A HANDSHAKE SHAKES A REGION

Christian Science Monitor
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May 19 2009

Turkey’s warming with Armenia stirs up ethnic and energy issues in
the strategic Caucasus.

Make one move in the unstable Caucasus region, and a host of difficult
and far-reaching issues get tripped over – ethnic tensions, Russian
dominance, and competition over oil and gas.

So the world discovered when Russia’s military clashed with tiny
Georgia’s last August. And so it’s discovering again under far more
welcome circumstances: a long-awaited warming between Turkey and its
Caucasus neighbor, Armenia.

Yes, even such rapprochement can stir up this region, sandwiched
between the Black and Caspian seas and bordered by Russia to the
north and Turkey and Iran to the south.

Over the past few weeks, energy-rich Azerbaijan has turned up the
flame under this geographic cauldron. It was furious with Turkey for
agreeing in April to a "road map" to normal relations with Armenia,
which backs a separatist Armenian enclave within Azerbaijan called
Nagorno-Karabakh. The area was the site of a bloody war in the early
1990s after the Soviet empire broke up, and has since become the oldest
"frozen conflict" in the south Caucasus. Armenia-supported separatists
hold additional Azeri territory outside the enclave.

So Azerbaijan has used the only leverage it has – oil and gas – to
influence Turkey. It’s an influence that extends even to European
energy goals.

Situated on the western coast of the Caspian Sea, Azerbaijan serves as
a gateway to the sea region’s fossil fuels. It funnels oil to Western
countries via a pipeline that avoids Russia and winds through Georgia
to the Turkish Mediterranean coast. It also exports gas via a pipeline
that ends in Turkey.

Azerbaijan expects to significantly increase gas exports in another
five to seven years and has been counting on extending gas pipeline
delivery to Western European markets. Similarly, Europe has been
looking forward to an extended pipeline – particularly a planned one
from Turkey to Austria – to give it more energy independence from
Russia. But that east-west line – called Nabucco – has a history
of delays.

Unless the Turks make resolving Nagorno-Karabakh part of normalizing
ties with Armenia (and Armenia objects to this), the longer gas
pipeline will end as a pipe dream – or so the Azeris hinted. They
threatened to withdraw Turkey’s status as "most favored customer"
and as the main Azeri export route for oil and gas. There’s Russia
as an alternative, the Azeris warned.

Azerbaijan has a self-interest in a diversified export energy
market, but its overture to Russia is more than bluff. The Azeris and
Russians recently signed a memo of understanding about gas sales. The
concern is that this could go further and that Azerbaijan, fed up
with delays over a gas pipeline to Europe, would make Russia its gas
patron. Because supplies are not enough to support two gas pipelines,
European governments are now pushing to realize their dream of a gas
line that reaches them.

If Russia eventually gets the gas deal, it not only locks in energy
supplies, it also solidifies its leverage over the Caucasus – already
enhanced by its occupation of Georgia’s two breakaway republics.

Multiple fears are at work in the Caucasus: at the local level about
the preservation of ethnic culture, at the national level about
territorial integrity, and at the international level about regional
influence and access to energy markets.

This calls for a sophisticated approach that seeks to build trust
in all these areas. Earlier this month, international mediators
for Nagorno-Karabakh quietly brought the presidents of Armenia and
Azerbaijan together to talk on the sidelines of a conference in
Prague. In June, the two presidents are expected to meet again in
Russia. These are positive steps.

Last week, Turkey’s Prime Minister Recep Tayyip Erdogan visited
Azerbaijan and Russia to try to reduce the simmering ethnic and energy
tensions in the region. He made progress with Russian Prime Minister
Vladimir Putin on a new north-south Russian-Turkish gas pipeline
that would supply Israel and other countries. That, plus renewing
a contract for Russian gas supplies to Turkey, should help reassure
Moscow of its continued energy influence.

But when Mr. Erdogan, on his visit to Azerbaijan, gave in to the demand
that Turkey not reopen its borders with Armenia until Nagorno-Karabakh
is resolved, he reignited flames in Armenia. Some speculate that the
normalization process is now at risk.

This region is too small, the stakes too high, to separate politics
from energy. Both will have to be handled at the same time, if perhaps
on different tracks.