In the period
October-December 2002, the area stretching from the Black Sea to the
Caspian Sea and its adjacent territories was influenced by specific
geopolitical, geo-economic and geo-strategic tendencies of a global
and regional nature, including the fight against terrorism and mounting
pressure on Iraq to comply with UN Security Council Resolution 1441.
first group of influential factors were those of a geopolitical, geo-economic
and geo-strategic nature. The growing energy needs of China, the United
States, and Turkey influenced issues such as oil and gas production
and transportation in the region. China is already in strategic competition
with the USA. Military links between these two global actors, as well
as their joint efforts in fighting terrorism, have developed against
this background of competition. The start of the practical testing phase
of America's National Missile Defence system (NMD) in cooperation with
Japan has contributed to continental China's perceptions that Taiwan
will be a beneficiary of this military build-up. The Chinese president's
visit to the USA in October was important in politically balancing and
regulating the complex relationship between Beijing and Washington.
The launch of a strategic dialogue between China and NATO will contribute
positively in the same direction. For its part, China is trying to induce
a regional answer to the US challenge by giving more muscle to the Shanghai
Cooperation Organisation (SCO), although without much effect.
Ministry of Foreign Affairs is implementing a concept of 'energy diplomacy'.
Moscow is eager to make the most of Russia's natural resources; first,
to compensate America's oil needs and reduce US dependence on the Middle
East, and second, to increase the EU's dependence on Russia's oil and
gas supplies. Russia is also trying to exploit its industrial base and
intellectual potential as well as its G-8 membership and experience
in energy-related international institutions. Russia is using these
important economic instruments to further the country's bilateral and
international relationships. The energy resources in the Caspian region
no doubt form a significant part of a more complex Russian puzzle. US-Russian,
EU-Russian and NATO-Russian relations have the dual purpose of stimulating
constructive activity in the economic sector and preserving the usefulness
of these relationships for the objectives of fighting terrorism and
protecting regional stability in various parts of the globe.
progress of the Baku-Tbilisi-Ceyhan (BTC) pipeline project continues
to undermine Russia's dominance in the transportation of energy resources
to various markets. However, it has also had the effect of uniting the
common interests of different actors, including those from Russia, and
motivating them to using the pipeline to their advantage. The eastern
enlargement of NATO and the EU provide Turkey with the chance to make
the best use of the BTC pipeline.
pressure on Iraq to comply with UN Security Council Resolution 1441
has created regional tensions as well as global expectations of new
energy problems and intensified terrorist activity. Turkey's burden
in this crisis has been compensated for by US military aid and the prospect
of entry into the EU. Iran has declared it will be actively neutral
if a war against Iraq breaks out. The pressure on Baghdad has really
increased following a joint resolution from the US Congress and Senate
authorising military action against Iraq. To ensure that its interests
in Iraq are respected post-Saddam Hussein, Russia is preparing an 'exit
strategy' out of its unconditional support for Baghdad. The UN and the
US must ensure, however, that if a war with Iraq does break out, it
isn't seen as a religious war or a clash of civilisations.
hostage crisis in Moscow during 23-26 October has led to a higher level
of Russian engagement in the war against terrorism. It was clear to
Russia that the US, NATO and EU are all partners in this fight, but
that its post-conflict rehabilitation policy in Chechnya has failed.
It was also obvious that without reforming its armed forces, re-conceptualising
national security and raising the morale of its security forces, Russia's
contribution to the fight against global terrorism would never be effective.
To this extent, Russia improved its anti-terrorist cooperation with
India. Similar steps were made between the USA and China, Turkey and
issue that will continue to be tackled in 2003 will be the demarcation
of the Caspian Sea. Progress in Russian-Iranian relations is crucial
for a breakthrough at the 2003 Tehran summit of the Caspian littoral
developments in the Black Sea-Caspian Sea region marked certain shifts.
The Chechen attack in Moscow showed how much needs to change in the
rebellious province. A political solution, expected to guarantee progress
in the republic, will begin with a referendum in March 2003. Armenian-Azerbaijani
dialogue on the Nagorno Karabakh issues continued with no breakthrough.
Russia has promised to finalise the pull out of its troops from the
Transdnistria region of Moldova by the end of 2003 rather than the end
of 2002 as originally expected.
national developments, Ukraine changed its Prime Minister while Russia
considered 2002 an economically successful year that led to the improvement
of living standards for the Russian people. According to Russia's citizens,
however, improvements were only very modest.
the area of bilateral relations, Iran was particularly active, especially
with neighbouring countries. Tehran is no doubt trying to avoid the
same pressure currently being exerted on Baghdad.
Developments in the CIS proved yet again that this organisation is far
from being effective. To date it has not displayed any real potential
as an integration center for the former Soviet republics.
joined the World Trade Organization (WTO) and Russia was given the status
of a market economy by the EU. The November EU-Russia summit in Brussels
led to a formula for solving the Kaliningrad-EU deadlock and of increasing
gas deliveries from Russia to Western Europe. Georgia's application
for both EU and NATO membership marked a new geopolitical opportunity
for the two institutions and also a promise for the Caucasian region
to join the European mainstream. The Russia-NATO relationship was solidified
after the visit of NATO's Secretary General to Moscow following the
Alliance's Prague summit in November.
US-Ukrainian relations registered their lowest level since 1993, US-Georgian,
US-Moldova and US-Russian relations were all marked by positive steps
during the last three months.
PROFILE OF THE BLACK SEA-CASPIAN SEA AREA
Geopolitical, Geostrategic, and Geoeconomic Tendencies
energy needs have put it in strategic competition with the world's current
energy consuming giant, the USA. The International Energy Agency (IEA)
considers China a major strategic buyer on world energy markets: oil
from the Middle East and Western Africa and gas from the Middle East
and South East Asia. China is also increasing the size of its imports
from Russia, Turkmenistan and Kazakhstan. In a report to Congress earlier
this year, the United States recognized the looming rivalry for the
world's energy resources. Chinese leaders believe the US wants to contain
China. Chinese President Jiang Zemin's visit to the US at the end of
October and his meeting with US President George Bush underlined the
importance of political ties between these two powerful states. Both
leaders agreed to prevent the proliferation of weapons of mass destruction.
On 12-17 December the head of the US Pacific Command, Admiral Thomas
Fargo, was in Beijing. On 11 December the US Under Secretary of Defence
for Policy, Douglas Feith, and the Deputy Chief of the Chinese People's
Liberation Army, General Xiong Guankai, met and agreed on further exchanges
China approached NATO to
seek a strategic dialogue for the first time. On 14 November NATO reported
that the Chinese Ambassador to Belgium, Guan Chengyuan had met Secretary
General Lord George Robertson on 10 October and asked to begin regular
contacts on strategic concepts, common threats and NATO activities in
Central Asia. The North Atlantic Alliance is particularly active in
its relations with the former Soviet republics that border northwest
China and has recently been involved in the activities of the International
Security Assistance Force (ISAF). NATO may eventually play a role if
war breaks out with Iraq. The Alliance's enlargement to the Baltic and
the Black Seas and the ongoing development of relations with Russia
and the Caucasus is a signal for Beijing to start its own dialogue with
Japanese participation in
the US National Missile Defence (NMD) programme caused fears in Beijing
that this will destabilise the region. The establishment up of ten interceptor
rockets at Fort Greely, Alaska, is expected to end by 2004 and may worsen
global stability and damage regional security. China fears such a missile
defence system may stretch to cover the island of Taiwan, considered
a separatist province from the mainland. Tokyo, however, is cooperating
with Washington to counter a possible nuclear threat from North Korea.
Japan has cost, feasibility and foreign-political concerns about such
a system, but developing a missile defence shield is still an option.
China is trying to compensate
certain regional deficiencies in the security situation by participation
in the SCO, a regional organisation with Asian characteristics according
to an official Chinese State Council document of 10 December. The SCO
has initiated a new security concept, as well as a new pattern of regional
cooperation and state-to-state relations. Regional security cooperation
is central to Chinese policy. The Shanghai Convention on Combating Terrorism,
Separatism and Extremism signed by the SCO states - China, Russia, Kazakhstan,
Kyrgyzstan, Tajikistan and Uzbekistan - the joint communiqué
of the defence ministers, the statement by the prime ministers, the
statement of leaders of the law-enforcement and security departments,
and the joint statement of the foreign ministers of the member nations
are specially mentioned by the white paper, "China's National Defence
The improvement in bilateral
Russian-Japanese relations is yet another development. The two G-8 states
have yet to conclude a peace treaty to mark the end of World War II
and the Kuril Islands remain a contentious issue. The Japanese Prime
Minister, Junichiro Koizumi is expected to visit Moscow on 10 January
2003 to sign a "Plan of Action" aimed at boosting bilateral
ties in a practical way. For this purpose Japan's Foreign Minister,
Yoriko Kavaguchi, visited Moscow in mid-October and met with President
Vladimir Putin. A few weeks later Russia's Foreign Minister, Igor Ivanov,
visited Tokyo and met with Prime Minister Koizumi. The northern version
of the East-West transport and trade corridor from the Far East to Europe
is highly dependent on Japanese investment. The old 'Silk Road', from
China to Europe is the southern version of this communication link.
The eastern enlargement
of NATO, announced in Prague on 21 November, will end in the spring
of 2004. This will lead to the Alliance's improved geopolitical position
in the space between the Baltic Sea and the Black Sea. Lord Robertson's
visit to Moscow and the earlier visit by President George Bush to St.
Petersburg, at the invitation of Russian President Putin, provided Russia
with an opportunity to develop an active and positive relationship with
the Alliance, short of membership. The war against terrorism brings
Russia closer to NATO and the USA and creates more geopolitical interpretations
than were possible before the appearance of this global threat.
Preparations for a war against
Iraq constitute a second major factor influencing the security situation
in the Black Sea-Caspian Sea region.
Preparations for a possible
war on Iraq have put a great deal of pressure on Turkey. Iraq has insisted
that Turkey not support a US military strike. Following intense bilateral
contacts between Baghdad and Ankara, Iraq's Deputy Prime Minister, Tariq
Azis declared on 10 October that if Turkey does support a strike it
will never again be a friend of Iraq. Earlier, on 3 October, Azis said
his country had no intention of attacking its neighbours if the USA
attacks Iraq. However, Iraqi government officials gave a contradictory
signal at the end of December - Iraq will retaliate against those neighbours
who provide bases for an attack against their country. Turkey's support
for a US-led war on Iraq is likely to damage the country's economy.
A Kurdish independent state in northern Iraq is another Turkish preoccupation.
However, Turkey already
has several hundred troops deployed in northern Iraq and Ankara has
drawn up military plans to support its closest ally, the US.
On 1 October Iranian Defence
Minister, Admiral Ali Shamkhani said Iran will not take part in any
military action against neighbouring Iraq, even if approved by a UN
Resolution. Even though Tehran opposes a US attack, it will adopt a
position of "active neutrality" and will not cooperate with
Baghdad. Iran rebuffed Iraq's efforts to gain Tehran's diplomatic support
during a visit by the Iraqi Foreign Minister Naji Sabri at the end of
On 11 October the US Congress adopted a joint House and Senate resolution
authorising the use of military force against Iraq. It also gave support
to US efforts to find a diplomatic solution to the crisis.
Although questioning the US position on Iraq at the UN, Russia is actually
negotiating its support for a possible military operation. Moscow is
insisting on guarantees that the interests of its oil companies (some
of which are rather well established in Iraq's oil fields) will be respected
if Saddam Hussein's regime falls. During the visit of British Prime
Minister Tony Blair to Moscow on 11 October, President Putin demonstrated
his readiness to find common ground at the UN Security Council with
Great Britain and the USA, including the return of weapons inspectors.
At the same time, Tony Blair underlined that Russia has legitimate interests
in defending its territory from extremists - a position supported even
more strongly after the hostage crisis in Moscow on 23-26 October.
During President Putin's visit to China at the beginning of December
he said it would be absolutely counter-productive to seek confrontation
with the United States. He told his Chinese hosts the USA is Russia's
biggest trading partner and a partner in the anti- terrorism coalition.
In December, Iraq terminated a contract with the Russian oil giant LUKoil.
Baghdad wanted to punish the company for negotiating guarantees with
Washington if the present regime is replaced. Iraq already negotiates
with two other Russian oil companies for working in the same oil fields.
Sources of Conflict in the Black Sea-Caspian Sea Region
Georgia handed over five suspected Chechen rebels to the Russian
authorities on 3 October. The rebels were wanted by Russia for terrorism.
On 6 October the presidents of the two countries met in Moldova for
a CIS summit. Following this gesture by the Georgian authorities, Putin
declared on 7 October that Russia would not launch threatened cross-border
raids against Georgia.
Turkey will help train Georgia's military servicemen under the US equip-and-train
programme. Both countries are the largest donors of military equipment
to Georgia. A key target of this cooperation is to bring Georgia's 11th
Motorised Infantry Brigade up to NATO standards, forming a rapid reaction
force capable of effectively dealing with terrorists.
On 23 October 50 Chechen terrorists armed with explosives and guns took
over a Moscow theatre and captured over 650 hostages. The attackers
threatened to kill the hostages and themselves if their demands for
an end to the war in Chechnya were not met. On 26 October Russian counter-terrorist
troops stormed the building leaving some 129 hostages and 41 terrorists
dead. President Putin declared war on terrorism and vowed that Russia
would take adequate measures to strike at terrorists, their infrastructure
and their ideological and financial sponsors. In the aftermath of the
hostage crisis in Moscow, Russia's army will have to revamp its Cold
War strategy and methods if it wants to combat terrorism effectively.
In a mirror-approach to the US president after 11 September 2001, President
Putin asked several government agencies to draw up a new security strategy
three days after the end of the hostage drama. In the opinion of the
Russian public and the country's security experts, terrorism is the
country's number one enemy. Legal restrictions have been imposed on
the Russian media when reporting terrorist activities. Joint Russian-NATO
counter-terrorist activities are looked upon positively as a necessary
step in the fields of security and defence. President Putin continues
to portray the Russian anti-separatist war in Chechnya as a Russian
version of the global war against terrorism. During the hostage crisis
NATO expressed solidarity with Russia while various intelligence services
provided help. Other organisations appealed to the terrorists to surrender.
On 5 November Russia signalled it would consider pre-emptive strikes
using precision weapons against terrorist facilities, training camps
and the ideological and financial sponsors of terrorism. It should be
noted that serious mistakes were made by the Russian security services
before and during the hostage crisis. The problem of fighting terrorism
in Russia is further complicated by the fact that 20 million Muslims
live in the Russian Federation. Any fight against terrorism must not
be presented or interpreted as a religious conflict or a clash of civilisations.
(1) US Attorney General John Ashcroft formally opened an FBI field office
in Beijing on 25 October. The office will coordinate US and Chinese
efforts in countering terrorism and organised crime. China plans to
open a similar office in the United States. (2) However, on 18 December
US officials said that the listing of a regional group as a terrorist
organisation was not a blank check to suppress human rights in the Xinjiang
province in northwestern China. Earlier this year the East Turkestan
Islamic Movement (ETIM) was designated as a 'terrorist group' by the
USA. This did not justify a long-running crackdown on dissent by ethnic
Uighurs said US officials.
During President Putin's visit to India the two countries decided to
establish a joint Russian-Indian Commission for fighting terrorism.
Extremism and separatism, a major source of terrorist activity, are
problems common to both countries.
During his visit in Moscow on 9 December, Lord Robertson, Secretary
General of NATO, called for a security coalition with NATO and Russia
as essential partners. Robertson pointed to three areas for a coordinated
military response: anti-terrorism (defensive measures to reduce vulnerability
to attack); counter-terrorism (offensive measures to deter terrorist
activities); and consequence management (measures to support civilian
authorities in stabilising a post-attack environment).
The Delimitation of the Caspian Sea and the Black Sea: The Caspian Sea
On 2 October Iran opposed any unilateral, bilateral or trilateral deal
on the Caspian Sea. Any piecemeal attempt to resolve border limits in
the mineral-rich Caspian Sea in the absence of an overall deal of the
five littoral states will be rejected by Iran, said government spokesman
Abdollah Ramezanzadeh. Russia has already concluded bilateral arrangements
with Azerbaijan and Kazakhstan on the Caspian Sea demarcation problem.
The Iranian position also includes the understanding that the Caspian
Sea belongs to five coastal states and that no other country should
interfere in this region.
Russian-Iranian consultations on the legal status of the Caspian Sea
began on 3 December in Tehran. The Russian delegation, led by Viktor
Kalyuzhny, President Putin's Caspian Sea envoy, included MPs and experts.
Iran's Special Representative on Caspian Sea Affairs, Mahdi Safari,
headed the Iranian delegation. The Russian delegation presented its
position to one of the sessions of the Iranian Parliamentary Commission
for Security and Foreign Policy. The two sides agreed to work on the
joint drilling of the Southern Caspian Sea if, and when, approved by
the Iranian authorities.
The second summit of the five Caspian states (Russia, Azerbaijan, Kazakhstan,
Turkmenistan and Iran) could be convened in Tehran in 2003, said Viktor
Kalyuzhny on 10 December. The suggestion was made by the Iranian President
and is supported by Russia. Top-level meetings will take place ahead
of the summit. The document drawn up during the first summit in Ashgabad
during April 2002 will probably be amended and will take into account
the progress reached during the negotiations since then.
Oil and Gas Issues
(1) On 1 October Russian Energy Minister Igor Yusufov said at the US-Russian
Commercial Energy Summit in Houston, Texas, that Russia plans to create
a strategic oil reserve to help stabilise international oil prices.
By 2007 Russia will be ready to supply 1.1 million barrels of oil per
day to US markets, reaching 13 per cent of US oil imports. (2) On 5
December US Congressman, Curt Weldon told a press conference in Moscow
that the US would cooperate with Russia in the energy sector. The US
needs Russian oil to decrease dependence on supplies from the Middle
East and as a result of inadequate production in Alaska.
The two neighbouring states will register a gas transportation consortium
in January 2003. This was agreed to on 9 December in Moscow, following
an agreement of 7 October by the countries' prime ministers for a 30-year
strategic partnership in gas. They also set up a consortium for managing
Ukraine's gas transportation system. European gas companies may also
join the project.
3) BTC Pipeline Project
(1) Georgia officially approved the BTC pipeline on 2 November. Together
with earlier approvals by Azerbaijan and Turkey, this marked a significant
milestone in the development of the project. (2) India is trying to
become a player in the world energy market and seeks the partnership
of Turkey. On 10 November New Delhi reported that an Indian company
had won the bid to construct 332 km of the BTC pipeline whose total
length of 1,750 km will stretch from the Turkish town of Ulas to Ceyhan
on the Mediterranean Sea. British, Azerbaijani, French, Turkish and
North American companies are also involved in the BTC pipeline. (3)
An oil pipeline will be constructed from Kazakhstan to Azerbaijan under
the Caspian Sea, said the President of the State Oil Company of the
Azerbaijan Republic (SOCAR), Natiq Aliyev. The announcement was made
in London on 10 December after talks at the US Embassy with a Kazakh
delegation on Kazakhstan's joining of the BTC pipeline project. Kazakhstan
considers this project one of its main interests. The next round of
talks will be in January 2003 in Almaty, Kazakhstan. (4) Contractors
started work on the BTC pipeline on 15 December in Turkey. Pipes from
Japan are expected in January 2003 both in Turkey and in Azerbaijan.
Actual construction work will begin in mid-March 2003.
Turkey negotiated lower prices for exported Iranian gas on 18 November.
A drop of 9 per cent in the price of Russian gas has probably led to
a 20 per cent cut in the price of Iranian gas. Turkey is expected to
become a major gas-transit country for Europe from both Russia and Iran.
CONFLICT AND POST-CONFLICT DEVELOPMENTS IN THE BLACK SEA AREA
(1) Bombings and
ambushes continued to kill government militia and regular Russian troops
in Chechnya. Two Chechen suicide-terrorists blasted the government building
in Grozny on 27 December, leaving 250 dead and wounded. The Moscow hostage
crisis of 23-26 October marked a failed Russian policy in Chechnya.
The cost of reconstructing the republic after the second Chechen war
has already risen to US$5 billion but with no results other than a Chechen
administration. (2) On 28 October the Organization for Security and
Cooperation in Europe (OSCE) said it would reduce its mission on the
Georgian-Chechen border from 54 to 42 personnel - a common practice
during the winter months. (3) On 13 November Mikhail Babich, a Russian
businessman was appointed as Prime Minister of Chechnya. (4) On 14 November
Russia ruled out any reduction in troop levels in Chechnya until the
security situation had drastically improved. Although the Chief of the
Russian General Staff, Anatoly Kvashnin, said the military phase of
the conflict was over, conditions for the reduction of forces were still
far off. Violence in the province continues and 80,000 Russian troops
are deployed in Chechnya. According to a peace plan by the Russian president,
a referendum for the approval of a new constitution will be convened
in March 2003. Chechnya will have increased autonomous control while
firmly remaining in the frame of the Russian Federation. Negotiations
with terrorist factions, including with former president Aslan Maskhadov,
have been ruled out by Russian authorities. On 7 December in Moscow,
Russia's NATO partners delicately hinted that a political strategy was
the key to defeating extremism in the province. Lord Robertson told
a Moscow conference on combating terrorism that poorly trained troops
who fail to respect civil rights or use excessive force only exacerbate
the problem they are sent to contain.
During the CIS summit
in Chisinau, Moldova, on 7-8 October, the presidents of Armenia and
Azerbaijan, Robert Kocharian and Geydar Aliyev discussed the Nagorno
Karabakh conflict. They continued this difficult dialogue during NATO's
Prague summit of 21-22 November.
Group of Russian Forces in Transdnistria removed another trainload of
military materials on 6 November from the Transdnistrian region of Moldova.
In October two more trains transported similar loads; a third departed
from Tiraspol. According to a commitment made at the 1999 Istanbul OSCE
summit, Russia should have fully withdrawn its forces from Moldova by
the end of this year but has shifted this deadline to 31 December 2003.
THE NATIONAL PERSPECTIVES: SPECIFIC DEVELOPMENTS
W ith the support of parliament, Ukrainian president Leonid Kuchma replaced
Prime Minister Anatoly Kinakh with one more loyal to him, Viktor Yanukovich
(52), governor of the Donetsk region. Mass street demonstrations have
called for the resignation of Kuchma, but he insisted he would stay
in power until 2004. The United States have accused Kuchma for approving
the sale of an advanced "Kolchuga" aircraft detection system
President Putin dismissed the Black Sea Navy Commander, Admiral
Vladimir Komoedov, at the start of October and appointed Vice-Admiral
Vladimir Massorin, former commander of the Caspian Sea Navy, to this
Speaking to the ruling party's tenth congress at the end of November,
the President of Azerbaijan, Geydar Aliyev, said he is ready to participate
in the October 2003 presidential elections. Former president Ayaz Mutalibov,
persecuted by Baku and hiding in Russia, also declared his readiness
to participate in the presidential contest.
AND MULTILATERAL RELATIONS IN THE BLACK SEA REGION AND THE STATE OF
CIS AND GUUAM
Top energy officials from the two countries expressed their readiness
to boost energy cooperation on 2 December. According to the deal, Iran
will export electricity to Azerbaijan as well as set up a power plant
there. A broader economic cooperation agreement was concluded on 29-30
October in Baku during the bilateral Joint Economic Commission meeting.
(1) According to the Caspian News Agency, high level transport officials
from Iran and Armenia met in Yerevan on 5 December and agreed to build
the Kajaran tunnel in the south of Armenia to provide a year-round transport
corridor between the neighbouring states. The project is strategically
important for countries in the region and also for TRASECA project participants
and for those in the North-South corridor. (2) On 15 December the Foreign
Minister of Iran, Kamal Kharazi, and the Head of the President's Office
of Armenia, Artashes Tumanian, signed an agreement on development affairs
in Tehran. The two sides called for the settlement of the Nagorno Karabakh
conflict, an issue in which Tehran wants to be involved as a mediator.
On 16 December the Defence Minister of Georgia, David Tevzadze, met
his Azerbaijani counterpart, Safar Abiev, in Tbilisi and agreed to hold
joint military exercises.
On 26 November Moldovan President Vladimir Voronin accused Romania
of becoming the biggest commercial partner of the separatist Transdnistria
republic. Romanian authorities responded by saying that trade relations
with Transdnistria were conducted by private firms.
The CIS summit was convened in Moldova on 7-8 October. Twelve presidents
participated in the meeting. No improvement in the effectiveness of
the CIS could be reported and declarations for the need to intensify
security and economic cooperation were adopted. The highlight of the
summit was president Putin's 50th birthday. Problematic bilateral relations
overshadowed the integration ambitions of the CIS. The next summit will
be in held in Ukraine in October 2003.
THE STATE OF REGIONAL COOPERATION IN THE BLACK SEA AND THE ROLE OF THE
EU AND NATO
Economic Aspects of Regional Cooperation in the Black Sea: National
and Regional Perspectives
Russian economic growth in 2002 is expected to be 4 per cent. The real
income per head is expected to grow by 8.5 per cent while inflation
will be 15 per cent. President Putin concluded that living standards
in his country had started to rise.
The second meeting of the bilateral inter-governmental Commission for
Trade, Economic, Scientific and Technical Cooperation was held on 27-29
October. The next meeting will be held in October 2003 in Chisinau.
The recommencement of bilateral relations after a three-year break was
the main topic of the meeting.
Armenia's membership to the WTO was formally approved in Geneva on 10
December. The negotiations had lasted ten years. Armenia applied for
membership after bringing its legislation within WTO requirements. The
Protocol of Accession will become effective after the Armenian parliament
passes a set of 19 WTO agreements. Direct foreign investment in the
Armenian economy is expected to increase.
The Russian State TV and Radio Company will control 16 per cent
of the share value of EuroNews TV from the start of 2003. France controls
24 per cent, Spain 18 per cent and Switzerland 9 per cent. Moscow's
share will enable it to manage the station's output.
Political and Security Aspects of the Black Sea Regional Cooperation
and EU and NATO/PfP Activities
Russian Black Sea Navy
During October and November, Russia's Black Sea Navy sent two cruises
out into the Mediterranean Sea. The first tour visited the Syrian port
of Latakia and the French naval facility in Toulon. The second was to
the Greek ports of Corfu and Pylos as well as to the Croatian port of
(1) The EU formally recognised Russia as a market economy on 7 November.
This recognition took place in the context of trade defence. Consequently,
European anti-dumping and anti-subsidy laws will be amended. The new
regime will be applicable to all cases initiated after 8 November 2002.
(2) The regular EU-Russia summit in Brussels was convened on 11 November.
The two sides adopted a joint declaration on fighting terrorism, found
a formula for dealing with the Kaliningrad issue, and agreed to increase
Russian natural gas deliveries to Western Europe.
(1) A Turkish-built military academy opened in Tbilisi on October
10 with a view to bringing Georgia's military closer to NATO standards.
The academy will play an important role in Georgian security. Two hundred
and fourteen students were enrolled this year and successful graduates
will become officers. (2) At NATO's Prague summit the Georgian President
officially requested that his country be considered an aspirant to NATO
membership. The request was made earlier than originally expected; in
2000 Edward Shevardnadze pledged to make a bid for membership in 2005.
NATO is considered the only organisation capable of guaranteeing Georgia's
security and opportunities for development. Georgia has to deal with
various internal challenges on its way to NATO membership; its chances,
however, are good. The Chairman of the US Joint Chiefs of Staff (JCS),
General Richard Myers, visited Georgia on 23-25 November. He reaffirmed
US plans to support Georgia's military modernisation. Britain is expected
to send instructors to Georgia to train the country's security services
in intelligence and counter-terrorism. A regional, Caucasian security
framework with NATO at the core will probably be a good option for Georgia
and other countries in the area. The Georgian Ministry of Defence discussed
new army regulations on 20 December. They were drafted on the basis
of documents concluded by the United States, Romania, the Czech Republic
NATO Secretary General, Lord George Robertson visited Moscow on
9-10 December. NATO and Russia will sign agreements on rescue at sea,
air transport and mid-air refuelling in 2003. Lord Robertson told President
Putin that NATO was ready to assist Moscow to modernize, downsize and
professionalize its armed forces. It is crucial for the two partners
to fix precise areas of cooperation.
President Shevardnadze of Georgia told his country's parliament
on 11 October that one of Georgia's long-term objectives was to join
OTHER EXTERNAL FACTORS – STATES AND INSTITUTIONS INFLUENCING THE BLACK
SEA REGION: US
(1) A group of US Congressmen visited Georgia on 1 December for
talks on US-Georgian cooperation in combating terrorism and other security
issues. Greg Weldon headed the delegation. It met with the Georgian
President and visited a military base where counter-terrorist troops
are being trained. The construction of the BTC oil pipeline will require
proper protection and the 2,000 Georgian special force troops are expected
to do this job. This was the first congressional level visit after NATO's
Prague summit and Georgia's application for membership to the alliance.
(2) The first counter-terrorist battalion on a US-designed training
programme graduated on 15 December. Georgian President Edward Shevardnadze
congratulated 558 Georgian soldiers and thanked US military instructors
from the four-month course. The US training program included instruction
in anti-terrorism techniques as well as supplies of weapons, ammunition,
uniforms and other equipment. It is part of the global counter-terrorism
effort launched by the USA after the 11 September terrorist attacks.
On 8 November US Deputy Assistant Secretary of State, Steven Pifer,
said that US-Ukrainian relations had hit a crisis of confidence over
what the US sees as Kiev's failure to disprove charges that it sold
arms to Iraq. According to the US State Department's assessment, the
two countries are in a very difficult period of their relations, probably
the most difficult since 1993. NATO downgraded its meeting with Ukrainian
officials from a presidential to ministerial level at its Prague summit.
(1) US President George Bush visited Russia for three hours after
the NATO summit in Prague and met with President Putin in St. Petersburg.
The United States considers its strategic partnership with Russia crucial
in its fight against terrorism. (2) The US Chairman of the JCS, General
Richard Myers, visited Russia on 11-12 December and met with Defence
Minister Sergei Ivanov and the Chief of the General Staff, General Anatoly
Kvashnin. They discussed the operation in Afghanistan, anti-terrorist
efforts, Iraq, arms control, missile defence and Russia-NATO relations
after the latter's decision to enlarge the alliance by seven more countries,
some of them former Soviet republics, at its Prague summit.
(1) The Overseas Private Investment Corporation (OPIC) will provide
nearly US$1 million in political risk insurance to two US companies
that are investing in telecommunications and agricultural projects in
Moldova. (2) Moldova's President Vladimir Voronin visited Washington,
D. C. on 17 December. In a declaration with President George Bush, President
Voronin reaffirmed their countries' relationship based on a "shared
commitment to promoting prosperity, freedom and security in Moldova
and throughout the region." Both leaders agreed that there is a
difficult "debt situation" in Moldova and there is need for
privatisation, energy sector reform, and improvement in the investment
climate. They agreed to continue promoting regional security, combating
the proliferation of weapons of mass destruction, trans-national crime,
and human trafficking as well as to cooperate in the war on terrorism.
consumption of oil and natural gas in the world have resulted in intensive
political and economic interaction in the Black Sea-Caspian Sea area,
both of a conflicting and cooperative nature. Energy projects hitherto
on the drawing table or in the planning phase will finally be launched
in the coming months and years. The political and strategic influence
of the US and NATO are increasing. Opportunities for the EU to be more
closely involved in the modernisation of the region have generated positive
trends from which Russia is most keen to take advantage of. The war
on terrorism and the preparations for a possible war against Iraq are
strongly influencing the political and strategic situation in the area.
It is likely that the five permanent members of the Security Council
will exercise a higher level of coordination and understanding on these
issues in the coming months than was shown three or four years ago.
The convergence of interests in the Black Sea-Caspian Sea region is
an important factor in this development.