Analytical Articles

A territorial dispute has recently worsened the relationship between Moscow and its committed ally in the South Caucasus, Georgia’s separatist republic of Abkhazia, whose independence was recognized by the Russian authorities less than three years ago. In an attempt to delimitate its state borders with Abkhazia, Moscow recently came up with a plan envisaging the de facto annexation of ca 160 square kilometers of Abkhaz soil, an initiative fiercely opposed by official Sukhumi. While Moscow would benefit from such territorial expansion ahead of the Sochi Olympics, forcing Abkhazia to cede territory could damage Moscow’s relations to Abkhazia as well as its other allies in the South Caucasus. 

With the Russian Federation nearing the finish line in its marathon race to join the World Trade Organization, Moscow has restarted negotiations with Georgia. They will have a full agenda stemming from Russian actions before and during the war with Georgia in 2008. These talks are taking place because the Georgia is in a position to use its veto as a member of the WTO to blackball Russia’s membership. Russia therefore needs Georgia’s assent to join the WTO. The negotiations are therefore about both the consequences of the Russo-Georgian war and overcoming them to  obtain a way for Georgia to approve of Russia’s candidacy to the WTO.

The recently announced “People's IPO”, a new round of public offerings by Kazakhstan's largest and most profitable corporations and companies was designed to address one of the country’s most divisive and contentious issues – the rise of extreme inequality between the very small class of nouveau riches who acquired former state companies for a song, and the large class (up to 70–80 percent) of impoverished citizens. The new ‘People's IPO’ immediately became the center of heated public debate in Kazakhstan. The main question is whether this bold and innovative act by Kazakhstan's government can address the fundamental problem of social inequality.

The past years have seen increased conflict-related violence in the North Caucasus, which in conjunction with economic instability and social insecurity has endangered the Russian administration of the region. Amid official claims that the insurgents are close to elimination, the Russian government for the first time since the start of the second Chechnya war in 1999 initiated a peace-building project in the region. The project is officially named Peace to Caucasus and aims to bring peace and stability to the volatile region. However, it has so far shown a weak performance and is unlikely to develop into a platform for peace-building.

In early April, Uzbekistan hosted the most recent EU-Central Asia ministerial meeting, where a high-level delegation from Brussels met with the foreign ministers of all five Central Asian countries and took the opportunity to hold one-to-one bilateral meetings with each of them. For the first time, energy has appeared in a significant place in the formal definition of the agenda for discussion at this level and in this forum. While the preparation and overall tenor of the meetings reflect a somewhat better sense of purpose on the part of Brussels, the EU’s policy remains plagued by difficulties of goal definition and bureaucratic coordination.

The dust has yet to settle entirely following the leadership controversy last August which pitted the putative leader of the Caucasus Emirate, Doku Umarov, against a group of erstwhile colleagues in Chechnya’s rebel organisation. Umarov’s steadfast refusal to relinquish his leadership position has not prevented his opponents in Chechnya from restructuring themselves politically and militarily. The leaders of this anti-Umarov constituency command sizeable support and can call upon the services of a number of militarily gifted field commanders. Conversely, support for Umarov within the Chechen organisation appears to be insignificant; is there a way for Umarov to redress this state of affairs?

A milestone has been reached in Afghanistan. For the first time in almost a century, Afghanistan’s regional trading network is up and running after the Soviet border split the region in 1917 and Afghan tradesmen are now trading with partners in all directions. Recent data from Afghanistan’s Central Statistics Organization (CSO) suggests that Afghanistan’s licit trade with the Central Asian republics is now surpassing trade with Pakistan and India. The U.S. State Department ingeniously reorganized itself already in 2005-2006 into a South and Central Asia Bureau to promote these ties. Reality has now caught up with bureaucratic administration, but the process of building further on it leaves much to be wanted.

The recent SOCAR-DEPA gas deal demonstrated Greece’s and Azerbaijan’s political support for ITGI at the highest level. The gas sale contract to Greece via Turkey implies the official opening of the Southern Corridor, and that the long-awaited strategic choice of SOCAR and the Shah Deniz Consortium will likely be ITGI and TAP. Thus, the Southern Gas Corridor could open with these two projects instead of Nabucco. The EU should encourage the ITGI and Nabucco consortia to cooperate in securing Azerbaijani gas for both projects so that the Southern Corridor can start with ITGI southward in a first phase and then follow Nabucco's planned route northward to Austria in a second phase.