals with CIS states are low. Gas supplies to the CIS and to a number of eastern European states are likely to become even more politicized and dependent on these countries' compliance with Russian interests. This may weaken western-oriented states' attempts to drift away from Russian influence. On the other hand, it may work the other way as well - increased fears of energy crises could enhance incentives for faster development of Azerbaijan and Turkmenistan gas reserves and infrastructure for their transportation to the CIS market and beyond. The other implication for CIS countries may derive from Itera, which was obtaining major industries in CIS countries in exchange for debts these states were unable to repay. Itera was, once again, acting in the best interest of the Russian government – increasing the Kremlin’s economic leverage over these states. If Itera is no longer closely affiliated with the Kremlin, it will no longer need these industries in their current condition. Itera will face a choice: invest heavily and make them profitable, which is unlikely, or sell them. In this case Gazprom, or in other words, the Russian state, is a possible buyer. This would not impact the struggle for independence in CIS Countries positively.

Recent advances in the establishment of a transport network from Almaty to Karachi bypassing Afghanistan have reemphasized the need for a sea outlet for the landlocked Central Asian states, as well as the central role of Pakistan in their realization. When the political situation allows, routes through Afghanistan, including oil and gas pipelines, will complement this route and cut distances and therefore costs of transport from Central Asia to the Arabian sea. New trade opportunities are being opened up, from which regional and other states stand to gain.

Caspian energy resources will play an increasingly important role in the world energy supply over the next two decades. The United States, the world’s largest energy consumer, Europe, China and India will compete for those resources. This competition could bring Russia closer to the West.

Only days before the Putin-Bush meeting in Ljubljana, an even more significant meeting took place in Shanghai between Putin and Chinese President Jiang Zemin, within the framework of the mechanism known until recently as the "Shanghai Five" or "Shanghai Forum". At the Shanghai meeting, Uzbekistan was welcomed as the institution's sixth full member. Documents were adopted bearing the titles, "Declaration of the Establishment of the 'Shanghai Cooperation Organization'" and the "Shanghai Covenant on the Suppression of Terrorism, Separatism and [Religious] Extremism". The name-change signals a move to establish a formal structure with a permanent secretariat in Shanghai, and to promote multilateral interministerial cooperation across a wide range of issue areas. It also signals, if one takes Beijing at its word, the incipient coalescence of a Sino-Russocentric geopolitical bloc in Asia. China's vision for such a bloc is to countervail any strategic vision that puts the United States at the forefront of twenty-first century global politics.

Kazakhstan President Nazarbaev's appointment on May 31, 2001, as the Chairman of the Inter-state Council of the newly established Eurasian Economic Community (EEC) once again puts Nazarbaev in the forefront of integration efforts in the CIS.  The new EEC represents the most significant Eurasian regional effort to harmonize labor, customs, tax, and trade policies since the disintegration of the USSR.   While previous attempts to establish free trade arrangements among the post-Soviet states have met with limited success, there are prospects that the provisions of the new EEC agreement -harmonizing and coordinating policies among Belarus, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan - may go substantially beyond previous measures.

On June 7th, the heads of the five GUUAM states met in the Livadia imperial palace in Yalta, in the very historic hall where the post-World War II “Yalta World Order” was designed. But, unlike that historic meeting, the GUUAM summit delivered a modest document - the Charter of GUUAM, which has not transformed this informal intergovernmental group into an international organization. A widely expected agreement on a free trade zone was not signed; however, bold prospects were floated, which, if realized, would have the potential of creating an emerging  sub-regional entity. 

In dealing with Russia's determination to export CPC oil through the Turkish Straits, claiming the right of 'free passage' under Article 2 of the Montreaux Convention, Turkey could use several trump-cards. By cracking down on environmental pollution and unsafe vessels flying under flags of convenience, Turkey could directly control the flow of traffic through the straits. Turkey could do so by simply following the letter of the law, and could find allies in maritime and environmental circles.

When Afghanistan's ruling Taliban announced that non-Muslims would be required to wear identification to that effect, Western officials and media were quick to condemn the decision. While most criticisms drew parallels to the Nazi persecution of Europe's Jews, the Israeli government did not voice the expected outrage. Israel's clandestine relationship with Afghanistan reaches much deeper, and has far greater implications for the region. Israel's secret intelligence relationship with opposing factions in Afghanistan's lingering civil war serves its multi-tiered national security objectives in the region, including the monitoring of Iran, the containment of Islamic fundamentalism, and the development of strategic partnerships with likeminded states. As a result, Israel will continue to be an active player in Afghanistan, unfortunately perpetuating the conflict.

Given the demand-driven character of the global trade in illegal drugs, the eradication of opium poppy in Taliban-controlled Afghanistan is bound to lead to an increase in production elsewhere. If the recent history of another major drug-producing area, the Andes region, is of any relevance, a major increase in production is to be expected in neighboring and unstable areas suitable for cultivation: that is to say, the Central Asian republics, especially Tajikistan and Kyrgyzstan. The possible ramifications of such a development are immense. 

BACKGROUND: In his annual report to the Parliament on May 12, President Eduard Shevardnadze devoted substantial space to proposals of constitutional amendments which he submitted to Parliament. The proposed amendments among other provide for the introduction of a Cabinet headed by a Prime Minister, empower the President to dissolve the Parliament and to make forceful alterations to the budget without Parliament's compliance. A few days later Shevardnadze nominated Speaker Zurab Zhvania as his candidate for the premiership.