The Situation in the Caucasus

 This is an article I wrote for Harvard Model United Nations India 2012, and the original article can be found here: http://hmunindia.org/the-situation-in-the-caucasus/

 International espionage, acute violence, and ruthless power-mongering- welcome to the Caucasus.

In one of the world’s most linguistically and culturally diverse regions, chaos still reigns supreme. The state of affairs is certainly very dire in the Caucasus, and as Anna Nemtsova writes for Foreign Policy, the violence “has driven more young men — and increasingly women — to various jihadist groups that aim to establish an Islamic state encompassing the entire North Caucasus.” And that’s without even considering the troubled South Caucasus.

A single stray word is enough to invite a visit from the “shadowy men in camouflage” as Ms. Nemtsova describes.

In the South, recent clashes between Armenia and Azerbaijan have killed ten soldiers so far, and it is impalpable as to when the violence might cease. American Secretary of State Hillary Clinton warned that the clashes “could escalate into a much broader conflict” in the Caucasus.

Another frozen conflict in the South Caucasus escalated into full-scale war in August 2008, following a similar series of incidents on the border between Georgia and the self-declared republic of South Ossetia in the first half of 2008. A five-day war “promptly erupted between Georgia and Russia, which has consistently supported the breakaway republic,” Business New Europe’s Clare Nuttall explains.

If the current situation was not alarming in itself, it has begun to emerge that the Caucasus is the latest arena for influence expansion, international espionage, and even a pawn in Russo-American discussions.
Let’s look at the expansion of influence first. In an interesting development for China watchers, one of their largest companies, the Hualing Group, has bought a 90% stake in Georgia’s Basis Bank for $100 million, and plans to invest an additional $400 million in expansion, potentially all across “Central Europe and Asia”, notes the deputy director of the group. This appears to be an attempt to safeguard Hualing’s $100 million investment in lumber, mining and trade in Georgia.

Is the Caucasus set to be the latest battlefield for global influence? This blogger would certainly encourage it. Whilst the rapid inflow of foreign investment may step on some toes, having China, the United States and potentially India fight it out for influence could be the best thing in the world for the Caucasus’ economic rejuvenation. This region is also a focus of international interest because of its immense natural resources reserves. With China having the clear upper-hand in the ‘battle’ for the Pacific, could the US step up for the Caucasus? Unfortunately, according to Ms. Clinton this would not be the case with the current suggested budget cuts. As she explained to the Senate Foreign Relations Committee, “We are in a competition for influence with China… and we are losing”. Currently, however the BBC’s Damien McGuinness says that “the region is dependent on US aid, so Washington has much influence.”

Next, let’s look at the latest from the newest theatre of war in the Iranian-Israeli cold war, a bomb was found attached to an Israeli diplomatic car in the Georgian capital of Tbilisi, and bordering oil-rich Azerbaijan had arrested three men accused of plotting to assassinate the Israeli ambassador in Baku. The Israeli government accuses Iran of being behind the attacks – a charge Tehran stoutly denies. As Georgian political analyst Alexander Rondeli puts it, “everyone is using the South Caucasus for this hidden war – no doubt about it”. Mr. Rondeli likens the modern-day Caucasus to Switzerland before World War II- a hotbed of espionage.
The Caucasus, located as it is between Russia, Iran and Turkey is a “strategic crossroads between Iran and the West”, Mr. McGuinness states.

Azerbaijan has historical and cultural ties with Iran, and Georgia had a record 60,000 Iranian tourists visit last year. The other side of the coin is that both countries are eager Western allies, and Azerbaijan is a major stopover point for US troops, supplies and fuel on their way to Afghanistan.

Mr. McGuinness provides a brief explanation of this apparent asynchrony; “torn loyalties are nothing new in the southern Caucasus. For centuries the Russian, Persian and Ottoman empires fought over this beautiful region of mountains higher than the Alps and fertile valleys, home to the world’s first known vineyards. Having Russia to the north and Iran to the south makes this a tough neighbourhood – and it is getting tougher all the time.”

The Russians have also frequently used the position of Azerbaijan in particular to bargain with the Americans, offering the Russian radar station at Qabala in Azerbaijan in exchange for the removal of the American missile defense shield from Europe in 2007. At the time, the Americans did not accept the offer, but recent reconciliation between the two countries may lead to American President Obama putting the offer back on the table.

So what’s next? International bodies attempting to tackle the violence will have to naturally look, in this blogger’s opinion, at socio-economic empowerment. While peacekeeping forces may be necessary, they are a temporary solution at best and a cause for deterioration at worst. In terms of non-state actors, they are far less likely to be able to recruit members if the population at large is happy, and it is clear that happiness, in most forms and definitions, stems from socio-economic (particularly the latter) empowerment.

This is why the recently-created Caucasus Growth Fund has such an important role to play. Targeting small businesses with a strong focus on pan-sector synergy, this $42 million fund is a pioneering step in the right direction. Predominantly important is the fund’s desire to address “gaps in the regional distribution system to help business and commerce develop across Armenia, Azerbaijan and Georgia”, as Business New Europe’s Molly Corso writes.

As General Marshall of the iconic Marshall Plan once wrote, “Economic stability will lead to political stability”, and I for one certainly hope that to be the case. The Institute for War and Peace Reporting has done a notable job, attempting to construct cross-border dialogue, particularly for professional journalists. It is companies, groups and efforts like these that will pave the way for reconciliation; not politicians and treaties.

In perhaps a rare exception, Georgia’s new Prime Minister, Vano Merabishvili has announced a landmark initiative for the Georgian population. Democracy & Freedom Watch says that the “The four year 20 billion lari (USD 12 billion) plan is called ‘More Benefit to People’ and parliament will approve the seven-page document tomorrow. Its three main areas are unemployment, health-care and agriculture.”

Here’s to hoping they succeed.