Analytical Articles

This autumn, an international consortium of oil companies finally broke ground for the much-heralded Baku-Tbilisi-Ceyhan oil pipeline.  Azerbaijan nevertheless remains vulnerable to the so-called "Dutch disease," in which the export of one favored commodity crowds out development of other economic sectors. To attract and lock in long-term investment in the non-oil sectors, Azerbaijan has in its favor a relatively strong, centralized government with a responsible budgetary policy, and the support of highly influential Western multilateral aid agencies, which are committed towards pushing diversification of the country's economy.  But the low purchasing power of the local population and serious perceptions of corruption, as well as the potential for social unrest, are obstacles.

When American forces were first deployed in Central Asia in October, Washington stated they were there for a limited purpose and would be withdrawn once the mission was completed. The deployment was not welcomed by Russia, China and Iran, though Russia chose not to oppose it. Since then, the U.S. build-up in the region has been out of proportion with the stated intention. Most recently, leading American representatives have publicly stated that the presence in Central Asia would not only be long-term but expand. This is likely to lead to a worsening of American relations with regional powers, including Russia.

For decades, if not longer, various Afghan ethnic groups have been used against each other by much more powerful neighbors. This first resulted in a bloody civil war among Afghans for power in Kabul, and later for expanding control to the provinces. Now that the U.S.-led anti-terrorist operation and broad international attention has generated new hopes for a peaceful and stable Afghanistan, the debate over whether it should adopt a federal structure or remain a unitary state has gained importance.

An October 7 meeting between Georgian president Eduard Shevardnadze and his Russian counterpart Vladimir Putin defused Russia's drive for military action in Georgia, but brought no breakthrough in bilateral relations. After Putin's September 11 ultimatum to Georgia, Georgian confidence in Russia will be difficult to restore.  The unprecedented tensions between the two countries have clearly stressed the need for more profound international involvement in the security architecture of the South Caucasus. While unveiling its new security doctrine, the Bush administration seems willing to address some gaping security voids of Georgia to mitigate threats to oil projects and the escalation of regional conflicts.

The mounting Russian pressure on Georgia has been widely noted, yet the role of civil-military relations in Russia in this context has been neglected. In fact, Russia's military is pursuing a hardline policy on Georgia for its own sectional interest, deliberately seeking to obstruct U.S.-Russian cooperation and risking to engulf the Caucasus in a wider war that do not serve Russia's national interests.  The lack of democratic control over the armed forces in Russia and the lack of responsibility among their leadership are an ever growing problem in CIS politics.

Recent news that Chechen forces under Ruslan Gelayev have left the Pankisi Gorge and returned to Chechnya may rekindle Chechen military opposition to Russia and help uniting the splintered Chechen forces. The mere possibility that this is happening would suggest that Russia's moves against Georgia may backfire in the core area of the war in Chechnya. It removes most of the already scant legitimacy of Russia's policy toward Georgia, and may significantly threaten the military balance inside Chechnya itself. Paradoxically, this may strengthen the voice of those in Moscow wishing to negotiate a solution to the conflict.

The co-chairs of the OSCE Minsk group have paid another visit to the region. Similar to the other ones in the past few years, this visit resulted in no concrete progress and showed the lack of activity in the peace process. Yet the meeting with President Aliyev revealed interesting tendencies in the peace talks. It is becoming apparent that Azerbaijan is losing its major bargaining chip - the opening of transport, communication and transportation links with Armenia. This, in turn, increases the risk of resumption of hostilities in the next few years.

During the last few weeks, talks of war in Iraq have helped move the oil price firmly to $30 per barrel. This makes Kyrgyz oil import too expensive and forces the government to look at domestic oil production more seriously. Kyrgyzneftegaz, Kyrgyzstan's oil exploitation company, recently announced that it plans to boost its oil production from 75,000 to 80,000 tons this year and to substantially increase investments into drilling exploration wells in the Jalal-abad region. Kyrgyz officials believe there are oil reserves of up to several hundred million tons -sufficient to at least ease the country's dependency on oil imports.

In 2000 Indian media attacked the government's policy as being 'directionless'.  This does not mean the absence of a policy or policies, but rather that they were uncoordinated, unfocused, and lacked an overall strategic concept that governed India's growing economic presence in Central Asia.  That situation is no longer the case.  Under pressure of the war on terrorism that has engulfed India and is the latest phase of its unresolved crises with Pakistan and due to its rising economic and strategic profile throughout Asia, India has launched new policy initiatives in Central Asia and beyond.

On August 24, Azerbaijan Republic faced the referendum on amendments and changes to Constitution. The falsified results of the second referendum in Azerbaijan's history showed that President Heydar Aliyev's regime inclines to use "Soviet" methods of management and use any chance for its reanimation. The Referendum strengthened the power of President, and diminished the role of parliament to the purely "decorative". At the same time, the changes to the Constitution could be assessed as an end of political struggle in Azerbaijan.