### Caspian Countries: Caught in the Middle

Kazakhstan, Turkmenistan, Azerbaijan, and Georgia have found that the discoveries of extensive energy resources in their region are, at best, a mixed blessing. Though the vast deposits of oil and natural gas offer the promise of enormous wealth, they also, indirectly, pose a danger to these states’ newly acquired sovereignty. Seventy long years of Moscow’s rule have made it particularly difficult for these four states to cope with the challenges brought by full independence.

For example, the drying up of the Aral Sea due to decades of ecologically unsound Soviet policies has severely damaged fishing grounds, agriculture, and food production. The fact that seventy-five percent of the land area is desert and that water often plays an even greater role than oil, has made Kazakhstan, in particular, even more dependent on oil revenues; and correspondingly more desperate to get the Tengiz oil fields fully on line.

Furthermore, along with the precarious ethnic mix that Moscow’s policies have left the region, the above four nations groan under the collapsing weight of the Soviet-era military-industrial complex. Their need for Moscow’s help to keep their outdated defense-oriented factories afloat, increases Russia’s already enormous leverage in the region.

In the past seventy years, the USSR had also invested extensively in energy development. In the Tengiz alone, Moscow spent in the order of one billion dollars, drilling the first wells and creating some infrastructure. Likewise, the Soviets extensively developed Baku. As a result high level Russian officials have stated publicly that since Russia developed the region’s existing infrastructure, it owes Russia a debt for this service.

Meanwhile, the economic situation of these four states, even compared to the recent destabilization in Russia, is particularly dire. The comprehensive public education of Soviet times (one of USSR’s greatest achievements) is breaking down. The cost of living is rising while pensions go unpaid. Health care is rapidly deteriorating--previously well serviced urban areas are fighting water contamination and other unsanitary conditions helping to spread cholera, hepatitis, and typhus. Ironically, despite their vast resources, energy shortages have become worse. Turkmenistan, for example, has regular power outages. Another telling statistic is that half of all emigrants from Kazakhstan go to Russia, where prices are two to three times lower and the salaries at least twice as high. In Georgia, the industrial output decreased by 70% in four years. The fear is that, under this kind of pressure to keep afloat, the countries of the Caspian may turn more and more towards drug trafficking. At present, they already furnish three fourths of Europe’s opium and heroin supply.

Apart from agriculture, the economies of Kazakhstan, Turkmenistan, and Azerbaijan are organized around the energy industry, and even Georgia (without its own significant oil or natural gas reserves) is looking to profit from oil-routes through its territory. Consequently, extensive exports of oil and natural gas seem the only quick way out of the economic and political quagmire.
These newly independent states would like to make themselves into replicas of Kuwait. However, there is widespread fear that, even if they do manage to develop their energy supplies, the Caspian nations may end up more like Venezuela, Nigeria, or Trinidad. All three underwent enormous economic and societal strain because oil and gas money only intensified existing authoritarian regimes – the same type of regimes that the legacy of seventy years of one-Party autocratic Soviet rule had left to the Caspian states.

President Nazerbayev of Kazakhstan and President Aliyev of Azerbaijan are both members of the former Communist elite. Following in the footsteps of the past, Nazerbayev has repeatedly called off elections, and Aliyev has outlawed all opposition parties. President Niyazov of Turkmenistan, though not as closely tied to the old Communist Guard, is perhaps the most authoritarian of all. His “cult of personality” permeates the country, with everything, from yogurt to airports, wearing his newly adopted name – “Turkmenbashi” (leader of all Turkmen). Finally, though President Shevarnadze of Georgia is generally viewed as the most democratic leader in the region; due to the current confused political situation in Georgia, oil money could just as easily go into the coffers of local warlords, as into the national treasury.

The challenges left these newly independent states by the Soviet era are dire, and the economic and political troubles currently prevailing make any quick energy development somewhat problematic. Nevertheless, at the same time, the situation leaves these states little choice but to press ahead.

Individual Country Pages:

Kazakhstan
Turkmenistan
Azerbaijan
Georgia

Caspian Countries Links