BLACK SEA BASIN REGIONAL PROFILE:

I. INTRODUCTION

ISIS believes that the developments in the Black Sea-Caspian Sea area after 11 September 2001 deserve to be discussed in terms of how international relations and cooperation are matching up to, and effectively responding to, the new existential threat of terrorism, especially in a worst case scenario involving weapons of mass destruction.

This question is no less appropriate as a measure of the US-Russian relations in the broader region stretching from the Black Sea to Central Asia. A sense of concern arises when pondering the following questions: 1) Are the traditional geopolitical calculations still valid in the light of the existential threat? ISIS believes this is no longer the case since 11 September. 2) Should geoeconomic calculations be re-considered and the hydrocarbon energy resources be more fairly divided among the various interested parties in the light of an existential threat? In our judgment, the answer is definitely "yes".

How did the developments in the period January-March reflect these tendencies and security concerns?

Joining forces against terrorism and the creation of a new strategic cooperation are the main trends emerging in US-Russian relations, whose impact on the Black Sea-Caspian Sea regional security and region-building efforts is hardly to be doubted. US President George Bush's upcoming visit to Russia (in May this year) has given rise to several joint working groups, including on military issues. Their objective is to prepare for this significant visit in a way that will generate effective results. One remaining bone of contention in the bilateral relations is the question of whether the dismantled nuclear warheads of the two sides will be destroyed or kept in storage. Another is the US pressure to line up more countries in a joint front against the countries named as part of the supposed ‘axis of evil’ - Libya, Iran, Iraq and North Korea. Russia is not only unwilling to join this front, but maintains positive and active relations with all ‘targeted’ countries of this axis, especially Iran. Russian-Armenian and Iranian-Armenian military ties add to the military reasons for Moscow’s unwillingness to join the US in such a front. Though Russia legitimately claims the right to develop good-neighborly relations with Iran, a lack of transparency in Teheran's nuclear plans and its relations with organizations that Bush has dubbed "terrorist" shed real doubts on the final outcome of the Russian-Iranian nuclear and military cooperation. If fighting terrorism has priority on the security agenda, no country should be allowed to reap economic or financial benefits by compromising on this issue, especially the big and leading powers of the world. Russian-American cooperation in the Working Group on Afghanistan shows the capability of the two sides to preserve the priority of the counter-terrorist perspective.

During the last three months, the fight against terrorism was focused on Afghanistan, and to a lesser extent, on Georgia. Russia, in turn, continues to counter Chechen terrorists, while the West maintains its pressure on Moscow to employ restraint in its use of violence in the rebel republic. In the last few weeks, Turkey made a very significant shift in its treatment of the Chechen issue by indicating it will cooperate with Russia in suppressing terrorism in the Northern Caucasus. Turkey is also very active in supporting Central Asian states in countering the terrorist threat. NATO and Russia continued to strengthen their cooperation to combat terrorism. Though the Pankisi Gorge issue gave rise to international concern over open opposition between the US and Russia during an anti-terrorist operation, the view that the US military presence is only designed to train and equip Georgian counter-terrorist forces gradually prevailed. The declaration of Russian President Vladimir Putin that US involvement there followed logically from its operations in Central Asia, and that there is no room for speculation, substantially decreased the emotional reactions in Russia to this problem. US anti-terrorist assistance to Georgia reinforces the evolving US-Georgian and NATO-Georgian military relationship and may prove to be a major stability factor in the Southern Caucasus. A likely important side effect of this cooperation will be higher security for the Baku-Tbilisi-Ceyhan oil pipeline.

The urgency of finding a lasting solution to the Caspian Sea delimitation issue was reinforced in the last months due to the parties' increasing eagerness to utilize the energy and other maritime resources. The oil and gas resources of the Caspian Sea region are what make it so attractive. The region-building opportunities in the Black Sea-Caspian Sea area are very much linked to a realistic perception on the side of the local states and governments of the potential of the region and the ways it can be utilized. It still remains to be realized how important cooperation in the Black Sea-Caspian Sea region is for the stability and prosperity of the people who inhabit this area. First of all, it is necessary to remind all players from time to time that the Caspian Sea's energy resources are far from those in the Persian Gulf. Second, however, it should also be underlined that within the limits of the Caspian resources, there is a chance for all interested actors to profit from peaceful economic cooperation and for the people of the states in the broader Black Sea-Caspian Sea region to prosper. The only additional condition, however, would be that the system of government should involve more efficient power sharing and that the reformers persist in democratizing their traditional societies.

The conflicts and post-conflict issues were marked by the tensions in Chechnya and the moves by the OSCE to re-vitalize the solution of the Nagorno-Karabakh conflict. There were efforts to link the disputed Pankisi Gorge question with the Abkhaz conflict in Georgia, however with no effect. Among the individual national developments, the most significant during the past months were the domestic political disturbances in Moldova and the internal security problems of Georgia. The bilateral relations in the area were marked by intensive foreign-policy moves on the part of Russia, trying to re-establish its influence, and by an active regional policy on the part of Turkey. The multilateral relations were mostly aimed at re-shaping the economic space stretching from Central Asia to the eastern shores of the Black Sea in preparation for an eventual more ambitious effort of integrating the states in the CIS context. At a Commonwealth summit, it became clear that trade-offs are replacing the usually hollow political declarations. Russia stepped up efforts to strengthen the Collective Security Treaty. The last months saw a continuing enlargement of the EU's influence parallel to NATO activity in the area. NATO's influence in Georgia and, to a lesser extent, in Azerbaijan is increasing. Armenia also made certain steps to consolidate its relations with NATO. The US continued to be a highly active partner of the countries in this region in the political, economic, and defense areas. The US is perceived more and more as a stability factor in the region.

II. PROFILE OF THE BLACK SEA-CASPIAN SEA AREA

1. Geopolitical, Geostrategic, and Geoeconomic Tendencies

The countering of the major security threat of terrorism, the development of the conflict and post-conflict issues in the Black Sea-Caspian Sea-Central Asian region as well as the realization of the economic opportunities in the energy sector will hardly be implemented without a clearer structure and better prospects in the US-Russian relations. Preparations were made for the US president’s visit to Moscow in the period January-March. Russian and US military experts held two days of talks at the Pentagon in Washington, DC, in mid-January on cooperation against new terrorist threats and creating a new overall military relationship. At the top of the agenda was the question of how states can be shielded from terrorist attacks. Upcoming joint military exercises will be based on the understanding that the two countries are no longer adversaries. A technology exchange on ballistic missile defense is also considered in this new strategic relationship. The bilateral strategic agenda is topped by issues like counter-proliferation, offensive nuclear force reduction, transparency and predictability measures, military technical cooperation in the field of missile defense, and counter-terrorism. Under Secretary of Defense for Policy Douglas Feith and General Yuri Baluyevskiy agreed on 16 January to set up working groups to discuss defense-related issues in preparation for President Bush’s visit to Moscow in May.

The new aspect in the bilateral relations – that Russia and the US are no longer a threat to each other – was confirmed by the Russian foreign minister and by the US secretary of state.  Russian Foreign Minister Igor Ivanov said during an interview in Russian television in early February that Russia's enemies included terrorism, fundamentalism, drugs and smuggling and that Russia was allied with the US in meeting this common threat. US Secretary of State Colin Powell quoted this statement during his testimony at a budget hearing before the House Appropriations Subcommittee on Foreign Operations, Export Financing and Related Programs on 13 February.

Still, there are areas of difference, including Russian technology sales to Iran. Teheran is believed to be engaged in a program to develop nuclear weapons and the US is afraid Russian technology could give the program a boost. The Bushehr nuclear plant in Iran is being constructed with Russian technical support, and Russian Atomic Energy Minister Alexander Rumyantsev said on 14 March that Russia would meet its commitments in the construction. Analysts do not doubt the issue of Iran is a difficult one in the bilateral relations of Russia and the US and will hardly be settled in the short-term. Moscow understands that Iran is of utmost strategic and economic importance for Russia as a neighboring Caspian Sea country. However, real guarantees would be needed to prove Iran would not re-direct its peaceful nuclear program to military purposes or in support of Islamic terrorist activists. Both Russia and the US have to be reassured these concerns will never come true.

2. Sources of Conflict in the Black Sea-Caspian Sea Region

a) Terrorism

At a speech on the six-month anniversary of the terrorist attacks on the US, President George Bush said a second stage of the war on terror had begun – a sustained campaign to deny sanctuary to terrorists. He named Georgia as one of the countries with whose government the US is working to counter terrorism in the area. Bush said the elimination of the terrorist threat should be a matter of priority, as some states that sponsor terror are seeking or already possess weapons of mass destruction. Terrorist groups, the president said, are eager to acquire such weapons, and would use them without hesitation. Bush believes that letting these weapons fall into the hands of terrorists would unleash blackmail, genocide, and chaos.

A number of other activities were carried out in the last three months in an effort to counter terrorism:

1) Turkey has asked Russia to provide it with an extradition dossier on Chechen separatist spokesman Movladi Udugov – more than one year after Moscow asked Ankara to hand him over. Russian officials commented on 9 January that this decision showed Ankara’s readiness to cooperate in the fight against terrorism – a welcome comment for two important neighboring countries with a crucial role in the joint fight against terrorists.

2) In the beginning of January, it was agreed during an extraordinary meeting of the foreign ministers of the “Shanghai Six” cooperation group (including Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan) to establish a common counter-terrorist agency and a mechanism of rapid reaction. The related treaty will be signed at the June 2002 summit of the “Shanghai Six”.

3) Delegations from Azerbaijan, Georgia, and Turkey met in Ankara on 14 January and drafted a trilateral agreement on combating terrorism, organized crime, drug and arms trafficking, money laundering, and other crimes. The law-enforcement bodies of the three countries are expected to intensify their cooperation, including regular data exchange.

4) On 21 January, Chinese security officials called for stepped-up efforts against terrorism and separatism in the mostly Muslim region of Xinjiang following the downfall of the Taliban in Afghanistan. China claims to have established a direct link between a series of attacks by Muslim separatists in its northwestern region and Osama bin Laden. In December, top US counter-terrorism envoy General Francis Taylor said in Beijing that Uighurs had been captured in Afghanistan fighting with the Taliban. He also said Washington had no plans to hand them over to Beijing and declined to call them terrorists. According to human rights organizations, the campaign against terrorism has inspired countries like China to revoke civil liberties for political ends. China has stepped up repression in Xinjiang since 11 September attacks. Careful assessment is needed to differentiate between separatist terrorism and the struggle for human rights in this province.

5) On 28 January, senior-level representatives of NATO and Russia met in Brussels to take stock of their cooperative efforts since October 2001 and to reiterate their determination to further intensify their struggle against the terrorist threat. The cooperation includes regular exchange of information and in-depth consultation on issues relating to terrorist threats, the prevention of the use by terrorists of ballistic missile technology and nuclear, biological, and chemical agents, civil emergency planning, and the exploration of the role of the military in combating terrorism. NATO and Russia are determined to further develop these and other measures aimed at defeating terrorism through appropriate NATO-Russia channels on a regular and comprehensive basis. In Rome attending a conference on counterterrorism in the beginning of February, NATO Secretary-General Lord George Robertson said that cooperation with Russia is a fundamental condition for the successful fight against terrorism. Intelligence exchange and technological cooperation are key areas of the joint work with Russia, Lord Robertson said.

6) High-level Russian foreign-political and US defense delegations visited India in the first days of February. Russian Foreign Minister Igor Ivanov and Major-General James Campbell underlined the significant role that India plays in fighting terrorism and discussed ways to combat terrorism and cooperate in special operations training. The simultaneous visit of high-level Russian and US officials in India may offer a better chance to include a big power like India in the joint fight that the US and Russia are already waging against the global danger.

7) The sixth meeting of the US-Russia Afghanistan Working Group was held on 8 February in Washington, DC. The main topic was cooperation in implementing the Bonn agreement for the reconstruction of Afghanistan and fighting terrorism worldwide. The US was represented by Deputy Secretary of Defense Richard Armitage and Russia was represented by First Deputy Foreign Minister Viacheslav Trubnikov. The Joint Working Group also discussed US-Russian military cooperation, the humanitarian needs of Afghanistan, counter-narcotics efforts, and multilateral sanctions against perpetrators and supporters of terrorist acts.

8) At the end of February, Washington began providing combat helicopters to Georgia and by the end of March started training several Georgian battalions to counter the terrorist threat in the Pankisi Gorge. US military personnel, including Special Forces troops, visited Georgia to assess Georgia’s security needs. Georgian officials said they were relying highly on American support and excluded any involvement of Russia in the Pankisi operation. Turkey and later NATO backed the anti-terrorist operation in the Pankisi Gorge. US military sources stated they intended to keep Russia informed about events in the Pankisi Gorge and declared they had no intentions of sending troops for the operation. President Putin of Russia did not make an issue of US-Georgian cooperation – unlike some representatives of the Russian media, the Russian Duma and the military.

9) The members of the Collective Security Treaty, Armenia, Belarus, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan, will hold joint military exercises in April. They will practice counterterrorist operations by Central Asian rapid-reaction forces. The CIS Counter-terrorist Center will also be involved in the exercises.

b) The Military Balance

1) Armenia-Iran. On 2 February, Armenian Defense Minister Serge Sarkissian, and the Iranian ambassador to Armenia, Farakh Coleyni, discussed the perspectives for the bilateral relations, the implementation of joint regional programs, and possibilities for military cooperation. Iranian Defense Minister Rear Admiral Shamkhani started a visit to Armenia on 4 March and met with Armenian Prime Minister Andranik Markarian and with President Robert Kocharian in Yerevan the next day. The Iranian minister said that the increased presence of foreign forces in the region could only be balanced by developing common geostrategic objectives. He also met with his counterpart and with Armenian Foreign Minister Vartan Oskanian. Joint consultations on regional security issues and a letter of understanding on bilateral military cooperation were agreed during the visit.

2) Turkey-Uzbekistan. Turkey has provided US$1.5 million of aid to Uzbekistan in the fight against terrorism and Uzbek soldiers are being trained in Turkey. The chief of the Turkish General Staff, General Huseyin Kivrikoglu, made a visit to Uzbekistan in mid-March. The Uzbek president, the foreign minister, and the speaker of the parliament will visit Turkey later this year.

3) Russia-Armenia. Russian forces relocated a consignment of ammunition from the largest warehouse in the Caucasus in Sagarejo, Georgia, to Gyumri base in Armenia.

c) The Delimitation of the Caspian Sea and of the Black Sea

The representatives of the foreign ministers of the five littoral states of the Caspian Sea met in Moscow on 24 January and discussed the delimitation issue. The eventual finalization of an agreement may take place at a summit on 23-24 April in Turkmenistan. Russia, Kazakhstan, and Azerbaijan have come to an agreement on the method of dividing the sea, while Turkmenistan is holding back from an agreement and Iran prefers the option of giving 20 per cent to each country. The unsolved issue of sea borders has led to incidents between Iran and Azerbaijan and, to a lesser extent, between Turkmenistan and Azerbaijan. Iranian Oil Minister Bijan Namdar Zanganeh declared on 21 February that his country would participate in Caspian oil and gas projects before any demarcation agreement and hoped to prevent others from exploiting what it considers the Iranian share of the sea. De facto arrangements are already in place ahead of an agreement on the legal status of the Caspian Sea, but the unsolved legal problems still constitute a huge destabilizing potential for the region. The April summit of the five littoral states is expected to conclude the pending legal questions.

d) Oil and Gas Issues

The January-March period of this year offered further examples of how the issues of oil and gas resources have the capacity to turn from sources of conflict into a catalyst for converging economic interests. The opportunity to profit from cooperation in the exploitation of oil and gas reserves in the region a much stronger motivation for the local state actors as well as for the external interested parties. Russia proposed in late January the creation of a natural gas cartel between Turkmenistan, Uzbekistan, Kazakhstan, and Russia. Russia intends to channel the flow of natural gas to Western Europe through Russian territory and prevent a southbound flow to the world markets. Kazakhstan and Uzbekistan have negotiated a gas contract for 2002-2003. The Russian oil giant Lukoil and the Azeri State Oil Company SOCAR prepared an agreement on the construction of the Baku-Tbilisi-Ceyhan oil pipeline in late February. According to a Caspian News Agency report of 20 March, the Azerbaijan International Operating Company’s President David Woodward thinks the outlook for the BTC project is very good and the profits are satisfactory, even if the oil prices have gone down to less than US$20 per barrel. Kazakhstan authorities are also considering state participation in the Baku-Tbilisi-Ceyhan project. Kazakh President Nursultan Nazarbaev communicated his interest in this undertaking to the US assistant secretary of state for Caspian basin energy diplomacy, Steven Mann, on 13 March in Astana, the capital of Kazakhstan. A CIS Oil and Gas Summit is in preparation and will be convened from 15-17 April in London. But contentious issues still persist: the Russian energy company ITERA has stopped supplying gas to Georgia, which failed to pay its debts; the US – a main player in the region – displayed a clear concern on 13 March over the possibility that an Iran-Armenian gas pipeline may be constructed. Washington is concerned that Teheran supports terrorism.

The tendency towards normalization of the geopolitical situation in the Caspian Sea-Black Sea region will have an extremely positive on economic conditions in the countries of the region. The process of democratizing the societies of the region is still far behind by comparison, and observers are not optimistic that this will change in the short-term or even in the mid-term.

III. CONFLICT AND POST-CONFLICT DEVELOPMENTS IN THE BLACK SEA AREA

1. Chechnya

In mid-January Viktor Kazantsev, the Russian president’s envoy for the Southern District, told government officials, members of the parliament, and businessmen in Vladikavkaz, Northern Ossetia, that the counter-terrorist operation in Chechnya would be concluded in 2002 and that southern Russia would be finally able to concentrate on the realization of its economic programs. The continuing killing of Russian troops, the continuing security operations, the suffering of peaceful Chechens, and the unsuccessful negotiations with former Chechen president Aslan Maskhadov made for a less than ideal start to this year.

2. Abkhazia

The security situation in Abkhazia was determined by several factors in the last three months: first, the expiration of the Russian peacekeeping forces' mandate on 31 December 2001. The absence of a UN Security Council resolution on an eventual new peacekeeping mandate, the tensions between the Russian peacekeepers, approved temporarily by the Georgian President, fearing from a security vacuum, on one side, and Georgian nationalists, on the other, was a logical follow-up in this situation. Second, the so called “parliamentary elections” in Abkhazia on 2 March that led to claiming “state sovereignty” of this region of Georgia brought the Abkhazian leaders to the understanding that they may decide to change the constitution and apply for joining the Russian federation, eventually as an associate member. The issue was further worsened by Russian Duma warnings Russia may recognize the independence of Abkhazia. Russian Foreign Minister said on 13 March to the Duma that the authorities of Abkhazia were concerned that Georgia may use the anti-terrorist forces in the Pankisi Gorge against Abkhazia. He added that it would be really dangerous to use military means for solving the Abkhazian problem. This, according to him, may destabilize Georgia itself.

3. Nagorno-Karabakh

Ten years after the establishment of the OSCE Minsk Group for Nagorno-Karabakh, there are no clear prospects yet of how the conflict can be solved on a permanent basis. On 11 March, the Minsk Group co-chairs for Nagorno-Karabakh visited Azerbaijan and Armenia and met with the presidents of the two countries, Heidar Aliev and Robert Kocharian. Regrettably, the two sides of the conflict are not yet prepared to develop cooperative bilateral relations in other areas as a contribution towards resolving the key conflict of the Southern Caucasus.

IV. THE NATIONAL PERSPECTIVES: SPECIFIC DEVELOPMENTS

1. Russia

A Russian ministry of defense official told Gazeta.ru on 8 January that Russia would reduce its armed forces to one million soldiers. Ground troops now make up 40 per cent of the Russian armed forces. The combat potential of the forces along the south-western and Central Asian borders has increased through the build-up of combat-ready elements, an army division in the Northern Caucasian Military District, and the deployment of general troops in the Volga-Urals Military District. According to Interfax of 8 January, Russia will spend much more this year on weapons and on research and development.

2. Moldova

The Ministry of Justice slapped a temporary ban on the main opposition party (the Popular Christian Democratic Party - PPCD) at the end of January over protests against Russian language education in schools. After pressure from the OSCE and the Council of Europe, as well as from the European People’s Party, the Moldavian government revoked the suspension of the PPCD. Interior Minister Vasile Draganel offered his resignation to Prime Minister Vasile Tarlev on 4 March. He was the fourth minister to resign since the beginning of the year, following the ministers of economy, of finance and of education. The government also faced problems with the Gagauz population (3.5 per cent of the total population of 4.5 million), claiming autonomy. The government announced legal measures against Gagauz leaders not because of their political claims, but because of their supposed links to organized crime. On 20 March, the Moldavian parliament requested the governments of Russia and Romania not to interfere in the delicate domestic political affairs of the country. Moldova requested the Romanian military attaché in Chisinau to leave the country within 10 days. Romania reciprocated immediately. 

V. THE BILATERAL AND MULTILATERAL RELATIONS IN THE BLACK SEA REGION AND THE STATE OF CIS AND GUUAM

1. Bilateral Relations

a) Russia-Azerbaijan. In mid-January, the prime ministers of the two countries, Mikhail Kassyanov and Artur Rasizade, signed an agreement in Moscow in which Russia acknowledges that the radar station in Gabala belongs to Azerbaijan, and Baku in exchange promises to rent it out for a period of ten years. The deal was confirmed at a visit by Azeri President Heydar Aliev to Moscow at the end of January. The two countries have found common ground in their approach to the Caspian Sea's legal division, as well as an interest in exploiting their own oil and gas resources. However, Ankara (a solid friend of Baku's) reacted negatively to the possibility of Russia acquiring a stronger strategic position in the region.

b) Azerbaijan-Iran. The president of Azerbaijan met with Iranian Minister of the Interior Abdulvakhid Musavi Lari on 24 January in Baku. A number of agreements are ready for signing in a high-level ceremony that will boost bilateral relations.

c) Georgia-Russia. Two visits by Russian officials to Tbilisi showed a growing Russian concern about the bilateral security relations. The Secretary of the Russian Security Council, Vladimir Rushailo, on 29 January began a three-day visit with the president of Georgia as well as with defense, security, and interior officials. The state of the Chechen refugees was one of the topics discussed. The head of the Russian Federal Security Service, Nikolay Patrushev, visited Georgia from 21-22 February and met with his counterpart Valeri Khaburdzania and with the Georgian president.

d) Russia-Turkmenistan. Turkmen President Saparmurat Niazov visited Moscow on 21 January and met with President Vladimir Putin. The two leaders pledged to step up efforts to resolve the legal status of the Caspian Sea and strengthen cooperation between the littoral states.

e) Armenia-Turkey. The foreign ministers of Armenia and Turkey met in New York in the first days of February and had “useful talks”, according to Armenian Foreign Minister Vardan Oskanian. He said there were a number of unsolved problems between the two countries.

f) Georgia-Armenia. The foreign ministers of the two countries met in Tbilisi from 11-12 February and signed two documents on legal information exchange and on re-structuring the Georgian debt of US$16 million. Stability and economic cooperation on regional issues were discussed at a meeting with the President of Georgia, Edward Shevardnadze.

g) Georgia-Turkey. (1) Defense officials of the two countries signed a plan for military cooperation in 2002 in Tbilisi on 20 February. (2) From 7-9 March, a delegation of the Turkish General Staff visited Georgia. Turkey has provided military and technical assistance worth US$3.5 million to Georgiaand has supported the US-Georgian counter-terrorist operation in the Pankisi Gorge. (3) The border guard services of the two countries carried out an exercise from 7-8 March in the Samtskhe-Javakheti region of Georgia bordering Turkey. The objectives of the exercise were training in countering illegal migration and smuggling.

h) Armenia-Russia. (1) During a visit to Yerevan on 19 February, the chairman of the Russian Accounting Chamber and former prime minister Sergey Stepashin said Armenia was the only strategic partner of Russia in the Southern Caucasus. (2) At a working meeting in Moscow on 13 March, the foreign ministers of the two countries discussed security issues affecting the Southern Caucasus, including the Nagorno-Karabakh conflict. (3) Russian Interior Minister Boris Gryzlov started an official visit to Armenia on 21 March. He agreed with his counterpart that cooperation between the two interior ministries should be intensified.

i) Azerbaijan-Iran. An Iranian parliamentary delegation paid an official seven-day visit to Azerbaijan from 5-11 March in an effort to study ways of boosting bilateral cooperation. The delegation met with Azeri President Heidar Aliev.

2. Multilateral Relations

a) Central Asian Economic Organization (CAEO)

(1) A meeting of the foreign ministers of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan was convened on 5 February in Bishkek, the capital of Kyrgyzstan. They discussed ways of turning this forum into a Central Asian Economic Organization (CAEO) and of strengthening their cooperation within that format. (2) At a summit in Alma-Ata, Kazakhstan, on 1 March the presidents of the CAEC forum decided to establish the CAEO and Uzbek President Islam Karimov was elected the chairman of the organization.

b) Shanghai Organization for Cooperation (SOC)

Representatives of SOC members Kazakhstan, Russia, China, Uzbekistan, Tajikistan, and Kyrgyzstan met in Moscow from 5-6 March to coordinate the April meeting of the foreign ministers. It will be convened in Moscow. The SOC summit meeting will be held in St Petersburg, Russia, in June. 

3. CIS

(1) An expert group meeting on the situation of the Collective Security Treaty was convened on 18 February at the Russian foreign ministry in Moscow. The participants agreed that instability will remain in Afghanistan for the long-term and that there is a need to adapt their foreign policy to the security arrangements in this country. (2) The informal CIS summit in Alma-Ata on 1 March was without an official agenda. Among the topics discussed were the regional situation, the anti-terrorist operation in Afghanistan, economic integration, and energy issues. Russia has been asked to develop a new vision for the Commonwealth of Independent States (CIS) and present it in May at the formal CIS summit in Moldova. It is becoming clearer to the twelve individual CIS actors that the convertible political currency of their relations is the national interest. Using this currency effectively is the political challenge for the present and future leaders of the CIS.

VI. THE STATE OF THE BLACK SEA REGIONAL COOPERATION AND THE ROLE OF THE EU AND NATO

1. Economic Aspects of the Black Sea Cooperation: National and Regional Perspectives

a) World Bank-Azerbaijan-Georgia. The construction of a border motorway from Baku to Georgia was discussed between World Bank (WB) experts and Azeri authorities in January. The WB will provide US$40 million, the Azeri government US$6.62 million, and the EU TACIS program will supply US$2 million towards the project.

b) US-Ukraine. The US Trade Development Agency (TDA) provided a grant of US$200'000 to the Ukrainian state oil transit company on 29 January for strategic planning related to the marketing of the Odessa-Brody oil pipeline.

c) US-OBSEC. The Export-Import Bank of the United States (Ex-Im Bank) and the Black Sea Trade and Development Bank (BSTDB) signed a cooperative agreement on 25 January making the Ex-Im Bank’s financing available to support US exports of goods and services to countries in the Black Sea region. Under the agreement, the BSTDB can be a guarantor for specific transactions and can also provide a parallel financing arrangement.

d) Russia. The Russian economy experienced a sharp increase in inflation during January and February. In various parts of the country, familiar complaints were heard and protests were organized over the late payment of wages. Russia saw an increase in economic output in 2000, and to a lesser extent, in 2001.

e) Caspian Littoral States. At the beginning of March, a UN-imposed ban on caviar trade by the Caspian littoral states was lifted after the coastal countries for the first time agreed on a joint plan to monitor and conserve endangered sturgeon stocks. The agreed quota among the littoral states for 2002 was 142 tons, which is 10 per cent less than the level in 2001.

2. Political and Security Aspects of Black Sea Regional Cooperation and EU and NATO/PfP Activities

a) BSEC

The Secretary-General of the BSEC Parliamentary Assembly, George Petricu, acknowledged the active participation of Armenia in the formation of the legal basis for economic, trade, social and cultural cooperation of the BSEC member-states during a visit to Yerevan on 12 March.

The full economic and political potential of BSEC will most probably be realized when the geopolitical situation in the Caspian Sea-Caucasus region is stabilized and the Black Sea assumes its natural function as a geoeconomic transit point connecting the eastern and the western parts of the northern hemisphere.

b) EU

The EU continued its efforts to establish more active relations with the neighboring region to the east of the Black Sea. Special emphasis has been given during the last half-year to relations with the countries of Central Asia and the Southern Caucasus. In Turkmenistan, the EBRD decided in the end of January to finance the construction of a third shop in the Turkmen jeans complex with US$10.663 million. The governments of Germany and Sweden met at the beginning of March with a delegation from Kyrgyzstan headed by President Askar Akaev. The two EU states agreed to expand their bilateral links with Kyrgyzstan and support the country’s economic transition. In a similar visit to Brussels in the second half of March, Georgian President Eduard Shevardnadze declared the long-term objective of his country was to join the EU. He also discussed cooperation with the EU in fighting terrorism.

c) NATO

1) NATO-Georgia. Georgian leaders perceive their country’s relations with NATO to be determined by its significant strategic position in terms of transport and telecommunications links and the flow of energy resources. Georgia is one of the most active participants in NATO’s PfP. A major PfP exercise code-named “Cooperative Best Effort – 2002” will take place In June of this year. It will be conducted at the Vaziani military base near Tbilisi with the participation of six NATO states (the US, Great Britain, Canada, Turkey, Greece, and Hungary) as well as ten partner countries (Austria, Azerbaijan, Armenia, Bulgaria, Georgia, Lithuania, Moldova, Romania, Ukraine, and Uzbekistan). Two big NATO groups of experts visited Tbilisi from January to March in preparation of the exercise.

2) NATO-Azerbaijan. Azerbaijan expanded its ties with NATO by appointing a deputy prime minister as head of a commission overseeing relations with NATO. This commission will be made up of the foreign, defense, and security ministers. The President of NATO's Parliamentary Assembly, Rafael Estrella, visited Baku on 16 January and talked about NATO's plans for closer cooperation in the regions of Southern Caucasus and Central Asia.

3) NATO-Armenia. A conference on the PfP military exercise that is coming up next year in Armenia was convened on 16 February in Yerevan. Seventeen PfP and NATO countries are expected to join the exercise.

4) NATO-Russia. NATO and Russia made a substantial progress in the last three months in their bilateral relations. On 12 February, senior representatives of the Russian Ministry for Emergency Situations and NATO met in Moscow to discuss the preparations for the joint exercise “Bogorodsk 2002” in September this year, simulating reactions to a major chemical accident. In the end of February, Russia's military representative at NATO Headquarters, General Viktor Zavarzin, was replaced by Vice-Admiral Valentin Kuznetsov. Russia insists on having a full say on security issues at NATO and is hopeful this privilege can be codified by May. NATO Secretary-General Lord George Robertson referred to Russia as the 20th member of the Alliance on 21 March in Prague and said he is optimistic about the ongoing talks with Moscow. The reason for that optimism was the entirely new context for their relations after 11 September 2001.

5) NATO-Ukraine. Ukrainian Prime Minister Anatoly Kinakh visited NATO Headquarters in Brussels On 1 March as part of the regular negotiations between the two sides.

6) NATO-Tajikistan. At a signing ceremony on 20 February in Brussels, Tajikistan joined NATO’s PfP program. This will give Tajikistan additional tools to deal with emergency situations, environmental programs and military reform. This move proves how important security in Central Asia is for European security.  Last year, Tajikistan made the courageous decision to support the anti-terrorist coalition. The trust between NATO and the Central Asian countries was decisive in building the anti-terrorist coalition.

VII. OTHER EXTERNAL FACTORS – STATES AND INSTITUTIONS INFLUENCING THE BLACK SEA REGION

1. US

a) US-Azerbaijan. A “shock” expansion of bilateral relations is expected in 2002, US Ambassador to Baku Ross Wilson said on 15 January. The US waived sanctions against Azerbaijan for one year in January. Azeri parliamentarians held meetings with the US Congress at the end of January and in the beginning of February. US Assistant Secretary of State Richard Armitage participated in a US-Azeri Chamber of Commerce Conference on 11 March in Washington, DC. Military cooperation also continues.

b) US-Turkmenistan. US Assistant Secretary of State for Europe and Eurasia Elizabeth Johns visited Ashgabat in the last days of January. The two sides discussed cooperation in border protection and in the struggle against drugs trafficking.

c) US-Russia. The bilateral relations in the period January-March were active and aimed at preparing the US president's visit to Russia in May. At the beginning of February, Russian Prime Minister Mikhail Kasyanov visited the White House and met with President Bush. In mid-March, the Russian defense minister made a visit to the Pentagon and continued the preparations for the May visit. The bilateral relations are turning into a fundamental axis in the fight against terrorism.

d) US-Georgia. The two countries signed a document in Tbilisi on 6 March that re-schedules the US$20 million debt for a period of 30 years at a 1.5 per cent annual interest rate. The state security minister of Georgia visited the US from 11-14 March and held talks concerning the situation in the Pankisi Gorge and the fight against al-Qaida terrorists.

e) US-Armenia. Armenian Defense Minister Serge Sarkissian visited the US from 18-21 March. He met with Secretary of Defense Donald Rumsfeld and other officials and agreed with his US counterparts on a bilateral military cooperation program. As in the case of Azerbaijan, the US is trying to achieve good relations with both parties to the Nagorno-Karabakh conflict and to facilitate a lasting solution to this problem.

2. The Vatican

* The Vatican-Azerbaijan. A visit by Pope John Paul II to Azerbaijan in May this year is in preparation. The Pope will meet with the Azeri president and with the country's Muslim spiritual leader, and will discuss cooperation between the religious institutions, the fight against terrorism, and the Azeri-Armenian conflict over Nagorno-Karabakh.

3. OSCE

* OSCE-Armenia-Turkey. OSCE Chairman-in-Office Jaime Gama said at a press conference held in Yerevan on 6 March that Armenia and Turkey must start bilateral negotiations. As neighboring countries, they must re-establish and develop bilateral relation and bring positive influence to bear on the solution of the conflict in Nagorno-Karabakh.

VIII. CONCLUSIONS

The global fight against terrorism, including its Central Asian and Caucasian strongholds, stimulated national and international efforts to find better ways to exploit the energy resources of the Caspian Sea and to settle existing conflicts in the area. The boosting of the economic and political relations in the Black Sea basin are very much depending on the stabilization of the geopolitical situation in the Caucasus and the Caspian Sea regions. Recent improvements in US-Russian relations and democratic progress in the Central Asian and Southern Caucasus states are factors contributing to the improvement of the security situation and the economic progress of this vast region.

CONTACT AND REFERENCE§

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

Mr. Ivan Tsvetkov, M. A.

E-Mail Address: isis@cserv.mgu.bg

Dr. Todor Tagarev