The Eurasia Daily Monitor – 01/20/2005 – Armenian Directory & News

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From: Vladimir Socor <[email protected]>
Subject: The Eurasia Daily Monitor – 01/20/2005

The Jamestown Foundation
Thursday, January 20, 2005 — Volume 2, Issue 14
The Eurasia Daily Monitor

IN THIS ISSUE:
*Uzbeks need reassurance of national military preparation
*Yukos predicament affecting Lithuania
*Tbilisi proposes new autonomy for Abkhazia within Georgian federation
*Is Moscow planning to influence Azerbaijan ‘s coming elections?

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KARIMOV TELLS ARMY TO PREPARE FOR PRE-EMPTIVE CAPABILITIES

President Islam Karimov, delivering a key speech on the eve of Army
Day in Uzbekistan , declared that the Uzbek army must be prepared to
launch pre-emptive strikes against international terrorists and the
centers that direct them. Alluding to the attacks within Uzbekistan in
2004, Karimov used the opportunity of addressing the military to focus
on the country’s security threats and pointedly raised the prospect of
taking pre-emptive action . Yet underlying Karimov’s public stance on
the issue of using force against Tashkent ‘s radical adversaries are
attempts to talk up military and intelligence capabilities to detect
and carry out such operations. Moreover, growing unease over the
rivalry of the United States and Russia in the region facilitates a
political imperative to convince a domestic audience that he can
adequately deal with the terrorist threat.

First, Karimov has been regarded by Washington as a stalwart supporter
of U.S. deployment into Central Asia in the aftermath of 9/11. He sees
the potential rivalry between these powers as a negative factor in the
region, highlighting the existence of American and Russian military
deployments in Kyrgyzstan , within 30 kilometers of each other, as
“unnatural.” Conscious of the controversy surrounding the
U.S. military presence in Uzbekistan, vehemently opposed as a
long-term option by Moscow, the Uzbek leader believes the
U.S. military will leave after Afghanistan has stabilized; leaving
open the thorny question of future U.S. Air Force basing
rights. Karimov told Nezavisimaya gazeta, “Regrettably, under the
guise of fighting international terrorism, the main geostrategic
players in the world are engaged in a struggle for influence in
Central Asia , an all-important part of the world. As a consequence,
the true fight against terrorism may find itself outside the framework
of real processes” (Interfax, Moscow , January 14). Such publicly
voiced suspicion about whether Washington and Moscow prefer to pursue
self-interests rather than engage in genuine efforts to enhance
regional security serve to convince Karimov that Uzbekistan must seek
security independently, while continuing to receive international
assistance from these powers.

Next, raising the prospect of an Uzbek army tasked with such
pre-emptive missions entails assessing the current military
capabilities to execute such plans. One indication of improvements in
the course of continued military reform has appeared in the army’s
rations. The outdated Soviet rations, introduced in the early 1980s
and offering only low nutritional value, have given way to the
appearance of elements of the national cuisine, meat, vegetables,
fruit juices, milk, honey, and vitamin supplements; all geared towards
the good health of military personnel and thus raising morale and
combat capabilities (Uzbek Television First Channel, January
9). Uzbekistan ‘s Defense Minister, Qodir Gulomov, inspected the
Tashkent Higher Combined-Arms Command School on January 1 specifically
to oversee the implementation of these rations plans. Though such
alterations are evidently long overdue and a clear improvement in the
lifestyle of the ordinary soldier, Uzbekistan suffers from other
problems associated with a Soviet legacy force; low-technology
equipment, lack of adequate intelligence assets needed to fix and
locate enemy targets, and Special Forces units resembling more closely
Western-style infantry units. In short, there is a long way to go in
Uzbekistan ‘s efforts to develop armed forces capable of meeting the
challenges of responding to the threats posed by international
terrorism.

There is no evidence to suggest that the Uzbek authorities had any
real understanding of exactly who was responsible for the attacks in
Tashkent in 2004, let alone being able to discover the intentions of
those responsible beforehand. Instead, the familiar suspect groups,
including Hizb-ut-Tahrir came under official scrutiny, and it is
possible that the Uzbek army, were it to be used in a pre-emptive
manner, would attack political targets instead of identifying actual
terrorists. In simple terms the army and intelligence services do not
currently posses the capability to act pre-emptively against
terrorists with any degree of precision. It is in this sense that
Karimov’s adoption of the language of pre-emption marks a dangerous
moment in the development of counter-terrorist policies in Central
Asia .

Karimov’s adoption of the language of pre-emption can clearly unsettle
his immediate neighbors, who are entitled to ask where these centers
of terrorism are located and on whose territory. Yet, the successful
development of such military capabilities seems inextricably linked to
pursuing closer relations with Western militaries and governments able
to plug the technology gaps in the Uzbek military. However, echoing
Russian President Vladimir Putin’s recent talk about pre-emptive
strikes against terrorists, Karimov may have calibrated his remarks to
a domestic audience and more significantly towards the armed forces
themselves. The population needs reassurance that there are options at
Karimov’s disposal that can offer a level of security from future acts
of terrorism not guaranteed by the U.S. military presence within the
country. Genuine pre-emption, aimed against genuine terrorist targets,
does not equate with Karimov’s understanding of what is politically
expedient.

–Roger N. McDermott

LITHUANIA BRACES FOR RUSSIAN MOVE ON MAZEIKIAI OIL COMPLEX

The Russian government’s ongoing seizure of the private Yukos oil
company threatens to extend into Lithuania . There, a Yukos subsidiary
is the majority-owner and operator of the oil-processing and
oil-transport industry, Lithuania ‘s largest industrial asset. The
country seeks to prevent, or limit the adverse consequences of, a
takeover by the Russian government or government-connected companies.

The Dutch-registered Yukos Finance holds a 53.7% stake and operating
rights in Lithuania ‘s Mazeikiu Nafta complex. This consists of the
eponymous oil refinery, a supply pipeline, the Butinge oil-loading
maritime terminal, and some distribution outlets. Yukos is the main
supplier of crude oil from its Russian extractive operations to the
Lithuanian refinery and terminal. The Lithuanian government holds a
40.66% stake in the complex.

Mazeikiai is the only refinery in the three Baltic states , and the
only major non-Russian refinery in the eastern Baltic basin. It
processed almost 9 million tons of crude oil in 2004, up 21% on 2003,
earning record profits of more than $200 million (by GAAP criteria) in
2004. The Butinge terminal exported more than 7 million tons of crude
oil in 2004 (almost the same amount as in 2003 when the rival Primorsk
terminal became operational in Russia ).

Yukos acquired the majority stake and operating rights in 2002. Within
one year it upgraded the refinery’s equipment and product quality,
enabling it to meet European Union standards and compete in EU
markets. It also expanded the operation of the maritime terminal,
originally built by the American company Williams International in the
late 1990s. The Butinge terminal possesses both export and import
capability, thus giving Lithuania the option to import North Sea or
other non-Russian oil, as a hedge against possible disruptions in
Russian supply.

Yukos came to Lithuania during the heyday of the company’s overall
performance as a model for Russia ‘s energy industry. The privately
owned Yukos rescued Mazeikiai from the stranglehold of the Russian
government-connected company Lukoil. Using its government-awarded
position as coordinator of Russian oil supplies to Lithuania , Lukoil
reduced those supplies to a trickle, pushing Mazeikiai toward
bankruptcy, in order to force Williams out and acquire the majority
stake at a fraction of its value. It was at that point that Lithuania
made the agreement with the privately owned Yukos, which then turned
Mazeikiai into a thriving enterprise as well as top taxpayer to the
country’s budget. Yukos guaranteed stable supplies of crude oil — the
key to that success.

The destruction of Yukos in Russia is now forcing the Lithuanian
government to consider precautionary measures, in anticipation of
possible takeover attempts by Russian government-connected
companies. One precautionary step is to ensure a Lithuanian majority
stake and operating rights in Mazeikiai and the associated
enterprises. Under arrangements dating back to the 1999 Williams
contract, Yukos has a preemptive right to increase its stake by 9.72%
to 63.4%, for a price of $75 million. Should it decline to exercise
that option — or should it be prevented by the Russian
government-organized bankruptcy — Lithuania can acquire that
additional stake, thus raising the total Lithuanian stake to 50.48%
and obtaining the operating rights.

Economics Minister Viktor Uspaskikh has initiated that move, and he
discussed it in early January in Israel with senior Yukos managers who
had found refuge in that country. According to Lithuanian press
reports, Uspaskikh did not clear this initiative with Prime Minister
Algirdas Brazauskas. The latter agrees in principle with the proposal,
on the strict condition that Lithuania should not pay for that
additional stake in cash, but rather through capitalization of
debt. Under the 1999 Williams contract, Lithuania had loaned $288
million to Mazeikiai. The $75 million price of the 9.72% stake can
come off that debt.

However, Brazauskas argues that ensuring stable supplies of crude oil
is more important than acquiring a majority stake and operating
rights. Brazauskas says that he would favor — if necessary — selling
Lithuania ‘s shares, “even at half-price,” to any [i.e., most probably
Russian] oil company that would guarantee the long-term continuity of
supplies. Ensuring that Mazeikiai operates at capacity and profitably,
without disruption of fuel supplies on the market, is the overriding
consideration.

How much longer Yukos and its Russian subsidiaries, primarily
Samaraneftegaz, may be able to continue supplying Mazeikiai with crude
oil is far from certain. Local analysts suggest that the predicament
of Yukos will open the way for an as-yet-unidentified Russian oil
company to take over a large ownership stake in Mazeikiai; and that
Lithuania should retain a substantial stake as well as bringing in a
major Western investor. Such a three-sided arrangement could guarantee
crude oil supplies, ensure product access to markets, and avoid any
disproportionate Russian influence.

(BNS, ELTA, delfi.lt, January 10-18).

–Vladimir Socor

WILL ASYMMETRICAL FEDERALISM WORK FOR ABKHAZIA?

The Georgian government has crafted a new framework to facilitate the
reintegration of Abkhazia and South Ossetia into the Georgian state. A
special blueprint drafted by the National Security Council reportedly
proposes an asymmetric federation with an unprecedented degree of
sovereignty for Abkhazia.

Giorgi Khaindrava, Georgian State Minister for Conflict Resolution,
said on January 3 that the government is developing a new statement on
the status for breakaway Abkhazia and South Ossetia . He said that
that the section regarding Abkhazia is actually based on an existing
concept. Prior to the Rose Revolution, five liberal Georgian experts
had developed a model at the initiative of several members of the
National Security Council and with technical support provided by
Conciliation Resources, a British NGO. The current National Security
Council planned to consider the blueprint by January 10, the deadline
that Georgian President Mikheil Saakashvili had set for the Georgian
think tanks and national Security Council for elaborating a
blueprint. As predicted by many think tanks, the time allotted was not
sufficient to work out a sound, mutually acceptable document (Imedi
TV, January 3).

The pre-2004 model creating a special status for Abkhazia within the
Georgian state first came to light last summer (24 Saati, June 30,
2004), and Khaindrava announced it would serve as his main guideline.

Kote Kublashvili, a lawyer and co-author of the project, admits that
the concept is leading Georgia toward a federal state where Abkhazia
must have all the rights of a sovereign state except of the right of
internationally recognized independence. He refers to the structures
of the United States , Spain , Germany , and Switzerland and
conclusions of foreign experts about the model, which, they argue,
would not give Abkhazia any legal leverage to secede. However,
Kublashvili allowed that Abkhazia could still violate any federal
agreement (24 Saati, January 12).

Georgian Minister of Justice Giorgi Papuashvili said, “Not everyone
will be satisfied with this blueprint.” As he explained, “Everyone
should understand that the Abkhaz have their own legitimate
interests.” Papuashvili forecast “resistance from various political
groups” but said the authorities should overcome this obstacle by
using the mandate of the people’s trust. He also implied that a
referendum might be called on the matter (24 Saati, December 29).

The comments and actions by some Georgian officials and
representatives of civil society indicate that some Georgians are
becoming less rigid in their views regarding the Abkhaz conflict.

On January 6, 16 Georgian NGOs and several individuals who have been
long engaged in “public diplomacy” with the Abkhaz sent an open letter
to Saakashvili containing four preconditions that they believe Tbilisi
must follow to regain Abkhazia. The letter called on the government to
abandon military rhetoric and recognize peaceful means as the sole
method of conflict settlement; provide an unbiased and comprehensive
assessment of the Georgian-Abkhaz conflict; treat the Abkhaz side as
an equal partner in the talks; and lift economic sanctions on
Abkhazia, including restoration of railway links and investments to
the region’s economy.

Pro-governmental and Western-leaning analysts argue that, for the sake
of reconciliation, Georgia must bow before the Abkhaz and publicly
acknowledge that the military campaign against Abkhazia in 1992 was a
grave mistake. Moreover, these analysts emphasize the absolute
necessity of recognizing the legitimacy of the Abkhazians’ right of
self-determination. “We [Georgians] have found ourselves captives of
our own truth and didn’t think about the Abkhaz truth,” one analyst
argued. These analysts advocate, apart from granting Abkhazia a high
degree of sovereignty and symbols of respect, the creation of special
economic zones in the trans-border areas of Abkhazia and Georgia under
joint Georgian-Abkhaz administration and financial support and
security guarantees from international organizations. They also
suggest supplanting Russia as mediator (24 Hours, January 12-13;
Resonance, January 12).

Abkhaz leaders have responded cautiously to the proposal. Alexander
Ankvab, the anticipated nominee as prime minister in the new Bagapsh
government, supports peace talks but is worried about the bellicose
statements that sometimes emanate from Tbilisi . “Yes, we certainly
support peace initiatives. However, we have recently been hearing
Mr. Saakashvili and his ministers make threats against us,” he said in
a phone interview with Imedi TV on January 3.

There are also reports that part of the Abkhaz establishment is ready
to make peace with the Georgians so long as the Georgian government
publicly apologizes to the Abkhaz for the 1992 military invasion
(Asaval Dasavali, January 17).

Meanwhile Tbilisi ‘s liberal model incurred sharp criticism from
Abkhaz refugee organizations at an Institute of Political Science
roundtable discussion on January 5. Malkhaz Pataraya, chair of the
public movement Dabruneba (“Return”) said, “It’s not difficult to
understand where the idea of federalization is coming from” alluding
to Russia . Some representatives of the Abkhaz government-in-exile
dismissed the model as “discriminative for Georgians” and paving the
way for a “velvet,” and this time legitimate, secession of Abkhazia.

Georgian hardliners advocate a tough policy. The editorial “What will
the President choose, ‘political fancies’ or real politics?” (24
Saati, January 11) says the peace concept ignores vital interests of
ethnic Georgians. It calls on the government to triple the Georgian
army and intelligence budgets instead of flirting with unrealistic
peace initiatives.

The newly created “Unitary Georgia” movement argues that
federalization of Georgia is a Russian scheme and “national suicide”
that will lead to the further fragmentation of the country (24 Saati,
January 11).

The Union of Georgian Veterans of the Abkhaz War said that if the
government accepts the NGO’s concept, the Union would oppose it “by
all legal means (Akhali Taoba, January 15).

The Georgian government likely prefers to remain on good terms with
both sides. Saber rattling by the hawkish Defense Minister Irakli
Okruashvili alternates with conciliatory gestures to the
separatists. An ethnic Ossetian, Alana Gagloyeva, has become
Saakashvili’s spokesperson and an ethnic Abkhaz, Leila Avidzba, has
been appointed as government spokesperson (Prime News, Rustavi-2,
January 11).

–Zaal Anjaparidze

NEW ELECTION COALITIONS IN AZERBAIJAN PROMISE HEATED PARLIAMENTARY
ELECTIONS

Two newly formed election coalitions have awakened Azerbaijan ‘s
seemingly indifferent political scene, promising heated parliamentary
elections later this year. On January 10, 26 NGOs and representatives
from various political parties formed a new election coalition,
“Solidarity and Trust.” Ilgar Gasimov, chairman of the public movement
” Alliance in the Name of Azerbaijan ” was elected head of this
alliance. Interestingly, the alliance also includes several prominent
Azerbaijani oppositionists, coalition can be portrayed as one crossing
party lines. For example, the deputy chairman of the Azerbaijan
National Independence Party, Maharram Zulfugarly, and the
editor-in-chief of the Baki Xeber newspaper and ideological secretary
of the Azerbaijan Democratic Party, Aydin Guliyev, both signed up for
the new coalition, as did the Amal intelligentsia movement (which is
closely linked to Musavat, another opposition party), the Agridag NGO,
and the Institute of Peace and Democracy (Turan News Agency, January
10).

Turan quoted Gasimov as saying that the alliance “would contest all
125 seats in the Parliament, but that he had no intentions to run for
Parliament himself.” Alliance members pledged to strive for free and
fair elections in the country and declared the alliance open to all
interested parties. “We already have many members of YAP [the ruling
New Azerbaijan Party] and opposition parties who have joined us,
especially in the rural areas,” said Gasimov.

Local media and political analysts rushed to label the new coalition
as pro-Russian. The independent daily Zerkalo, in its lead article on
January 12, described the situation as “The shadow of the Russian
eagle hanging over the Azerbaijani parliament.” Gasimov, who worked
in Russian Ministry of Justice until his retirement, is somewhat of a
“dark horse” in Azerbaijani politics. His organization has been
increasingly vocal in the past few years on the issue of Karabakh, and
it has organized numerous street rallies in Azerbaijan , Russia , and
various European countries, protesting the Armenian occupation. This
new move to strengthen his position prior to the parliamentary
elections was interpreted by some as the establishment of a new
opposition or a sign of Russia ‘s increasing influence in the
country. Zerkalo, in the same article, linked the creation of the
alliance to the recent events in Ukraine in which the political battle
between the two political forces was very much perceived as part of
the battle between the West and Russia .

Yet there are also those who scoff at a link between Gasimov and
Russia . One opposition member, who knows Gasimov very closely but
preferred to stay anonymous, told EDM that Gasimov “is a puppet in the
hands of the [Azerbaijani] authorities and that Russia will never put
its bets on him.”

Meanwhile, leaders of ADP, Musavat, and the Popular Front met on
January 12 to discuss the possibility of forming a joint coalition
prior the parliamentary elections and came out of the meeting saying,
“In principle, an agreement has been reached” (Echo, January 12). The
Azerbaijani opposition has long been known for its inability to unite,
which has caused them serious defeats in previous elections, most
lately in presidential elections in 2003. Yet, the recent success
stories from Georgia and Ukraine seem to have changed the attitude of
opposition leaders in the country. “As a result of negotiations
[between the Popular Front, Musavat, and ADP parties] it has been
agreed to consolidate the opposition and submit unified candidates”
Zerkalo quoted Ali Kerimli, chairman of the Popular Front, on January
14.

It is likely that several more coalitions, willing to run for
Parliament, will emerge in the next months. Jumshud Nuriyev, a former
member of the opposition, has also stated that in March he plans to
announce the creation of broad-based political alliance. In this
situation, the ability of the ruling party, also known for its
internal rivalries, to unite and form a common list of candidates will
matter considerably. In any case, the upcoming elections in November
promise much life in the once near-dead Azerbaijani political scene.

–Fariz Ismailzade

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