FORMER SOVIET REPUBLICS AND TURKEY BACK ECONOMIC ZONE IN CAUCASUS
By Lale Sariibrahimoglu

Eurasia Daily Monitor, DC
Nov 30 2007

With the November 21 launch of the long-stalled Baku-Tbilisi-Kars (BTK)
railroad project that will link Azerbaijan and Georgia with Turkey,
Ankara has made headway toward its goal of creating an economic zone in
the Caucasus. But there are still obstacles to overcome before making
that scheme fully functional; specifically the ongoing territorial
dispute between Armenia and Azerbaijan, as Turkey has sided with Baku.

International financial institutions refused to support the scheme
because Armenia was excluded from the railroad project, prompting
the three countries of Azerbaijan, Georgia, and Turkey to finance
the $420 million project through their own means.

Since Turkey closed its border with Armenia in 1993, Georgia has
played a major role in Turkey’s access to Central Asia, while also
serving as a transit route for carrying Azerbaijani gas and oil via
Turkey to Europe, bypassing Russia.

Georgia’s dispute with Russia over Moscow’s alleged support for
separatists in Abkhazia and South Ossetia also endangers the viability
of long-term economic projects in the Caucasus.

However, Turkey is pushing ahead with projects that Ankara thinks
will contribute to the stability of this fragile region.

Turkish President Abdullah Gul, attending the opening ceremony in
Georgia together with Azerbaijani President Ilham Aliyev and Georgian
President Mikheil Saakashvili, said, "This project is very important
for the regional peace, stability, and prosperity" (see EDM, November
27, 28).

The railway, which will eventually connect Far Asia with Europe, is
also open to other countries, Gul said, sending a message to Armenia.

"The railroad scheme does not only link Baku with Turkey’s Kars
township, but it will also connect China to London under which rail
cars leaving China will pass via the Caspian Sea [using ferry boats],
as well as Baku, Tbilisi, and Kars before reaching Istanbul," he
said. "Via Istanbul, the railroad will be connected to Europe, passing
under the Bosphorus Straits through the Marmaray project [already]
underway, reaching to the English Channel and then to London. Today
here, we are in fact taking a step toward the realization of a big
project that will change history" (All Turkish dailies, November 21).

The idea to connect Turkey to Central Asia via Georgia with a railway
emerged in 1993, pre-empting an earlier plan to link Turkey with the
existing railroad to Central Asia via Armenia. At that time Ankara
closed its border with Yerevan due to its ongoing occupation of a
portion of Azerbaijan’s territory as well as the Azerbaijani-Armenian
dispute over the enclave of Karabakh.

Ankara also blames Yerevan for not abandoning its policy of claiming
territories from Turkey, as well as its refusal to accept a 2005
Turkish proposal to set up a panel of historians to investigate the
allegations of an Armenian genocide committed by Ottoman Turks during
World War I. Turkey denies the genocide allegations.

In the meantime, President Gul predicted that the railroad project will
revitalize the historic Silk Road, now dubbed the "Iron Silk Road,"
while thanking Kazakhstan’s President Nursultan Nazarbayev for his
commitment to allocate 10 million tons of goods to be carried via
the new railroad (Milliyet, November 21).

A joint economic zone is beginning to emerge, as Azerbaijan, Georgia,
and Turkey become more connected to each other via road, air, and
railroad links, Gul stated, indicating the gradual realization of
a Benelux model in the Caucasus that Ankara first proposed in the
mid-1990s.

"These are very exciting big projects. Once upon a time, such projects
were described by some as a dream. But today all those projects are
becoming a reality. The BTK railroad will become operational soon, as
has been the case with the Baku-Tbilisi-Ceyhan pipeline, now carrying
Caspian oil to Europe as well as the Baku-Tbilisi-Erzurum gas pipeline
[carrying Azerbaijan’s Shah Deniz gas to Europe via Turkey]," he said
(Milliyet, November 21).

Meanwhile, bilateral trade between Georgia and Turkey is planned to
reach to $1 billion by the end of this year, as the two countries
negotiate a free-trade deal and an agreement to prevent double
taxation.