Oleg Stolyar

GEOPOLITICS IN THE CASPIAN:

Can Russia Keep Control in Its Own Backyard?

The Caspian Region, a backwater for the last fifty years, has suddenly found itself in the midst of one of the greatest geopolitical struggles of the twentieth century. In 1991, following the collapse of the Soviet Union, the Soviet republics finally emerged from under two centuries of Russian domination. However, recent discoveries of massive reserves of oil and natural gas in the region have caught the attention of Moscow, and once again threaten the sovereignty of these newly independent nations.

Some 30-180 billion barrels of oil and 7.9 trillion cubic meters of natural gas are estimated to rest in the Caspian basin – virtually all of it in Kazakhstan, Turkmenistan, and Azerbaijan. Thus, though the region seethes with political unrest, ethnic conflict, and a dozen violent secessionist rebellions – some of which could spread far beyond their national borders – the Caspian also offers significant strategic and economic advantages to any state that could come to control it.

As a result, military threats, diplomatic plots, and political power games predominate throughout the region. Russia, Turkey, Iran, the United States, and even China, all scramble for influence and power, while the newly independent states in Central Asia and the Transcaucasus are caught in the middle. The investment of billions of dollars by giant international corporations merely adds steam to the fire, as proposed pipelines pit state against state, leader against leader, and often bring neighboring republics to the brink of war.

Accordingly, the current struggle over the Caspian energy rights cannot be properly analyzed if examined merely in terms of lift and shipping costs or pure economic analysis of proposed pipeline routes. Though large consortiums, such as the CPC (Caspian Pipeline Consortium) and the AIOC (Azerbaijan International Operating Company) play a role, they do so only in the context of the geopolitical contest for power.

Caught up in the midst of such titanic political, economic, and occasionally military struggles, the power of the oil companies and the energy consortiums frequently pales in comparison. Thus, to be fully understood, the issue of the Caspian energy must be put into the context of the ever-evolving political and economic environments of the various states currently active in it, particularly Russia. "No single nation, except Russia, has the means to dominate Central Asia and the Transcaucasus."

Consequently, the main purpose of this work is to examine and analyze Russia’s interests and involvement in the Caspian; for without Russia’s agreement, no pipeline would ever be viable. As Monica Eppinger, the State Department representative in charge of the Caspian clearly stated, "Any possible solution would have to include Russia. Of that I have no doubt."

The first section of this paper thus presents a brief geographic and historical background of the area and of Russia’s involvement in the Caspian. The second section examines Russia’s post-Soviet policies towards the region, and the degree to which it is responsible for the numerous ethnic, religious, and ideological conflicts in the area. The third section analyzes Russia’s interactions with the newly independent states in the region: Azerbaijan, Georgia, Armenia, Kazakhstan, and Turkmenistan individually, and with Turkey, Iran, China, and the United States more generally – to the extent that their actions conflict or coincide with Moscow’s interests in the area. Finally, the paper concludes with a brief analysis of the chief factions currently active in Russia (as far as the current state of flux in the economic and political situation of the country allows), the conflict between the Center and the regions, and the answer to the question posed in the title – whether or not Russia can control its own backyard, and what that means for any energy development in the area.

BACKGROUND

The Caspian Sea is the world’s largest inland body of water. It covers approximately 275,000 square miles (some 700 miles long and 170 miles at its widest point – approximately the size and shape of California) and is relatively shallow, averaging only 86 feet below sea level. The Volga, as well as numerous other rivers feed this inland sea, but no water ever flows out. The Caspian is surrounded on all sides.

"Central Asia" bounds it to the east, a vast semi-desert region of land that is also bordered by the Hindu Kush mountains to the south, the Kazakh steppe to the north, and the Tien Shan mountains in the direction of China. This area includes five states: Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, and Kyrgizstan, though only the first two are of interest due to their oil supplies. As the geography demonstrates, bordered by the mountains or the sea on all sides, the most cost-effective routes for any Kazakh or Turkmen energy exports must all cross through either Russia or Iran’s lowlands. Naturally, "This makes them vulnerable to pressure from their neighbors (Russia and Iran)."

Moreover, "Seventy-five percent of the land area is desert,", consequently, water often plays an even greater role in the region than oil. The drying up of the Aral Sea, due to decades of ecologically unsound Soviet policies, had severely damaged Kazakhstan’s fishing grounds, agriculture, and food production; and has thus made the country even more dependent on oil revenues, and correspondingly desperate to get the Tengiz oil fields fully on line.

Meanwhile, the three Caucasian states of Azerbaijan, Georgia, and Armenia bound the Caspian to the west, straddling the only non-Russian and non-Iranian access routes connecting Central Asia to the Black Sea. Such routes (Baku-Supsa, Baku-Ceyhan) currently provide the US-favored means of access to the multi-billion dollar quantities of Caspian oil and natural gas. However, the geography of the area once again leaves any possible pipeline from Azerbaijan (or a trans-Caspian pipeline from Kazakhstan or Turkmenistan) no choice, if the owners wish to avoid the ethnic and separatist conflicts raging in the Caucasus, but to go through either Russia or Iran – the two states that bound the Caspian to the north and south, respectively. The Iran option is completely unacceptable to the United States, though it would be more than welcome to all the other states (with the exception of Russia), which leaves the Russian route as the most viable and cost-effective alternative.

Historically, Central Asia and the Transcaucasus have both traditionally served as the meeting places of numerous civilizations. Central Asia marked the crossroads of the ancient silk routes linking China, India, and Iran with the West, and the Transcaucasus still marks the line between Muslim and Christian civilizations – the site of continuing conflict between the two religions, as amply demonstrated by the examples of Nagorno-Karabakh, Chechnya, and Dagestan.

Russia’s involvement with the above two regions stretches back for nearly a thousand years. Central Asia has always been the soft underbelly of Russia. For centuries, mass migrations of warlike tribes from Asia pushed though the deserts of Central Asia to move on into Eastern Europe and the Slavic heartlands. In the 16th century, following Ivan the Terrible’s defeat of the Tartars, Russia finally began to push back. By the second half of the 19th century Russian forts encompassed the Kazakh steppe and by the late 1860s Russian troops had taken the Khanates of Bukhara, Khivam, and Khokand, effectively giving Russia control over all of Central Asia. Meanwhile, Georgia and Azerbaijan had also fallen under the Russian sway, with Iran being forced out of Azerbaijan in 1828.

Russia’s steady advance southwards, closer and closer to India, "the jewel of the British crown," was to give rise to what the world would soon refer to as the "Great Game". The 1848 discovery of oil in Baku, offering the promises of vast riches and involving Russian, British, and various other foreign companies in the Caspian, only heightened the geostrategic interests of both nations in the region.

After the 1895 treaty with Britain demarcating the border with Afghanistan, Russia went on to effectively control Central Asia and the Transcaucasus for the next hundred years (first under the Czars, and then under the Bolsheviks) until the sudden and unexpected collapse of the Soviet Union. Throughout that time, "Central Asian boundaries, like those of most African states that gained independence during the 1960’s, were imposed by colonialism." Their borders were artificially drawn by distant Party Secretaries in Moscow, and everywhere people with the same ethnicity, language, and religion were left living on both sides of the border.

As a result, the 1991 emergence of eight newly independent states along Russia’s southern rim, where before only the Iron Curtain presented its opaque and impenetrable visage to the world, opened up the door to immense and virtually unprecedented levels of ethnic strife. "Deep ethnic divisions have left each of these new states sitting on the equivalent of a separatist timebomb."

Due to the lack of any stability in the region and the resulting permeability and fluctuation of the borders, one of the most direct consequences of Russia’s withdrawal was to open up the area to other interested foreign actors. The stage was once again set for a new round of the "Great Game", with Turkey, Iran, the United States, and even China contending with Russia and with each other; all scrambling for influence and power amidst the discarded portions of the outer Soviet empire.

Meanwhile, in addition to suffering from the precarious ethnic mix that Moscow’s policies had left the region, the newly independent Caspian states 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 significant leverage in the region (as is made particularly clear in the case of Kazakhstan).

Moreover, the Soviet Union had invested extensively in energy development. Just in Tengiz alone, the equivalent of one billion dollars was spent in 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."

Finally, "Great Game" actors from the late 19th century to the second world war viewed oil as a strategic raw material, the control over which had to be monopolized at any cost. Though most other nations have redefined their approach since then, Russia has not. To current military/security and nationalist interests in Moscow the competition for oil presents a zero sum game. "The Primakov school sees development and export of oil in zero sum terms," Thus, to Russia, if not to others, the current situation in the Caspian represents round II of the Great Game.

RUSSIA’S POST-SOVIET INTERESTS in the CASPIAN: an OVERVIEW

Russia’s current position on the Caspian can best be summarized by Andranik Migranyan’s 1994 assertion in Moscow’s Nezavisimaya Gazeta, "All the geopolitical space of the former USSR constitutes the sphere of vital interests of Russia." That statement emphasized what, in essence, amounts to a Russian version of the Monroe Doctrine. Any regional or international actors in the Caspian are warned that, "Moscow will vigorously oppose all attempts to build up the political or military influence of third countries in the states adjoining Russia." Much like the United States of Monroe’s time, though suffering from numerous internal problems and conflicts of interest, Russia still remains able to impose its will on the region for two reasons: its comparatively advantageous regional position; and the vast network of links with the former Soviet republics still left over from the Communist era.

Following the break up of the Soviet Union, Russia’s foreign policy has been consistently subdivided into three different levels: the Far Abroad, the Nearest Abroad, and the Near Abroad; each with its own military, political, and financial objectives – and the corresponding interests willing to defend them. The Far Abroad policy issues concerned the West and the rest of the world, the Nearest Abroad represented Belarus and Ukraine (the two former Soviet republics that remained closest to Russia, geographically, ethnically, and linguistically), and the Near Abroad designated the rest of the former Soviet republics, particularly the ones in Central Asia and the Transcaucasus.

Russia’s policy towards the Near Abroad has undergone a marked shift since the first heady days of the post-Cold-War period. Initially, from 1991 to mid-1992, Moscow’s foreign policy remained very conciliatory to the West; including, "A nearly complete neglect of Central Asia, the Caucasus, … and total immersion into relations with the West." Yeltsin was primarily concerned with asserting control inside Russia and prevailing in his struggle with Parliament. He had no energy or resources left to spare for Russia’s turbulent southern rim. Integration with and influence over the Caspian states was not a priority, and Yeltsin consistently rejected Central Asian leaders’ pleas for greater economic integration.

However, by mid-1992 Russian foreign policy objectives began to shift. The Tashkent Collective Security Treaty of May 15, 1992, signed by Russia, Kazakhstan, Armenia, Uzbekistan, Tajikistan, and Kyrgyzstan, set the background for Russia’s quick turn away from the interests of the West. After Georgia, Azerbaijan, and Turkmenistan refused to join this Collective Security Treaty, Moscow decided to pursue a system of bilateral agreements, putting pressure on each country individually.

There were four chief reasons responsible for such a radical shift in policy, reasons that persist to this very day. The first was the realization was that the security of Russia and the eight new states on its southern rim were interdependent. The permeable borders of the newly independent states, and the waves of ethnic separatists, revolutionaries, and simple drug smugglers and criminals that poured into the Federation from its southern rim all exposed Russia’s glaring need for security. "Three-fourths of Europe’s heroin supplies now come from Central Asia, and they all first have to pass through Russia."

Moreover, the CIS states on Russia’s southern border (with the possible exception of Armenia), until this very day, have almost no independent defense capability. The local officer cadres are virtually all Russian, once again with the exception of Armenia, which leaves the regional capitals incapable of organizing any sort of effective armed forces. Consequently, if there were ever a Turkish, Iranian, or NATO invasion through the "Southern Tier", as Defense Minister Grachev once complained, "The Moscow military district would become virtually the front line."

This new obsession with security furthermore reflected the reemergence of newly determined communist and nationalist forces throughout the nation, particularly in Parliament, and the corresponding weakness of the reformers; as well as the realization that the West was not willing or able to step in financially and solve all of Russia’s fiscal problems. That, in turn, meant that Russia no longer had to be as conciliatory towards the West.

The second cause for the shift in policy was the growing concern over the security of the large number of ethnic Russians living in the Near Abroad. There were some twelve million Russians living in Central Asia and the Transcaucasus in 1992, and there are still some nine million there today. Yeltsin, and more recently Primakov, have repeatedly, "reiterated the right of Russia to conduct "peacemaking in the Near Abroad to protect Russian speakers,"

The third factor was the increasing anxiety in Moscow over the perceived Muslim or pan-Turkik threat. Though this concern has died down in the last few years, there are still occasional calls in the Muslim Republics, and in Ankara and Tehran, respectively, for a pan-Turkik or a pan-Islamic state; each of these calls inevitably followed by a corresponding surge of activity in Moscow.

Finally, the last main motive for Moscow’s determination to regain its influence in the Caspian reflected the rising pressure upon the government from the economic elites. The military-industrial complex needed the Caspian as a source of raw materials, and the business oligarchs in Moscow were very interested in the energy development opportunities present in the Caspian.

To sum it up, the four pillars of Russian policy in the region to date have been: 1) the overriding concern for security; 2) the more general concern for the safety and wellbeing of Russian citizens and all ethnic Russians in the Near Abroad; 3) the determination to contain the Islamic threat, and to strangle in the cradle any dreams of a pan-Turkik or a pan-Islamic state; and 4) the resolve to protect and secure the interests of Russian financial groups in any possible energy deal in the area.

Any one of these goals demands a partial subordination of the newly independent states’ sovereignty. Together, they mark "The whole southern tier of the former USSR a zone of feverish Russian activity aimed at tightening Moscow’s grip." Consequently, it is no surprise that Moscow is so determined to prevent or sabotage any proposed pipeline route which, by granting the Caspian states a measure of financial and political independence, could possibly serve to draw any CIS state out of Russia’s sphere of influence.

Russia’s pursuit of the above four goals, and the degree to which it is responsible for the current conflicts in the area is examined below; subdivided into Russia’s struggle with each of the Caspian CIS states individually, and with Iran, Turkey, China, and the United States over influence in the area more generally.

RUSSIA vs. AZERBAIJAN

Azerbaijan had belonged to Russia for over a century and a half, with only a brief experience of freedom in 1918-1920. It is thus understandable that after that state’s declaration of independence on October 18th 1991, Russia did not look favorably upon President Elchibey’s attempt to move away from Moscow. Consequently, when in June 1993 Elchibey’s pro-Turkish government wanted to sign a 30-year contract with an American consortium to move oil through Georgia and into Turkey, "The Russian infantry (divisions 104 and 107) headed for Baku.". A few days later, Russia supported former KGB general and Brezhnev Politburo member, Gennady Aliyev, in his successful coup against Elchibey’s government.

Russia’s decision to back Aliyev initially paid off. "Aliyev, of course, went to Moscow to agree to make Azerbaijan a member of the CIS." However, when Aliyev began to show signs of independence from Moscow, Russia interfered again. In 1994, when Azerbaijan looked ready to move oil through Iran, "Russia supported Armenia’s invasion of the Fizuli region near the Iranian border."

Moreover, when Aliyev attempted to achieve a measure of financial independence by agreeing to a pipeline through Turkey, "Both the Russian Foreign Ministry and the Russian Defense Ministry came out squarely against the deal." Russia then instigated a coup against the Aliyev government. Though the coup failed, Russia continued in its attempts to destabilize the country and "torpedo the oil contract".

Furthermore, Russia has consistently used the Nagorno-Karabakh conflict as leverage over the recalcitrant Azeri state. Moscow supplied Armenia with planes, tanks, and advanced weaponry; and various units of the former Soviet 7th Army (such as the 366th Brigade) took direct part in the struggle on the side of the Armenians.

As the examples in the above paragraphs demonstrate, each time Azerbaijan’s government attempted to play up to Turkey, Iran, or the United States, Russia was quick to respond with political or military pressure – either by supporting a pro-Russian coup, or by supplying and arming the Armenian forces.

To date, through ruthlessly suppressing the opposition and playing Russian, Iranian, and Western interests against each other, President Aliyev has managed to remain in power. This October, he won reelection by an overwhelming percentage of the vote. Nevertheless, one should keep in mind that the main opposition parties, including former President Elchibey, boycotted the elections, and that some of President Aliyev’s most outspoken critics (such as Huseinov) are housed in Moscow, no doubt waiting for a chance to do to Aliyev, what Aliyev himself had previously done to Elchibey.

In addition, American opposition to Iran (as exemplified by the Iran Libya Sanctions Act), the US government’s inability to give significant aid to Azerbaijan (due to the Freedom Support Act, Section 907), and Turkey’s reluctance to directly stand up to Russia in the Nagorno-Karabakh conflict (see Russia vs. Turkey) all limit Aliyev’s options and force him to be more deferential towards Moscow.

Yet another issue in dispute between Azerbaijan and Russia is the status of the Caspian. While Russia has traditionally desired to treat the Caspian as a lake, thus ensuring common ownership to all the littoral states (in other words, giving Russia a veto power over any possible oil field development or energy transport through the Caspian), "Azerbaijan is unlikely to accept anything short of a full division of the sea." Recently, Moscow has made a grand turnabout, abandoning Iran and agreeing to divide the Caspian as a sea, but only if the waters remain jointly owned. Though this timely switch in position has enabled the Kremlin to sign an agreement with Kazakhstan (see Russia vs. Kazakhstan), Azerbaijan is still opposed, demanding that the waters, as well as the seabed, should also be divided.

Finally, Russia’s and Azerbaijan’s positions on pipeline routes continue to differ. Aliyev, along with Turkey and the US government, currently favors the route from Baku to Ceyhan on the Mediterranean coast of Turkey. However, the continuation of the conflict between Armenia and Azerbaijan allows Russia to block all attempts to design and build the pipeline to Turkey.

Meanwhile, though Russia has given up overt attempts to overthrow Azerbaijan’s government and has for the moment halted further Armenian military advances, Moscow continues to push for the Novorossisk route. "This would give Moscow a considerable say over Azerbaijan’s economic and thus political future.". Of course, that is precisely why Aliyev and the United States oppose such a route. A peaceful consensus between all the concerned parties does not seem possible any time soon.

To sum it up, Russia has achieved three of its four previously mentioned goals in Azerbaijan. In terms of security, though Azerbaijan refuses to allow Russian military access to its bases, "Russia achieved regularization of its troop presence and an agreement for Russian Border Troops to control Azerbaijan’s border with Iran." Azerbaijan remains a firmly secular state, with all Islamic parties outlawed, and Azeri tensions with Iran due to Tehran’s support of Armenia allow Moscow not to worry about the possible spread of radical Islam from Iran.

In terms of financial interests, Russia has managed to secure a 10% stake for LukOil in the AIOC, various other concessions for Russia in regard to Azerbaijan’s other energy projects, and continues to sabotage all efforts to create a pipeline to Turkey. It is true that Russia has failed to protect the security and wellbeing of its nationals in Azerbaijan, but such was the price of the war with Armenia and Nagorno-Karabakh that Moscow helped to pursue and inaugurate; a price that the military/security interests in Moscow were more than willing to pay.

RUSSIA vs. GEORGIA

If a new pipeline for Azeri oil is to avoid both Iran and Russia, it would have to pass through either Georgia or Armenia. The state of war between Azerbaijan and Armenia would clearly make impossible any Armenian route for the near future. Consequently, a route through Georgia is the only current option.

Georgia, like virtually all of its southern CIS neighbors, had been under Moscow’s rule for most of the last two centuries. Its only period of independence in living memory was from 1918-1921, following which it was quickly incorporated into the Soviet state. After its declaration of independence, Georgia briefly pursued an independent national policy under President Gamsakhurdia. However, his refusal to join the CIS and blatant disregard of Russia’s interests quickly antagonized Moscow.

As a result, when Abkhazian leaders declared independence from Georgia on July 23, 1992, they were promised extensive support from Russia. They received it. Russian pilots flew sorties for the Abkhazians and the Russian Black Sea navy shelled the Georgian coastline. These actions were personally authorized by Defense Minister Grachev and they were aimed to force Georgia to join the CIS and to sign collective security agreements with Russia. Boris Pastukhov, the Russian Deputy Foreign Minister, delivered the ultimatum to Georgia’s government, "We will not let you win the war in Abkhazia."

Russia’s pressure finally paid off when, after winning the civil war with Gamsakhurdia due to direct Russian support and Russian T-74 tanks, Shevarnadze was forced to join the CIS and to grant the Russian military rights to bases in Georgia. To this date, Shevarnadze remains dependent upon the 1500 strong Russian peacekeeping force in southern Abkhazia. Meanwhile, Russia purposefully keeps the conflict simmering to ensure Georgia’s continued dependence upon its good offices.

Despite its troubled internal situation, Georgia is aggressively campaigning for a pipeline route through its territory; either to carry Azeri oil directly to Turkey, or to use and upgrade the existing pipeline to Supsa. However, Russia is firmly opposed to these plans, not wanting Azerbaijan to have any options for oil exports other than through Russian territory. Georgian officials claim that the recent attempt on the life of Shevarnadze and the resumption of fighting in Abkhazia in late May of 1998 are the results of Russia attempting to prevent a Baku-Supsa pipeline. "They believe that Russia wants instability in Georgia, so that Georgia is not selected as the route for Azeri oil exports."

Russia’s interference in Abkhazia is especially clear when compared to the parallel situation developing in South Ossetia. Whereas Russia directly involved itself in stirring up and aggravating the Abkhazian conflict, Moscow remained comparatively quiet in South Ossetia. This is of course due to the neighboring North Ossetia, right within the Russian border. As a result of Russia’s desire to contain that conflict, the leader of South Ossetia was encouraged to meet with President Shevarnadze on June 21st, 1998, and a speedy peaceful settlement seems very likely. "The Ossetians appear to have abandoned claims to full independence."

The Georgian case presents a virtually complete victory for Russian interests in the area. In terms of security, Russian military forces essentially own Georgia. After the civil war and the separatist conflict with Abkhazia, the Russian Defense Ministry forced numerous concessions from Shevarnadze. These included the rights to a number of military bases within Georgia, a Russian naval presence along Georgia’s extensive Black Sea coast (much of which, including the port of Sukhumi, is now directly controlled by Russia – via Abkhazia), and Russian troops on the border with Turkey. Russian citizens, though generally unwelcome in Georgia, have great influence in Abkhazia. In fact, "On numerous occasions, the irredentist leaders of Abkhazia declared their intent to join Russia." The spread of Islam is not an issue in Georgia, and Russian financial interests are virtually guaranteed a large stake in any pipeline through Georgia, including Baku-Supsa, due to Moscow’s control over much of Georgia’s coast. Thus, all four goals of Russia’s policy have been largely met.

RUSSIA vs. KAZAKHSTAN

Kazakhstan, perhaps more than any other former Soviet republic, is dependent upon the continuance of Russia’s goodwill. In the nearly three centuries that it had been dominated by Russia, its vast resource-rich and open spaces (2,724,900 sq. km.) have inspired successive waves of land-hungry Russian colonists. Moreover, Stalin consistently used Kazakhstan as a dumping ground for various undesired ethnic groups, including Germans, Chechens, and several million Ukrainian peasants. As a result, at the time of its independence, "Kazakhstan was the only post-Soviet state where the native nationality was a minority at independence.".

Furthermore, the entire north of Kazakhstan, the location of virtually all of its non-cotton-based industry, is settled by ethnic Russians. These northern provinces, particularly Karaganda and Semipalatinsk, are directly adjacent to the Russian border, and the Kazakh government must live in constant anxiety over the possible threat of secession. Consequently, "Kazakhstan cannot afford to alienate its northern neighbor, especially when more nationalistically inclined Russian politicians frequently make noises about reclaiming these territories."

Kazakhstan’s precarious ethnic mix has thus frequently made it unusually accommodating to Moscow. Kazakhstan was the last Soviet republic to declare full independence (December 16th, 1991) and Nazarbaev, of all the post-Soviet leaders, has been the most adamant in his calls for reintegration. "Among the Central Asian republics, Kazakhstan took the lead on 25 May 1992, to sign the Treaty on Friendship, Cooperation, and Mutual Assistance." This treaty, among others, made Kazakhstan part of Russia’s military and strategic zone, and gave Russia joint rights over numerous military bases, test sites, and other military infrastructures within Kazakhstan. An additional agreement in 1995 further merged some functions of their military institutions. As a result, not only does the Russian military guard Kazakhstan’s borders, but there are tens of thousands of Russian troops scattered throughout virtually all regions of Kazakhstan. Russia also leases the city of Leninsk and the Baikonur space center. These large Russian military concentrations within Kazakhstan’s borders, as well as the nearly 35% strong Russian minority, cannot help but give Russia a strong voice over Kazakhstan’s policies. In response, Nazarbaev has been far more solicitous of the Russian speakers than his respective counterparts in the neighboring republics, and "Since 1994 the Kazakhisation drive has slowed considerably."

The few times Nazarbaev has tried to shift Kazakhstan away from the Russian sphere, Moscow acted strongly in opposition. For example, when Kazakhstan tried to make an independent deal with Western companies regarding its Tengiz field in 1994, "Russia demanded upwards of 20 per cent of the Chevron revenues and 15 per cent of the British Italian deal, and in pursuit of its goal temporarily cut off most of Kazakhstan’s oil flow." Also, on February 10, 1995, "Russia threatened to block export of Karaganchak oil and gas, and to purchase the field’s output at no more than 15% of the world prices unless Gazprom was included in the projects."

Furthermore, when Nazarbaev was rumored to be considering a trans-Caspian pipeline to avoid total dependence for its oil exports upon Russia, Moscow "halted payment for coal mined in Kazakhstan’s Karaganda region, obstructing capital flow to the new state, and has reduced Kazakhstan’s fuel supplies."

The north of Kazakhstan depends upon Russia’s energy grid, and northern Kazakhstan’s factories were repeatedly left without power as punishment for Nazarbaev’s independent policies. The fact that most of Kazakhstan’s grain comes from the north and 55% of its imports comes from Russia, puts it at a further disadvantage towards Moscow. As if that were not enough, Russia controls the Volga-Don canal – Kazakhstan’s only waterway access to the Black Sea, as well as all other railways and land routes to Europe.

To sum it up, it is clearly evident that Kazakhstan is completely dependent on Russia. "Given the tensions between the Kazakh regime and the Russian minority, one is forced to conclude that only Russian enthusiasm for Kazakh independence can secure it."

As a result, even the dispute over the status of the Caspian Sea has recently been settled, at least between Kazakhstan and Russia. "Kazakhstan and Russia will divide up both the northern Caspian’s surface and seabed along the median line into national territorial sectors." Both countries will, however, maintain joint use of the waters of the sea (the sea-column). The fact that Russia and Kazakhstan have reached an agreement, while Azerbaijan and Turkmenistan remain obstinate, is perhaps due to the fact that, "Unlike Azerbaijan, all of Kazakhstan’s existing oil and gas production is on shore."

In conclusion, Russia seems to have succeeded in all four of its general goals towards Kazakhstan. In security terms, Kazakhstan is more intricately tied to Russia than any other CIS nation, with the possible exception of Belarus. Russia leases whole Kazakh cities, including the Baikanour Space-center, and the Russian military has extensive rights throughout the country, as demonstrated above. The Russian minority in Kazakhstan, while somewhat inconvenienced by the state’s post-Soviet policies, nevertheless remains in a far more advantageous position respective to its brethren in the neighboring states. As concerns the spread of radical Islam, all rabidly nationalist and all religious (particularly Islamic) parties are currently outlawed in Kazakhstan, and Nazarbaev’s secret police (the KNB) is very effective in dispersing any Islamic opposition as it arises. Finally, "By blocking and delaying new projects the Russians have managed to win entry into practically every major energy deal — with little or no cash investment on their own part." Consequently, it seems very unlikely that Kazakhstan’s oil exports will take any route other than through Russia.

RUSSIA vs. TURKMENISTAN

"Turkmenistan appears to be the most stable country of the CIS." Such is the observation of one political analyst after another. However, Turkmenistan’s stability is bought at the price of all democratic institutions. Niyazov calls himself "Turkmenbashi" (literally, the Chief of all Turks), and has outlawed all political parties. Through rigging a plebiscite in which he won 99.9% of the vote, Niyazov has managed to obtain a semblance of legality by securing constitutional guarantees of his position until 2004. A Niyazov spokesmen recently described the latest parliamentary elections as "a holiday for democracy", unintentionally drawing laughs from the audience.

Yet, Niyazov’s centralized autocracy and ruthless suppression of all opposition do have one unintended benefit; they strengthen his position in regard to Russia. Niyazov’s ruthless handling of his rivals, Turkmenistan is the only former Soviet republic to still put dissidents into mental asylums, simply does not give Russia any opportunity to incite a coup (as it did in Azerbaijan) or a civil war (as it did in Georgia). "Accordingly Russian leaders have to deal with Niyazov on his own terms," and are denied the opportunity to effectively meddle in Turkmenistan’s internal affairs.

Consequently, Russia is forced to rely primarily on economic measures to impose its will on Turkmenistan. Though the military-industrial sector is on friendly terms with Niyazov — there are some 2,000 Russian officers in the Turkmen army, Russian military bases on its territory, Russian troops on its borders, and "Turkmenistan must pay the entire cost of maintaining Russian armed forces on its territory," – Moscow’s financial interests are often in direct conflict with Niyazov.

Russia’s largest financial conglomerates view Turkmenistan as a rival in the gas sector. Turkmenistan is the fourth largest natural gas producer in the world, producing some 60-80 bcm a year. Yet, Gazprom’s policy is that the "Turkmen gas supply is simply a reserve for Gazprom’s supplies to the former Soviet Union."

Meanwhile, Turkmenistan, though it has a small pipeline to Iran with a capacity of 1.5 bcm per year, is entirely dependent on Gazprom for all its other exports. Naturally, this gives Gazprom enormous leverage over the country. For example, in 1994 Moscow halted all shipments of Turkmen gas through its territory and blockaded the pipeline to wring economic concessions from Niyazov. "Moscow would only grant access to its pipelines if Turkmenbashi agreed to ship gas to the insolvent CIS states." Turkmenistan actually stood firm and Gazprom eventually backed down.

However, in 1997 Gazprom once again cut off all access to its export pipelines, severely crippling Turkmenistan’s economy. In August of 1997, Vyakhyrev of Gazprom announced that Turkmenistan could only use his pipelines to supply the CIS, and Gazprom reserved the right to supply Western markets for itself. Offering a very low export price of $36 per 1,000 cubic meters of gas, 14.3% lower than the export price of $42 previously agreed upon in 1995, "Viakhorev sarcastically promised to do what he could to keep the Turkmen population from starving to death."

Due to the fact that 75%-80% of Turkmenistan’s hard currency earnings regularly come from exports of oil and gas, it is very vulnerable to any blockade of the pipelines. Nevertheless, Niyazov’s response to Gazprom was to cut off all gas supplies. So far, only its leader’s extraordinarily firm hold on power has allowed Turkmenistan to defy Moscow. Despite that fact, "The EIU expects gas exports to be restored on the terms dictated by Gazprom in the fourth quarter of this year."

Niyazov’s choices are extremely limited. To date, all of his searches for alternative pipeline routes have come to naught. The route to Pakistan and India through Afghanistan has turned out to be a pipe dream, the route to Iran fell through due to American pressure, and the pipeline under the Caspian Sea remains stymied by Russian opposition. Though Moscow’s official explanation for opposing the trans-Caspian pipeline is concern for the environment, Russia’s motive is readily transparent. Any route under or across the Caspian would lose Russia its control over Turkmenistan’s oil exports, along with the strategic influence over the country’s domestic and foreign policies that such control allows.

In conclusion, the military/strategic and the financial interests are all united in opposition to any route for Turkmenistan’s energy exports other than through Russia, and Niyazov does not seem likely to overcome this opposition any time soon. "Turkmenistan’s political future, therefore, is to a large degree hostage towards Iran." As long as the United States remains fundamentally opposed to Iran, Turkmenistan will have no choice but to deal with Russia.

On the issue of the Caspian Sea, Turkmenistan and Russia agree to disagree. Niyazov continues to switch allegiances between Russia and Iran, occasionally agreeing to joint ownership of the sea-column, and occasionally demanding full division of the Caspian into national sectors. Moreover, the dispute over possession of several oil fields with Azerbaijan is nowhere close to being settled, which gives Russia a further advantage in playing Niyazov and Aliyev off against each other.

To sum it up, though the rest of Russia’s goals towards Turkmenistan have largely been achieved, its financial goals are still somewhat out of reach. Moscow’s military interests are fully guaranteed by the extensive presence of Russian troops throughout Turkmenistan; Russian citizens enjoy a dual citizenship in Turkmenistan, a privilege that is conspicuously absent to them in the rest of the CIS; and Niyazov has managed to incorporate Islam within his rule, without allowing any independent religious opposition or Islamization. Thus, the only losers on the Russian side appear to be the financial elites.

So far, Turkmenistan has been able to defy the oligarchs in Moscow due to its lack of a common border with Russia, its bilateral arrangements with Russian military/security interests, and its unusual internal stability. However, Niyazov is ailing, and such a state of affairs is unlikely to last. Moscow, just as in the case of Azerbaijan, is housing opposition leaders to Niyazov within its grounds; and the Russian gas and oil companies are patiently waiting for their chance, eager to impose the same terms upon Turkmenistan’s Turkmenrusgaz, as they have upon Azerbaijan’s SOCAR and Kazakhstan’s Kazakhoil.

RUSSIA vs. TURKEY

Russia and Turkey have fought over the Caucasus mountains for centuries. Georgia was not fully wrested away from Turkey until the early 1800s . During the Soviet era, overt conflict over the area came to an end, and Turkey instead served as the West’s key ally in the region, playing the central role in containing the communist threat. With the collapse of the Soviet Union, Turkey’s strategic role, and the billions of Western dollars that went with it, virtually disappeared. Consequently, a heightened role for Turkey in Transcaucasia and a pipeline passing through its territory would "help to replace the loss of its cold war role as NATO’s linchpin in eastern Mediterranean."

Moscow naturally opposes Turkey’s growth of influence in what the vast majority of Russian politicians view as the "Motherland’s backyard". Turkey has historical, ethnic, religious, cultural, and linguistic ties to Kazakhstan Azerbaijan, Turkmenistan, Uzbekistan, and the Kyrgyz Republic. However, Russia has far more recent economic and political ties to the region. The elites in all the Turkik republics were educated in Russia, speak better Russian than their native languages, and are fully "Russified". Thus, the initial calls for pan-Turkism from Ankara, though they did elicit extensive enthusiasm from the newly independent states, soon came to nothing. Once Baku, Ashgabat, and Almaty realized that little financial help would be coming from Ankara, their eyes quickly turned back to Moscow. "In the political sphere, the Central Asian republics have remained within Moscow’s orbit."

Nevertheless, Russia continues to view Turkey as a strategic rival in the area. For example, in the conflict raging between Armenia and Azerbaijan over Nagorno-Karabakh, Russia and Turkey came down squarely on opposite sides. In fact, Turkey’s promise to Azerbaijan, to send in its troops if Armenia would invade the enclave of Nakhichevan, elicited a powerful counter-threat from Russia. "The warning of the CIS joint forces commander, Marshal Shaposhnikov, that Turkish intervention could lead to another world war," shows just how seriously Russia took the Turkish danger.

Currently, the main focus of competition between Russia and Turkey is the proposed pipeline route. Russia desires the Novorossisk route, and is fundamentally opposed to the Baku-Ceyhan route. Meanwhile, Turkey desires completely the opposite. It is aggressively lobbying for the Baku-Ceyhan route, and severely discourages the permanent state of dependence on Moscow that a sole reliance upon the Novorossisk route would impose upon the other CIS states.

However, Turkey lacks the financial or political strength to support its interests. "Poor performance of the Turkish economy with its large deficit and high inflation rate is an impediment to Turkish influence in the region." As a result, it is unable or unwilling to offer sufficient concessions to the oil companies to make the Baku-Ceyhan route viable. Moreover, the persistent fighting with the Kurds in northern Turkey, through which much of the proposed pipeline must pass, raises questions of just why the Ceyhan route would be more advantageous to all parties concerned than the one to Novorossisk.

As a result, Russian interests seem destined to prevail, despite the US support for Turkey. Not only are the Novorossisk and the Baku-Supsa routes much more cost-effective and commercially viable, Russian influence on the CIS states (particularly Georgia and Armenia) is so great that it seems very unlikely that they would be able to fully defy Moscow. The best that Turkey can hope for is a Baku-Supsa compromise, with the hope for an eventual route to Ceyhan.

Turkey’s last-ditch attempt to force through the Ceyhan route was to play its environmental card. According to the 1936 Montreux Convention, Turkey is allowed to limit shipments through the Bosporus for reasons of safety and the environment. Due to the 1994 accident in the strait, Turkey threatened that if the Ceyhan route is not chosen, it will not allow any additional oil through the Bosporus. Since, if the Novorossisk pipeline fully comes on line, oil traffic will be increased from the current 36 million barrels per year to an eventual 350 million barrels per year, that would pose a significant problem. Russia’s response to this threat was to send its diplomats to Bulgaria and Greece, to develop a Burgas-Alexondroupolis path; a route that would bypass the Bosporus and Turkey altogether.

In the long term, Ankara’s dependence upon Russia’s natural gas and the flow of exports and imports from all the countries of the CIS (5.7% of Turkey’s exports go to Russia alone), particularly the Caspian region, makes it likely that Turkey will eventually accept and come to support (no matter how reluctantly) whatever export route the coil companies decide upon. Too many Turkish financial interests are at stake in the eventual economic growth of the region for Turkey to wholly refuse to cooperate with the pipeline, whether it will be to Novorossisk or to Ceyhan.

RUSSIA vs. IRAN

Much like the pan-Turkik confederation, the greatly feared Islamic threat, guided from Tehran, has never materialized. As mentioned previously, one of the four pillars of Russian policy in the Caspian is the prevention and containment of the Islamic danger. Yet, despite fears from Moscow, none of the six CIS Muslim nations have opted for an Iran-type government. The only possible exception is Tajikistan, and Moscow moved early and aggressively to contain that threat. Kazakhstan, Turkmenistan, and Azerbaijan, the states that are relevant to the discussion at hand, all remain firmly secular. In fact, Islamic parties remain outlawed in each of these nations.

Nonetheless, Iran enjoys a great amount of influence in the Caspian states. As the fifth littoral state and a regional power, Iran’s interests cannot help but occasionally come into conflict with Moscow’s. For example, despite their initial alliance, Russia has abandoned Iran on the Caspian Sea "condominium issue" and is now aligned against it for a division of the seabed, if not the waters. Also, Iran and Russia were forced to come down on different sides in Tajikistan’s civil war.

Yet, despite Iran’s direct ethnic and religious relations to their Tajik brethren, Tehran has been very careful not to antagonize Moscow. It did not provide any direct support to the Tajik rebels, despite criticism at home, and has even allied itself with Christian Armenia against Muslim Azerbaijan. One of the reasons for such a policy is Iran’s dependence upon Russia for technology and arms shipments. For example, in return for Tehran’s lack of interference in the Tajik civil war, "Russia’s response was to proceed with the arms deliveries, which included the sale (to Iran) of three submarines."

Strengthening Tehran is part of the global balance strategy known as the Primakov Doctrine (significant, since Primakov is now the Prime Minister of Russia), which is aimed at creating a "Eurasian counterbalance to the Euro-Atlantic zone." In other words, Moscow wants to play Iran off against the West.

However, though Russia and Iran are generally aligned together against Western interests, the few times that Iran seemed to threaten Russian predominance in the area – as when Azerbaijan seemed likely to build a pipeline through Iran, Russia was quick to intervene. For example, in the case mentioned above, Russia instigated the Armenian advance that seized the Fizuli area of Azerbaijan bordering Iran, and threatened to foment a separatist conflict in that region if Azerbaijan did not abandon its plans.

Russia is equally opposed to any possible pipeline from Turkmenistan to Iran. When combined with the US determination to exclude Iran from any possible oil deal in the Caspian, it does not seem likely that Iran could directly threaten Russia’s interests any time soon. Thus, though Iran is aggressively lobbying for a pipeline through its territory, it currently does not pose any serious danger or competition to Russia’s favored Novorossisk route. "Iran does not have the economic capacity to offer significant aid," to the Caspian nations, and its leaders know it. Until it can, Tehran will always remain secondary to Moscow in the area.

RUSSIA vs. CHINA

After the collapse of the Soviet Union, China emerged as the most powerful neighbor of the new Central Asian States. Its pattern of development, economic rather than political, appealed to the conservative and autocratic leaders of these former Soviet republics. Nonetheless, Beijing has chosen to pursue a conciliatory policy towards Russia, not wishing to repeat the hostilities of recent decades. In 1994, Chinese Premier, Li Peng, "Stressed that Chinese involvement was not intended to counter the interests of any other party, i.e. Russia." Moscow recognized that China was unwilling to go directly against its interests, and Yeltsin has pursued a policy of improving relations with Beijing accordingly. "The President has consistently commented upon the importance of good relations with Beijing."

China’s greatest interaction in the Caspian is with Kazakhstan. The relations between Kazakhstan and China have generally improved after the 1994 final resolution of the border. However, though China has become Kazakhstan’s second greatest trading partner, it only accounted for 7.4% of its exports, as compared to Russia’s 44%. Clearly, Russia, by far, remains Kazakhstan’s greatest commercial partner. As a result, the new capital of Akmola will never go directly against Moscow for the benefit of Beijing.

China recognizes this and is willing to pursue a relatively low-key policy towards the Caspian. "China became a net oil importer for the first time in its history in 1993." Thus, an eventual pipeline from Kazakhstan or Turkmenistan to China remains a possibility. For example, "Kazakhstan has signed an agreement with China to transport oil to China’s western provinces." Turkemenistan’s situation is more complex, due to the need to go through at least one other state (most probably Kazakhstan) in order to reach Chinese markets. In any case, such projects remain decades from completion. Moreover, due to the numerous internal problems within its borders, the Caspian does not seem to likely to become a high priority for China any time soon. Consequently, for the near future, China presents no direct danger to Russia’s interests and remains a second-tier player in the Caspian.

RUSSIA vs. THE UNITED STATES

The end of the Cold War and the collapse of the Soviet Union ushered in a brief period of euphoria. Russian and American politicians alike thought that nothing now stood between these two former enemies and full cooperation. However, the extent of the geopolitical commitments of both nations in the Caspian region made it inevitable that Russian and American objectives would eventually clash.

Three basic factors limit United States’ influence comparative to Russia in the region. The first is, of course, Russia’s proximity, and the vast distances that separate the Caspian from the United States. The second is the fact that American interests so often seem to go directly against the most cherished goals of the Caspian states. For example, US opposition to the route through Iran severely limits the options of the Caspian states vis-à-vis Russia. Finally, the third and perhaps most important factor, "has been the United States inability to commit large enough resources to completely overhaul Central Asia’s physical infrastructure and thus reduce Russia’s influence."

As a consequence of the above limitations, Russia enjoys a significant advantage over the United States in the region. However, this does not prevent great fear in Moscow over US intentions. For example, the military/security interests have been quick to cry, "Imperialism" and, "American penetration," each time a high-profile American politician has visited the region. Similarly, "Russian oil executives viewed the Eurasian corridor as a plot to thwart the trans-Russian pipeline out of Tengiz."

To date, Moscow has largely managed to contain American influence in the Caspian. The US attempts to mediate in the Nagorno-Karabakh dispute have come to naught, partly due to Russia’s pointing out that the United Stated did not represent a neutral party, as evidenced by Article 907 passed by the American Congress. The US insistence on a trans-Caspian pipeline, and on Baku-Ceyhan as one of three multiple routes, likewise seems doomed to fail – primarily due to Washington’s and Ankara’s refusal to subsidize that route (see Russia vs. Russia, p.33). In conclusion, the US has so far proved unable to wrest any of the newly independent Caspian states out of Moscow’s sphere of influence.

RUSSIA vs. RUSSIA

One of the most consistent accusations leveled against Yeltsin’s government by politicians from all ends of the spectrum has been the lack of any consistent policy towards the Caspian. What many of these public figures failed to realize was that the conflicting signals coming from the administration stemmed from the fact that Moscow has always had two different priorities towards the region, "Military and economic, which sometimes conflicted and sometimes reinforced each other."

This two-fold position reflects the interests of the two main groups of political actors currently dominant in Moscow: 1) the financial interests – represented by companies like LukOil, Gazprom, etc…, and the newly emerged Russian oligarchs – such as Boris Berezovski (who briefly served on the federal Security Council); and 2) the power ministries axis – representing the military-industrial complex, the security agencies, and the hard-line nationalist and communist forces.

The financial oligarchs have their strongholds in the Ministries of Finance, Energy, and even Yeltsin’s household-- and are primarily focused on profits. The security interests control the three power ministries, the Ministry of Defense, Security, and Internal Affairs, as well as the Foreign Ministry – the latest stepping stone in Mr. Primakov’s climb to the post of Prime Minister, and are chiefly concerned with building up Russia’s security and reestablishing Moscow’s former influence in the Near Abroad.

As a result of their pursuit of profits, oil industry officials and the Ministers of Finance and Energy "welcome Western participation in the development of Caspian oil, as a means of ensuring access to capital and advanced technology." Russian oil companies are eager to participate in Western consortiums, as long as their Western partners put up most of the capital, and are supportive of any pipeline route if they are guaranteed a large enough share of the profits. The fact that by the mid-1990s, "The demand for exports via the Novorossisk terminal exceeded its capacity by up to 65%," is but one of the causes why Russian oil companies are now considering alternate routes.

The military and nationalist interests, on the other hand, have quite a different view. They disapprove of Western participation in the area on general principles, viewing all the space of the former Soviet Union as an exclusive Russian sphere of influence. The key concern for these interests, frequently allied with the Communists, the right-wing nationalists – such as Tsirinovski’s Liberal Democratic Party, and the military-industrial complex, is to prevent any new pipeline route from offering some CIS nation an avenue of escape from Moscow.

Due to their somewhat different priorities, these two massive groups of interests are often opposed. For example, when a multi-billion oil deal was signed in Azerbaijan in September of 1994, "The Russian Foreign Ministry held an official news conference to condemn the deal as illegitimate, while a representative of the Russian Energy Ministry participated in the signing ceremony." Furthermore, while Gazprom exerted all its influence in Moscow in the hopes of persuading the government to force Niyazov to accede to their demands, the military/security interests reveled in Gazprom’s discomfort – satisfied with their own, private arrangements with Niyazov (see Russia vs. Turkmenistan). As a result of their lack of agreement, Niyazov managed to successfully defy Gazprom.

Nevertheless, despite occasional disagreements, both the financial and the military/security interests (for quite different reasons) support the northern Novorossisk route. The financial elites support it in expectation of greater profits. Rosnefttransport is reluctant to give up the projected earnings from the 1.3 million barrels per day that could eventually be squeezed out from the Tengiz oilfield; that is not including the projected earnings from the Baku-Novorossisk line that would skirt Grozny. "There will always be a strong incentive for Rosnefttransport to exploit its monopoly power… in the form of discriminatory pricing for access to the Russian pipeline system."

Meanwhile, the power ministries are in favor of the Novorossisk route chiefly due to security issues, determined not to allow any CIS state a significant measure of financial independence. Their priority is not profit, but political control. As one oil executive noted, "Russia does not seem to be as interested in making money as in keeping all of these countries under its thumb."

Though they are united on the Novorossisk route, the security and the financial interests are of two minds about the Baku-Ceyhan route. The financial elites are undecided. On the one hand, it could lose them eventual profits; if Rosnefttransport or Gazprom charges too much for transport, the CIS countries would have an option to ship their oil and gas elsewhere. On the other hand, the Novorossisk port already receives more oil than it can possibly handle (as mentioned previously), and Rosnefttransport has recently (once again) been forced to restrict the flow of oil from the Tengiz fields due to severe bottlenecks in the existing pipelines. "Russia has not even allowed Tengizchevroil to consistently export the 65,000b/d of the initial agreement." Consequently, the Baku-Supsa or the Baku-Ceyhan route could present a new source of profits.

The military/security interests are of course firmly opposed, claiming that any route other than through Russian territory would detract from Russia’s influence in the region. "Russia has a strategic imperative to control such resources." The recent attempt on the life of Shevarnadze, for which Moscow is widely thought to be responsible, amply demonstrates their hostility.

In conclusion, the Novorossisk route seems destined to come fully on line eventually, regardless of any alternative routes. It is extremely doubtful that the Baku-Ceyhan route, without substantial contributions from the United States or Turkey, will do the same. As repeatedly stated by numerous oil companies, Azerbaijan is simply not capable to of providing the one million barrels per day necessary to justify the $4 billion projected expense of the Ceyhan route. In the words of the World Bank, "It is important that large and expensive projects are not undertaken solely to reduce dependence on other CIS republics."

Moreover, Russia, through covert military and political action (political coups, arming separatists within the region, or attempted assassinations – such as the recent attempt on the life of Shevarnadze) could easily make it too costly for any companies or states involved. Consequently, the most viable current alternative route to Novorossisk, would be the one from Baku to Supsa. The lack of consensus between Russia’s commercial and security interests leave that option open to exploitation.

In addition to conflicts between factions in Moscow, there is yet another great division in Russian politics. That division, of course, is the conflict between the Center and the regions. In his initial desire to dismember the Soviet Union, President Yeltsin gave no thought to what effect that would have upon the future of the Russian Federation, itself home to over 3,000 nationalities, and subdivided into 89 different regions. Twenty-one of these regions are notionally ethnic, autonomous republics. Many of them, such as Tatarstan, have managed to wring almost as many concessions from the Center as Georgia or Armenia; some would argue, more. "The regional political elites have been the biggest winners as the Center crumbled."

However, these two groups often have the same interests – profits, and the Novorossisk route seems to be one of the issues on which they agree. The issue in question between the Center and the regions is not whether or not the Novorossisk route should be built, but on how to split the profits.

Yet, to add full dimension to the picture, there is also the ever-present example of Chechnya – an example of a drive for full autonomy gone hopelessly wrong. Several years of civil war, and the lawlessness and anarchy that resulted, have left this small autonomous republic in ruins, with armed bands independent of any government control still roaming its territory. Ironically, the existing Baku-Novorossisk pipeline passes directly through Grozny, the capital of Chechnya. Moreover, the situation in Dagestan (a close neighbor of Chechnya) continues to simmer close to boiling point. Four British UN officials were recently kidnapped in the area, and only Boris Berezovski’s intercession allowed them to go free. On the plus side, the fact that they were released once again demonstrates that Russian big business and local interests are able to work together; the prospect of profits can make the most unlikely allies.

To make matters short, the CPC Consortium (the group of companies developing the Novorossisk route) have obtained agreements from virtually all the regions through which the pipeline is supposed to pass. The proposed pipeline will start at the Tengiz oilfields, cross Komsomol, reach Tikhroretsk, and finally end on the coast of the Black Sea, at Novorossisk. Recently, Chevron’s Matzke and LukOil’s Alekperov toured the regions and, "In Novorossisk and Astrakhan, the regional governors presented Matzke with documents assuring pipeline rights through their territories." Thus, virtually all factions in Russia, regional and otherwise, are agreed on the need for the Novorossisk route, if only to deny the other CIS states any alternative path for energy exports.

CONCLUSION

Russia’s post-Soviet policy towards the Caspian can be divided into three general stages. In the first phase, 1991 to mid-1992, a complete disregard of the region prevailed in Moscow. By late 1992, the newly powerful right-wing nationalist forces, allied with the reemergent Communist Party, forced the Center to redefine its policy towards the Caspian. "Yeltsin and Kozyrev increasingly shifted their positions to make them unobjectionable to those who decried the loss of Russia’s superpower status."

The Russian government then began to consciously arm the Armenians (which before had been done on a local, ad-hoc basis), and the Defense Ministry ordered Russian military units to fight directly on the side of the Abkhazians. Simultaneously, Russian troops were moved into Tajikistan in order to support the beleaguered pro-Russian communist government. As a result, by early 1994, the anti-Russian governments of Elchibey and Gamsakhurdia were out, and more conciliatory regimes of Aliyev and Shevarnadze were in. Moreover, both Georgia and Azerbaijan had been coerced into joining the CIS. "The alternative was continued civil war in which Russian military units backing the antigovernment groups would destroy them (the governments)."

The dying down of open conflict and the relative normalization of the region’s relations with Moscow in late-1994/early-1995 marked the third stage of Russian involvement in the region. Overt military interference was out, and more subtle economic pressure would now become the norm, as evidenced by the repeated blockages of power to the industrial north of Kazakhstan and Gazprom’s denial of its pipelines to Turkmenistan. In addition, the stalemated Nagorno-Karabakh conflict represents leverage over both Azerbaijan and Armenia, and the stalemated Abkhazia conflict represents leverage over Georgia; leverage that could be brought to bear at any time.

Primakov’s ascension to the post of Prime Minister may mark the beginning of yet a new stage in Russian policy. His past views and policy as Foreign Minister do not bode well for the sovereignty of the states in the region. As Ambassador Morningstar stated, he is not likely to do the regional leaders any favors. However, "With what is happening in Moscow right now, it is very doubtful that playing games in the Caucasus would be the highest Russian priority." On the "black Thursday" of August 13th alone, the Moscow stock exchange fell 15%, and the Russian economy is projected to contract by 3% in 1998, and by a further 5% in 1999. Consequently, for the near future, Primakov will be careful not to overtly antagonize the United States, since some sort of financial help from the West will no doubt once again be necessary to set Russia back on its financial feet.

To date, Russia has managed to skillfully play Turkish and Iranian interests against each other, and to successfully prevent the spread of both pan-Islamic and pan-Turkik influence. Moscow used "Turkish influence in Central Asia and Azerbaijan as a positive counterweight to Islamic radicalism in the region." Russia’s sudden reversal on the Caspian "condominium issue" has isolated Iran, and the lack of fiscal viability for the Baku-Ceyhan route has made Ambassador Kamel of Turkey admit, "Partnership with Russia, and mainly on Russia’s terms, is the best that Turkey can hope for." Moscow has simultaneously managed to defeat any plans for a trans-Caspian pipeline by cooperating with Iran on the joint-use of the sea-column and the environmental issues. Finally, the deep penetration of Georgia by Russian interests makes any pipeline through that country certain to represent Russia’s commercial interests.

Meanwhile, the fact that, "The US government will not subsidize Caspian Sea export lines," severely limits American influence in the area. Thus, though, the region’s leaders continue to look to Washington for support, following every rejected overture their eyes repeatedly turn back to Moscow.

As a result, it is highly unlikely that the Baku-Ceyhan route will become a reality. In pure economic terms, as mentioned previously, Azerbaijan simply does not have enough oil. Moreover, in geopolitical terms, though many Russian leaders (particularly the financial oligarchs in Moscow) could be persuaded not to actively oppose the Turkish route – as long as: 1) the CPC route is also guaranteed, and 2) Russia is assured some sort of financial stake in the pipeline – opposition from the military/security interests would make any such project highly volatile and dangerous to the stability of the region. Disaffected parties in Russia could sponsor terrorist attacks upon the pipeline, attempt to undermine the Georgian government by reigniting the Abkhazian conflict, and perhaps even instigate a new civil war. Furthermore, potential terrorist attacks upon the Turkish pipeline, and the lack of full government control over much of Georgia would add further expenses and delays to the Baku-Ceyhan route.

The Novorossisk route, on the other hand, should come fully on line in the near future. According to State Department representative, Monica Eppinger, the CPC Consortium has already obtained all the required regional agreements. The only reason the project is stalled for the moment is the current confusion in Moscow. The financial and the security interests in Moscow are all agreed on the necessity of Novorossisk, and Russia’s hold over the Caspian states, particularly Kazakhstan, will continue to make that the dominant route for any energy exports from the area.

The Baku-Supsa route is a strong possibility, but will not significantly detract from Russia’s influence in the area. As mentioned above, due to Russia’s close relations with Abkhazia and the latter’s direct control over some 50% of Georgia’s Black Sea coast, any possible route through Georgia would be almost certain to include Russian interests.

Finally, in response to the question posed in the title of this paper, it seems that Russia can, and almost certainly will, keep control in its own "backyard". The Russian Federation, while severely weakened by its recent financial crisis, will continue to exercise the dominant influence in the region. China is not a threat and, as illustrated previously, the flawed economies of Turkey and Iran, as well as the reluctance of the United States to make any significant financial commitments to the area, will all prevent these states from taking over Moscow’s role in the Caspian. The Novorossisk route will remain the dominant export-option for the region, and while the Baku-Supsa is a distinct possibility, the Baku-Ceyhan route does not appear to be economically viable (even without the threat of Russia’s opposition). Thus, to reiterate, the economic and geopolitical realities of the region will not allow any solution to the CIS states energy exports problem that would not include, or would directly damage, the interests of Russia.

For all of the above reasons, the best option for the United States and Turkey would be to gradually relent from their pressure for a Baku-Ceyhan pipeline, and to accept (no matter how reluctantly) the Novorossisk route as the sole viable long-term oil-export option at the moment. In return for its cooperation with Russia, the United States government could attempt to obtain Moscow’s agreement for a Thrace bypass of the Bosporus, as opposed to the Burgas-Alexandroupolis route. Such an approach would still include Turkey, while fulfilling Russia’s geostrategic goals in the area.

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