BLACK SEA BASIN REGIONAL PROFILE:

(January - March 2003)

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

Research Study 17

I. INTRODUCTION
After 12 years of violations by Iraq of UN Security Council Resolutions, international law (which has been ineffective and powerless), the war option seemed to be the practical solution to answer the question: What should the people of the world do when faced with the deadly mixture of terrorism and the weapons of mass destruction? The ongoing developments in Iraq and the post-war follow-up will strongly influence the processes and tendencies evolving in the region that stretches from the west coast of the Black Sea to the adjacent areas of the Caspian Sea.
Two groups of factors had a decisive impact on the US pre-emptive war doctrine and its practical implementation in Iraq – the main issue influencing the Black Sea-Caspian Sea area at present.

The first group of factors includes the various countries’ interests, policies, and importance to international affairs of the post-Cold War world, and especially in relation to the great power centres. Notably, it has become more than obvious that the United States is becoming the only superpower (what the French term “hyper-power”). There is virtually no area of national strength in which the US is not the leader. The US faces the difficult task of restraining its power. The question of balance between unilateral and multilateral approaches in dealing with world politics is an ongoing debate in US society and in the US Congress. The global economy, society, communications, and information exchange is unthinkable without the US contribution. US military power – both conventional and non-conventional – is the most respected. However, other great powers like Russia, France, China, and India have made their intentions clear that they wish to work toward the establishment of a multi-polar power structure and that they are keen to participate in any such configuration. To this end many bilateral agreements between most of these states have been signed in the past eight years. Unfortunately, focused on these, the great world powers failed to perceive soon enough the importance of their cooperative relations to reform and of making the international legal system more effective. Even the crises in Bosnia and Kosovo did not lead them to provide efficient international legal mechanisms for dealing with the new conflicts. The small countries lacked the vision and moral integrity to insist on developing a new, effective post-Cold War international legal system. And in the lead-up to the Iraq crisis the UN Charter and institutions did not provide adequate instruments for dealing with the problems surrounding Iraq since the beginning of the 1990s.

Instead of being able to draw on a smoothly regulated mechanism for dealing with the existing issues in Iraq, a coalition of countries was formed that lacks thoroughly detailed interrelationships and responsibilities. The coalition, apart from its modest contribution to US-UK power, adds credibility to the moral justification of the war.

The second group of factors includes the need to cope with the threat of terrorism and the need to deal with the dangerous link between weapons of mass destruction (WMD) and terrorist activities. Both issues are aspects of the need to overcome an encompassing danger to global society, the danger posed by intimidation and terror as a result of the combination of universal lethal weapons and suicidal terrorists, which compromise the very liberty and normal life of human beings. The threat of terrorism, including its most dangerous aspect – the combination of suicide-terrorism and weapons of mass casualties and/or WMD – has never before been perceived in the same light by the US, on the one hand, and its allies and friends, on the other. Differing threat perceptions have led to differing visions of, approaches to, and instruments for dealing with those threats. Saddam Hussein has successfully exploited these disparities in his diplomatic struggle, while the US felt that it had been deserted and that no other doctrine or effective practical tool could substitute the pre-emptive strikes on Iraq. Even those US experts and the political elite who doubted the effectiveness of US policy rallied, in the end, behind the US president, once the attack on Iraq had been launched. It would be an exaggeration to claim that all members of the loose anti-Iraq coalition shared the same arguments and motivations for approving of the pre-emptive strike. However, the pace of the war and proof that Iraq possesses chemical or biological arsenals will dramatically change the political, information, moral, and psychological situation regarding the strike on Iraq.

The effects of the crisis in Iraq on the Black Sea-Caspian Sea area could be the following:

First, terrorist activity will be on the rise for some time during the military campaign. However, if counter-terrorist forces were to have a second victory after Afghanistan over terrorism strongholds, this would impact negatively on terrorist organizations.

Second, there could be a new geopolitical alignment of countries according to counter-terrorism and counter-WMD proliferation terms and values. It will become a norm of political life that the fight against WMD is the necessary second front of the war against terrorism. Terrorists can plot greater catastrophes if they possess WMD; hence, depriving dictatorial regimes of such weapons reduces their capacity to induce terror. Participants in the present anti-Iraq coalition from this area would comprise the bulk of the new alignment, and the EU and NATO would play a key role in amalgamating and solidifying the alignment.

Third, Russia could become more active in trying to gain privileged great power status through formal institutions. It might try this through its present permanent membership in the UN Security Council, with clearer rules for its effective functioning, or through an institutionalized G-8.

Fourth, the US will increase its capability to politically control the oil production areas between the Persian Gulf, the Red Sea, the Eastern Mediterranean, and the Caspian Sea. This will probably take place through rules of interaction between more oil-producing actors (including Iraq, Iran, and other Caspian states). Russia may play a special role in the interplay with Persian Gulf and OPEC countries, if Moscow remains in tune with the US aim of a better balanced and regulated oil production system that renders Washington less dependent.

Fifth, the sub-region of the Southern Caucasus will attract more intensely the political and strategic attention of major world actors. The practical launch of the Baku-Tbilisi-Ceyhan oil-pipeline project and the need for a more effective fight against terrorism – a joint US and Russian interest – will induce a political situation in which corruption, administration inefficiency, a lack of democratic control of the security sector, and a general unsatisfactory security situation will be tackled.

II. PROFILE OF THE BLACK SEA-CASPIAN SEA AREA

1. Geopolitical, Geostrategic, and Geoeconomic Tendencies
The period January to March was marked by Russian diplomatic activity, highlighting the increased efficiency of Moscow in dealing with difficult issues in the immediate surroundings of the huge state. In mid-January Japanese Prime Minister Djunichiro Koizumi visited Moscow and signed a long-term bilateral plan for action. The two sides agreed on a joint approach to dealing with the North Korean nuclear issue. Russian President Vladimir Putin made important visits to Germany and France in the first half of February, negotiating a joint position on the crisis in Iraq with Berlin and Paris in the UN Security Council. Russian Foreign Ministry officials agreed in January with South Korean authorities to play a mediating role in the North Korean nuclear issue. Indian Foreign Minister Djasvan Singh visited Moscow in mid-February and met with his Russian counterpart. New Delhi is one of the largest importers of Russian weapons. Russia continues its nuclear assistance to Iran. On 10 February the long-term transport infrastructure project of building the North-South Corridor received an additional boost during the visit to Tehran of Russia’s First Deputy Railway Minister Vladimir Yakunin. In March the Russo-Iranian discussion was continued at another meeting that included participants from India and elsewhere.

US-Russian relations in this period reflected US efforts to bring Moscow closer to Washington’s plans of pressing Baghdad to reveal its WMD arsenal. Longer-term intentions and motivations in the bilateral relationship were attempts to attract Moscow to the US-UK anti-Iraq coalition. On 5 February the US Senate Foreign Relations Committee approved the Moscow Strategic Offensive Reduction Treaty (SORT). On 17 March the Russian Duma postponed a vote until at least the beginning of April on the ratification of SORT due to differences over the Iraq crisis. On 20 March Putin called the start of the US strike on Iraq “a grave political mistake”.

A broader spectrum of Russian reactions and activity, however, showed that the Kremlin and the Russian Foreign Ministry did not wish to see SORT fall victim to the Iraq crisis. On 12 March US Ambassador to Moscow Alexander Vershbow warned in an Izvestia newspaper interview that Russia would suffer serious economic and geopolitical consequences, if it vetoed a UN Security Council Resolution authorizing war against Iraq. In particular, the energy sector, where massive US investments in the Russian oil industry are expected, could suffer. The same could happen to the under-funded Russian space program. Vershbow spoke of the commonality of interests in the counter-terrorism fight and in preventing WMD proliferation, as well as a joint nation-wide strategic missile defense build-up.

SORT is of great interest to Russia. Moscow also has clear commercial interests in post-Hussein Iraq.

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

a) Terrorism/Threat of WMD Falling in the Hands of Terrorists

1) Russia. In the first days of January Russian diplomatic sources announced that the Algerian citizens arrested near Paris on 24 December and suspected of plotting terrorist acts had been in close contact with armed extremists in Chechnya and the Pankisi Gorge. Those arrested had undergone intensive training in Afghanistan and the Pankisi Gorge.

2) US-Russia. (1) US authorities disclosed in the first days of January that the US International Charity Fund, which has provided financial support to Chechen terrorists, was on the black list of organizations collaborating with Al-Qaida. The bank accounts of the fund have been frozen in many countries (Pakistan, China, Croatia, Bosnia and Herzegovina, Azerbaijan, Georgia, and Russia). (2) US First Deputy Secretary of State Richard Armitage visited Moscow mid-January and met his Russian counterpart, Vyatcheslav Trubnikov. The two leading diplomats co-chair the US-Russian Antiterrorism Commission. (3) In mid-February the US State Department announced that it had included three groups, currently operating in Chechnya, on the list of international terrorist organizations. On 20 February US Secretary of State Colin Powell said the US acknowledged the serious threat that Chechen terrorists posed to the Russian Federation. The names of the groups are: Riyadus-Salikhin Reconnaissance and Sabotage Battalion of Chechen Martyrs, the Special Purpose Islamic Regiment, and the Islamic International Brigade. (4) On 18 March Russian Foreign Minister Igor Ivanov said the unilateral war of the US against Iraq without UN Security Council approval would have a negative effect on the counter-terrorist coalition. On 21 March Ivanov said the UN Security Council should not sanction US actions in Iraq. On 22 March he suggested that the UN Security Council discuss post-Saddam Hussein arrangements in Iraq, in an effort to find an acceptable formula for protecting Russian economic interests. (5) On 24 March Russian President Vladimir Putin denied allegations by the US State Department that Moscow had been supplying the Iraqi regime and its armed forces with high-tech tools for jamming US satellite communications, including tools for guiding precision-targeted bombs and missiles. The US said they had hard evidence of such help.

3) ISAF-Turkey. Germany and the Netherlands took control of ISAF, taking over from Turkey in a ceremony on 10 February in Kabul. Turkish Major General Hilmi Akin Zorlu handed over the command to German Lieutenant General Norbert van Heyst. The German-Dutch administration of ISAF will be responsible for ISAF’s activity till October. This joint effort may see the continuation of a broader NATO involvement in bringing stability to Afghanistan. NATO is already providing planning and logistic support to the Dutch and Germans. NATO Secretary-General Lord George Robertson has already said that NATO could play a bigger role in Afghanistan.

4) USA-China. On 19 February US State Department coordinator on counter-terrorism J. Cofer Black praised China for taking active steps to address concerns such as Al-Qaida operatives and Chinese Muslim separatists. China backs US-led war on terrorism but calls for international support of its own campaign against Uighur separatists in the northwest region of Xinjang. The Afghan war has revealed direct contacts between Al-Qaida and the East Turkestan Islamic Movement (ETIM). The latter was placed in September 2002 on the US list of terrorist organizations.

5) China. On 10 March Chinese sources announced that a 1’100-strong counter-terrorist squad had been formed in Beijing. The squad has drafted counter-terrorist plans for key areas of the Chinese capital, undergone training, and coordinated activities with the police.

6) Ukraine. Ukraine has pledged to support the US in the war of the coalition against Iraq with 532 troops specialized in anti-chemical and anti-biological warfare; the team has started to arrive in Kuwait. The pledge was made on 27 February. By 10 April the whole military unit will be stationed as agreed with the US command.

b) The Delimitation of the Caspian Sea and the Black Sea: The Caspian Sea
(1) On 14 January in Baku, Iranian and Azeri experts discussed the draft of an agreement on the status of the Caspian Sea. (2) On 27-28 February in Baku the Deputy Foreign Ministers of the five Caspian states – Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan – discussed a draft convention on the legal status of the Caspian Sea. This expert meeting has been postponed three times since last autumn. Iran has moved its position closer to those of the other littoral states by agreeing to sign bilateral treaties for use of maritime resources. Tehran has already signed such agreements with Russia, Kazakhstan, and Azerbaijan. The last dissident, Turkmenistan, has already reduced its differences with Russia on the demarcation issue. (3) In mid-March the Russian Duma ratified the bilateral Russian-Kazakh Treaty on Caspian Sea Delimitation in the sea’s northern sector. This provides the legal basis for utilization of the resources from the bottom of the sea.

c) Oil and Gas Issues

1) USA-Caspian Sea Region. On 9 January US State Department and Department of Commerce hosted a conference in New Orleans entitled “Caspian Basin Energy: Business Opportunities for US Oil and Gas Firms”. Representatives of companies doing business in the Caspian Basin, including British Petroleum and Chevron Texaco, and of US business associations provided information on how to do business and on new business opportunities in Azerbaijan and Kazakhstan. During the past 10 years foreign investment has totaled more than US$20 billion there, most of that to develop the oil and gas sector. The US strongly supports the development of the oil and gas resources of the Caspian Basin and the means to transport them to markets. The Caspian Basin resources are beginning to make an important contribution to the world’s energy supply. Caspian oil will represent the largest non-OPEC source of production growth in the coming decade.

2) Shah Deniz Natural Gas Project. At the end of February the commercial partners of the Shah Deniz natural gas project in Azerbaijan approved the project and it subsequently entered into the construction phase. The project includes the South Caucasus Gas Pipeline, running from Baku through Tbilisi to Eastern Turkey. The project’s approval is a milestone in the development of the East-West Energy Corridor, which also includes the Baku-Tbilisi-Ceyhan (BTC) oil pipeline. The gas from Shah Deniz will contribute to the economic development of Azerbaijan, Georgia, and Turkey and will also play a significant role in supplying markets in Southeast Europe. Recently Greece and Turkey announced that they would build a gas interconnection. Southeast Europe has a general interest in developing energy links with Caspian producers. Norway’s Statoil has been named as the commercial operator covering gas sales, contract administration, and business development for Baku’s Shah Deniz gas and condensate field in the Caspian Sea. Statoil says it will be the commercial operator for business development and administration of the South Caucasus Pipeline Company (SCPC).

3) BTC Oil Pipeline. On 14 February the construction of the Baku-Tbilisi-Ceyhan oil pipeline began.

4) British Petroleum (BP)-Russia. On 11 February BP, the world’s third largest oil company, pledged a US$6.75 billion investment in Russia through a deal with partner TNK – the fourth biggest Russian oil company. The deal increases oil and gas output for the British group by about 16 per cent to over four million barrels of oil equivalent a day. The investment is 10 per cent of Russian foreign exchange reserves and 1.5 per cent of Russian gross domestic product. BP has pledged to spend US$20 billion over five years – close to 50 per cent of its capital investment budget.

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

1. Chechnya
(1) On 8 January the EC decided to provide € 3 million to the people of Chechnya to help 253’000 people overcome winter hardships. (2) The signatures for convening the referendum for the new constitution of the republic in Chechnya were collected at the beginning of January. The Organization for Security and Cooperation in Europe (OSCE) has said that it was too soon to hold the referendum. The presence of Russian soldiers and the tensions did not provide adequate conditions for a legitimate referendum. (3) On 23 March the referendum on a new constitution for Chechnya was convened. Russian sources disclosed plans by Chechen terrorists to bomb Moscow locations where many people came together – before and after the referendum. Chechen terrorists called for the boycotting of the vote. Both Council of Europe and OSCE officials considered the situation inappropriate for a referendum and did not send observers to monitor the vote. Many Russian critics of the referendum said that people understood that the political effect would be insignificant, but they would prefer to pretend that this project of the president could be carried out. One doubts such criticisms, since the Chechen people need to embark on democracy-making exercises and find out for themselves that there are alternatives to shooting when decision-making is needed.

2. Transdnistria
On 6 March, US and EU officials in the OSCE announced that they had introduced travel restrictions on the leadership of the breakaway Transdnistria region of the Republic of Moldova. This decision signals that the international community will no longer tolerate the continued obstruction of an early political settlement of the Transdnistrian conflict by the leadership of separatist Tiraspol and its “president” Smirnov. The continuation of the secessionist policy and the interference with the Russian military forces’ withdrawal from Moldova by Tiraspol are the main motivations for this step by the US and the EU.

3. Abkhazia
(1) On 30 January the UN Security Council unanimously accepted Resolution 1462/2003 for extending the mandate of UN observers in Georgia in support of finding a political solution to the conflict in Abkhazia. (2) At the beginning of February Russian-Georgian consultations on prolonging the mandate of the CIS peacekeeping forces in Abkhazia were held in Moscow. The consultations followed a decision from the CIS summit in Kiev.

IV. THE NATIONAL PERSPECTIVES: SPECIFIC DEVELOPMENTS

1. Moldova
On 11 February Moldovan President Vladimir Voronin proposed a formula for a new state structure. The plan aims to bring to an end the 12-year Transdnistria conflict. The draft constitution is a first step toward a federal solution of the conflict. A referendum is expected to approve the new constitution in Transdnistria as in the rest of Moldova, followed by elections for a bicameral parliament.

2. Russia
(1) On 18 February Russian authorities reported that Russian arms sales had risen to US$4.8 billion in 2002. Moscow targets emerging markets, including Iran and Syria, in an effort to re-establish itself as a top weapon exporter. (2) On 24 February the Russian Labor and Social Development Ministry announced that 36 million Russians – almost 25 per cent of the population– live below the poverty line. (3) Russian President Vladimir Putin implemented at the beginning of March the planned structure and personnel reforms in Russia’s security institutions. The aim is to make more effective the fight against trafficking of drugs and against terrorism, leading to dramatic changes that increase the relative weight of the Federal Service for Security alongside the other security services within the framework of the new single Federal Service of Investigation. The dismantling of the Federal Tax Police Service (FTPS) was assessed by servicemen of the FTPS as a consequence of an “order by the oligarchs”, whose capital is mostly abroad. At least three months would be needed to launch the new mega-organization, hence its effectiveness will be low in the next few months.

3. Armenia
On 19 February the first round of presidential elections was held, and on 5 March the second round was held. The pre-election process was marked by irregularities. The OSCE and CE observers said that the overall election process had fallen short of international standards. There were numerous confirmed cases of ballot box stuffing. President Robert Kocherian won 67.5 per cent of the votes and his rival, Stepan Demirchian, 32.5 per cent.

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

1. Bilateral Relations

a) Moldova-Bulgaria. (1) On 16-17 January Bulgarian President Georgy Parvanov made an official visit to Chisinau. He met with Moldovan President Vladimir Voronin and Prime Minister Vasile Tarlev. Government member delegates signed bilateral agreements on administrative assistance in the customs service and on Ministry of Justice cooperation. Meetings of business delegations of the two countries accompanied the official contacts. (2) At the beginning of March the Moldovan government approved the ratification of the bilateral agreement for the transportation of nuclear waste from Bulgaria via Moldova to Russia.

b) Ukraine-Russia. At the end of January in Kiev, Ukrainian President Leonid Kuchma and Russian President Vladimir Putin signed a bilateral treaty on the state borders of the two countries. The border is 2’063 km long. The only unsolved issue remains the border between the two states in the Azov Sea. Ukraine wants to divide the sea in equal parts, while Russia prefers equal access to the Azov Sea resources, mostly fish.

c) Ukraine-Bulgaria. Bulgarian President Georgy Parvanov made an official visit to Ukraine in February. He met with Kuchma, other Ukrainian leaders, and representatives of the large Bulgarian minority (which numbers over 300’000). The Bulgarian delegation included government and parliamentary officials, as well as business representatives. Six bilateral agreements in the areas of the economy, nuclear energy, the environment, and culture were signed.

2. Trilateral Cooperation: Armenia, Azerbaijan, Georgia
On 26-28 February members of parliaments of the three countries met in Tbilisi to discuss the integration of the region into European structures. The discussion was in the context of the South Caucasus Parliamentary Initiative, organized by British NGO links. The initiative was launched in 2001 and aims to promote the exchange of views and develop frameworks for cooperation between MPs of the three countries.

3. CIS
At the end of January, the leaders of the CIS states met in Kiev and elected Ukrainian President Leonid Kuchma chairman of the council of CIS state leaders. Kuchma is the first non-Russian to take this position. It was decided that the CIS Yalta summit meeting in September would lead to an agreement on a free-trade area.

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

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

a) Eurasian Economic Community (EEC). Members of the EEC gathered on 1 February in Moscow. Russian Prime Minister Mikhail Kassyanov proposed that the Russian ruble be made the community’s single currency. Kazakhstan President Nursultan Nazarbaev confirmed that by 2011 a single currency should be introduced. The EEC is considered by Russia as an important addition to CIS activities.

b) US-Russia, Ukraine. In early February the US Administration decided to cut with almost 25 per cent of its economic support to Russia and Ukraine. Uzbekistan, Kyrgyzstan and Tajikistan will receive more support as a result of their support for the US operation in Afghanistan.

c) US-Russia. On 27 February the US Export-Import Bank (Ex-Im Bank) announced that it is significantly increasing its support for the export of US goods and services to Russia. Russia is a vital market for US exporters. Ex-Im Bank identified Russia as one of six key markets to focus on in 2003.

d) US-Ukraine. The 12th meeting of the US-Ukrainian Committee for Economic Cooperation was held on 28-29 January in Washington. The participants discussed US support of a comprehensive market reform, sustainable economic growth of Ukraine, and improving investment opportunities.

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

a) NATO-Russia. In mid-February it was announced NATO headquarters and the Russian Ministry of Defense would soon establish a hotline to discuss urgent affairs in a confidential manner. Recently, NATO and Russia have begun to exchange highly classified intelligence information, according to NATO Secretary-General Lord George Robertson.

b) NATO-Georgia, Azerbaijan, Ukraine. On 21 March parliamentary delegations of the three countries signed an agreement in Tbilisi on coordinating their activities towards joining NATO. The process is expected to be similar to that of the Vilnius 10.

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

1. USA-Georgia
(1) US Marines arrived in Georgia at the end of January to participate in the Georgian Train and Equip Programme. The Marines were to train four battalion-sized units, one in mountain warfare, two in light infantry operations, and one in mechanized warfare. Each 560-strong battalion consists of three rifle companies and a headquarters company. (2) Georgia is part of the US-led Coalition for the Immediate Disarmament of Iraq, Georgian Defense Minister Davit Tevzadze said on 19 March in Tbilisi. He said Georgia was ready to assist the US with all means, including the use of Georgian airfields, in a war against Iraq. Georgia hopes US will support Tbilisi with its Abkhazia problem.

2. China-Moldova
At the end of February and early March Moldovan President Vladimir Voronin made a five-day visit to China. He met Secretary of the Central Committee of the Chinese Communist Party Hu Jintao and Chinese Prime Minister Zhu Rongji. The two parties signed three documents of cooperation in the fields of agriculture, medicine, and the training of doctors. China granted a free loan to Moldova of € 1.2 million.

VIII. CONCLUSIONS
The toppling Saddam Hussein’s regime in Iraq, clarification of the issue of weapons of mass destruction on Iraqi territory, the elimination of an important link between terrorists and such weapons and a supportive regime, and terrorist activities – all these issues are likely to create a new geopolitical situation in the broader Middle East region and its adjacent areas, including the Black Sea-Caspian Sea area.

A new and more prominent geo-strategic role will be achieved by the countries on the eastern and western coasts of the Black Sea, especially after Turkey’s response to the Iraq crisis.

Very important re-adjustments could be witnessed on the great-powers level too: Depending on the course of the war, Russia will adapt to the polarity-drive by Moscow, Paris, and Berlin that has occurred in recent months. If it is allowed, Russia will ensure a winning role for itself after a war in which it has not shot a single bullet. During the course of the war, Russia has underlined the negative effects of the war on the global counter-terrorist coalition. China’s more relaxed attitude will secure a comparatively beneficial position for Beijing. Both the EU and NATO are expected to focus on the end results of the war in Iraq.

Geo-economic shifts may provide a better regulated production and distribution to the world energy markets of the resources of the Middle East and Caspian Sea Basin area, with a stronger US political and strategic leverage on these issues.