(A Background and July - September 1999 Issue in Brief)

© Institute for Security and International Studies (ISIS), Sofia

Research Study 3

Hard Copy: ISSN 1311 – 3259




1. The Conflicting Models of Integration in the Northern Caucasus
2. The Competitive Interests Over the Oil and the Gas Pipelines from Russia and the Caspian Region to the World Markets


1. The Northern Caucasus (Chechnya, Dagestan, Northern Ossetia, Karachaevo-Cherkessia)
2. Armenia-Azerbaijan Conflict

3. The Intensification of the Lezgin Separatist Movement in Azerbaijan

4. The Abkhazian Conflict

5. The Transdniestria Conflict

6. The Kurdish Issue in Turkey


1. Bulgaria
2. Romania

3. Russia

4. Turkey


1. Bilateral Contacts
2. Multilateral Relations


1. The Economic Situation in the Countries of the Black Sea Region and Its Consequences on the Black Sea Cooperation
2. Political and Security Aspects of the Cooperation


1. USA
2. EU


I Introduction

The July-September 1999 period in the developments of the countries of the Black Sea basin continued the tendency of reviving the conflicts in the Transcaucasus. The clashes between the Chechen separatists and the Federal forces of Russia enlarged their territory. The marks of Islamic fundamentalist terrorism and the shadow of one of its leaders – Osama bin Laden, could be seen in the bombings and killings of innocent civilians in Buinaksk (Dagestan), Moscow and Volgodonsk (Rostov oblast). The devastating earthquake in Turkey of 17 August 1999 put on the move also major regional political relationships and increased the hopes for an acceptable for the international community turn of the Kurdish question inside the country. The drive of some New Independent States to European and Atlantic integration was further demonstrated . The motivation of their leaders is the expectation of the acquisition of a larger package of economic, infrastructure and political modernisation by their countries.

II Profile Background of the Black Sea Basin: Sources of Conflict

Two sources of real and potential conflicts were especially actual in this period:

1. The Conflicting Models of Integration in the Northern Caucasus

The conflicts and various other problems throughout the 90s, including of the last twelve weeks are a curious repetition of a similar problem of the 18th century of imperial Russia – how to integrate the people of the Northern Caucasus into Russian society. The clue to finding the answer to this question two centuries ago was the old Roman principle of "Divide and Rule". For too many years the Russian political leaders of today have been trying (with very few exceptions) to exploit this same approach to the issues of the Northern Caucasus. However, the effect is rather counterproductive for the Russian interests and for the stability of the entire region.

The people of this region have been for several decades part of an integrated economically, socially and politically society. The abdication of the central federal authorities from playing the role of the integrative factor – in conceptual, political, economic and social terms, called in an anarchic way the process of integration of the people of the Northern Caucasus. There are many real factors that drive this process: the small area of the region populated by many ethnic, religious and language communities that need an encompassing economic activity and relations; the historic linkages of the various communities; the vital need to survive economically and the incapacity to carry out this task individually. Most acute are the issues of employment in an environment of low-qualified in professional terms working force; a mostly agrarian orientation of the regional economy and a deficit of a fertile for agrarian activity land.

After the loss of the war in Chechnya by the Russian Federation an anti-Russian, Chechen-based integration nucleus evolved. The initial ambitions of this integration centre was just the differentiation of the Caucasian people from Russia. Gradually Chechnya assumed the role of the leading consolidating factor of these people from the Russian Federation. The rising appetite drew the Chechen separatists to their role of active participants in the regulation (and instigation in many cases) of conflicts, tensions, animosities and issues in the area. The Dagestan and the Ossetia-Ingushetia cases are the latest examples of this strategy. However, all these roles are just steps in the direction of solidifying the anti-Russian (anti-federal) integration centre and establishing an anti-Christian, anti-modern Moslem, Wahhabite, Great Ichkeria, stretching territorially from the Caspian to the Black Sea.

Unlike a similar situation in the 20s of this century the external factor that is involved openly by the separatists is not a local or world great power, but the most repugnant brand of contemporary international terrorism – the extreme Islamic terrorist Osama bin Laden, his money and mujaheddin organisation.

The second contending integration nucleus, the Russian Federal one, has chosen to cope by violent force with the mounting aggressiveness of the separatist Chechen forces and their followers from within and outside the region and the country. A total blockade of Chechnya by Russia and a combined military operation of the ground and air forces are the most distinctive features of the present approach of Moscow to bringing this region back to its integrated state. The issue of the world-wide wanted billionaire-terrorist, Osama bin Laden and his involvement in the Northern Caucasus has brought closer in cooperation Moscow, Washington and other world leading capitals and their allies. The US FBI has pledged to provide practical support in fighting international terrorists. But even if the second most powerful nuclear power of the world succeeds militarily in fighting the strong men of Chechnya it is doomed to lose politically if a comprehensive economic, social and cultural strategy is not implemented to the Northern Caucasus and the different peoples who inhabit the region.

2) The Competitive Interests Over the Oil and the Gas Pipelines from Russia and the Caspian Region to the World Markets

The prospects for a clash of interests and for reaching compromise for the mutual benefit of the actors involved remain open options.

On 17 August 1999 the US Energy Secretary Bill Richardson said his country will further cooperate with Turkey on the next steps of the Baku-Ceyhan oil pipe-line to which the United States are firmly committed. Turkey and Azerbaijan discussed in the last week of August 1999 in Washington, D. C. the financing for the pipeline.

The Energy Secretary said that regarding the Trans-Caspian natural gas pipeline the USA strongly supports its construction because it represents important regional cooperation among Turkmenistan, Azerbaijan, Georgia and Turkey. Earlier, on 6 August 1999 in Ashgabat, Turkmenistan, three significant agreements on the Trans-Caspian Gas Pipeline were signed. The agreements establish a partnership between the Government of Turkmenistan and the pipeline’s developers – PSG and Royal Dutch Shell. They also lay the commercial and legal foundation for the pipeline within Turkmenistan and open the way for the next round of discussions on this project, which will include the Governments of Turkmenistan, Azerbaijan, Georgia and Turkey, as well as PSG and Royal Dutch Shell. The United States conceive these developments as a cornerstone of the construction of the East-West energy transit corridor. Alongside with fostering cooperation among the new states of Central Asia and the Caucasus the project will bolster their independence and prosperity, strengthen their integration with Europe via Turkey, enhance the energy security of the United States and the American allies and create business opportunities for companies from the USA and other countries.

The competing conception about the development of the oil and gas routes from Central Asia and the Caspian Sea basin is shared by Russia. In the third week of August 1999 the Russian Foreign Ministry issued a declaration which blames the United States of blocking big foreign-economic projects of the Russian Federation. Russian analyses link the oil and gas issue of the Caspian region with the conflicts in Northern Caucasus, mainly the recently escalated one in Dagestan. Russian experts find a relationship between the oil/gas and the ethnic conflict issues with the religious influences from Saudi Arabia, Pakistan, the UAE, Iran etc.

There are also economic arguments that further complicate the perception of the dominating concepts about the region. First, the newly found natural gas in the off-shore zone of Azerbaijan may turn this country into a competitor of the Turkmeni gas at the Western markets and compromise the encompassing US concept of the progress of the region through the cooperation of the neighbouring countries and outside partners. Second, the transportation of the Kazakh oil from Tengiz to Novorossiysk is the only real and viable project of transportation that makes a strong case for the powerful Russian participation in the distribution and directing the routes of the oil and gas from the area.

Definitely, isolating Russia and Iran is a working concept about the mixed geopolitical, geoeconomic and geostrategic issues of the Black Sea-Caspian region. However, Turkey, a key factor in most of the complex equations has also a definite interest of balancing its relations with both Russia and Iran. Shouldn’t the concepts and policies about the oil and gas energy projects consider more options that would not antagonise but bring-in both Russia and Iran into the East-West energy and transport corridor, and hence, into the democracy-building evolution of this area?

III Conflicts and Post-Conflict Developments in the Black Sea Area

The July-September 1999 period that was monitored was characterised by the escalation and the broadening of major conflicts in this area and by the further complicating or efforts of regulating of others:

1. The Northern Caucasus (Chechnya, Dagestan, Northern Ossetia, Karachaevo-Cherkessia)

The growing tensions, the terrorist acts of the previous months and a growing need of Moscow to prove it has a policy in this area led to the escalation of the military confrontation of the opposing and most armed forces. The territory of the various conflicts marked a clear tendency of merging, reminding the stakes of the Russian Federation in this region are high and the expectations from a comprehensive political and economic treatment of the Northern Caucasus by Russia are great after the firm military engagement of the federal army and security forces. The dramatic catalyst of the events is hard to point precisely: the strike against Chechen separatists on the Chechen-Dagestan border on 5 July 1999; or the death of the brother of the Chechen field commander Shamil Basaev; the death of peaceful villagers in the region after the raids of Russian Air Force against terrorists who were based among the civilians; or, probably, after the start of a terror campaign against innocent Russian citizens in different cities of the Federation, including the capital Moscow.

A closer analysis of the situation in the last three months shows that the Russian Federal Government and especially the armed and the security forces were in a process of preparation for a broader military campaign in Chechnya – the core and most militant dissident among the different autonomous units with separatist tendencies of the Federation in the Northern Caucasus. From the beginning of July 1999 the Central Russian TV station started an information campaign of preparing the people for violent opposition of the Chechen cruelties. A military victory is becoming a needed part of the election campaigns and a step-stone in overcoming the psychological blow of the humiliation suffered by the Russian armed forces in the 1994-96 Chechen war. The economic, especially the energy – oil and gasoline, pressure over Chechnya by Russia simply through by-passing Chechen territory in the transportation of Russian oil-products ( thus depriving the local people from stealing but also losing from making dysfunctional the Baku-Novorossiysk oil pipeline through Chechnya) marked a next step in preparing for a greater pressure. Soon after that 17,000 troops of the Russian Interior Ministry were stationed along the borders with Chechnya in the end of July 1999. It was leaked in the Russian press in the beginning of September 1999 that the Russian General Staff has planned an operation of entering Chechnya and taking hold of the Northern part of the separatist entity, thus making the Chechens fight inside and outside – in Dagestan. On 21 September 1999 was built a sanitary cordon around Chechnya by the Russian armed and security forces under the command of Gen. Vladimir Shamanov. Part of the Russian Marine Special Forces were dispatched in the Northern Caucasus; the Russian intelligence, counter-intelligence and the Air-Force intensified their activity in countering the Chechen terrorist campaign.

The chain of events that either preceded or developed in parallel with the Russian military preparation included terrorist bombings organised by the Chechen field commander, the Jordanian Khattab in Vladikavkaz, Northern Ossetia. This republic is included in the plans of creating a big Islamic state from the Caspian to the Black Sea with the Chechen war-lords and Wahhabites at the head. Exploiting internal ethnic (between Ossetians and Ingushetians), social and economic tensions, the complicated relationship with the brethren in Southern Ossetia (an autonomous part of sovereign Georgia) the ambitious geopolitical designers Basaev, Khattab and their mentor – Osama bin Laden, polarise the internal situation to the point when Islamic fundamentalist amalgamation would remain the only option for the republic which is part of the sovereign Russian Federation.

Tensions evolved throughout August and September 1999 in the neighbouring Karachaevo-Cherkessia autonomous area. The causes were the traditional ethnic tensions between Karachaevs (33% of the population) and the Cherkes (10%); an undemocratic election campaign for the Head of the area, protests after the elections and poorly managed politically Russian involvement for regulating the situation. One may easily predict good opportunities for bringing in this territory in the larger conflict of the Northern Caucasus.

However, the most dramatic developments that led to the encirclement of Chechnya and reaching the edge of a more intensive local war with broader consequences were in Dagestan. The escalation of the internal situation started one year ago after the killing of the Muslim religious leader of Dagestan and the shift in the relations among the Moslem population of the autonomous Russian republic. Wahhabism and its Chechen separatist followers began their fight for enlarging the territory of their future "Great Ichkeria" by taking in Dagestan and gaining an outlet to the Caspian Sea shore. But Dagestan is both a part of Russia and one of the Russian springboards in the South, to the Caucasus. It is also a territory through which passes the route of Caspian oil to Novorossiysk – the largest oil exporting terminal in the Black Sea region. This terminal serves the transportation also of Kazakh and Azeri oil to the world markets. On 7 August 1999 a Wahhabite group from Chechnya under command of Shamil Basaev and Jordanian-born (married to a Dagestani woman) ‘commander Khattab’ occupied/liberated four mountain villages in Dagestan, the Botlikh region. The Russian counter-operation restored the sovereignty of the territory and brought to an end the existence of "independent Muslim state of Dagestan", its Islamic judicial organisation and the jihad that was declared to non-Moslems. The Chechen aggression did not meet the popular support it has expected. After re-organising their forces the Wahhabites of Chechnya and throughout the Moslem world started on 5 September 1999 the next phase of their campaign for pushing the Russians out of the Northern Caucasus. 2,000 mujaheddins attacked Dagestan from Chechnya. This act was accompanied by the launch of bomb-terror operation in Buinaksk, Moscow, Volgodonsk killing more than 300 innocent civilians in their apartments while sleeping in the night. Several other targets in different Russian cities have been saved after planned acts of the counter-terrorist services of the Federal Government or just accidentally by vigilant and traumatised psychologically civilians.

The Russian Government succeeded to gain the international support in fighting "international terrorism". The US President, Secretary of State, Secretary of Defence and the Director of FBI have already extended their support and readiness to work together with Russia for protecting democracy and human rights against terrorists (including Osama bin Laden, chased for $5 mil. reward world-wide by the US law enforcement authorities). Russia has keenly avoided accusations of waging ‘ethnic war’ in the North Caucasus by carrying an information campaign inside Russia and internationally. Russia is careful of the reactions of some 18% of its population which is of Moslem confession. China and Japan also extended some support in what Russia is doing in the Caucasus. The UK, French and Israel’s secrete services also are cooperating in blocking the acts of terror in Russia. Interpol is already tracing 18 leaders of the terrorist activities in the Northern Caucasus. The visit of the Russian Foreign Minister in Armenia, Azerbaijan and Georgia in the first days of September 1999 very probably will cause a change of policy in the region. The Russian call is for joining ranks in the fight against international terrorism. The missing stability is directly influencing in a most negative way the suffering economies of the three traditional Caucasian states.

Russian bombing of Chechen capital Grozni, the military blockade of the dissident republic, the thesis Chechnya and Chechen outlaws have concentrated financial and military power that serves already the most dangerous wings of Islamic fundamental terrorism, the new mood of solidarity in Russian society compared only to the Russian attitudes during World War II, the international support Russia acquired show that this conflict has entered a most decisive phase. It bears many similarities with the NATO campaign against FRY earlier this year. More than 1,700 sorties have been carried out by the Russian Air Force against targets in Chechnya and Dagestan. The Russian diplomacy was backed by the military. The challenges ahead are the effectiveness of the Russian military machine and the economic, political and the organisational potential of Moscow to bring back to social and economic vitality the region of the Northern Caucasus.

2. Armenia-Azerbaijan Conflict

In the third week of August 1999 the Presidents of Azerbaijan and Armenia, Geydar Aliev and Robert Kocharian held a meeting and agreed to strengthen their mutual security along their common borders. They also agreed their negotiations will continue. Finding a political solution to the bilateral issues, an up-coming meeting between the Defence Ministries of the two states to find solution to ending attacks on each other and the understanding of the need for compromise on both sides were the results of the negotiations.

The Nagorno-Karbakh region of Azerbaijan, populated mostly by ethnic Armenians separated from Azerbaijan in 1988. The military conflict that followed and which continued for 6 years led to 35,000 killed on both sides and 1 mil. Azeris were left homeless.

3. The Intensification of the Lezgin Separatist Movement in Azerbaijan

On 11 August 1999 the National Security Ministry announced unspecified additional security measures on the border with Dagestan. This comes after accusations that the Lezgin separatist movement Sadval is exploiting the destabilised situation in neighbouring Dagestan for intensifying its activity in Azerbaijan.

The movement is aiming at the creation of an independent Lezgin state that would unite Lezgins who live on both sides of the Dagestan-Azerbaijan border. The leader of the separatist movement, Nasyr Primov was arrested in Southern Dagestan in July 1999. The dramatic events in Dagestan endanger spreading to the south. This logically may lead to cutting the northern trans-Dagestan and the trans-Chechnya oil pipe-lines – a development that puts on ends the Western investors in Caspian oil processing and transportation. The political reaction of the governments of the countries from the Southern Caucasus is speedily evolving into a new policy of relations with Russia in an effort to prevent the creation of an Islamic terrorist state in the Northern Caucasus.

4. The Abkhazian Conflict

On 30 August 1999 the President of Georgia, Edward Shevardnadze urged Russian peacekeepers to expand a zone they supervise in the breakaway province of Abkhazia. Russian troops have been patrolling a narrow stretch between Georgia and Abkhazia since 1994, after Abkhazian separatists drove Georgian government forces out.

For years President Shevardnadze has been demanding the Russian forces go deeper in the region to facilitate the return of some 300,000 Georgian refugees. He even threatened, however with no effect to ban the Russian troops from the region if they refused. The Georgian leadership prefers to avoid the risks, says President Shevardnadze. "Georgia has no choice but to extend the peacekeepers’ mandate", added the President.

Both Abkhazians and Russians have previously hesitated to expand the buffer zone in the restive Ghali region, and Georgia has often accused Moscow of siding with the separatists. The situation may further worsen in light of the up-coming "presidential elections" in Abkhazia on 3 October 1999 – an act Georgia firmly opposes.

5. The Transdniestria Conflict

In the second week of July 1999 the President of Moldova Petru Luchinski met Igor Smirnov, the leader of the separatist Transdniestria (Pridniestrovskaya) republic. They reached no agreement on the status of the dissident territory. Moldova insists Transdniestria is part of the sovereign state though it may be granted some autonomy. Pridniestrovskaya republic claims to establish a federation of two independent states.

The conflict further escalated after it became clear that Ukraine is not ready to encourage the Russian policy pressure on Moldova and is even ready to form regional combined peacekeeping forces with Moldova and eventually with Romania to regulate the stability in Transdniestria. Ukraine will not allow the retreat of the Russian forces through its territory without the consent of Moldova. The counter-measure of the dissident republic was to cut the flow of electricity for Moldova with 40% leaving 70% of the capital in the dark. It would become too dangerous if the polarisation mounts to the formation of two opposing blocs: Transdniestria and Russia, on one side, and Moldova, Ukraine and Romania, on the other.

Meantime, in an effort to stimulate the peaceful regulation of the conflict, in the last week of 1999 the US Congress adopted a resolution for extending $ 30 mil. of aid for the withdrawal of the Russian troops from the Transdniestria region.

6. The Kurdish Issue in Turkey

The PKK Kurdish leader A. Ocalan called on his followers in the first days of August 1999 to stop the terrorist activities and leave Turkey starting from 1 September 1999. Obviously the unnamed country to which PKK could go is Northern Iraq. The two Kurdish parties in Northern Iraq – the KDP and PUK, have committed themselves to the territorial integrity of Iraq and to preventing the PKK from operating in northern Iraq.

The USA does not support the formation of a Kurdish state in Northern Iraq and continues to designate the PKK a foreign terrorist organisation under the 1996 Antiterrorism and Effective Death Penalty Act.

The new mood of historical and political reconciliation that the solidarity and mutual sympathy to the victims of the devastating earthquakes in Turkey and Greece unlocked and inspired lends an excellent opportunity of approaching in a new and fresh way the contentious Kurdish question. This holds true for Turkey and the Turkish policy-makers, for the neighbours and the allies of Turkey. It is crucial what attitude Russia, the EU and the USA will take in encouraging the Turkish Government find a satisfactory solution of this painful issue – a solution that may further change in a favourable way the tides concerning the application for EU membership.

IV The National Perspectives: Specific Developments

1. Bulgaria

On 15-16 September 1999 the President of Kazakhstan, Nursultan Nazarbaev, visited Bulgaria and declared the wish of his country to transport the Kazakh oil through the Bulgarian ports of Varna and Bourgas from the Russian Black Sea port of Novorossiysk. Kazakhstan is ready to cooperate in the construction of the TRACECA transport corridor from Asia to Europe.

2. Romania

On 20 September 1999 at an international conference in Bucharest – "The Caspian energy – for Europe", Romania declared its interest the route of the oil to Europe to pass through its territory and the Romanian port of Constanza turns into a key transit centre. Romania has suggested two projects of oil transportation between Constanza and Triest. An Italian and an American private companies have been involved in these projects.

3. Russia

(1) On 9 August 1999 the Russian President Yeltsin dismissed premier Sergei Stepashin and appointed in his place Vladimir Putin, head of the Federal Security Council. This was the fourth change of Russian prime ministers in less than 18 months . (2) Russia plunged into a huge scandal of money-laundering that involves the highest levels of power and has major internal and international repercussions on the eve of the parliamentary elections. According to GOP of the end of August 1999 47% of the Russians think the transition to market economy is positive and 39% consider it a blunder or even a crime. 65% of the people insist on re-distributing the national wealth of the country and on punishing those who committed crimes. Meantime the Paris Club of the creditors of the former USSR reached an agreement in the last days of July 1999 with Russia to re-schedule the country’s debt of $ 8,3 billion. Instead of paying back $ 8 bil. this and the next year, Russia was allowed to return only $ 600 million. By the end of 2000 Russia is expected to receive a credit from Japan worth of $ 1,1 billion. For the same period Russia will get $ 1,2 billion from the World Bank. A credit of more than $ 0,5 billion by the end of 1999 was agreed with the IMF. (3) Russia activated its foreign policy: the French Prime-Minister was the first high-level statesman to visit Moscow after the Kosovo conflict in the beginning of July 1999. Russia participated in the meeting of the five Asian neighbours in the last week of August 1999 in Bishkek, Kirgistan – Russia, China, Kazakhstan, Tadjikistan and Kirgistan. The perspective aims of this group of countries is to evolve into a broader Asian system of security – if it can do it. Russia also realised two important meetings with the new leadership of Israel and with the leaders of Syria, reminding of its continuing role in the Middle East. Most importantly, Russia renewed its active relationship with the United States, shaping its position of a major and respected country by the dominant USA. Despite the new, post-Cold War level of relationship of the two countries it has a crucial impact on the preservation of the Russian stability during the country’s transition to democracy and market economy. The new cooperation in fighting international terrorism will improve the climate of solving the nuclear reduction and the new missile defence issues in the bilateral relations. The US support of Russian institutions during the money-laundering scandal in Russia is serving the preservation of Russia’s stability and indirectly – American interests by keeping the global nuclear stability. (4) Russia is facing a most difficult period since the beginning of the 90s with a major issue: will its weakness prove to be dangerously provocative for its rivals. For example, it became obvious Russia has not developed yet sophisticated means of responding to terrorist campaigns. It also became clear that Russia’s defence lacks timely and reliable intelligence and security services – after several rounds of reforms, cuts, rotations and political appointments. The problem is that Russia’s weakness is dangerous for many smaller countries in the neighbourhood as well as for Europe. The military campaign in the Northern Caucasus will be a test-case with long-term consequences for the future of Russia, the security in the area and for the international relations in the beginning of the 21st century.

4. Turkey

The devastating earthquake of 17 August 1999 had a major humanitarian and political impact in the internal Turkish developments and significant shifts in the country’s foreign policy. The challenge to overcome the dramatic losses and to keep the programme for developing the Turkish economy, society and state in the next century may be solved with major external support and a creative approach inside this key strategic country.

V The Bilateral and the Multilateral Relations in the Black Sea Region

1. Bilateral Contacts

a) Russia-Ukraine

In the third week of July 1999 the visit of the then Russian Prime-Minister Sergei Stepashin to Kiev confirmed the economic need of Ukraine to preserve its "strategic partnership" with Russia while insisting on the country’s independence (from Moscow) and neutral status.

b) Ukraine-Turkey

In the beginning of July 1999 the Ukrainian Parliament adopted a resolution calling on the UN and the CE to prevent the execution of the death penalty in Turkey of the Kurdish PKK leader A. Ocalan.

c) Bulgaria- Georgia

On 24 September 1999 the Chief of the General Staff of the Georgian armed forces, Johnny Pirzhaliashvili made an official visit to Bulgaria and met with his Bulgarian counterpart and the Minister of Defence of Bulgaria.

d) Turkey-Romania

The President of Romania, E. Konstantinescu compared the importance of the geostrategic situation of Turkey to that of Romania relative to Central Europe and the Black Sea area during an official visit to Ankara.

e) Russia-Bulgaria

On 3 September 1999 the General Prosecutors of the two countries discussed in Moscow the ways of joint fighting organised criminality.

f) Ukraine-Moldova

In the third week of August 1999 the Presidents of Ukraine and Moldova, Kuchma and Luchinski signed a treaty that clears a long border issue: 7 km stretch of land with a significant road for Ukraine becomes a sovereign Ukrainian territory. The two Presidents discussed also the Transdniestria conflict.

g) Russia-Romania

The 80-years long conflict about the Romanian national treasure is presently tackled by CE authorities with no clear prospects of finalising. This treasure is in Russia since 1917 and has not been returned because of the Russia’s claims to be compensated for the unpaid Russian arms given to Romania and later – for the damages inflicted by the German Nazi ally – the Romanian army, during World War II on Russian territory.

h) Russia-Georgia

A 443 km long optic cable line under the surface of the sea worth of $ 26 mil. became operational in the last week of July 1999 between the Russian port Novorossiysk and the Georgian Black Sea ferry-boat and oil pipe-line terminal port of Poti.

i) Ukraine-Greece

On 29 August 1999 in Kiev was signed a Ukrainian-Greek weapons trade accord. Greece will buy two Zurb-class ships worth of about $ 100 million, T-84 tanks and transport planes from Ukraine. The Greek Defence Minister Akis Tsohadzopoulos, who struck the deal said that relations with Ukraine might become "strategic points" for Europe and NATO.

2. Multilateral Relations

a) Turkey-Russia-Bulgaria

On 24 September 1999 in Sofia the three countries agreed to increase from 22 to 34 million cubic metres the transit of natural gas from Russia to Turkey via Bulgaria.

b) Armenia-Greece-Iran

On 12 July 1999 in Athens the Deputy Foreign Ministers of the three countries met within the framework of the second session of the trilateral cooperation executive committee. They discussed issues of tourism; communications, telecommunications and transport; energy, industry and technology; disaster prevention; environment and health.

c) Russia-Azerbaijan-Turkmenistan

Russia’s Foreign Ministry announced on 20 September 1999 that Moscow will not recognise Turkmenistan’s effort to extend its sovereignty over part of the inland sea.

The legal status of the Caspian Sea and claims by Azerbaijan and Turkmenistan have stalled the Trans-Caspian pipeline project. This dispute has worked to Russia’s advantage as Gasprom, Russia’s gas monopoly is trying to outpace the US project and supply gas to Turkey’s growing market. The international status of the Caspian Sea is expected to be finally settled in early October 1999 when the five Caspian states hold a meeting in Iran. Soon after that the Governments of Azerbaijan and Turkmenistan will reach a territorial agreement and there will be no legal obstacles for blocking this US backed project.

d) The Conference for Interaction and Confidence-Building Measures in Asia

The Conference (CICA) was convened in Almaty, Kazakhstan in the second week of September 1999. Russia, Tajikistan, Uzbekistan, Kyrgystan, Azerbaijan, China, India, Mongolia, Afghanistan, Pakistan, Iran, Israel, Egypt, Turkey and Palestine agreed to raise their cooperation in fighting cross-border terrorism.

Over a year ago Uzbekistan, Russia and Tajikistan formed a "troika" alliance to fight Islamic extremism. Kazakhstan’s President is urging the establishment of a wider collective security set-up in Asia since 1992.

e) BSEC-Baltic Cooperation Countries

An unprecedented meeting of the leaders of the BSEC and the Baltic Cooperation States took place on 11-12 September 1999 in Yalta, Ukraine. The participants agreed that European integration without discrimination of the individual states was the chance for the continent’s future. The Russian Deputy Foreign Minister Khristenco said that a further expansion of NATO to Southeastern Europe and the Baltic would lead to the creation of dividing lines and diminish Europe’s security.

f) Russia-Armenia-Belarus-Kazakhstan-Kirgistan

From 23 till 27 August 1999 at the exercise ground Ashluk, Astrahan district, Russia was carried out a military exercise "Fighting Community-99" with the participation of ground and air forces of the five CIS states.

VI State of the Regional Initiatives

1. The Economic Situation in the Countries of the Black Sea Region and Its Consequences on the Black Sea Cooperation

After the general drop of economic growth in Russia in 1998 by 4,5% the economic situation continued to be unstable and inflationary pressures have brought to contracted domestic demand and further economic difficulties. A further economic decline is observed in Russia and the forecasts of negative economic growth of minus 5% for 1999 seem already by the end of the third quarter of this year yet quite probable. The new round of hostilities and war in the Northern Caucasus, the difficulties in transporting oil from and through this region may make the figures even worse.

Ukraine was most severely hit by the Russian crisis and will continue to experience a further worsening of economic growth. The latter is expected to be negative by the magnitude of minus 5% for 1999.

The economic decline of Moldova of 8,6% in 1998 continued this year and further worsened the problem of economic depression and social distress.

The post-conflict economies of Armenia, Azerbaijan and Georgia have experienced an economic rebound in 1998, but for the present year seem to have slowed down considerably the rate of economic growth. After achieving respectively 7,2%, 10,1% and 2,9% of economic growth in 1998 the three countries are expected to achieve in 1999 a lower rate of growth and contraction of domestic demand and exports volumes. Armenia’s growth of GDP is expected to fall to 4%, Azerbaijan’s – to 5% and Georgia’s – to 1,2%.

The worsening of the economic performance in the CIS countries and the similarity of their economic difficulties threatens to make the prospects of their mutual relations rather dependent on the political factor. Thus the economic crisis becomes a bottleneck to the efforts of enlarging the economic cooperation in the CIS and in the OBSEC.

As a consequence of the worsening of the economic situation in both groups of countries that participate in the Black Sea cooperation (the CIS and the Balkan countries – see more about the Balkan economic situation in the September issue of the "Balkan Regional Profile") the prospects of widening this cooperation become even more dependent on the political cooperation and on the security factor.

2. Political and Security Aspects of the Cooperation

(1) From 1 to 14 August 1999 in the NATO designated PfP Training Centre at Yavoriv, Ukraine was run a PfP exercise – "Peace Shield ‘99". It focused on the combined command and control and staff procedures at the brigade level. Participants of 17 nations joined the exercise, among them from Greece, Turkey, Ukraine, Romania, Bulgaria, Moldova, Azerbaijan, Georgia, the USA, Belgium, Italy, Norway, the UK, Poland and others. (2) A PfP disaster planning exercise was carried out in Neptun, Romania on 10-19 September 1999. It simulated command post activities during a disaster. Participants from Romania, the USA, Bulgaria, the Czech Republic, Hungary, FYROMacedonia, Moldova and Ukraine joined the exercise. Albania, Portugal and Slovenia attended as observers.

VII External Factors (States and Institutions) Influencing the Black Sea Region

1. USA

(1) USA-Georgia. On 10 July 1999 in Poti President Shevardnadze hosted a ceremony at which he showcased new equipment worth $ 34 million from the US Government for enhancing the country’s ability to control its borders and enforce export controls. The equipment included uniforms, boats, helicopters, vehicles, an airplane, radiation pagers, bulletproof vests and other basic law enforcement tools. On 1 August the US Secretary of Defence, William Cohen visited Georgia and met with the Georgian President. Since 1995 the military cooperation between the two countries has tripled and only in 1999 they had 30 joint exercises. Georgia supported NATO’s action in Kosovo and plans to send a platoon to serve with Turkish troops in the American sector. The Defence Secretary made it clear that the Abkhazian issue must be resolved by Georgia. The US Department of Agriculture signed on 2 August 1999 an agreement to donate $ 5 million of wheat – 35,000 metric tons and an agreement to sell the same quantity to Georgia. On 23 September 1999 President Clinton met in the White House Georgian President Shevardnadze. They reviewed the full range of bilateral cooperation and discussed opportunities to enhance relationship in the period ahead.

(2) USA-Turkey. On 16-17 August 1999 Gen. Henry Shelton, chairman of the Joint Chiefs of Staff, made a visit to Turkey. At the same time US Energy Secretary Bill Richardson visited Turkey (and Azerbaijan and Turkmenistan) to discuss developments on the Baku-Ceyhan oil pipeline and the Trans-Caspian gas pipeline. The US policy in this region seeks to strengthen economic ties to help ensure the diversity of world energy supplies. On 28 September 1999 Turkish Prime Minister Bulent Ecevit met in the White House with President Bill Clinton and reviewed regional issues, reaffirming the close bilateral ties between Turkey and the USA.

(3) USA- Ukraine. In the last week of July 1999 Defence Secretary W. Cohen met in Kiev and on 31 July-1 August 1999 in Washington, D. C. with President Kuchma and his Ukrainian counterpart Oleksandr Kuzmuk. The USA will contribute to Ukraine’s participation in the KFOR in Kosovo. The two countries agreed to extend the $ 569 million Cooperation Threat Reduction program by an additional six years – till 2006. The aim of the agreement is to control the spread of WMD. The sum is provided by the US budget.

(4) USA-Azerbaijan. The US Department of Agriculture announced on 10 August 1999 that it will donate approximately 10,500 metric tons of wheat to the Adventist Development and Relief Agency for milling and sale in Azerbaijan.

(5) USA-Bulgaria. On 25 September 1999 the Prime-Minister of Bulgaria, I. Kostov told the BBC the Bulgarian Government is formulating its position on the issue of providing bases to NATO and the US Navy. This position is expected to be finalised before the visit of President Clinton to Bulgaria in November 1999.

2. EU

(1) On 1 July 1999 took effect the Partnership and Cooperation Agreements between the EU and the Governments of Armenia, Azerbaijan and Georgia. A few days earlier the German Foreign Minister, presiding the Union and the President of the EC met in Luxembourg with the Presidents of Armenia and Georgia and with the Prime-Minister of Azerbaijan. They agreed to work together for the strengthening of the democratic institutions of the three Transcaucasian countries; to narrow the gap between their legislation and that of the EU; to improve the investment activity and the infrastructure of the three countries. Closer involvement of the UN and the OSCE in regulating the various conflicts of the area was underlined by the participants of the meeting in Luxembourg.

(2) Representatives of more than 40 countries from Europe and Asia met on 21-23 July 1999 in the Ukrainian capital Kiev which hosted the secretariat of the INNOGATE Programme. It aims at achieving independence from the supply of energy and other sources from Russia by channelling the flow of oil and natural gas from the Central Asian and especially the Caspian reservoirs. The reparation and reconstruction of the pipe-line system of Georgia and Azerbaijan are significant elements of this encompassing programme. Another element is the "Framework Agreement on the Institutional Format for Developing Inter-State Systems for Oil and Gas" among 10 countries of the former Soviet Union, Mongolia, Romania and Bulgaria. Another element of the Innogate agreement was the signatories to accelerate market reforms in the energy-generating industry. Russia is presently an observer in the Innogate Programme.

VIII The Security Situation and the Region-Building Opportunities: Conclusions

1. The conflicts in the Northern Caucasus marked a tendency of polarising around the Russian-Chechnya confrontation. The competing concepts of integration of the region reached a level of direct and massive military clash. Countering international terrorism and bringing the Northern Caucasus back in the Russian political and economic system are the challenges Moscow faces during its second war against Chechnya after 1994-96. In meeting the first challenge Russia will definitely need the support of the international community. For countering the second one will be needed a comprehensive political, economic and cultural plan that will be attractive enough for the diverse in ethnic, religious and language terms population of this area.

2. The improvement of the region-building opportunities in the basin of the Black Sea is becoming more dependent on the ability of the influential internal factors (Russia, Turkey and Iran) and the external providers of capital and stability (USA, EU, NATO, the oil and gas companies) to strike a deal through compromise and complete two key tasks: first, regulate in a stable way the conflicts in the Northern Caucasus and in the Kurdish part of the Turkish territory; cooperation in crushing international terrorism that has chosen to erect its state and economic infrastructure in the volatile Russia’s Northern Caucasus is an obligatory component of this major task. Second, reach a compromise on the oil and gas issues before they have started instigating more antagonistic behaviours in the region, thus closing for an indefinite period world-big US and EU economic projects.



Dr. Plamen Pantev, Editor–in–Chief

ISSN 1311 – 3240

Dr. Tatiana Houbenova-Delissivkova

Address: ISIS, 1618 Sofia,

Mr. Valeri Rachev, M. A.

P. O. Box 231, Bulgaria

Dr. Sc. Venelin Tsachevsky

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Mr. Ivan Tsvetkov, M. A.

E-Mail Address:

Dr. Dinko Dinkov


Dr. Todor Tagarev




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