(July - September 2002)

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

Research Study 15

Hard Copy: ISSN 1311 – 3259


  1. Geopolitical, Geostrategic, and Geoeconomic Tendencies
  2. Sources of Conflict in the Black Sea-Caspian Sea Region
    a) Terrorism
    b) The Delimitation of the Caspian Sea and the Black Sea
    c) Oil and Gas Issues
  1. Chechnya
  2. Nagorno-Karabakh
  3. Transdnistria
  1. Azerbaijan
2. Ukraine
3. Russia
  1. Bilateral Relations
  2. Multilateral Relations
3. CIS
  4. GUUAM
  1. Economic Aspects of the Black Sea Cooperation: National and Regional Perspectives
  2. Political and Security Aspects of Black Sea Regional Cooperation and EU and NATO/PfP Activities
  1. US


The area adjacent to the basins of the Black Sea and the Caspian Sea was at the center of global attention in terms of political, security, strategic, and economic developments in the last three months.

This fact can be easily explained by the growing pressure for regime change in Iraq, coordinated by the US, which wants to end the danger that Iraq's weapons of mass destruction may be used by terrorists or directly by the authoritarian regime's armed forces. Preparations are underway to show Saddam Hussein he cannot abuse the patience of the international community. The broad strategic area between the Black Sea and the Caspian Sea would be of key significance for an eventual strike against Saddam.

What is less obvious about this huge area, but actually reflects a more complex reality is the impact of a combination of global and regional geopolitical, geoeconomic, and geostrategic tendencies and the global importance of fighting terrorism. The latter trend serves as an umbrella to bring together all the other influences in the area, but also as a "system organizer and prioritizer" for these tendencies - not only in the last three months, but also for the decades ahead. What does that mean?

First, the Black Sea-Caspian Sea region has a direct influence on the only regional G8 member-state- Russia, which joined the exclusive economic and diplomatic club at the end of June. Putin told his top diplomats on 12 July in Moscow that Russia would remain a global power and that since 11 September 2001, relations between his country and the US were a source of international stability and not of rivalry. This new Russian partnership, which some analysts predict will in time be transformed into an alliance, has had a "positive influence on the entire system of international relations and therefore remains unquestionably one of our priorities", according to Putin. This new Russian self-confidence was reflected in the conduct of a large-scale military exercise in the Caspian Sea, led by Moscow from 8-15 August. The region has not changed since this exercise, but Russia's display of power was a dominant assertion of military presence in an important geostrategic region on its southern borders. It sent a signal that Moscow insists on finding a solution to the legal dispute of the Caspian Sea delimitation. If the objectives of the exercise were not clear to all observers, in practice it may suffice to focus on the fight against terrorism. This primary objective of the exercise is a reminder of where Russia stands today on a variety of issues affecting the broader region on its southern borders: the standpoint of a most influential reader of the affairs of today's world marred by the evil of terrorism. All the other topics of interaction with the neighbors and partners are expected to be subordinated to the dominant power's priorities. This dominant behavioral characteristic could be observed in the non-confrontational attitude towards Iran - a regional power that chose not to participate in the exercise, but to have one of its own in 2003. Furthermore, Russia agreed to build three new nuclear reactors for Iran in a clear demonstration of the position that its regional differences do not affect Russia's dominant position or its friendly attitude towards Iran. In the context of the newly developing global friendship with the US, Russia has even indicated that Washington's policy towards Teheran is not constructive. The broader energy cooperation between Russia and Iran gives Moscow a long-term perspective that is not necessarily restricted to the present regime in Tehran and is being carefully developed under the umbrella of Russian-American strategic partnership.

The emerging relations between Russia and Iraq and between Russia and North Korea can be viewed similarly: They are typical of relations between a global actor that insists on being respected for its regional interests that, however, would not harm the bigger engagement - namely, fighting terrorism in accordance with the US.

Second, despite Turkey's clear economic and strategic interest in developing good relations with Iraq, this interest will be eclipsed by the new stage in the strategic alliance between the US and Ankara: the stage of jointly fighting terrorism, including states that provide safe haven or may potentially provide extremists with weapons of mass destruction. The new US defense doctrine of preventive strikes will inevitably affect Turkey as a staunch US ally in this key region of the world.

Third, China, which borders the broader strategic and geoeconomic region of the Black Sea-Caspian Sea to the east, is also exerting a new influence to this area. While Beijing confirmed its huge economic interest in developing the bilateral relations with Russia during Russian Prime Minister Mikhail Kasyanov's three-day visit to China in August, it received a long-expected incentive to change its position on US behavior in the area. A Uighur group operating in Xinjiang province was listed by the US as a terrorist group at the end of August. China had earlier claimed that the East Turkestan Islamic Movement (ETIM) has ties with al-Qaida and has been linked to ethnic unrest in this northwestern Chinese province. China issued new rules governing the transfer of missile technology that were praised by Washington.

Fourth, the role of the Black Sea-Caspian Sea area as a crossroads is increasing. The construction of the waterway between the two seas, the building-up of relationships between the Baltic states and Southern Caucasus states, the geopolitical impact of the integration of Bulgaria and Romania into NATO on the Eastern Black Sea states - all these emerging tendencies must be included in a net assessment of the various geopolitical and strategic pressures on the Black Sea-Caspian Sea region. All three developments reflect the growing influence of current or prospective NATO member-countries. The decisions by Ukraine and Georgia to apply for NATO membership add to this influence. In the long run, this pressure will form a significant barrier to terrorist infiltration of the volatile area. What remains is to match these developments with a constructive Russian response and a general agreement of all actors in the region of the basins of the Black Sea and the Caspian Sea that the stability of the area is indispensable to utilize the comparatively limited Caspian Sea resources of oil and gas. However, additional cooperative efforts will be needed to cope with the conflicts in Chechnya and Nagorno-Karabakh and to prevent a deterioration of Russian-Georgian relations.

The magnitude of the diverging, but not conflicting influences of Russia and the pro-NATO states in the region will also be affected by the future of the CIS and of GUUAM. Considering the continuing influence of the EU in the broader area stretching from the Black Sea to Central Asia, one may suggest that there are bright prospects for a win-win situation involving many players. The cohesive effect of the counter-terrorism fight may serve this goal.


1. Geopolitical, Geostrategic, and Geoeconomic Tendencies

In the last days of June in Canada the group of the world's leading countries included Russia as a full member, thus becoming the G-8. Russia will host the 10th annual meeting in 2006. The integration of Russia into this exclusive club reflected the economic and democratic transformation there over the last years as well as Moscow's new potential for a full and meaningful role in addressing the global problems. This was the strongest demonstration of support so far for the reforms of Russian President Vladimir Putin by the leading countries of the world. ISIS concludes that Russia's adoption of its role as a global power of less magnitude and significance than the US realistically suits the Russian interests and guarantees a constructive attitude towards Moscow by Washington and the rest of the G-8 powers. President Putin's outspoken support for the fight against global terrorism is only the most significant factor leading to this new and higher status of Russia in the world.

Putin's statement to top Russian diplomats on 12 July that Russia remained a global power is correct and reflects Moscow's new global role, though smaller in comparison to the single US superpower. This new role is already being fully exploited diplomatically and militarily by Russia in the broad stretch between the Black Sea and the Caspian Sea: Russia conducted a large-scale military exercise in the Caspian Sea from 8-15 August that involved all branches of the Russian military, including more than 60 ships. This was the biggest military exercise in this area since the collapse of the Soviet Union. Azerbaijan and Kazakhstan also joined with forces, while Iran and Turkmenistan were invited to join the exercise with observers. Russia needed to hold this exercise after the failure of the five littoral states in April this year to agree on how to divide the Caspian Sea and intensify the extraction of its oil reserves. The pressure on those who do not agree on the accepted principles of division (Iran and Turkmenistan) is not applied in a hostile manner, but the message is clear: that the many diverse problems in the Caspian Sea area require a clear legal status and will permit no delay in the resolution of this issue. The littoral states will address the issue again next year. Since Iran is also preparing for a big military exercise in the Caspian Sea to be held in 2003, it remains doubtful that the demonstration of military power will in any way improve the security situation, the chances for a diplomatic resolution of the legal status of the Caspian Sea, or the atmosphere of cooperation in oil extraction and transportation from the region to the world markets.

Russia has undertaken additional steps in proving its case about the Caspian to the Iranians: On 22 August, Moscow approved a plan for building three additional nuclear reactors to the one already under construction in Bushehr. Russia's energy cooperation with Tehran is not limited to these reactors, but involves other similar projects. The Russian criticism of the US' "non-constructive" policy towards Iran on 23 August added to the Russian overtures towards Tehran that should lead to the recognition of the important regional role that Iran plays, to the long-awaited resolution of the legal status of the Caspian Sea, but also to Iran's tacit acceptance of the clearly dominant Russian position in the area.

Russia's newly intensified links with North Korea and the preparations for an economic agreement with Baghdad in the second half of August should be read in a similar manner: Russia as a global power has an impact on its direct neighborhood - no matter who is in charge of these countries today.

Another powerful tendency in the region is China's stance as a meaningful and more respected world and regional center of power. Russian Prime Minister Mikhail Kasyanov's three-day visit to Beijing in the second half of August and the agreement on improving the bilateral economic ties, including a boost to Chinese investments in the Russian economy; the improved relationship between Washington and the Chinese government after the latter's decision to create a licensing system for the export of missile technology, a regulation that will require exporters to be registered and transfers to be approved by the government - these recent developments make the Chinese voice more influential in the issues affecting the adjacent Caspian Sea-Black Sea area.

A third trend in the last three months has been the growing role of the region as a crossroads. High-ranking Turkish and Azeri officials agreed in the last days of August that both the Black and the Caspian Seas should be opened to international traffic. The Volga and Don rivers could be used to intensify the trade traffic between the two seas. Armenian Defense Minister Serge Sarkissyan on 22 August agreed with the Lithuanian initiative for closer Baltic-South Caucasus cooperation, including in the military area. The expected invitation to Romania and Bulgaria to join NATO in the next two years will increase their strategic role relative to the broader region stretching to the Caspian Sea. In these three examples, NATO is definitely improving its position in geopolitical and geostrategic terms in this still delicate (in terms of security) region, hence chances for greater stability have increased.

The various sources of conflict and threats to security in the period July-September can be better understood against the background of these trends.

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

a) Terrorism

1) Ukraine
On 15 July Kiev passed a law allowing the air defense to shoot at unidentified aircraft that fly across the former Soviet state and fail to respond to warnings. This anti-terrorist measure allows the army and the border guards to open fire at aircraft if they believed they had been hijacked. The shooting-down would be the last measure after the aircraft fails to respond to any other signs and messages of air-traffic controllers.

2) US-Russia
The US-Russia Working Group on Counterterrorism expressed its concern on 27 July that remnants of Taliban militia and al-Qaida terrorist forces regrouping in southern and southeastern border regions of Afghanistan pose a serious threat to Afghan and regional stability. The Working Group delegations also expressed concern over the recent assassination of Afghan Vice President Haji Abdul Qadir. The Working Group was formerly known as the US-Russia Working Group on Afghanistan. It held its eighth session on 26 July in Annapolis, Maryland. The two delegations were led by US Deputy Secretary of State Richard Armitage and Russian First Deputy Foreign Minister Vyacheslav Trubnikov. This was the first session of the Working Group with a broadened mandate, endorsed by President George Bush and President Vladimir Putin during their Moscow summit in May earlier this year. The two delegations discussed recent developments in Afghanistan, Central Asia, India-Pakistan, Southeast Asia, and Yemen. The next meeting in December will be held in Moscow.

3) US-Iran
US special presidential envoy to Afghanistan Zalmay Khalilzad accused Iran on 5 August of harboring, hosting, or hiding members of the al-Qaida terrorist network. Khalilzad said Tehran had to make a strategic decision to turn over al-Qaida members that Washington believes are hiding in Iran. The US special envoy blamed the presence of al-Qaida members in Iran on hard-line, unaccountable Iranian elements that facilitated the escape of al-Qaida terrorists from Afghanistan, perhaps without the knowledge of elected members of the government. However, Khalilzad welcomed Iran's recent reports that it had expelled 240 al-Qaida members in the last few months.

4) Shanghai Cooperation Organization (SCO)
A session of the intergovernmental working group on preparations for a Regional Anti-Terrorist Structure (RATS) of the SCO was announced on 8 August in Bishkek, Kyrgyzstan. The discussions of the group focused on the implementation mechanisms of RATS. The participants in the meeting agreed to hold the first meeting at state level in Kyrgyzstan. The headquarters of RATS will be located in Bishkek.

5) Georgia-Russia-US
In March this year, 200 US elite troops were dispatched to help Georgia build up its internal security capabilities against terrorism. They also had to coordinate measures to neutralize Afghan and Chechen irregulars in the Pankisi Gorge region. The Pankisi Gorge is a 34-km valley following the Alazni river some 150km northeast of Tbilisi and for years has been a no-go area for Georgian security forces. Its indigenous inhabitants are Kists, otherwise called Chechen Georgians. The Kists have long enjoyed a traditional system of self-rule and shown no secessionist ambitions. But the erosion of central power in Georgia, combined with the proximity of the Chechen border, has turned the region into a hotbed of drugs and arms trafficking and a training and supply base for Chechen fighters operating into Russia (see in more detail: the on-line May 2002 intelligence bulletin of the European Press Agency at After months of mounting tensions in the Russian-Georgian relations, caused by the alleged presence of Chechen rebels in the Pankisi Gorge, Russian President Vladimir Putin in early September ordered the military to draw up plans to attack Chechen terrorists in the gorge. The Russian argument is based on UN Security Council resolution 1373, approved in October 2001, in which states are required to help prevent cross-border terrorist attacks and to deny terrorists or their sponsors any safe haven. At the same time, the Russian president disclosed details of Georgia's inaction. Soon after, the Russian press quoted the Chief of the General Staff of the Russian armed forces, Anatoliy Kvashnin, as saying he had a plan to invade Georgia. Satellite data and human intelligence have played a crucial role in the preparation of the plan. This determination was confirmed by Russian Defense Minister, Sergey Ivanov on 12 September. The efforts of the Georgian armed forces to deal with the problem have had only modest results, namely the detention of 13 alleged criminals and one suspected Arab militant. The reaction of the Georgian leadership was very strong: President Shevardnadze insisted on apologies from the Russian president, while the Georgian parliament discussed the country's withdrawal from the CIS. Many MPs even wanted to break off diplomatic ties with Moscow. The parliament reiterated Georgia's expectation that Russia withdraw from military bases on Georgian territory as well as from Abkhazia. They also suggested an in crease in the national military budget.

The situation was handled wisely by the three participants - Georgia, Russia, and the US - and led to a new situation in which the focus of all three countries was the fight against terrorists. Georgian President Edward Shevardnadze said on 18 September that the US and Russian troops were aiding his forces in fighting Chechen rebels in the Pankisi Gorge. On 19 September, however, Russian Defense Minister Sergey Ivanov warned during a visit to Washington that Georgia continued to demonstrate ineffectiveness in preventing Chechen rebels enter Russian territory. A security zone of 20-40km along the border with Georgia was earlier claimed by Russian military authorities . Ivanov warned that Russian air force would have to execute surgical strikes to kill hundreds of Chechens still using the Pankisi Gorge as a safe haven. In the meantime, US sources published telephone conversations that were allegedly held between al-Qaida operatives and correspondents in Georgia just minutes after the strike on the first of the World Trade Center towers and that purport to establish a link between Georgia and the 11 September hijackings. The FBI in the end of September disclosed plans of Osama bin Laden to use Chechen terrorists for hijacking airplanes. All these developments show that an imperfect communication between the leaders in Tbilisi and Moscow may easily lead to a limited use of Russian force on Georgian territory with all the negative consequences for the broader stability of the region. The priority given to the fight against terrorism, especially in tense regions, requires a new and more dynamic political approach and cooperation. Tbilisi is not doing its best in this field and Russia would not miss the moment to score bigger geopolitical results than neutralizing Chechen terrorists.

6) US-China-Afghanistan-Kyrgyzstan
At the request of the governments of Afghanistan, Kyrgyzstan, China, and the US, the UN in the beginning of September added the Eastern Turkestan Islamic Movement (ETIM) to its list of terrorist organizations. This Uighur group operates in the Xinjiang province of China, and under President Bush's Executive Order 13224 it has been designated as one of 236 terrorist groups and individuals. That led to a freeze on the assets and financial transactions of ETIM. China claims that ETIM has ties to al-Qaida and that its members trained in terrorist camps in Afghanistan. US Deputy Secretary of State Richard Armitage said that after careful study, the US had judged it was a terrorist group and that it had committed acts of violence against unarmed civilians without any regard for who was hurt. ETIM has, however, played only a small role in the ethnic unrest in the restive Xinjiang province claiming independence from China.

b) The Delimitation of the Caspian Sea and the Black Sea: the Caspian Sea
The seventh meeting of the Caspian Special Working Group was opened on 29 July in Tehran. The two-day meeting aimed to continue consultations relating to the delimitation of the Caspian Sea, the largest inland sea in the world. This group was composed of the deputy foreign ministers of the littoral states, and they also discussed other issues such as ecological issues, fishing, navigation, commerce, and energy. Iran repeated its traditional position that the most important factor to strengthen cooperation in the Caspian Sea is the preservation of the 1921 and 1940 agreements between Iran and the former Soviet Union. Iran regards the continuation of common sovereignty as the best alternative to agreeing on the delimitation of the Caspian Sea.

c) Oil and Gas Issues
Russia and Kazakhstan signed an agreement on 9 April on delimiting the Caspian seabed and exploiting its resources. Iranian Foreign Minister Seyed Kamal Kharrazi visited Azerbaijan on 11 April and discussed the legal status of the Caspian Sea. The deputy foreign ministers of the Caspian littoral states (Azerbaijan, Kazakhstan, Turkmenistan, Iran and Russia) met in Ashgabat on 22 April to draft a summit declaration. The presidents of the five Caspian Sea states failed to reach an agreement on the legal status of the sea and to sign a final joint declaration on 24 April. Russia proposed holding the next Caspian summit in Tehran.  Iranian President Mohammad Khatami said on 23 April that common sovereignty over the Caspian Sea was the best choice for the littoral states. Iran expects that the other four Caspian states will not operate in the 20 per cent of the sea that Tehran regards as its minimum share of the seabed and the surface in the case of a division. According to the Russian president, the Caspian seabed should be shared and the water must remain common. According to Putin, the legal status must be decided by consensus. Splitting the Caspian Sea into five seas, Putin says, would be a great mistake. In the aftermath of the summit, Turkmenistan and Azerbaijan decided to start discussing the controversies over the offshore oil and gas deposits of the Caspian Sea. If the two countries should fail to agree, they would turn to international organizations for mediation, President Niyazov of Turkmenistan said on 26 April.

The presidents of Russia and Kazakhstan signed a supplementary document to a bilateral agreement on the division of the northern part of the Caspian Sea in Moscow on 13 May. Its aim was to clearly define the scope of sovereign mining rights. On 14 May, Baku ratified the agreement on delimitation of the Caspian seabed between Azerbaijan and Kazakhstan, signed on 29 November 2001 in Moscow. Azeri President Heidar Aliev visited Iran from 20-22 May for talks on the division of the Caspian Sea. Iran has massive oil reserves elsewhere and opposes the pressure of Western foreign energy companies in the area. Unlike Azerbaijan and other littoral states, Iran is in no hurry to exploit the oil deposits. This is why the Iranian position of accusing foreigners, while claiming the Caspian Sea must be a sea of peace and cooperation, is widely perceived as hypocritical.

Russia and Azerbaijan are close to agreeing on the defining principle of dividing the seabed and on the co-ordinates of the median line. The co-ordinates of the median line were already agreed earlier. The principles of division are the same as those applied in the Russia-Kazakhstan agreement. The Azeri authorities consider the agreement between Russia, Kazakhstan, and Azerbaijan on the division of the Caspian Sea to be a good basis for establishing the legal status of the Caspian Sea. Turkmenistan generally agrees with the principle of the median line, though it still contests the method of its establishment. A continuation of the Iran-Azerbaijan dialogue on this issue is expected in July this year.

The agreements reached between the three countries have given rise to hopes that safe transportation of oil from the energy-rich region will start soon. However, it is not yet clear what the cost of isolation in the issue of Caspian Sea delimitation will be for Turkmenistan and Iran . They may soften their position, but they may likewise delay the resolution of the issue. During a visit to Iran on 21 June, the Russian special envoy for Caspian Sea affairs, Viktor Kaluzny, having discussed legal issues with his Iranian counterpart, Mahdi Safari, proposed that the next summit of the Caspian working group (scheduled for July this year) be held in Tehran. Iran continues to oppose bilateral agreements on the sea as counterproductive to the establishment of a common legal regime. Unlike the Iranian side, Kazakhstan has decided that in the absence of legal clarity, differences should be settled on a bilateral basis with the rest of the coastal states.

d) Oil and Gas Issues

1) Kashagan Oil Field
The Kazakh National Petroleum Company and consortium Agip KCO said on 1 July that the Kazakhstan's Caspian Sea oilfield of Kashagan contains recoverable resources of at least seven to nine billion barrels of oil. The geological resources are estimated at 38 billion barrels. Kazakhstan expects to become in the next years one of the world's top oil producers. Kashagan adds to the Tengiz oil field, which is already being exploited. Agip KCO brings together Italian group Eni, UK-Dutch group Shell, US ExxonMobil group, Phillips Petroleum of US, Japanese Inpex, and TotalFinaElf of France.

2) Russia-EU
On 29 August, Russian President Vladimir Putin called European demands to raise the price of Russian gas as a condition of joining the WTO unreasonable. Similar demands had not made on other countries applying for WTO membership, Putin said, and it would be unfair to ask this from Russia.

3) Baku-Tbilisi-Ceyhan Pipeline Co
Representatives of the governments of Azerbaijan, Georgia, and Turkey formed the Baku-Tbilisi-Ceyhan Company on 1 August in London. This was a major step in the realization of the pipeline project that will carry oil from the Caspian Sea region to the Mediterranean for export into the world markets.

4) Iran-Turkey-Bulgaria
Iranian and Bulgarian government officials agreed in the end of August on a project to transfer Iranian natural gas to Bulgaria with a pipeline through Turkey. Other aspects of boosting bilateral trade were also agreed.


1. Chechnya
The protracted peaceful regulation of the situation in Chechnya may be partly nourished politically by the dispute between Russia and Georgia, but would hardly bring about the objective desired by the Russians - a stable Chechen republic as a member of the federation. The military cannot pacify the Chechen population or bring life in the Northern Caucasus back to normality. A fight and most probably a victory over terrorists may be a better demonstration of Moscow's policy in the area, but the necessity of resolving a domestic conflict remains as throughout the last decade. What kind of compromise may crystallize is hard to predict, but a more peaceful solution would be needed.

2. Nagorno-Karabakh
The presidential elections in the rebel Nagorno-Karabakh Republic (NKR) on 11 August were won by hard-line acting president Arkadiy Gukassyan. NKR elections were not internationally recognized by any other state. The Nagorno-Karabakh authorities signed an agreement on 6 August with the International Committee of the Red Cross (ICRC) granting the latter access to all places of detention and to all categories of detainees being held in the NKR, whether convicted or not. ICRC representatives would be able to hold private interviews and to repeat their visits, if considered necessary. The ICRC has visited prisoners in the NKR since 1992. The presidents of Azerbaijan and Armenia met on 14 August to discuss bilateral issues, including the Nagorno-Karabakh conflict. As expected, no breakthrough was made, but the very contact was a positive development and a promise for a peaceful solution of the conflict. The last meeting between President Heidar Aliev of Azerbaijan and President Robert Kocharian was in the end of November 2001.

3. Transdnistria
A meeting of the mediators in the Transdnistria conflict - Russia, Ukraine, and OSCE - was convened in Moscow in the second half of August. They confirmed their position asserting the preservation of Moldova's territorial integrity as a prerequisite for any solution. Earlier, Transdnistria authorities had rejected an invitation to participate in negotiations in Chisinau with Moldavian government officials and OSCE mediators without good reason.


1. Azerbaijan
On 24 August, a poll that was highly disputed by the opposition led to the introduction of constitutional changes in Azerbaijan. 97.5 per cent of the eligible voters, however, supported the constitutional amendments in the usual "Aliev style". One of them provides for the son of the present president of the republic to succeed him. Azerbaijan is still far from the democratic reforms it has claimed to introduce to its society and state.

2. Ukraine
(1) In the beginning of July, the Ukrainian National Council on Radio and Television decided to use the Ukrainian language exclusively for broadcasting from 2003. This decision implements a decree by President Kuchma of 15 March this year. (2) On 14 August, President Leonid Kuchma appointed Colonel General Oleksandr Zatynaiko as chief of the Ukrainian General Staff. General Zatynaiko replaced Colonel-General Petro Shulyak, who was dismissed after the 28 July crash at the Lviv air show that killed 76 spectators. Zatynaiko has been commander of the Ukrainian land forces since December 2001. The Ukrainian armed forces' reputation was spoiled by a record number of incidents during the last year.

3. Russia
(1) On 21 July, Russian opposition leader Boris Nemtsov told a conference in the Russian capital that his country was drifting towards national socialism. He predicted that only a union of the right forces could stop this process, because the forces of the left were linked to the communist past and lack authority. The reasons he gave for the advance of fascism in Russia were the appalling poverty and the drastic difference in the standards of living in Moscow and in the countryside. (2) The command of the Russian Black Sea navy cancelled a planned training cruise to the Mediterranean Sea due to economic considerations, mainly the need to conserve fuel. Three of the navy's top-of-the-line ships may, however, pay visits to France and Italy later this autumn.


1. Bilateral Relations

a) Georgia-Romania
In the beginning of July, Romanian President Ion Iliescu made an official three-day visit to Georgia and met with President Eduard Shevardnadze. Transportation of oil from Azerbaijan via Supsa (Georgia) to Romania was one of the discussed topics. A high-level Georgian Defense Ministry delegation visited Romania from 3-7 September and discussed ways of Romanian participation in the US-funded "Georgia Train-and-Equip Program" (GTEP).

b) Iran-Turkey
In the first days of July, a high-level Turkish Interior Ministry delegation visited Tehran. It was a regular meeting in the context of the bilateral High Security Commission, supporting cooperation by guaranteeing national, regional, and international security.

c) Ukraine-Russia
(1) In the beginning of August, Kiev renewed its claims to part of the property of the former USSR abroad or the equivalent- 42.1 tons of gold and US$20.5 billion. These figures became public on 12 August when bilateral talks on the division of the former Soviet Union's foreign assets continued. Ukraine has worked out both its part of Soviet assets - 16.73 per cent - as well as its portion of the Soviet debt - US$16.5 billion. (2) In mid-September, Ukrainian Interior Minister Anatoly Zlenko declared his country's will to set down its maritime boundaries with Russia. The Ukrainian position would secure substantial additional fishing rights from Russian companies working in the Azov Sea.

d) Russia-Armenia
Sub-divisions of the Armenian-Russian joint military group demonstrated interaction at an exercise that took place from 6-10 August at the Marshal Baghramian firing range near Yerevan. Parallel to the tactical shooting and aviation exercise, a joint command-staff exercise for fighting terrorism was also held by the Russian 102nd military base in Armenia and the 5th corps of the Armenian armed forces.

e) Ukraine-Romania
In the second half of September, Romanian President Ion Iliescu paid an official three-day visit to Kiev and met with his counterpart Leonid Kuchma. The two leaders agreed to conclude a bilateral agreement on the common border by June 2003. This document will formally renounce any mutual territorial claims.

f) Bulgaria-Georgia
The Bulgarian government on 19 September announced an agreement reached in spring of this year to provide arms and ammunition to Georgia. Tbilisi will receive 1.2 million cartridges, 650 missiles for missile launchers, 1'100 hand grenades and 58 Makarov pistols at a total value of US$90 million. The donated ammunition falls within the framework of a program initiated by the US armed forces command that aims at reaching internal stability in Georgia and the Caucasus. Bulgaria, a NATO candidate, sympathizes with Georgia's membership application to the Alliance.

2. Multilateral Relations: Russia-Georgia-Azerbaijan-Armenia
On 3 September, representatives of the so-called Caucasus Four group announced their parliamentary meeting would be held in Tbilisi in October. The speakers of the four parliaments are expected to participate in the meeting. In May this year, the parliamentary leaders agreed to hold such meetings every three months.

3. CIS
A meeting of the Council of CIS Ministers of the Interior was convened in Baku from 6-7 September. The Council discussed the implementation of the joint program for fighting crime in the period 2000-2003 as well as the program for fighting terrorism in the period till 2003. Cooperation in the fight against illegal drugs trafficking was also on the agenda of the meeting.

A meeting of the GUUAM Foreign Ministers was convened on 2 July in Baku in preparation of the summit meeting to be held at the end of the month in Yalta, Ukraine. While the presidents of all the GUUAM states were present, the only Uzbek participant was Tashkent's ambassador to Kiev. Uzbekistan continues to be a member of GUUAM, but has suspended its work. After this summit, a number of events were planned and carried out within GUUAM. Kiev hosted a meeting of the inter-agency group on departmental cooperation on 9 September. A meeting of the group's section on project development was held in the Ukrainian capital on 6 September. During the 57th session of the UN General Assembly in New York from 18-19 September, the GUUAM Council of Ministers met and discussed the prospects of the association. GUUAM border guard chiefs met for a regular session in Tbilisi at the end of September. Other meetings with participation of other international organizations are planned for October.


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

a) Georgia
In an open letter to President Shevardnadze dated 7 August, the US Chamber of Commerce in Georgia expressed its concern at the lack of law and order and the security situation in the country. Crime has a disastrous effect on the Georgian economy, the letter said.

b) US-Georgia
The US Trade and Development Agency (USTDA) has committed almost US$1 million to assist Georgia in planning and implementing oil and gas projects designed to enhance energy security. The projects are the Baku-Tbilisi-Ceyhan Oil Pipeline and South Caucasus Gas Pipeline Project.

c) Iran-Armenia
On 18 August, the Iran-Armenia Chamber of Commerce announced that trade between the two countries had reached a total volume of US$120 million. This placed Iran third among Armenia's trading partners, after Russia and Belgium.

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

a) Black Sea Regional Cooperation
Vessels of the BLACKSEAFOR naval group reached the Romanian port of Constantia on 21 August. The group, which comprises vessels from Bulgaria, Georgia, Romania, Russia, Turkey, and Ukraine, left the Turkish port of Eregil on 19 August and practiced tactical maneuvering, communications establishment, and cargo relocation from a Bulgarian minesweeper to a Russian one. Late on 19 August, the vessels anchored in the Bulgarian port of Burgas, and on 20 August left for Constanta.

b) EU

1) EU-Ukraine
A summit meeting of EU and Ukraine officials was held in the beginning of July. The state of relations, the management of crisis situations, and economic and legal cooperation were addressed during the meeting.

2) EU-Russia
International donors agreed on a  1.8 billion program to clean up areas in northern Russia, which faces a big threat from nuclear waste. On that day a conference chaired by EU and Russia decided to grant at least  100 million in initial funds for the most urgent projects needed to reduce water and air pollution in the Baltic and Barents Sea regions. Less than one-third of the funds for the program will be spent on tackling dangerous nuclear waste in northwestern Russia, mainly from the hundreds of decommissioned Russian nuclear submarines from the Cold War era. Preventing future disasters is the main objective of the program.

3) EU-Georgia
The EU Presidency issued a statement on 12 August concerning violations of the Georgian airspace at the Russian-Georgian border. Territorial integrity, reducing bilateral tensions, and taking control over extremists in the Pankisi Gorge were mentioned as priority issues for the EU in the present situation.


1) NATO-Russia
(1) A joint NATO-Russia center for helping discharged Russian military personnel return to civilian life was officially opened in Moscow on 2 July. The NATO-funded center will provide personnel leaving the military with information on training and employment opportunities and their rights and privileges. (2) On 16 September, a senior Russian officer told the press in Moscow that Russia and NATO would cooperate on future submarine rescue operations to prevent another Kursk-style disaster. A cooperation agreement to this end would be signed in the near future, said Russian General Yuri Baluyevski, Deputy Chief of Staff of the armed forces. (3) NATO and Russia conducted the joint military exercise "Bogorodsk 2002" at the Russian Emergency Ministry training base in the town of Noginsk from 24-27 September. A special emphasis was placed on anti-terrorism operations under conditions large-scale chemical warfare.

2) PfP Black Sea Navy Exercise
Bulgaria, Georgia, Romania, Turkey, and Ukraine held a one-week joint exercise from 9-15 September off the Turkish western Black Sea coast. The codename of the exercise was "Black Sea Partnership 2002". Search, rescue, and firing drills were included in the exercise. Azeri and Russian observers also participated in the exercise.

3) NATO-Georgia
After Ukraine, Georgia has also declared its formal intention to apply for membership in NATO. The Georgian parliament unanimously voted to launch the accession process to NATO on 13 September. Though integration in NATO has become a priority for Georgia, NATO will hardly let this membership application affect its relations with Moscow.


* US-Armenia
In the beginning of August, the US Senate approved a program for military cooperation with Armenia in 2003. It very much resembles the 2002 program.


The fight against terrorism serves as a factor catalyzing the integration of all security and geopolitical factors in the broader Black Sea-Caspian Sea region. The potential of the Caspian Sea energy resources to diversify the supply to the world energy markets can neither be over-stated, nor ignored. However, the common denominator in approaching this issue from the point of view of most global and regional actors remains the determination to fight terrorism and an appreciation of the danger of proliferation of mass casualty weapons. The growing role of Russia in the area is developing in parallel with Moscow's cooperation in the fight against terrorism and the continuing rise of US's and NATO's influence in the Black Sea-Caspian Sea region.




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.

Phone/Fax: ++(359 - 2-) 551 828

Dr. Todor Tagarev

E-Mail Address:

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