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Marshall Auerback: The Militarisation Of Oil

Wednesday, 23 March 2005, 12:54 pm

Marshall Auerback

International Perspective: The Militarisation Of Oil

by Marshall Auerback
March 8, 2005
From: prices
spiked to record levels last week, propelled by a rally in petrol prices and
a cold snap in the northern hemisphere, against the backdrop of a tight
balance between supply and demand. Yes, that’s right, basic “supply/demand,”
not “political turbulence in the Middle East.”

If anything, this simplistic relationship between Middle Eastern political
tension and rising/falling crude prices has broken down over the past few
weeks. As the FT’s Philip Stephens noted, “The Middle East is becoming a
different place. The world’s sole superpower is unwilling any longer to
accept the status quo. That of itself is a powerful agent for change. Images
beamed by Arab satellite television, first of the Palestinian and Iraqi
elections and now of the public clamour for Syria’s withdrawal from Lebanon,
are shaking the authoritarian preconceptions of the old order. Behind the
scenes, the world-weary cynicism about the prospects of an
Israeli-Palestinian peace deal is giving way, if not to optimism, then at
least to glimmers of hope.”

It is very telling that the price spike came during a most propitious
backdrop: a popular uprising in Beirut, the growing isolation of Syria and
small stirrings of change in Egypt and Saudi Arabia. Analysts said hawkish
comments from the Organization of Petroleum Exporting Countries have
contributed to the rally. Ali Naimi, the Saudi oil minister, last week
forecast that oil prices would stay between $40 and $50 a barrel for the
rest of this year. The acting OPEC secretary general, Adnan Shihab-Eldin,
also added fuel to the fire (so to speak) when he said oil prices could rise
to $80 in the next two years in the event of a major oil supply disruption,
similar to the war in Iraq. (It is also worth noting that crude’s strength
is no longer simply a weak dollar phenomenon: as market analyst James Turk
has noted, oil is now becoming more expensive in terms of both euros and
dollars, reflecting the growing breadth of this particular bull market.)

But talk, unlike oil, is cheap. OPEC could no more “talk up” the market than
it could talk it down last year. Obscured against the perennial geopolitical
conflict that tends to characterise the oil producing regions of the world,
or the endless theorising about whether the oil cartel is “cheating” on its
quotas, is the fact that exploration success in global oil has been in
decline for decades and that the world has been living off of the major
fields discovered literally decades ago. Recent exploration has gone in
large part toward exploiting more effectively these major fields, but such
exploration has not been characterised by huge new discoveries. Announced
increases in “reserves” merely reflect changes in reporting requirements as
mandated by the SEC, rather than major finds of new sources of oil.
Likewise, most advances in technology simply enhance extraction, but have
done little to augment existing supply. As a consequence, the rate of
depletion of these fields has increased, implying looming supply problems
ahead. Add to this the fact that the vast majority of new projects will
produce less refinable heavy oil and it is clear that major supply
shortfalls loom, cold weather or hot weather.

We have arrived at the summit of “Hubbert’s Peak,” the oil geologist who in
1956 correctly prophesized that U.S. petroleum production would peak in the
early 1970s, then irreversibly decline. In 1974 he likewise predicted that
world oil fields would achieve their maximum output in 2000; a figure later
revised by some of his acolytes, such as Henry Groppe, Colin J. Campbell,
and Matt Simmons, to anywhere between 2006-2010.

If high oil prices are here to stay, it clearly has epochal implications for
the global economy. Indeed, even if the recent rise puts paid to the notion
that Middle Eastern political risk premiums in and of themselves bear
tangential relationship to underlying movements in the oil market, the very
lack of new supply will almost invariably lead to an increasing
militarization of global energy policy, although perhaps not in the Middle
East-centric manner in which this has been occasionally manifested in the
past.

For Iraq is hardly the only country where American troops are risking their
lives on a daily basis to protect the flow of petroleum. In Colombia, Saudi
Arabia, and the Republic of Georgia, U.S. personnel are also spending their
days and nights protecting pipelines and refineries, or supervising the
local forces assigned to this mission. American sailors are now on
oil-protection patrol in the Persian Gulf, the Arabian Sea, the South China
Sea, and along other sea routes that deliver oil to the United States and
its allies. In fact, as Michael Klare has noted (Blood and Oil: The Dangers
and Consequences of America’s Growing Dependency on Imported Petroleum), the
American military is increasingly being converted into a global
oil-protection service:

“Ever since the Soviet Union broke apart in 1992, American oil companies and
government officials have sought to gain access to the huge oil and natural
gas reserves of the Caspian Sea basin — especially in Azerbaijan, Iran,
Kazakhstan, and Turkmenistan. Some experts believe that as many as 200
billion barrels of untapped oil lie ready to be discovered in the Caspian
area, about seven times the amount left in the United States. But the
Caspian itself is landlocked and so the only way to transport its oil to
market in the West is by pipelines crossing the Caucasus region — the area
encompassing Armenia, Azerbaijan, Georgia, and the war-torn Russian
republics of Chechnya, Dagestan, Ingushetia, and North Ossetia.

“American firms are now building a major pipeline through this volatile
area. Stretching a perilous 1,000 miles from Baku in Azerbaijan through
Tbilisi in Georgia to Ceyhan in Turkey, it is eventually slated to carry one
million barrels of oil a day to the West; but will face the constant threat
of sabotage by Islamic militants and ethnic separatists along its entire
length. The United States has already assumed significant responsibility for
its protection, providing millions of dollars in arms and equipment to the
Georgian military and deploying military specialists in Tbilisi to train and
advise the Georgian troops assigned to protect this vital conduit. This
American presence is only likely to expand in 2005 or 2006 when the pipeline
begins to transport oil and fighting in the area intensifies.

“Or take embattled Colombia, where U.S. forces are increasingly assuming
responsibility for the protection of that country’s vulnerable oil
pipelines. These vital conduits carry crude petroleum from fields in the
interior, where a guerrilla war boils, to ports on the Caribbean coast from
which it can be shipped to buyers in the United States and elsewhere. For
years, left-wing guerrillas have sabotaged the pipelines — portraying them
as concrete expressions of foreign exploitation and elitist rule in Bogota,
the capital — to deprive the Colombian government of desperately needed
income. Seeking to prop up the government and enhance its capacity to fight
the guerrillas, Washington is already spending hundreds of millions of
dollars to enhance oil-infrastructure security, beginning with the
Cano-Limon pipeline, the sole conduit connecting Occidental Petroleum’s
prolific fields in Arauca province with the Caribbean coast. As part of this
effort, U.S. Army Special Forces personnel from Fort Bragg, North Carolina
are now helping to train, equip, and guide a new contingent of Colombian
forces whose sole mission will be to guard the pipeline and fight the
guerrillas along its 480-mile route.”

Other countries are responding in kind, notably China. More expensive oil
will undercut China’s energy-intensive boom. The country is already
experiencing sporadic power shortages against a backdrop of growing car
ownership and air travel across the country. Energy is becoming vital to
strategically important and growing industries such as agriculture,
construction, and steel and cement manufacturing. Consequently, pressure is
already mounting on Beijing to access energy resources on the world stage.
As a result, energy security has become an area of vital importance to
China’s stability and security. China is stepping up efforts to secure sea
lanes and transport routes that are vital for oil shipments and diversifying
beyond the volatile Middle East to find energy resources in other regions
such as Africa, the Caspian, Russia, the Americas and the East and South
China Sea region.

To be sure, China’s drive for energy security has nowhere come close to
reaching the militarization of America’s current energy policy. To the
extent that it has engaged in competition, this has so far been limited to
the economic sphere through state-owned oil and gas companies such as China
Petroleum Chemical Corporation (Sinopec), China National Petroleum
Corporation (C.N.P.C.), its subsidiary PetroChina and China National
Offshore Oil Corporation (C.N.O.O.C.), all of which are actively seeking to
accumulate overseas subsidiaries or offshore exploration rights. Sinopec,
for example, has won the right to explore for natural gas in Saudi Arabia’s
al-Khali Basin and Saudi Arabia has agreed to build a refinery for natural
gas in Fujian in exchange for Chinese investment in Saudi Arabia’s bauxite
and phosphate industry.

Chinese acquisitions are also extending closer to Washington’s traditional
sphere of influence in the Americas. China and Canada signed a joint
statement on energy cooperation, which included accessing Canada’s oil sands
and uranium resources following Prime Minister Paul Martin’s recent trip to
the country. Moreover, while attending last November’s annual Asia-Pacific
Economic Cooperation (A.P.E.C.) summit in Chile, Chinese President Hu Jintao
announced an energy deal with Brazil worth $10B supplementing a $1.3B deal
between Sinopec and Petrobras for a 2000 km natural gas pipeline. China is
also acquiring oil assets in Ecuador as well as investing in offshore
petroleum projects in Argentina. During Venezuelan President Hugo Chavez’s
visit to Beijing in December and Chinese Vice President Zeng Qinghong’s
visit to Venezuela in January 2005, China also committed to develop
Venezuela’s energy infrastructure by investing $350M in 15 oil fields and
$60M in a gas project in Venezuela.

However, as oil prices rise and China imports an increasing amount of its
energy needs, the competition is beginning to spill over into the political
and military spheres. The burgeoning energy trade with Saudi Arabia, for
example, already complements a growing relationship in the military sphere
as seen with China selling Saudi Arabia Silkworm missiles during the
Iran-Iraq War in the 1980s,

There are also indications that Beijing’s relations with Tokyo are taking on
a more militaristic hue, particularly in relation to the issue of Taiwan.
Although Taiwan has largely been viewed within the context of the so-called
“One China” policy, analyzing the conflict through this narrow prism has
obscured other important, energy-related facets underlying Beijing’s
hawkishness on the issue (and the corresponding response by both Tokyo and
Washington). A territorial dispute between China and Japan in the East China
Sea, which both sides claim as their Exclusive Economic Zone (E.E.Z.), is
being further fueled by reports of vast supplies of oil and gas in the
region. The disputed territory includes the Diaoyu or Senkaku islands and
the Chunxiao gas field northeast of Taiwan, which according to a 1999
Japanese survey holds 200 billion cubic meters of gas. Japan regards the
median line as its border while China claims jurisdiction over the entire
continental shelf. In 2003, China began drilling in the area after the
Japanese rejected a Chinese proposal to develop the field jointly. Although
the Chunxiao gas field is on the Chinese side of the median line, Japan
claims that China may be siphoning energy resources on the Japanese side.

The rising military tensions between the two countries manifested itself
most recently in the form of a confrontation following the incursion of a
Chinese nuclear-powered submarine into Japanese waters off the Okinawa
islands on November 10, 2004. The intrusion was followed by a two-day chase
across the East China Sea. Although China subsequently apologized, it was
not an isolated occurrence: this was soon followed by the intrusion of a
Chinese research vessel into Japanese waters near the island of Okinotori,
which was believed to have been surveying the seabed for oil and gas
drilling purposes. This was, according to a Power and Interest News Report
by author Chietigj Bajpaee, the 34th such maritime research exercise by
Chinese vessels within Japan’s E.E.Z. in 2004, up from eight in 2003, with
China not giving prior notification in 21 of the 34 cases.

Tokyo has responded in kind: Japan’s most recent Strategic Defense Review
named both North Korea and China as causes for security concern as it
instigated an overhaul of defense priorities. The review is particularly
notable for the inclusion of China as a country that needs “carefully
watching” in the wake of the November 2004 submarine incident.

Adding to these tensions is Japan’s shift from its post-war pacifist and
defensive posture towards a more active military role in the region, as seen
with the current deployment of its Self Defense Forces to Iraq. Last
December, Prime Minister Koizumi extended by a year the deployment of 550
ground troops in Iraq, the biggest and most controversial dispatch since the
Second World War. His government has also continued to push for a revision
to the 57-year-old pacifist constitution that would enable more effective
participation in such missions as a way of strengthening the U.S.-Japan
alliance.

The Bush Administration has not remained a disinterested party in this
rising dispute. After a temporary post Sept. 11-cessation of references to
China as a “strategic competitor”, the US has more recently again begun to
express disquiet about the thrust of China’s military policy, particularly
in response to the proposed lifting of the European Union’s arms embargo on
China. A recent joint statement by the US and Japan last month named Taiwan
as an issue of joint security concern for the first time. In response, China
has noted that the US spends more on its defense than the next 18 countries
combined, but this has not stopped Beijing from pushing to acquire a
national fleet of Very Large Crude Carriers, or V.L.C.C.s, that could be
employed in the case of supply disruptions brought on by a terrorist attack,
the Malacca Straits (through which about 80 per cent of China’s oil imports
flow) or a U.S.-led blockade during a conflict over Taiwan.

Growing US-Chinese tensions (fuelled in large part by this ongoing
competition for global energy resources) also help to explain China’s less
than enthusiastic support of US aims to discourage North Korea from
developing its nuclear weapons program further. Indeed, in regard to the
latter, the Chinese foreign minister, Li Zhaoxing, has recently expressed
doubt about the quality of American intelligence on North Korea’s nuclear
program and said the United States would have to talk to North Korea
one-on-one to resolve the standoff. Washington has repeatedly sounded the
alarm about North Korea’s nuclear efforts and has pressed China, North
Korea’s only significant ally, to be more active in seeking seek a solution.
If the US insists on playing the “Taiwan card,” Beijing seems equally happy
to play the “North Korea card.”

Oil, and the corresponding drive for energy security, therefore, is becoming
an increasingly common, yet disruptive, thread driving policy in Washington,
Beijing and Tokyo. The competition over energy resources is now becoming an
additional area of contention over and above existing trade disputes between
Washington and Beijing. China’s growing presence on the international energy
stage could ultimately bring it into confrontation with the world’s largest
energy consumer, the United States, where a growing number of American
soldiers and sailors are being committed to the protection of overseas oil
fields, pipeline, refineries, and tanker routes. Given the parlous state of
America’s national finances, it is clear why Tokyo, with its huge repository
of savings, is being brought in effectively to help underwrite this policy
(although why the Japanese have gone along so compliantly, other than a
longstanding historic rivalry with China, is less clear). With these 3
global behemoths engaged in an increasingly fraught competition over an
increasingly scarce resource, it is clear that the global economy will pay a
higher price for oil, not only in dollar terms, but also in blood for every
additional gallon of oil which we seek to consume. The great game has truly
begun.

ENDS

ARMENIA ONLY POST-SOVIET REPUBLIC WITH SERIOUS ARMY: US SOCIOLOGIST

YEREVAN, MARCH 22. ARMINFO. No post-Soviet republic except Armenia
has managed to form a serious army, says Georgy Derlugyan, professor
of sociology of North-Western University, Chicago, US.

Derlugyan notes that on May 9 (the day of the return of Sushi) the
army of the Nagorno Karabakh Republic holds Soviet-like parades with
the soldiers holding the images of Soviet marshall Hovhannes Bagramyan
rather than of middle age Armenian heros. This is a conscious imitation
of the Soviet times.

In Abkhazia they are raising monuments to Abkhazians killed in the
Great Patriotic War (1941-1945). In NKR they are holding parades with
slogans “Fathers Reached Berlin – Sons Will Reach Baku!”

These people had a state that they still have in their memory. They
believe it was good and are trying to restore it. That’s why there
are so many Soviet patriots among old people in the Caucasus. They in
Georgia even say they will raise a gold monument to he who restarts
the Moscow-Tbilisi N14 train.

This is not empire consciousness this is remembering the times when
people got a chance to go beyond their traditional communities –
the times of a well-organized social system that was ruined with the
collapse of the Soviet Union. But only force can take people back
into the past. This happens when, say, Armenians are displaced from
Baku to Karabakh. Former teachers, doctors, engineers they are forced
to milk a cow, to chop wood and to take water from a well.-

FOX SPORTS, Australia
Townsville Bulletin, Australia
Advertiser Adelaide, Australia
March 23 2005

Fenech foe plots Vic’s fall
By Grantlee Kieza

HE once broke the heart of Jeff Fenech – and this Sunday Harold
Volbrecht wants to crush the apple of his eye.

Volbrecht, South African welterweight champion for a staggering 14
years, was the architect of Fenech’s worst defeat. And now he’s back
in Australia confident his flyweight Mzukisi Sikali will take the IBF
world flyweight title from Fenech’s pride and joy, Vic Darchinyan.

It’s the first title defence for the Fenech-trained Darchinyan, and
the Armenian-born world champ has picked a fight with a slick-moving
veteran who is unbeaten over his last six years, and supremely
confident of springing an upset at the State Sports Centre.

Volbrecht was one of the world’s top welterweights for a decade and
has trained some of South Africa’s greatest fighters of the last 20
years.

These range from Corrie Sanders, the giant policeman and rugby
five-eighth who held a version of the world heavyweight championship,
to the sublimely gifted Brian Mitchell and the flamboyant Lovemore
Ndou.

He also trained Phillip Holiday, the world lightweight champ who
ended Fenech’s career with a devastating second-round knockout back
in 1996 in Melbourne.

And Volbrecht says Sikali is the best fighter of the lot.

“He is a far more talented boxer than Darchinyan,” Volbrecht said.

“In terms of style he fights a lot like Sugar Ray Leonard, but from a
southpaw stance.

“Sikali is a beautiful mover and I have always said that a skilful,
thinking fast boxer will always beat the strong, hard-punching
aggressive types like Darchinyan.

“I have trained a lot of fighters over the years and we have come a
long way for this fight. I don’t often travel with losers and I will
be very surprised if Vic Darchinyan is still the world champion on
Monday.”

Volbrecht has been able to back up his confidence in the past.

He says he planned for the deeply-religious Holiday to nail Fenech
with overhand rights from the fourth round of their world-title bout
in 1996. Instead Holiday unleashed a barrage of punches in the
opening seconds with the fury of a biblical plague.

“We had a TV monitor in our room and we could see Fenech in his
dressing room just sitting there and not warming up properly,”
Volbrecht said.

“I knew then we could catch Fenech cold and I told Phillip to throw
the right hands we were planning for round four.

“Phillip was a very good fighter but he was helped a lot in that bout
by catching Fenech cold.”

Volbrecht says Sikali’s lack of a proper warm-up was responsible for
his worst defeat, a 48-second loss to WBC flyweight champ Pongsaklek
Wongjongkam in Thailand eight years ago.

Since then he has lost just once, and that was by a split decision in
a world super-flyweight title fight in Italy six years ago.

Darchinyan, 29, also fights as a southpaw. He won the world title in
an epic battle against the Colombian fighter Irene Pacheco in
Hollywood, Florida in December.

KOSTYA Tszyu’s protege, Anton Solopov, and Newcastle’s most popular
fighter, Chad Bennett, will both be in action tomorrow night at
Newcastle Panthers.

Solopov, who is a former world junior amateur champion and the first
fighter to be managed by Tszyu, will be looking for his 10th
professional victory when he faces Argentina’s Raul Eduardo Bejarano,
the South American welterweight champion.

Bennett, who is the current IBF Pan Pacific welterweight champ, will
face another South American fighter, Oscar Samudio from Paraguay.

NKR DEFENSE MINISTER CALLED AZERBAIJAN TO STOP PROVOCATION

PanArmenian News
March 21 2005

21.03.2005 04:13

/PanARMENIAN.Net/ Karabakh Defense Minister Seyran Ohanian called
Azerbaijan to put an end to provocation. “Adhering to the peaceful
settlement of the Karabakh conflict we call the Azerbaijani leadership
to be mote considerate and undertake measures to alleviate tension
at the contact line. This provocation policy is useful neither for
our people nor for Azeris”, Seyran Ohanian stated when commenting on
the situation at the contact line of the Karabakh and Azeri armed
forces. The Minister noted that the Azeri side is creating tension
trying to advance its positions. At that he reported that the NKR
Defense Army undertakes appropriate measures to secure the front
line. “The defensive capacity of our army is at a proper level and
we are ready to provide security of our country and people”, Seyran
Ohanian said. In his words, since 1994 Azerbaijan has been making
anti-Armenian statements in an attempt to mislead the international
community.

HAMLET GASPARIAN: TURKISH NEWSPAPERS TURN UPSIDE-DOWN RA AMBASSADOR’S
WORDS ABOUT GENOCIDE

YEREVAN, MARCH 18, NOYAN TAPAN. The Turkish newspapers “Radical” and
“Miliet” have turned upside-down the statement attributed to the
Armenian Ambassador to the European Union Vigen Chitechian. The
spokesman for the RA Foreign Ministry Hamlet Gasparian stated this,
when commenting, at the request of reporters, on the allegation by the
above mentioned newspapers that during his speech made at the
Commission on Cooperation between Armenia and the European Parliament
in Strasbourg last week, Vigen Chitechian said, “The Genocide problem
was created by the Diaspora.” Hamlet Gasparian underlined that in
connection with the genocide issue Ambassador Chitechian usually uses
the expression “The Diaspora itself has been created as a result of
the Genocide.” “I think the Turkish press, for propaganda purposes, is
trying once again to mislead the international community into thinking
that there is a contradiction between the approaches taken by Armenia
and the Diaspora to the Armenian Genocide. “This is an old Turkish
trick indented for those uninformed,” the RA Foreign Ministry
spokesman stated.

`NO NEED TO CLOSE MELKONIAN’ EMPHASIZES PATRIARCH

ISTANBUL, March 13 (LRAPER Bulletin). His Beatitude Mesrob II, Armenian
Patriarch of Istanbul and All Turkey, answered questions posed by the Noyan
Tapan information agency. The following is the authorized translation from
Western Armenian to English.

Q. – Your Beatitude, Armenians worldwide are concerned with the dispute
concerning the Melkonian Educational Institute that is evolving between the
Armenian Patriarchate of Istanbul and the Armenian General Benevolent
Union (AGBU). Please, present the background of this issue briefly.

A. – Let me summarize. In 1921, Karapet Melkonian transferred to the
Patriarchate of Istanbul a donation of 400,000 Egyptian pounds which was
worth at the time 3,5 million dollars. In 1924, Patriarch Zaven Der
Yeghiayan of blessed memory, established a school and an orphanage in the
city of Nicosia, Cyprus, with the income from this donation. He named it the
Melkonian Educational Institute. In 1925, Patriarch Zaven transferred the
Cyprus MEI and the entire Melkonian fund to the AGBU. It is to be noted that
the AGBU received everything from the Istanbul Patriarchate. In 1926, with a
court decision an agreement was signed between Karapet Melkonian, Patriarch
Zaven and the AGBU. According to this agreement, the AGBU must keep the
Melkonian Educational Institute open, provide it with necessary funds, pay
1,000 Egyptian pounds per annum to the Jerusalem Patriarchate, 1,500
Egyptian pounds per annum to the Istanbul Patriarchate, as well as open a
kindergarten for Armenians living in Alexandria. In 2004, however, the AGBU
announced its decision to close down the Melkonian Educational Institute,
which is the only 12-year Armenian school within the European Union. With
regret, I followed the conflicting opinions on this matter published in the
Armenian media. However, on December 26, 2004, I personally saw, for the
first time, the official copy of the 1926 agreement. It was now clear that
the lawful successors to Patriarch Zaven had the right to intervene in the
issue. Therefore, in January, we took legal action against the AGBU in the
California supreme court to withdraw the decision to close down the
Melkonian Educational Institute.

Q. – How do you assess the AGBU announcement of their wish to establish a
similar institution in Armenia, instead of keeping the Melkonian
Educational Institute open?

A. – What does “similar” institution mean? How can the only Armenian senior
high school operating in the European Union be replaced with a new school in
Armenia? Opening a new school in Armenia will cost, with the most
exaggerated estimate, 2-3 million US dollars. The AGBU elite or their
flatterers can easily afford such a school in Armenia, so the closure of yet
another school operating in Europe is not necessary at all. One ponders: if
the land and buildings of the Melkonian Educational Institute are sold, the
AGBU would earn, according to Cypriot Armenians, perhaps more than 120
million US dollars. There is also the Melkonian fund itself, which,
according to experts, would comprise no less than 20 million US dollars if
it has been reasonably managed. What are they going to do with this sum? Our
people have a right to know. Karapet Melkonian was an ethnophile and he left
his wealth to the children of his nation through this Patriarchal See. Thus,
in the words of the Gospel, today we can all say to the AGBU “Give an
account of thy stewardship.”

Q. – So, may we conclude that the primary goal of the Patriarchate is to
maintain the Melkonian Educational Institute, rather than getting funds from
the will of patron Melkonian?

A. – Naturally. Already, the Patriarchate receives annually a certain
allocation. In 2004, I wouldn’t know the figures by heart, but I suppose we
received something like 1,600 US dollars. A little more or less will not
create a significant change in our annual budget. What is important is this:
Like every charitable institution, the AGBU, also, must be accountable to
our people. What happened to the 3,5 million US dollars of the 1920s? How
much money is left in the Melkonian fund today? Let them inform the nation.

Q. – In the critical observations addressed to you, among others, there was
an accusation that you have not attempted to settle the dispute with the
AGBU by way of negotiations prior to taking legal action. Please comment on
this.

A. – We would be pleased if they were satisfied only with critical
observations. Also prior to the Catholicosal Elections in 1999, when they
supposed that I would declare my candidacy – then proposed by certain
clergymen presently occupying primatial sees – they began to try to stick
mud on me, and to defame me with false accusations and slanderous
expressions via hired pens in the Armenian media. Other potential
candidates, too, were treated in the same way. It is bad and immoral people
who resort to such methods when they fear that their interests are
endangered. Today, too, the same circles resort to the same murky methods,
due to their lack of moral and intellectual probity. A pity! As for the
negotiations: the current successor of Patriarch Zaven is the guarantor of
the Melkonian will. Why has the AGBU not applied to the Patriarchate to this
day? Let me say why. Because it does not wish to negotiate. It must not be
forgotten that no reply has been given to the letters and criticisms
directed at the AGBU, to this day. In other words, the accusation should be
reversed and directed to the AGBU.

Q. – Do you see any prospect today of avoiding the judicial act and
achieve an agreement with the AGBU?

A. – In response to Californian mediators, we already expressed willingness,
two months ago, to receive an AGBU delegation in Istanbul. Therefore, it is
difficult to comprehend the purpose of the heinous announcement of the
Armenian Democratic Liberal Party, as well as other media assaults. It is
possible that they think it more opportune to negotiate after having dealt
blows. They are mistaken.

EurasiaNet Organization
March 15 2005

SAAKASHVILI: NO JOBS IN JEOPARDY FROM BASE CLOSURE
Molly Corso 3/15/05

A parliamentary resolution that seeks an early Russian withdrawal
from military bases from Georgian territory is stirring concerns
about what a pull-out will mean for the economic welfare of one
Georgian town.

In a unanimous vote March 10, Georgian legislators called on
President Mikheil Saakashvili to demand a full Russian troop
withdrawal from two bases on Georgian territory by January 1, 2006,
unless Russian officials agree to a mutually acceptable pull-out
timetable before May 15. Saakashvili is not bound by law to implement
the resolution, which is aimed at breaking a deadlock in base
withdrawal negotiations. [For background see the Eurasia Insight
archive]. If Russia balks on the base issue, Georgia should simply
shut down the two facilities – one at the Black Sea port of Batumi,
the other in Akhalkalaki, a town of 10,000 with a predominantly
ethnic Armenian local population – the resolution states.

The situation in Akhalkalaki illustrates the extent to which the base
debate with Moscow goes beyond foreign policy. Related economic and
interethnic issues promise to play a considerable role as well.

The base in Akhalkalaki employs about 15 percent of the local
population and is the only major employer in town. In addition, local
Armenians say the Russian troop presence makes them feel more secure.
Between 1,500 and 4,000 Akhalkalaki residents took to the streets on
March 13 to demonstrate against the base’s potential closure,
contending that Russians troops provided their only defense against
Turkey, a longtime Armenian foe. [For additional information see the
Eurasia Insight archive]. David Rstkyan, leader of the ethnic
Armenian political party Virk, has pledged that town residents will
“do everything to try and stop the Russian soldiers from leaving
Akhalkalaki,” Kavkasia-Press reported.

Strengthening relations with Georgia’s ethnic minorities is a key
government policy goal, and the discontent in Akhalkalaki seems to
have caught Saakashvili’s attention. In a televised exchange with
Defense Minister Irakli Okruashvili on March 14, the president stated
that a Georgian army unit would move into the town’s base once
Russian troops had vacated the property. Jobs for all Georgians
currently employed at the base would be preserved, he said.

“Our task is to make sure that not a single qualified person who has
anything to do with the military is left without a job,” Imedi
television quoted Saakashvili as saying during a March 14 inspection
of a Georgian army battalion. “We have the resources and money to
ensure this.”

Hamlet Movsesian, Akhalkalaki’s parliamentary representative, told
EurasiaNet that, after the Rose Revolution, government
representatives, including the late Prime Minister Zurab Zhvania,
promised the town the base would not be closed until alternate
employment could be created. “It worries me,” he said. “In the region
there are no factories, no production plants. The base is the only
working industry employing citizens.” Base employees reportedly earn
$200-$300 per month, considerably more than any local Georgian
employer could pay.

Infrastructure, town officials say, poses a major obstacle for
attracting interest to the region – whether private businesses or
international organizations.

“[Y]ou can say that the infrastructure is basically zero. If you want
to develop something, without infrastructure, that is not possible,”
said Akhalkalaki region head Artul Eremayn, citing his office’s lack
of a fax machine as an indication of the extent of the problem. “It’s
like what comes first, the chicken or the egg? [Should we work on]
development first or the infrastructure?”

In interviews with EurasiaNet before Saakashvili’s announcement,
Movsesian and Akhalkalaki Deputy Mayor Ararat Kanaian said that some
jobs could come as early as April or May as part of the national
government’s on-going project to rebuild regional roads. Plans also
exist to open the Karsi-Akhalkalaki-Tbilisi railroad line as well as
a possible customs checkpoint in the region. No estimate on exactly
how many jobs could be created from these plans, however, exists.

Additional help could come from foreign donors. The United States
Department of Agriculture plans to set up an Internet café in one
local school to act as an information center for local farmers. The
United States Agency for International Development says that it
intends to involve an unspecified number of area villages in its
Georgia Employment and Infrastructure Initiative, a program that
finances infrastructure overhauls for villages that submit qualifying
business plans.

Georgia’s improving relationship with neighboring Armenia would seem
an important factor in Saakashvili’s decision-making calculus on the
Akhalkalaki base. Georgian Prime Minister Zurab Noghaideli completed
a two-day visit to Yerevan on March 12, during which he expressed a
desire to expand bilateral trade ties. The Georgian government is
especially interested in importing electricity from Armenia. Tbilisi
also wants to explore a possible Georgian link to a planned pipeline
between Armenia and Iran. [For background see the Eurasia Insight
archive].

For now, it appears that the base jobs in Akhalkalaki are secure.
Moscow recently stated that it needs three-four years for its
withdrawal from Batumi and Akhalkalaki – along with a training center
in Gonio, a village not far from Batumi — a declaration welcomed by
Tbilisi as an improvement over earlier estimates of seven-eight
years.

Still, the Georgian parliament does not appear inclined toward
patience. “The Red Army took much less time to occupy Georgia [in
1921],” resolution co-author and member of parliament Giga Bokeria
was quoted as saying by the Civil Georgia website in reference to
Moscow’s proposed timeline for the withdrawal.

Georgian legislators have scoffed at demands from Russian Duma
Chairman Boris Gryzlov that Tbilisi to pay compensation for the
property left behind. Instead, MPs have charged that Russia owes
Georgia between $300 million – $400 million in back taxes for use of
the land the bases sit on, and have threatened to suspend visas for
Russian military personnel traveling to the bases, as well as the
installations’ electricity and phone service.

One of those threats appears to have already taken effect: On March
12, the Russian Foreign Ministry issued a protest note in connection
with a delay in issuing a visa to General Alexander Bespalov, the
newly appointed commander for Russian troops in the South Caucasus.

Saakashvili’s promise that Georgian soldiers would effectively
replace departing Russian troops appeared unlikely to sway opinion in
Akhalkalaki. Many local residents believe that Georgian troops are
not as skilled as Russian troops at providing security against a
widely perceived threat coming from nearby Turkey, according to
Kanaian. Roughly 95 percent of the town’s residents are descended
from Armenians who fled Ottoman Turkey following the 1915 massacre of
thousands of their compatriots. “[The base] protects us and there is
work there. The base is our guarantee,” Akhalkalaki resident Vova
Chlokhyan commented. “It protects us from the Turks. We have already
seen the danger [they pose for us] and we are afraid of them.”

Despite Virk’s threat to organize more demonstrations, Deputy Mayor
Kanaian is confident that unrest can be avoided as the base issue
plays out. “I don’t think that there will be a particular problem
here. There are people, who have a huge interest in that base, and,
of course, they will try [to keep it here].”

Educating the public about how the base closure could impact them is
a larger worry for the government than protests, he said. “[We] are
doing things to explain to people [what is going on]. We have to
understand each other, the people and the government.”

Editor’s Note: Molly Corso is a freelance journalist and photographer
based in Tbilisi.

RUSSIA IS READY TO CLOSE RUSSIAN MILITARY BASES IN AKHALQALAK AND
BATUMI IN 3-4 YEARS

Azg/arm
12 March 05

According to BBC, the representatives of RF Defense Ministry,
stated that they are ready to withdraw the Russian military base 62
in Akhalqalak and 12 in Batumi from the territory of Georgia. Moscow
has been stating that at least 11 years are needed for that. “3-4
years are the minimal deadline,” Anatoli Mazurkevich, RF Defence
Ministry’s high-ranking official, told Interfax.

Referring to a high ranked official of RF Defence Ministry, Novosti
agency informed that the two Russian military bases will be withdrawn
from Georgia, when “new highland gunnery detachments are formed in the
Caucasus. “We can’t be present in Russia forever. We will leave for
Caucasus, where highland gunnery detachments are being formed. Their
formation will be though in 3-4 years,” the official said.

Congressional Quarterly, Inc.
Federal Document Clearing House Congressional Testimony
March 8, 2005 Tuesday

CAPITOL HILL HEARING TESTIMONY

COMMITTEE: SENATE FOREIGN RELATIONS

SUBCOMMITTEE: EUROPEAN AFFAIRS

FUTURE OF DEMOCRACY IN BLACK SEA AREA

TESTIMONY-BY: ZEYNO BARAN, DIRECTOR

AFFILIATION: THE NIXON CENTER

Statement of Zeyno Baran Director, International Security and Energy
Programs The Nixon Center

Committee on Senate Foreign Relations Subcommittee on European
Affairs

March 8, 2005

Thank you, Mr. Chairman and Members of the Committee, for the
opportunity to appear before you today and share my views on the
progress the countries of the Black Sea have made in their democratic
reform process and on the impediments to further reform these
countries face. I will also present some suggestions on how the
United States can continue to advance its own security interests in
this strategic region. I will not discuss developments in all the
countries of this region, which includes the three South Caucasus
countries (Armenia, Azerbaijan and Georgia), Moldova, Ukraine, new
NATO allies Bulgaria and Romania, and the two big powers, Turkey and
Russia. I will concentrate on four principal issues: I. The recent
revolutions in Georgia and Ukraine. Georgia’s November 2003 Rose
Revolution and Ukraine’s 2004 Orange Revolution have inspired people
and countries from throughout the region (especially Moldova) and
around the globe. II. Russian energy monopoly over the European and
Eurasian countries. This is one of the main impediments to the future
success and prosperity of Georgia and Ukraine, as well as to the
democratic future of the Black Sea region as a whole. III. The
dangerous trend in Armenia and especially Azerbaijan. If Azerbaijan
does not hold democratic parliamentary elections in the fall of 2005,
Islamist forces may gain ground. Moreover, if there is no solution to
the Karabakh issue over the next several years, Armenia and
Azerbaijan may once again go to war. IV. The deterioration in the
US-Turkey bilateral relationship. Turkish mistrust of US long-term
objectives in the Black Sea region dramatically hinders American
initiatives in this area. I. Georgia: Inspiration for Change

Mr. Chairman, I was an election observer during the November 2003
parliamentary elections in Georgia and saw firsthand how tens of
thousands of people refused to accept the theft of their votes and
the silencing of their voices. More than anything, the Georgian
people no longer wanted to live in a “failing state”; they feared
that if the post-Communist regime stayed in office any longer, the
damage would be such that they would forever lose the prospect of
reuniting with Europe, where they believed they belonged. The Rose
Revolution was not a movement led or even inspired by the United
States; it was a domestic uprising against a corrupt and weak regime
that was rotting internally and could not deliver on any promises to
restore stability and economic growth and bring Georgia closer to the
transatlantic community. Its internal weakness was exploited by
Russian companies as they took over strategic assets, tying the
country’s economy and future directly to Moscow–just as they had
previously done in Belarus and Armenia. Yet, over the course of a
decade, American assistance was essential, especially to preparing a
cadre of reformers, both inside and outside government. Current
president Mikheil Saakashvili received training and strong support
for his overarching reforms in the judicial sector when he was
minister of justice. Former prime minister and parliamentary speaker
Zurab Zhvania, who recently died in a tragic accident, similarly
benefited from his close work with the American assistance community.
These are just some of the many Georgians who, over this period,
developed personal relations with American leaders, while discovering
that both sides shared the same values and principles. Based on these
experiences, these Georgians took the initiative to move their
country in a positive direction, both while in government and in the
opposition. Following this example, then, I strongly urge that the
United States assist reformers within governments, not just those in
NGOs or in opposition parties.

The Georgian revolutionaries were indeed committed to the ideal of a
democratic revolution, and wanted to share it with their country’s
strategic partner, Ukraine. Soon after the “Rose Revolution” of
November 2003, even before he was inaugurated as president,
Saakashvili made Kyiv his first foreign destination in January 2004.
In fluent Ukrainian, Saakashvili confidently predicted that Ukraine
would become democratic over the next year, while pledging his
support for his friend, Viktor Yushchenko. While few in the West (or
in Russia) noticed, over the next year Georgians and Ukrainians, in
government as well as in civil society, worked together to ensure
Ukraine’s democratic triumph. While many in the West (and in Russia)
looked down on the state of Ukrainian civil society, Georgians knew
that they had helped inspire this European nation and reawaken its
quest to reclaim its place in the West on the basis of the same
shared values and principles. When the Georgian president, prime
minister, and other officials met with their American counterparts
over that period, they urged US support for Ukraine’s democratic
voices. They knew that if Georgia remained the sole island of
democratic

change in the Black Sea region, it would be very tough to succeed,
especially given the Russian pressure. Now Saakashvili and Yushchenko
want to support others who want to move in a pro- democratic
direction by aggregating their voices to obtain more attention from
the EU and the US. This is precisely what happened with the Moldovan
parliamentary elections on Sunday, March 6. Both Saakashvili and
Yushchenko met with President Voronin just ahead of the elections in
order to provide support for a leader who seeks to reintegrate
Moldova into Europe. It is no coincidence that Saakashvili and
Voronin were the only presidents of the former Soviet countries who
did not accept the falsified second-round election results that
declared former Prime Minister Viktor Yanukovych as the winner of the
Ukrainian elections in November. Nor is it surprising that they in
turn were also the first to congratulate Yushchenko for his eventual
victory.

But the situation in Moldova is complicated. While Voronin is head of
the Communist Party of Moldova, he has distanced Moldova from Moscow
in recent years in pursuit of Moldova’s European vocation. His
underlying goal may have been to preempt any democratic revolution by
playing Moldova’s European card. In contrast to Georgia and Ukraine,
Moldova is thus pursuing an evolutionary rather than a revolutionary
reform process. But the country’s progress towards democracy is no
less real.

As Saakashvili stated, Georgia, Ukraine and Moldova now together
believe that “we can complete democratization’s third wave in Eastern
Europe”.1 Completing this wave means that each country has committed
to fighting crime, corruption, and the influence of clans that has
led these countries to internal weakness and external vulnerability;
it means that each country must consolidate democratic gains and move
closer to the Euro-Atlantic institutions; and it means that each
country needs the continued support of the European Union and the
United States to succeed.

The sustainability of the Georgian and Ukrainian revolutions is
essential for others in the Black Sea region to follow a reformist
trend, whether revolutionary or evolutionary. For this
sustainability, Georgia and Ukraine have submitted their EU action
plans–plans that need to be seriously considered, as the prospect of
eventual EU membership will provide the necessary incentive for both
countries to undertake tough but necessary reforms. The US needs to
support, and to urge its European allies to support, both Georgia and
Ukraine in their EU process as well as in their implementation of the
NATO Individual Partnership Action Plans (IPAP), which pave the way
for their eventual alliance membership.

Second, the US needs to work closely with its European allies to urge
the resolution of the separatist conflicts in the Georgian regions of
Abkhazia and South Ossetia, as well as the Moldovan region of
Transnistria. It is encouraging to see Ukraine and Romania
cooperating on the issue of Transnistria, and to see the
recently-founded New Group of Friends of Georgia (consisting of
Poland, Romania, Bulgaria, Estonia, Latvia and Lithuania) taking the
lead in urging Brussels and Washington to pay attention to these
issues. In fact, these former Soviet-bloc states that have now joined
the EU (Bulgaria and Romania are expected to join in 2007) and NATO
have become the most visionary and constructive of America’s European
allies. They are also helping the Europeans to better understand
Russia and are urging the resolution of these frozen conflicts,
without which further democratic reforms are difficult, to say the
least. As long as these conflicts remain, they will be sources of
potential instability and of potential Russian pressure.

Senator Richard Lugar’s resolution on Russian troop withdrawal from
Georgia and Moldova, urging it to implement the 1999 OSCE agreement
to withdraw its troops from these two countries, is extremely timely
and very important as the existence of the Russian military forces
have become a hindrance to peace. One of the four Russian bases in
Georgia has been vacated, the status of the second is in dispute, and
talks are ongoing regarding the remaining two. Yet after six years,
Russian troops still remain in both countries, and discussions on
troop withdrawal are often held in parallel with other political
concessions.

The US also needs to at the high levels engage the EU and NATO to
ensure a new Border Monitoring Mission (BMO) in Georgia to replace
the OSCE mission, which, following the Russian veto, will terminate
in May. The BMO has been critical to the effort to obtain credible
information on Georgia’s borders with the Russian republics of
Chechnya, Daghestan and Ingushetia. Moreover, in the past, it was
thanks to these monitors that the West found out that Russian planes
had bombed Georgian territory. The US needs to help find a mechanism
to replace the BMO; there are several European countries that are
willing to step up to the task, but none wants to take the lead for
fear of drawing Russia’s wrath. Georgia, Ukraine and Moldova are also
eager to revive the GUUAM organization, consisting of Georgia,
Ukraine, Uzbekistan, Azerbaijan and Moldova, an effort for which they
need US political support. As GUUAM is perceived in Moscow to be an
alliance against Russian interests, Uzbekistan and Azerbaijan at this
point are not interested in reviving it in a political form; they
instead want to increase cooperation in the economic sphere,
especially regarding east-west transportation corridors. While
Georgia, Ukraine and Moldova may prefer to include security and
democratization issues in GUUAM, in order to avoid a breakup of the
organization and to instead utilize it as much as possible, an
initial focus can be energy–an area in which the United States can
be particularly helpful.

II. Russian Energy Monopoly

Mr. Chairman, a very important yet often ignored hindrance to further
reform in Georgia, Ukraine, and the Black Sea region is the effects
of the Russian energy monopoly in Europe and Eurasia. The West
ignored the clear intentions of Anatoly Chubais, head of Russia’s RAO
UES, who declared in September 2003 that “Russian business ought to
be allowed to expand. . .with the aim of creating a liberal empire”
in the former Soviet sphere. In addition to such an expansion of
Russian energy monopolies, over the last year Russia’s largest oil
company Yukos has been dismantled and through Rosneft its assets
consolidated under Kremlin control. When Rosneft merges with Gazprom,
Putin will be in direct control of the world’s largest integrated oil
and gas company.

Putin’s policies indicate a desire to strengthen Russia’s already
strong position in the Eurasian and European energy markets. If
Russian monopoly power increases across the Eurasian region, then
countries will have difficulty resisting Russian political and
economic pressure. Similarly, if Russian market power within the
European gas sector increases, then the Europeans will be even less
willing than they are now to lean on Russia when Moscow’s policies
toward the Eurasian countries undermine the sovereignty and
independence of these states.

Armenia and Belarus are already facing this problem of Russian energy
leverage. Post-revolution Ukraine and Georgia, as well as the Central
Asian and even the Baltic countries, are beginning to grasp the need
to quickly come up with comprehensive energy security plans.

While many of these countries want to ensure their energy security by
diversifying their sources away from Russia, without strong political
support from both the US and the EU, they will not be able to resist
the Russian pressure. Moreover, those individuals and corporations
who currently benefit from non- transparent energy deals with the
Russian firms currently have no incentive to give up their power,
which would make Western support for democratic governance even more
important.

The US needs to be aware that Gazprom wants to control the gas
markets of Georgia, Turkey, and Ukraine to form a strategic ring
around the Black Sea, which would then be under permanent Russian
energy control. Georgia is the gateway through which Caspian gas will
be able to enter to Turkey and then be transported onwards to the
European markets. However, it is also the weakest link in this Black
Sea chain. The difficult economic conditions prevailing in Georgia
have given Gazprom a great opening to try and acquire the title to
the Georgian gas pipelines, thus bolstering its monopoly power. If
Tbilisi unintentionally helps Gazprom in this effort, then Georgia
will only be enhancing the company’s long-term leverage over European
gas consumers, and thus discouraging Europeans from taking a firmer
line with Russia on political issues, such as the frozen conflicts
mentioned earlier.

The US should therefore include Eurasian energy strategy in its
transatlantic dialogue. The US helped Georgia and Azerbaijan with
their energy diversification by supporting the East-West energy
corridor, by which Azerbaijani oil and gas will soon be transported
via Georgia and Turkey to world markets, thus breaking up the Russian
monopoly. Now, the US ought to further extend the East-West corridor
from Central Asia to Europe, a corridor with the Black Sea region at
its heart. While gas is more directly relevant to strategic
considerations in the South Caucasus and European countries, the
situation is similar in the oil sector. Ukraine needs the most help
in this area; it had constructed the Odesa-Brody oil pipeline to
transport Caspian oil to European markets; yet, under Russian
pressure, the Kuchma government last year agreed to its reversal so
that Russian oil could be transported to the Black Sea. While
commercial reasons were presented as justification for the reversal,
it is more likely that it was done in consideration for Russian
political support to the Yanukovych presidential campaign. This is
apparent by the fact that, over the past several months, the Russians
have not put enough oil into the line to make it profitable;
expectations were that it would supply half the amount it originally
pledged for 2005.

The Yushchenko government recently announced–at a joint press
briefing of the Ukrainian and Georgian prime ministers–that
Odesa-Brody would be reversed back to its original direction. On
March 4, the Ukrainian and Polish prime ministers also agreed to the
extension of the pipeline to the Polish city of Plock. In this way,
Poland will also be able to diversify away from Russian oil. Despite
its intentions, Ukraine will be unable to make the reversal happen on
its own; it needs American political support, which can help
facilitate an intergovernmental agreement between Kazakhstan, Ukraine
and Poland that will ensure supplies on one end of the pipeline, and
markets on the other end, thus making it commercially viable.

III. Armenia and Azerbaijan: Time is on Neither Side

Mr. Chairman, I have followed developments in Armenia and Azerbaijan
closely since 1996 and believe that until the Karabakh issue is
resolved it will be very difficult to see real progress in democratic
and economic reform. Both countries’ politics are totally consumed by
this issue and both sides believe time is on their side; as a result,
neither one wants to make a concession– which is a dirty word in
that part of the world. The main losers are the youth of these
countries, who are spending their most productive years waiting.

Azerbaijan is told by the West that it lost Karabakh in the war and
needs to give up this piece of land for the sake of peace and
prosperity and move on with its EU and NATO integration process. This
kind of talk only hardens the nationalists, who believe that with
massive oil and gas revenues starting to flow into the budget over
the next several years, they can strengthen their military, and take
back their land. Given that there are already four UN resolutions
supporting Azerbaijani territorial integrity, if they play the oil
card well, they may have a chance in getting diplomatic support.
Hence, they believe the best strategy for them is to bide their time.

Armenia too believes time is on its side to turn Karabakh’s de- facto
separation from Azerbaijan to de jure acceptance. They do not think
Azerbaijan would risk a war when its oil and gas pipelines may be
attacked and its economy devastated. Armenia also can wait, as its
economy has grown despite having no trade with two of its
neighbors–Azerbaijan and Turkey. While Armenia wants to resume
economic relations with Azerbaijan as a best confidence building
mechanism, Azerbaijan claims that the refusal to have economic
relations is the only peaceful mechanism they have to keep Armenia at
the negotiating table. Azerbaijan’s strategic partner Turkey has also
closed its borders with Armenia, and will also not open them until
the Karabakh issue is resolved.

To change the political and economic conditions on the ground and the
calculations of the two sides, the US needs to get engaged at the
highest levels. In 2002 Presidents Bush and Putin issued a joint
statement on the need to resolve the frozen conflicts of Abkhazia and
Karabakh, but no further steps were taken. The Karabakh process has
been left to the OSCE Minsk group, which cannot deliver a solution,
as the issue requires top level discussions. While it is good to keep
the dialogue going between Armenia and Azerbaijan, failure to deliver
a solution is leading to massive frustration among the people and
hurting the image of the OSCE.

In addition to a committed Bush-Putin discussion, the solution to
Karabakh requires democratic progress in both Armenia and Azerbaijan
so that the governments have legitimacy in the eyes of their people,
which is essential for support for the final agreement. The US
therefore needs to encourage the leaders of these two countries to
embrace the democratization process as essential to regional security
and stability. I will not spend much time on Armenia, as issues
relevant to Armenia are well known here thanks to the work of the
strong Armenian diaspora. I will simply mention that the strength of
the diaspora cuts both ways, as it also limits US ability to
encourage democratic change in this country. The US simply cannot put
the same kind of pressure on President Robert Kocharyan as it was
able to do with President Leonid Kuchma of Ukraine; it is
inconceivable to think that Washington would threaten to keep senior
Armenian government officials out of the US in case of a falsified
elections.

Azerbaijan, unlike Armenia, has fewer friends in the US as it does
not have a major diaspora; however, potentially it can be a great
strategic partner. Azerbaijan is the only Muslim country with troops
in Afghanistan, Iraq and Kosovo. It is a secular democracy with a
Shiite majority neighboring Iran. As many Azerbaijanis proudly state,
theirs was the first secular democratic republic in the Muslim world.
Though short-lived, the 1918 republic included opposition parties in
the parliament and allowed women to vote. It is an oil and gas rich
country and if it manages to spend its energy wealth wisely,
Azerbaijan can become a great example for the rest of the oil-rich
Muslim world.

The November parliamentary elections could be a turning point in the
U.S.-Azerbaijan relationship. The Bush Administration has made a
commitment to pro-democracy forces throughout the region to support
their calls for free and fair elections. Many in the opposition and
civil society have been inspired and energized by recent events in
Georgia and Ukraine and expect the US to deliver on its promises of
democracy and freedom. The government, however, is nervous that
opposition will receive support from the US and possibly try to have
a revolution as well. Given that there is no fundamental difference
between President Ilham Aliyev and the leaders of the pro-Western
opposition groups, with a correct engagement strategy, the US can
help move the country in a positive direction.

At the same time, many people are many benefiting from the current
corrupt, clan based system in Azerbaijan and these forces will try
their best to avoid free and fair elections in November, which will
be a turning point for Azerbaijan. In fact, since Aliyev succeeded
his father in the October 2003 presidential elections there has been
crackdown on media and opposition activists; this has led many to
wonder whether Aliyev is not fully in charge of his government or
whether he himself sanctions these policies. The most brutal incident
so far occurred last week, when Elmar Huseinov, the editor in chief
of the Azerbaijani opposition magazine Monitor was shot dead in front
of his home in Baku. Aliyev blamed “internal and external forces”
that want “to deliver damage to Azerbaijan’s international image, to
discredit it before the parliamentary elections and present the
country as an unstable and non-democratic state, where freedom of
speech is violated and acts of terrorism are committed”.2 It is
highly unlikely that Aliyev himself was involved in this murder, and
it is critical for him to make sure the killers of Huseinov are found
and properly punished so that neither his nor his government’s image
is further damaged.

Over the next eight months the US needs to both assure Aliyev that
Washington does not want his ouster, and at the same time be firm in
supporting free and fair elections. As a start, the US, together with
the EU, can ask Azerbaijan to allow the operation of at least one
independent television station, and to let the opposition hold
meetings. In Georgia the so-called Baker Plan, which was delivered by
James Baker to his friend Shevardnadze and the leaders of the
opposition, provided the framework for the critical November 2003
elections. Such an approach can also work in Azerbaijan

The US should also be concerned about the November elections in
Azerbaijan because if the secular parties in and outside the
government loose more ground, the Islamists are likely to fill their
place. As the leader of the opposition Popular Front Party, Ali
Karimli stated in his talk at the Nixon Center on February 15, 2005,
with the secular political opposition’s activities restricted,
Islamists are getting stronger. As Karimli put it, “on Fridays more
than three or four thousand people turn up at services in every
mosque, in a country where I cannot gather fifty people together for
a meeting!” He also mentioned, and as I have observed in my recent
visits, the Islamists are gaining ground because they exploit the
Karabakh issue, arguing that even though Azerbaijani territory is
invaded and there are four UN resolutions about it, “because we are
Muslim, our rights are not respected;” second, the Islamists
highlight the “extreme poverty and the huge inequality between the
average person and the top one or two percent who own everything;”
and third, they take advantage of the fact that “no one seems to
care” about democracy in the country.3 These are all worrisome signs
in a country neighboring Iran, which experienced a similar
development that brought in the Islamic Republic.

IV. Turkey: Growing Mistrust of the US

After decades of NATO alliance and strategic partnership, Turkish-
American relations began deteriorating with the Turkish Parliament’s
refusal to allow US troops to transit Turkey and into Iraq in March
2003, and deteriorated as the war in Iraq unfolded. There had been
ups and downs in the relationship before, but the level of
anti-Americanism in Turkey today is unprecedented. A recent BBC
survey found that about 82 percent of Turks have a negative view of
the Bush administration’s policies and consider today’s America to be
one of the biggest threats in the world.

This Turkish anger is primarily a result of the Iraq war, which many
in Turkey opposed. They initially feared their neighbor turning into
an ethnic and religious war zone. Turkish concerns have focused on
the presence of the several thousand PKK terrorists in Northern Iraq.
The US has promised to eliminate the PKK terrorist threat in Iraq,
but so far has not made a move. After a brutal civil war with its
Kurdish population that lasted a decade and cost over 30,000 lives,
Turks are angered with the US for not taking action against a group
that already began terrorist operations inside Turkey. They are
therefore wondering whether the “global war on terror” is waged only
on groups that threaten the US and excludes groups that threaten only
US allies.

In addition, Turks fear the Kurds in Iraq may eventually establish an
independent state that would also appeal to Turkey’s own Kurds living
in the border areas; such a development could once again lead to
separatism and instability inside Turkey, potentially rekindling
civil war and even undermining Turkey’s territorial integrity. The
fact that the oil-rich city of Kirkuk is gradually coming under
Kurdish control and the Turkmen–their ethnic brethren–living in
Kirkuk are being discriminated against, further causes suspicion and
mistrust towards the US.

Turks now associate Iraq with chaos and damage to their national
interests, while the US hails Iraq as a test case for spreading
democracy and freedom in the world. This has led many Turks to
associate American democracy and reform initiatives in the Middle
East with an expansionist policy that will weaken Turkey, but cloaked
in the rhetoric of “freedom” and “justice”. Fearing further chaos and
change in its southern neighborhood, Turkey has even pulled closer to
Syria and Iran.

This is part of the context for the Turkish reluctance to support US
or European initiatives for democracy in the Black Sea region. Many
in Turkey were skeptical of the Georgian and Ukrainian revolutions,
which they believe were managed by the US. They fear that under the
rubric of “democratic alliance,” the US is creating an anti-Russian
alliance in the Black Sea region, which will lead to instability and
undermine Turkey’s security in this region. Second, when the US talks
about democracy in the Black Sea region, Turkey hears American naval
presence. Turkey is strongly opposed to any foreign military presence
in the Black Sea, which it fears will undermine the Treaty of
Montreaux of 1923, which afforded Turkey rights to regulate the
Turkish Straits.

Retaining some jurisdiction over the Bosporus and Dardanelles remains
one of the highest priorities of Turkish national security policy, as
it has since 1453.

US-Turkish tension is aggravated by a lack of dialog. There have been
few discussions on the Black Sea region at governmental levels; the
first one in several years took place only in the last week of
February when Ambassador Halil Akinci, the Turkish Foreign Ministry’s
Director for Russia, Caucasus and Central Asia visited Washington. In
his meetings Akinci stated that Turkish policy in the Black Sea
region is based on four pillars: “contributing to the consolidation
of state building; supporting political and economic reforms;
promoting the Black Sea states’ integration with the international
community; developing and enhancing bilateral relations on the basis
of equality, mutual interest and respect for sovereignty.”4 Given
that this Turkish vision and the American vision are at the core
complementary, more bilateral discussions need to be held between
diplomats, military and the civil society so that the Turks can
understand these interest are shared. At the same time, the US needs
to understand a much deeper psychological issue is at play, and this
is why Turkey has been moving closer to Russia. The US should not
ignore the psychological hang-ups of former empires like Turkey and
Russia, which still suffer from the 19th/20th century views of
strategic factors and do not share Bush’s vision of advancing
democratic change in pursuit of freedom. Turkey and Russia still pine
over lost lands and fear being surrounded by a West hostile to their
interests. Both oscillate between feelings of insecurity about their
waning influence in global politics, and a sense of strategic
indispensability in Eurasia. Both have in varying degrees resented
growing American presence in the Caucasus and Central Asia, where
they had historic, ethnic and religious ties and a sense of
entitlement. The last thing they want is to see the US also enter the
Black Sea region, which Turkey and Russia feel is their “special zone
of influence” where they are the major powers. Ultimately, both are
status quo powers in terms of foreign policy who oppose change in the
Black Sea region, mainly because in their recent past any change
meant losing territory or influence.

What Turkey now needs more than anything is a carefully balanced
message from the US that Washington appreciates Ankara’s importance
and seeks partnership, but that Turkey’s strategic importance will
not shield it against the consequences of nasty behavior. In the
Black Sea region, this means that Turkey needs to hear that Turkish
and American interests overlap in terms of shared NATO values. But
Turks also need to understand that the unchecked growth of
anti-Americanism is not acceptable. Anti- Americanism has grown in
many countries since the Iraq war, but the tone and the depth of the
anger in Turkey is a result of a number of other factors that have
created a perfect storm. In fact, today Turkey’s secular military,
Islamists, leftists and nationalists–forces that often oppose each
other–have united in their common opposition to the US. Why?

Maybe the best example for understanding what is happening inside
Turkey is a brief look at the best selling fiction in Turkey today,
The Metal Storm. While it is fiction, Turkish and American government
leaders’ real names are used and the context is based on actual
events. The Metal Storm is about a war the US launches against Turkey
in 2007 under the name “Operation Sevres,” which is the much-feared
agreement signed at the end of the World War I whereby the Western
powers hoped to dismantle the Ottoman Empire. In the book Armenians,
Greeks and Kurds are once again portrayed as fifth columns of Turkey
who the West can use to destabilize Turkey.

The American operation against Turkey begins when the Turkish
military enters northern Iraq after the attacks in Kirkuk on non-
Kurds, i.e. Turkmen, have increases significantly. The US does not
diplomatically oppose the Turkish move as it is about to attack
Syria. Moreover, the US has been running a psychological campaign
against Turkey for some time and uses this opportunity to portray the
Turks as the aggressors, even though it is the US that launches a
brutal attack on them. It is interesting to note that the book makes
clear that by that point in 2007, Nicholas Sarkozy has become
France’s President, and afterwards the EU ended talks with Turkey,
which in turn has moved away from the West. The Turkish government
has withdrawn its Ambassador to the US as a result of the Armenian
genocide resolution that passes the US Congress. As part of the
campaign against Turkey, the US was also portraying Turks are wrong
in Cyprus.

Now while for many in the US such scenarios may be far-fetched, to
say the least, in the Turkish context they are quite believable.
Since this book was published a few months ago, there have been
several TV shows in the US where the Turks were portrayed as
terrorists, which was taken as a sign of a psychological operation
against Turkey. Only a few days ago Sarkozy, who is the most likely
candidate to be France’s next president, received a huge applause
when he objected to Turkey’s EU membership. The list goes on. In the
book there are two more reasons for the US to launch a war on Turkey.
The first is to “liberate Istanbul from 500 years of occupation by
the Turks” and let the Evangelical Church construct the biggest ever
church in this city. At secret meeting in Vatican called “The New
Byzantium,” the church decides to re-Christianize Anatolia, which has
many holy Christian sites. Again, while this theory sounds almost
insane, many in Turkey do not understand the role of the Evangelical
church in American politics and fear that President Bush was serious
when he announced the beginning of a new crusade after the attacks of
September 11, 2001. On top of this comes the EU’s religious freedom
reform pressure, which again, is perceived in Turkey as a way to
“Christianize” Turkey. Consequently, those in Turkey promoting
interfaith dialogue have been accused of serving American and Western
interests, not Turkish ones. (This is of course very unfortunate
since Turkish moderate traditions and long history of interfaith
acceptance can be the best antidote against the radicalism prevalent
in many Muslim societies).

A second reason for the US attack in the book is the American desire
to move away from dependence on Middle Eastern oil and the need to
develop new energy sources. Turkey has rich borax, uranium and
thorium mines; it has monopoly in borax, which is mainly used for
space and weapons technology and therefore is a strategic mineral.
While few in the US ever think of these mines, many in Turkey,
starting several years before this novel was published, have feared
an eventual US attack to take over these mines. It is probably not
surprising that in the end of the book, Russia and Germany help
Turkey by taking on a common diplomatic position against the
US–simply because they do not want the US to control these mines and
become even more powerful.

Throughout the book honorable Turkish military and political leaders
wondering how and why the US would attack Turkey after decades of
partnership. Turkish Prime Minister Recep Tayyip Erdogan and others
are often portrayed as having difficulty grasping that the US is
indeed attacking Turkey. In several parts, the book states “For a
long time there was speculative news about the US plans on Turkey.
Many people ignored these as fiction because it was considered so
insane;” clearly this language is intended to make the story even
more believable.

I have spent a significant part of my testimony on Metal Storm,
because it is essential in understanding the Turkish mindset today.
What can the US do when many Turks read this book and daily articles
in the press that play on the softest spots in the Turkish psyche to
create a sense of insecurity and fear of US intentions?

The average reader in Turkey has difficulty in separating fact from
fiction and reports indicate many read the book as a prophetic one.
With the EU reform process forcing fundamental changes in Turkey that
exacerbate many people’s sense of insecurity about their future and
sense of certainty, this book has brilliantly captured the mood in
Turkey. It further clouds fact and fiction by hinting at current
issues of contention in US- Turkish relations, including whether the
tragic events of 1915 constitute the “Armenian Genocide,” the
unresolved Cyprus issue, and developments in Iraq.

Getting US-Turkish relations back on track in the Black Sea and
beyond requires the Turkish leadership to put an end to the breed of
wild and destructive speculation portrayed in Metal Storm. Turkish
political leaders need to step back an contemplate whether they truly
believe the United States would contemplate the outlandish actions
concocted by the authors of Metal Storm, who use references to actual
American leaders and a deep familiarity with US military technology
to convey a sense of authority in their writing. Turkish leaders must
then decide whether they must clarify to the Turkish people that wild
speculation about a US plan to dominate Turkey are divorced from
reality. Perhaps this will lead to a genuine debate about the future
of US-Turkish relations, including in the Black Sea. Instead,
Turkey’s civilian and military leaders are silent, allowing thousands
of Turkish readers to misperceive the book’s ruminations as
plausible, if not fact, and causing potentially serious damage to
US-Turkish relations. There is a danger that, as Turkey proceeds with
democratic reforms required to advance its quest for EU accession,
and as the hallowed role of the military decreases in Turkish
politics, Turkish society may compensate these developments with
growing anti-Americanism and anti-Westernism Hopefully, Turkey can
come out of the process much stronger and as a valuable EU member.

In the short term, there are three specific steps the US can take to
try to reverse these negative trends and restore a sense of
partnership in relations with Turkey. First, together with the Iraqi
government, the US needs to find a formula to assuage the Turkish
irritation with the continued PKK presence in Northern Iraq. Until
and unless the PKK issue is resolved, Turkish-US relations cannot
move to a better phase, and Turkey would continue to resist any US
initiatives in the Black Sea region.

Second, given the prevalent Turkish view that the US is running a
campaign against Turkey, it would be very damaging if the “Armenian
Genocide” resolution passed Congress this year. This year is the 90th
anniversary of the tragic 1915 massacre and certainly the Armenian
diaspora groups would like to get recognition. However, such a
resolution would play right into the hands of the growing set of
anti-Americans and ultra-nationalists in Turkey. For the Black Sea
region, it will mostly hurt the Turkish-Armenian rapprochement.

Third, the US needs to continue raising Turkish EU membership as part
of the transatlantic dialogue and insist that Turkey should be
accepted into the EU on the merits. Turkey needs to be assured that
it will not be swapped with Ukraine; this certainty is necessary for
Turks to support Ukraine’s (and Georgia’s) ongoing democracy reforms,
and make the fundamental mental and institutional changes at home.

Georgia interested in Iran-Armenia gas pipeline
By Tigran Liloyan

ITAR-TASS News Agency
March 11, 2005 Friday

YEREVAN, March 11 — Georgia is interested in the construction of a gas
pipeline from Iran to Armenia and discusses possible gas transit from
Iran to Ukraine via Armenia and Georgia, Georgian Prime Minister Zurab
Nogaideli told his Armenian counterpart Andranik Markaryan on Friday.

Nogaideli came to Yerevan in the evening on a two-day working visit.

Nogaideli and Markaryan noted a high level of mutual confidence and
cooperation, a source in the Armenian governmental press service
told Itar-Tass.

Strengthening of the Armenian-Georgian relations becomes topical in
the light of integration with European organizations, especially after
the involvement of the South Caucasian states into the EU Neighborhood
Policy, the prime ministers said.

Closer bilateral cooperation in regional and international
organizations meets the interests of Armenia and Georgia, they said.

Bilateral economic cooperation has intensified, and trade grew 50%
last year, they said.

Georgia has built the Sadakhlo-Marneuli motor road to Armenia and
provided for the road security under an agreement between the two
presidents, Nogaideli said.

The Armenian premier welcomed the Russian-Georgian intergovernmental
agreement to open a railroad ferry line between the Georgian port of
Poti and Russia’s Caucasus port on the Krasnodar territory.

Meanwhile, ArmRosGazprom General Director Karen Karapetyan said in
Yerevan on Friday that ArmRosGazprom joint venture between Russia
and Armenia has won a tender for the construction of the Armenian
segment of a gas pipeline from Iran to Armenia.

ArmRosGazprom transports and distributes natural gas in Armenia. The
Armenian government and Russia’s Gazprom gas giant have 45% interest
in the joint venture each, while ITERA international company has 10%.

The pipeline, whose construction will start in late March – early
April, will supply gas only to Armenia. It will not have capacities
for gas transit. Iran will supply natural gas in exchange for Armenia’s
electricity.

“If Iran and Ukraine agree to lay a transit gas pipeline across
Armenia, we will certainly take part in the project,” Karapetyan said.

“Armenia will have exclusive positions in the regional energy system
if it has an alternative gas pipeline from Iran, an underground gas
storage facility and excess of electricity,” he said.