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Eldar ISMAILOV
Director of the Institute of Strategic Studies of the Caucasus, Chairman of the Editorial Council of Central Asia and the Caucasus Journal. His experience also embraces work at the Baku Institute of Public Administration and Political Science (currently—Academy of Public Administration under the President of the Azerbaijan Republic) as head of the Department of Social Administration and Management (19911997). He is also founder and president of the Transcaucasus Development Bank. He is the author of more than 50 academic works on geo-economics, macroeconomics, economic-mathematical modeling and public administration of socioeconomic processes. His most recent work Tsentral'niy Kavkaz i ekonomika Gruzii (The Central Caucasus and Economy of Georgia) (2004) was published in co-authorship with Vladimer Papava and Teymuraz Beridze.
NEW REGIONALISM IN THE CAUCASUS: A CONCEPTUAL APPROACH
Abstract
The article looks at the particular issues associated with the Caucasian region becoming an independent entity of the global economy. The author justifies the need for a new approach to structuralizing the socioeconomic space of the Caucasus, which includes the Northern, Central, and Southern Caucasus, that most fully and precisely reproduces current geopolitical reality in the region and makes it possible to draw up a natural model of Caucasian integration. The
choice of Azerbaijan and Georgia—two Central Caucasian countries—is comprehensively justified as the integrating nucleus for the region, with the help of which the Caucasus can begin carrying out its geopolitical and geo-economic functions. These functions can best be performed by integrating the Central Caucasian and Central Asian states into the system of world economic relations, which will ultimately lead to the formation of a Central Eurasian regional union.
The Caucasus as an Independent Region of the Global Economy: An Evolutionary Approach
The Soviet economy, which comprised a “single national economic complex,” was distinguished by a high degree of integration of the Union republics and clear-cut division of labor among
them. After the Soviet Union collapsed, independent national states arose in its former expanse, each of which retained the main characteristics of the former unity for a certain period of time. These characteristics consisted of the structure of the economy, the distribution of productive forces, the technologies used, and the organizational principles of production applied.
The situation was complicated by the absence of specific development programs. The momentum of the administrative-command system of management, and the fact that these countries were not ready to undertake independent market reform and unable to raise the efficiency of the economy and the population’s standard of living on the morally worn out material and technical base they inherited long made themselves felt. As a result, the first years of sovereign development were accompanied by an abrupt slump in production, investment passivity, and limited opportunities for technical and technological renewal and access to the world markets due to low competitiveness, the breakdown in the monetary system and production relations, hard currency instability, and so on. All of this was characteristic to one extent or another of each of the regions of the former Union, including the Caucasian.
The Caucasus became an arena for playing out diverse geopolitical and economic interests.1 In contrast to the other regions which separated from the U.S.S.R.—the Baltic countries, Central Asia, the West Slavonic part of the U.S.S.R.—the legal and political status of the various Caucasian countries vis-a-vis the world community is heterogeneous. The Caucasus lost its political-legal and socioeconomic integrity. The Northern Caucasus is under the jurisdiction of the Russian Federation. Out of the three South Caucasian republics that acquired state independence and that by our classification represent the Central Caucasus, two of them—Azerbaijan and Georgia—are oriented toward the West. They are being shaken up from within by ethnopolitical conflicts in which ethnic minorities are taking advantage of the former metropolis’ patronage. Armenia, on the other hand, as a satellite state and Russia’s outpost, continues to carry out the latter’s policy in the Caucasus.
The multi-vector nature of the Caucasian political space, Russia’s involvement, partially in the form of direct participation and partially as an external factor, in its reform processes, the region’s rich hydrocarbon resources and its significance as a transportation corridor for exporting Central Asian oil and gas to the world market, and the arduous nation-building period the region’s countries have been going through are all drawing the attention of both the academic community and politicians to the Caucasus, and particularly to the Central Caucasus.2 Each country with interests in the Central Caucasus (Russia, Turkey, Iran, the U.S., the European and Asian states, and others) is developing its own views on this region and the prospects for its development.3
No matter what the differences in opinion or the approaches to the current situation and the prospects for developing the integration processes in the Central Caucasus, the key question is whether the traditional (Russian) factors still retain their influence on the Caucasus, or whether the future lies in the new strategic priorities. This question makes it possible to consider these approaches from two perspectives:
1 See: K.S. Gajiev, Geopolitika Kavkaza, Moscow, 2001; A.G. Dugin, “Kavkazskiy vyzov.” Osnovy geopolitiki. Geopoliticheskoe budushchee Rossii. Myslit prostranstvom, ARKTOGEIA, Moscow, 2000; V.V. Degoev, Bolshaia igra na Kavkaze: istoria i sovremennost, Moscow, 2001; H. Guliyev, “Geopoliticheskie kollizii Kavkaza,” Tsentral’naia Azia i Kavkaz, No. 4, 1999, pp. 23-29.
2 See: Kavkaz: istoria, sovremennost i geopoliticheskie perspektivy, Papers from an international scientific conference, Baku, 1998.
3 See: Rossia i Zakavkaz’e: poiski novoi modeli obshcheniia i razvitiia v izmenivshemsia mire, Moscow, 1999; A.V. Beliy, E. Remakl, “Rossia i Zapadnaia Evropa: geopoliticheskie interesy v Kavkazsko-Kaspiiskom regione,” in: Evropa i Rossia: Problemy iuzhnogo napravleniia. Sredizemnomor’e-Chernomor’e-Kaspiy, Moscow, 1999; S. Cher-niavskiy, “Kavkazskaia strategiia Vashingtona,” Mezhdunarodnaia zhizn, No. 1, 1999; S. idem, “Zapadnaia aktivnost v Zakavkaz’e,” Mezhdunarodnaia zhizn, No. 6, 1998; S. idem, “Iuzhniy Kavkaz v planakh NATO,” Mezhdunarod-naia zhizn, No. 9, 1998; F. de Pau, “Politika Turtsii v Zakavkaz’e,” in: Spornye granitsy na Kavkaze, Moscow, 1996; F. Nakhavandi, “Rossia, Iran i Azerbaijan. Istoricheskie istoki vneshnei politiki Irana,” in: Spornye granitsy na Kavkaze.
1. we can either entertain the idea of a united Central Caucasus in a new political system of relations;
2. or we can see the future of the Central Caucasus as a new modification of the old integration model.
Frequently, the new strategic priorities imply that one traditional priority factor of influence (the Russian) is replaced by others (the Western, Turkish, and so on). This dichotomy is often described as replacing one Big Brother with another. It is obvious that this bipolar systemization of the integration processes in the Central Caucasus appears overly simplified. In order to understand the current situation, as well as develop principles and the main areas for forming a regional integrated community, it is important to comprehend and summarize the historical experience of the integration processes going on in the Caucasus.
The transformation of the Caucasus into a single socioeconomic region with its own regional system of governance (including in the Central Caucasus) has a long history. As a component of different empires at different times in history, this system underwent significant modification. It stands to reason that imperial systems left their mark on the integration of the Central Caucasus. On the whole, they (as governing entities) played a consolidating role with respect to the Caucasus (as the object of governance), giving it qualities of integrity. Nevertheless, at certain short times in history, which we will talk about below, the centralized administration of the Caucasus was extremely fragile.
At the beginning of the 16th century, independent state formations existed in the Northern Caucasus, the most significant of which were the Avarian Khanate, the Daghestani Shamkhalate, and several others.4 By the mid-16th century, all of these independent feudal dominions were under the protectorate of the Ottoman Empire, although they retained their own system of governance and local currency. Things were a little different in the Central Caucasus. As a result of the collapse of the united Georgian state in the 15th century, which had existed since the 12th century,5 three independent czardoms—Imereti, Kartli, and Kakheti—and one princedom—Samtskhe—arose at the same time in the western part of the Central Caucasus. In the eastern part of the Central Caucasus, the ancient Azerbaijani state of Shirvanshakhs, which arose in the 9th century,6 and the Shekinskoe dominion were on their last legs. As for the Southern Caucasus, this region was divided between two powerful neighbors—the Sefevid and Ottoman empires.
The long confrontation between the Sefevid shahs and the Ottoman sultans led to an abrupt change in the situation in the Caucasus. As a result of the Amasiiskiy Peace Treaty entered between the sides sparring for the Caucasus in 1555, the Imereti czardom7 and the Samtskhe Princedom8 were subordinated to the Ottoman Empire for more than two centuries. In 1628, the Akhaltsikhe pashalik was created in the Samtskhe-Saatabago Princedom by the Ottomans.9 The entire eastern part of the Central Caucasus, including the Georgian czardoms of Kartli and Kakheti, and territories of the already non-existent Shirvanshakh state (abolished in 1538) and the Shekinskoe feudal dominion (abolished in 1551), was subordinated to the Sefevid Empire. The mentioned lands were part of three bey-lerbeyliks (the Shirvan, Karabakh, and Chukhursaad). The Sefevids created an Azerbaijani (Tabriz) beylerbeylik in their part of the Southern Caucasus (the southeastern part). Administration was under the strict control of the shah’s court, and Sefevid currency—the abbasi (abaz)—was in circulation there.
The Ottoman system of governance was widespread in the mountainous area of the Northern Caucasus and the western parts of the Central and Southern Caucasus, which belonged to the Ottoman
4 See: Istoria narodov Severnogo Kavkaza s drevneishikh vremen do kontsa XVIII veka, Moscow, 1988, pp. 292, 294.
5 See: Sovetskaia istoricheskaia entsiklopedia, Vol. 4, Moscow, 1963, pp. 812, 814.
6 See: The History of Azerbaijan, in seven volumes, Vol. 2, Baku, 1998, p. 296 (in Azerbaijani).
7 See: Sovetskaia istoricheskaia entsiklopedia, Vol. 5, Moscow, 1964, p. 804.
8 See: Ibid., Vol. 12, Moscow, 1969, p. 524.
9 See: Istoria Gruzii, Tsodna Publishers, Tbilisi, 1961, p. 142.
Empire or were under its powerful influence. In these regions of the Caucasus, the standard Ottoman currency—the piastr (kurush)—was in circulation.
This situation in the Caucasian region, with a few insignificant changes one way or the other (between the Ottomans and the Sefevids), remained right up until the first quarter of the 18th century, when the Russian Empire became actively involved in the struggle for the Caucasus. Even before its final establishment in the Northern and Central Caucasus, Russia began deliberately and consistently to form a new administrative-territorial structure in the region. It introduced the Russian model of governance and the principles of territorial division, and it also established its own model of interrelations with the region’s former independent state and ethnopolitical formations. In 1785, the Russian Empire created an integrated regional system of governance of the conquered northeastern parts of the Caucasus (the Astrakhan and Caucasian gubernias/oblasts) for the first time. This was the Caucasian vicegerency with its center in Ekaterinograd, which also governed the conquered Central Caucasus from 1844. Gubernias, oblasts, and okrugs were created, which were supervised by Russian bureaucrats. A czarist vicegerent, who lived in the city of Tiflis,10 headed the central body of coordination and control over all socioeconomic life in the Northern and Central Caucasus. Russia also began to actively introduce its own currency—the ruble—in the Caucasus.
The Russian government carried out administrative reform in the Caucasus in 1846. Five gubernias were created in the Central Caucasus—Shemakha (after 1859, the Baku gubernia), Tiflis, Kutaisi, Irevan, and Elizavetpol. As early as 1844, due to Shamil’s increasingly frequent uprisings, the Dzharo-Belokan oblast was transformed into a military district of the same name, the head of which was endowed with the rights of a governor. In the Northern Caucasus, in addition to the existing Astrakhan gubernia, in 1846-1847, the Derbent and Stavropol gubernias were created, and in 1867, the Black Sea okrug (see Table 1).
In the second half of the 19th century, the remnants of independence to which the local state formations still clung were completely eradicated. For example, in the 1860s, the Daghestani khanates (Kyurin, Mehtulin, and Avarian) and shamkhalate were abolished. In the Central Caucasus, during the same years, Abkhazia, Megrelia and Svanetia were deprived of the remnants of their autonomy.11
In the Southern Caucasus, both in its western and eastern parts, including the Kars pashalik (part of the Ottoman state) and Azerbaijani (Tabriz) beylerbeylik (part of Iran), the former systems of governance of the corresponding state centers, as well as their currency, were still in place in the mid-19th
Table 1
Administrative-Territorial Division of the Caucasus in the Russian Empire:
1721-1917
Division Gubernias Oblasts Okrugs
Region^^^ Name Years Name Years Name Years
Northern Caucasus
Astrakhan 1715-1785, Astrakhan 1785-1796
1796
Caucasian 1785-1822 Caucasian 1822-1847
Stavropol 1847-1917
10 Between 1882 and 1905, the post of superintendent was introduced in the Caucasus instead of vicegerent (see: The History of Azerbaijan, Vol. 4, Baku, 2000, pp. 117, 196; Vol. 5, Baku, 2001, p. 98).
11 See: Ocherki istorii Gruzii, Vol. 5, Gruzia v XIX veke, Tbilisi, 1990, pp. 165, 167-168.
Table 1 (continued)
^^^Division Gubernias Oblasts Okrugs
Region Name Years Name Years Name Years
Derbent 1846-1860 Daghestan 1860-1917
“Don Cos- 1786-1917
sack Host
Region”
Terek
Kuban 1806-1917
Black Sea
1896-1917
1860-1920
Black Sea 1867
Central Caucasus
Georgia
Georgian
1801
Georgian-
Imereti
1841-1846
Tiflis
1846-1917
Kutaisi
1846-1917
Batumi
1878-1917
Sukhumi 1866-1917
Azerbaijan
Shemakha
1846-1859
Caspian (from Derbent to Astara)
1722-1735
Irevan
1850-1917 Dzharo-Belokan
1830-1844
Dzharo- 1844-1860 Belokan
Baku
1859-1917
Caspian
(Northern
Azerbaijan)
1840-1846 Zakataly 1860-1917
Elizavetpol 1868-1917
Southern Caucasus
Southwestern
Caucasus
Southeastern
Caucasus
Kars
Akhaltsikhe
1878-1917
1828-1917
Caspian (from Astara to Rasht)
1722-1732
century. As a result of the Russian Empire’s victory in the war with the Ottoman state, the Kars pasha-lik (southwestern Caucasus) was transferred to the czarist authorities’ control in 1878. Here a Russian system of governance was also established, the Kars oblast was created in the Caucasian vicegerency and the Russian ruble was put into circulation.
In this way, beginning in 1878, almost the entire Caucasus (without the eastern part of the Southern Caucasus) was part of the Russian Empire and functioned as a single, integrated socioeconomic and financial-institutional system—the Caucasian vicegerency.
Only after the collapse of the Russian Empire in February 1917 was the vicegerency in the Caucasus abolished. In 1918, independent republics and integrated state formations emerged in the Caucasian region. For example, in the piedmont of the Northern Caucasus, the Don, Terek, Kuban, Black Sea, and other Soviet republics arose and existed for a while. In 1918, some of these new state formations (the Kuban-Black Sea, Terek, and Stavropol Soviet republics) became integrated into the North Caucasian Soviet Republic. The same situation developed in the Central Caucasus, where the Transcaucasian Democratic Federative Republic (T.D.F.R.) arose in 1918 on the basis of the integration of the former Transcaucasian gubernias. After existing for just over one month, it broke down into three independent states: the Azerbaijan Democratic Republic, the Ararat Republic, and the Democratic Republic of Georgia. The same thing happened in the Southern Caucasus. The Southwestern Caucasian (Kars) Democratic Republic and the Araz-Turkic Republic arose in the western part, and the Republic of Azadestan and the Soviet Ghilan Republic in the eastern part.
After reinforcing their position in the 1920s, Russia, Iran, and Turkey began to conduct a coordinated policy in the Caucasus aimed at abolishing the local independent state formations. Gradually all of them were abolished. In Iran and Turkey, they were transformed into administrative-territorial units—ostans and vilayets, respectively. In the former Russian Empire, first Soviet republics were created on new socialist principles, which were later integrated into a single state formation with their regional financial-institutional systems of governance: in the Northern Caucasus—into the Mountain Autonomous Soviet Socialist Republic (M.A.S.S.R.), and in the Central Caucasus—into the Transcaucasian Soviet Federative Socialist Republic (T.S.F.S.R.). As the governance system of the socioeconomic processes in the Soviet state developed, these regional party-legal and financial-economic institutions were abolished—in 1924 and 1936, respectively.
Nevertheless, the main institutions of regional governance were retained: military-strategic and political—the Transcaucasian and North Caucasian Military and Border districts, the Transcaucasian and North Caucasian railroad, the Transcaucasian and North Caucasian Energy System, the Transcaucasian Higher Party School, and so on; and economic—corresponding structures in the central (Union) bodies of state administration of the economy (of the Transcaucasian and North Caucasian economic regions). These institutions functioned until the collapse of the U.S.S.R. in 1991.
So, during the past five centuries, the Caucasus has been in and out of various imperial systems of governance: the Ottoman, Sefevid, Iranian, Russian, and Soviet. The most complete and integrated was the governance system of the Russian Empire in the form of the Caucasian vicegerency, which at certain times included almost the entire Caucasus (apart from the southeastern subregion, although its Caspian part, Ghilan, belonged to the Caspian region of Russia in 1722-1732).
When independent republics formed in the Central Caucasus in the 1991, the single sociopolitical and economic space of the Soviet Caucasus disintegrated. Each country began to create its own political-legal and financial-economic institutions.
The Northern Caucasus, on the other hand, retained the properties of a single political and economic space it possessed in Soviet times. In 2001, it was incorporated into the newly formed Southern Federal District of the Russian Federation. This presumed greater integration of the Northern Caucasus with Russia’s other southern regions than with the rest of the Caucasus, although until the collapse of the Soviet Union, its economy was more closely integrated with the Transcaucasian economic region than with the Russian regions.
In the western and eastern parts of the Southern Caucasus, the systems of governance and currency of the Turkish Republic and the Islamic Republic of Iran were retained, respectively.
During the past two centuries, formation of an integration model (principles, forms, and methods) in the Caucasus took shape and was supervised mainly by the Russian and the Soviet empires. In the 20th century, Moscow, shifting from the political-economic principle of governance to the party-economic, created the C.P.S.U. Central Committee Bureau for the Transcaucasus and, in keeping with this, identified the Transcaucasian and North Caucasian economic regions as independent units
within the single national economic complex of the country and the Russian Federation, respectively (1954-1991). Between 1844 and 1917, the Northern, Central, and Southwestern (after 1878) Caucasus, belonging to the Caucasian vicegerency of the Russian Empire, were governed from a single regional center by the czarist vicegerent in the Caucasus and its headquarters in Tiflis.12 In the Soviet Empire, the governance systems of the Northern (M.A.S.S.R. and Daghestan A.S.S.R., later the North Caucasian Economic Region) and the Central Caucasus (T.S.F.S.R., Transcaucasian Economic Region, C.P.S.U. Central Committee Bureau for the Transcaucasus) were divided and coordinated by Moscow.
Nevertheless, it should be noted in particular that during the periods of their independence, the Caucasian peoples also created their own integrated state formations and, correspondingly, regional economic-financial and legal institutions of governance. For example, the Imamate of Sheikh Shamil (1835-1856) and the Mountain Republic (1920-1924) formed in the Northern Caucasus, as well as the Transcaucasian Democratic Federative Republic (April 1918) in the Central Caucasus.
So this historical excursion shows that, despite its history full of contradictory trends, integrated state formations (governance systems) formed in the Caucasus. This was observed both during periods of independence of the indigenous peoples of the Caucasus and during periods when they belonged to various empires, which shows the existence of objective trends toward regional integration. In other words, the Caucasus is bound to form a single and integral entity of globalization.
At present, due to the “collapse” of the single Caucasian sociopolitical and economic space after the self-elimination of the Soviet Union (whereby the Northern Caucasus remained part of the Russian Federation) and since independent republics have formed in the Central Caucasus, the nations of this region have begun intensively searching for ways to integrate. This also explains the permanent emergence and discussion of ideas such as the Common Caucasian Home and Caucasian Common Market.
On the Geo-economic Concept “The Caucasus”
Before turning to an analysis of “new regionalism” in the Caucasian region, it would be a good idea to reveal the essence of the concept “the Caucasus” and its components. The contemporary content of this geopolitical concept goes back to the 18th-19th centuries—to the period when Russia conquered the Caucasus. This was when the Caucasian region began being divided into the Caucasus and the Transcaucasus (beyond the Caucasus).13 Later, the concept of the Northern Caucasus was introduced to designate the territory to the north of the conquered Transcaucasus.
It goes without saying that the concept “the Transcaucasus” was a product of Russia’s foreign policy conception, which reflected the metropolis’ attitude toward the political-administrative division of the conquered region. Of course, in so doing, the interests of its peoples, as well as the ethnopolitical, economic, cultural, and other relations that historically developed in the region, were frequently sacrificed to the interests of the Russian Empire. What is more, the concept “the Transcaucasus” latently presumed that the territory to the south of the Great Caucasian Mountain Range did not belong to the Caucasus proper, was beyond it and so outside it. In so doing, this term was essentially an expression of and to some extent a means for achieving the Russian Empire’s political goal—division of the local peoples living in the northern, central, and southern parts of the Caucasus.
12 See: Ocherki istorii Gruzii, Vol. 5, Gruzia v XIX veke, Tbilisi, 1990, pp. 165, 167-168.
13 See: T.V. Gamkrelidze, “‘Transcaucasia’ or ‘South Caucasus’? Towards a More Exact Geopolitical Nomenclature,” Marco Polo Magazine, No. 4/5, 1999, available at [http://www.traceca-org.org/rep/marco/mp40.pdf].
There is no doubt that the concept “the Transcaucasus” not only had a geographical, but also a geopolitical meaning. This is clear at least from the fact that the Transcaucasus only stretched to the southern state frontiers of the Russian Empire and altered in size along with their changes. For example, at the end of the 19th century, after the Kars Region of the Ottoman Empire was conquered by the Russian Empire, it was considered a component of the Caucasus. But after Russia lost Kars, Ardahan, and Bayazeh, they were no longer mentioned as Caucasian in the Russian political and historical documents. Nevertheless, this is precisely what these areas considered themselves: after declaring their independence, they created a state in November 1918 and called it the Southwestern Caucasian (Kars) Democratic Republic.14
Since it reflected the existing geopolitical reality and, in particular, Russia’s absolute domination in the Caucasian region, the concept “the Transcaucasus” was used right up until the beginning of the 1990s.
The first attempt to reject the Russian model of geopolitical division of the region was to replace the concept “the Transcaucasus” with the more correct concept “the Southern Caucasus,” which includes all the same republics—Azerbaijan, Armenia, and Georgia. It should be emphasized that the concept “the Southern Caucasus” also has a “Russian” geopolitical meaning, since it designated the part of the Caucasian region that achieved its independence from Russia (the U.S.S.R.), unlike the Northern Caucasus which remained part of the Russian Federation. The division of the Caucasus into these two parts is again carried out in correspondence with the borders between Russia and the sovereign Caucasian countries. It is no coincidence that the term “the Southern Caucasus” went into circulation and was endorsed as soon as the U.S.S.R. collapsed. In so doing, the concept “the Southern Caucasus” reflected an important aspect of the new geopolitical situation in the Caucasus—the emergence of three independent states there.
The historical significance of this event cannot be overestimated, since declaration by the largest Caucasian nations of their own statehood opened the way for their consolidation on new principles and for building a united Caucasus in the future.
In this respect, the meaning of the concept “Caucasian state” should be clarified. First, a state claiming to be called Caucasian should, like any other state, possess the necessary attributes of statehood. Second, it should be territorially located in the Caucasus. At present, only Azerbaijan and Georgia correspond fully to the listed conditions. Armenia is located territorially beyond the Great Caucasian Mountain Range, so cannot unequivocally be considered a “Caucasian state.” As for Russia, this state can be considered a contiguous state, since only a small part of its territory belongs to the Caucasus.
In light of this, another semantic load of the concept “the Southern Caucasus” can be singled out. This is perhaps a not fully recognized desire to underline the Caucasian nature of the three South Caucasian states in counterbalance to Russia, which is constantly claiming the status of a Caucasian state with a certain geopolitical undertone.
Nevertheless, the term “the Southern Caucasus” in its present meaning, in our opinion, does not adequately reflect the geopolitical processes going on in the Caucasus. The mechanical exchange of one concept for another is essentially taking place within the framework of the former Russian model for structuring the Caucasus, dividing it into the Northern and the Southern within the post-Soviet space. This model suffers in our opinion from two main drawbacks. First, it has outlived itself, since its foundation has disappeared—Russia’s monopoly domination in the Caucasus. Second, this model is based on an incorrect reflection of historically developed socioeconomic, sociocultural, and ethnic parameters of the Caucasus. The matter concerns the unjustified shrinking of these parameters due to the fact that the northeastern regions of Turkey (the Kars, Ardahan, Artvin, Igdyr, and other ils) and the northwestern regions of Iran (the East Azerbaijan and West Azerbaijan ostans) are not included in
14 See: A. Gajiev, Iz istorii obrazovaniia i padeniia Iugo-Zapadnoi Kavkazskoi (Karskoi) Demokraticheskoi Respub-liki, Baku, 1992.
Figure 1
Russia
the Caucasian region. Many centuries before Russia conquered the Caucasus, these regions were part of the same socioeconomic and ethnocultural area, where even today Caucasian peoples mainly live, which makes it possible to consider them “Caucasian” regions of these countries, like the Caucasian region of Russia (the Northern Caucasus).
Based on the above, we offer the following way to structure the Caucasian region15 (Fig. 1):
1. The Central Caucasus, including the three independent states—Azerbaijan, Georgia, Armenia;
2. The Northern Caucasus, consisting of the border autonomous state formations of the Russian Federation;
15 At first glance it may seem that the methodology offered will complicate the already extremely complicated geopolitical picture of the region even more. But it is precisely this that makes it possible to supply the integrity of the Caucasus with its “lacking elements” and, in so doing, achieve dynamic, stable, and systemic development of the integration processes throughout the region. This approach will make it possible to offer an integration model for the Caucasus based on the “3+3” principle, incorporating into it the independent states of the Central Caucasus (Azerbaijan, Georgia, and Armenia) and regional nations (Russia, Turkey, and Iran).
3. The Southern Caucasus, including the ils of Turkey bordering on Azerbaijan, Georgia, and Armenia (Southwestern Caucasus) and the northwestern ostans of Iran (Southeastern Caucasus).
In our opinion, the offered version for structuring the Caucasus most fully and precisely reproduces current geopolitical reality in the region, encompasses all its components (countries, regions, and autonomous formations), and takes into account the historically developed specific features of the Caucasus as a sociocultural and economic formation. Division of the Caucasian region into its central, northern, and southern parts makes it possible to designate essentially new and realistic ways of developing the integration processes in the Caucasus.
Special mention should be made of the particular (ambiguous) position in which Armenia finds itself in this methodology. In this model, it is part of the Central Caucasus, while it could also be included in the Southern Caucasus due to the fact that, first, it, just as the Southeastern Caucasus (ostans of Iran) and the Southwestern Caucasus (ils of Turkey), is beyond the Great Caucasian Mountain Range and equidistant from it. In other words, Armenia is geographically located in the Southern Caucasus. Second, until the 19th century, most of the Armenian population, along with other Caucasian peoples, lived compactly for many centuries in these particular regions of the Ottoman Empire and Iran, but thanks to the Russian Empire migrated entirely to the Azerbaijan (Erevan) khanate. But keeping in mind that in the Soviet period (1920-1990), Armenia developed socioeconomic relations with Georgia and Azerbaijan as part of the single Transcaucasian economic region, and at present it has approximately equal political-legal and sociodemographic parameters (in contrast to the constituent “Caucasian elements” of the regional nations—the Northern and Southern Caucasus), and also taking into consideration that the world community already considers Armenia (along with Azerbaijan and Georgia) as a South Caucasian state of the same ilk, it is included in the Central Caucasus.
Correlation of the Geopolitical and Geo-economic Functions of the Caucasus
An analysis of Caucasian geohistory of the 16th-20th centuries shows that the socioeconomic space of this region executed both a geopolitical and a geo-economic function at different stages in its history. The correlation between them changed depending on the stage of historical development: whereas during the years of complete dependence, that is, when the region belonged to a particular empire, the entire Caucasus or its individual parts could not carry out any geofunction, during periods of varying degrees of dependence, it carried out one or the other geofunction, and during periods of independence, it executed both of the above-mentioned functions at the same time.
For example, after the Russian Empire conquered the Caucasus and during the time of the Soviet Empire, the region was a component of Russia and the U.S.S.R., respectively, and so it could not fulfill either the geopolitical or the geo-economic function.16 At present, when the countries of the Central Caucasus have acquired their independence, both functions are being revived. In so doing, it should be noted that at this stage, the region’s geo-economic function must undergo more intensive development.
16 Only during isolated short periods of history, in particular during the transformation of the Russian Empire into the Soviet, was the Caucasus involved in a big geopolitical game (World War I). In so doing, during this period, this region began to carry out a geopolitical function, while its geo-economic function could not be engaged. As the Center’s (Moscow’s) powers and absolute domination over the region intensified, its geopolitical function ceased to be effective.
But geopolitical predilections, along with extreme enthusiasm about the national idea, in the Central Caucasus are continuing to have a strong influence on the formation and development of the geo-economic function, which in turn presumes an active search for and the drawing up of a new concise and balanced geo-economic strategy. In this respect, in the 21st century, the countries of the Central Caucasus themselves should primarily strive to ensure that the geo-economic, rather than the geopolitical, function dominates in the region. If the region finally begins to carry out its geo-economic function in a balanced way and can consistently develop it, this will make it possible to develop and perform a coordinated geopolitical function in the future, from which both the countries of the region and the world economy as a whole will benefit. Only by predominantly strengthening the geo-economic function can the Caucasus become a single, integrated, and effective functional subsystem of the global economy.
When developing a conception of national-state interests, the ratio between geopolitics and geoeconomics depends on the priority of particular factors, for instance, security in the broad context, prestige on the world arena, economic prosperity, and so on. The geopolitical and geo-economic vectors do not necessarily have to coincide for different goals to be reached. What is more, since they have numerous intersection points, they might contradict each other. Sometimes geopolitical categories play the role of dangerous throwbacks, particularly in those cases when foreign economic strategy is fully subordinated to foreign political precepts.
In our opinion, the Caucasus, which is located on the border of the European security space, should be a geo-economic, rather than a geopolitical region. The Caucasus itself should strive to ensure that geopolitics does not predominate here, otherwise, it might be in danger of becoming controlled by other countries. Geo-economically, the region’s entities can function as single components of the global economy. If the region can ultimately define its geo-economic function, all of its states will gain from this. In this sense, the transportation projects are very important, both of energy resources, and of other raw minerals.
Along with this, based on geopolitical and geo-economic expediency, the need for Caucasian integration, primarily with Central Asia, is growing. Together, these two regions can become a new integrated independent economic regional formation—Central Eurasia. Although the Caucasus, as a historically developed region, is important in itself, its value and geo-economic advantages will increase manifold in this context, since the geo-economic function of the Central Asian region, keeping in mind that it is identical to the geo-economic function of the Central Caucasus, will allow the latter to fully carry it out. Coordinated implementation by the Central Caucasian and Central Asian countries of their geo-economic function is throwing integration opportunities wide open, both throughout the entire Eurasian expanse, and in the global economy. In order to justify this viewpoint, we would do well to look at a three-dimensional panorama of the Caucasus’ geopolitical structure (see Fig. 2 on p. 18).
It is easy to see that the Caucasus forms an ellipse or a sort of arc supporting the bunches of circles of different regional nations and integration formations stretching from the Black to the Caspian seas. Russia, from the north, and Turkey and Iran, from the south, are “pulling it back.” At the same time, the Caucasus began receiving, particularly in recent years, strong impulses from larger, in the geographic and geopolitical sense, integration formations: from the U.S. and the EU in the far west, and from the Asia Pacific Region (APR) in the east. In so doing, the U.S. and EU are striving to “advance” their interests through the “neutral” Central Caucasus to the Central Asian region, while China, Japan, and Korea are doing the same through “neutral” Central Asia, to the Central Caucasus. Whatever the case, the geopolitical and geo-economic vectors of the interests of the Euro-Atlantic and Asia Pacific nations will, in the final analysis, promote unification of the “neutral” Central Caucasian and Central Asian countries. Although these states are still far from clearly comprehending the global need for accelerating regional integration, the beginnings of this process are already manifest. This shows that it is indeed possible to form a new independent economic regional entity—Central Eurasia (CEA)—in the center of the Eurasian continent, stretching
Figure 2
Geopolitical Structure of the Caucasus
□
THE CAUCASUS
NORTHERN CAUCASUS
(Russia)
CENTRAL CAUCASUS
(Azerbaijan, Georgia,
Armenia)
SOUTHWESTERN CAUCASUS
(Turkey)
SOUTHEASTERN CAUCASUS
(Iran)
as a single historical-geographical space from the shores of the Pacific to the shores of the Atlantic and from the Arctic seas to the Indian subcontinent. However, some experts believe that this configuration will be the most vulnerable element, in terms of strength of economic and geographic ties, of the Eurasian continental model.17
Ignoring geo-economic and geopolitical determinants, it is impossible to ensure high efficiency of integration unions. In this respect, the prospects for Caucasian development depend to a decisive extent on rational use of the advantages of CEA’s geopolitical and geo-economic location between two mega regions—the Euro-Atlantic and the Asia Pacific—which will also largely define the distribution of global forces in the new century. Each country claiming participation in Central Eurasian integration should propose its own ways to intensify the integration processes based on interrelated interests. It is precisely the geo-economic paradigm that should predetermine the domestic economic strategy and model of conduct for the integrating countries from the very outset. For example, Azerbaijan, which has immense transit and production potential, is paying particular attention to communication projects, including development of transportation and energy infrastructure, as well as to linking its economy up to the labor division system in the Eurasian macro region. This approach calls for a reliable foundation for cooperation among the CEA countries aimed at jointly advancing their own interests, which is helping to realize the geo-economic interests of the region’s states. But if the geopolitical component both in the Central Caucasus, and in Central Eurasia as a whole becomes more prominent than the geo-economic, this region will not be able to fully carry out its geo-economic function and, in so doing, will not achieve stable and accelerated economic growth and a higher standard of living. The real need for cooperation among the Central Caucasian and Central Asian states in developing and operating transportation routes, jointly forming security mechanisms, and
17 M. Laumulin expresses a similar viewpoint in his article entitled “Politika protiv geografii. Evrazia na geo-politicheskom perelome,” Kontinent, No. 8, 17-30 April, 2002.
implementing energy projects, including the geopolitical and environmental aspects, is more than obvious. What is more, implementation of the Central Caucasus’ geo-economic function—ensuring transit trade between the East and West—defined the region’s geopolitical destiny and security in the past and should continue to define them in the future.
The interest of the great and regional powers (the U.S., EU countries, China, Russia, Iran, and Turkey) in CEA is equally indisputable today. This interest is primarily aroused by the region’s geo-economic potential (although each of them sees this task differently). Their attention has long been attracted and is still attracted by CEA’s geographic location as an important transportation corridor and area of vast undeveloped natural resources. So achieving stability in CEA and its incorporation into the world community and world economy are important tasks for all these states. In so doing, formation of a “neutral” CEA is especially advantageous for the U.S., EU countries, and APR, while Russia, Iran, and Turkey picture this unity in a slightly different way. At present, obvious rivalry is going on among these powers for economic supremacy in the region, and so the Central Caucasian countries, as well as all of CEA, must take the right attitude toward this global geo-economic situation.
In this way, geo-economic integration is entirely reshaping the geopolitical structure of the Caucasus, is changing the ideas about development priorities, and is creating real prerequisites for establishing new regionalism. And although the Central Eurasian countries may have more regional differences than common characteristics, under globalization conditions the most important thing is to find a mutually advantageous solution to potential problems and prevent dangers, which of course could be used later to eliminate the conflicts going on in different areas of social life.
Special Features of New Regionalism in the Central Caucasus
Under the conditions of universal globalization and new regionalism, the post-Soviet states are faced with the urgent task of looking for ways of socioeconomic integration into the world economy. This task is also urgent for the Caucasus, where extremely complicated socioeconomic, national-territorial, confessional, geopolitical, and other interests are clashing.
The special features of the Caucasus stem from its exclusively ethnonational and confessional diversity, as well as other factors, among which a particular place is occupied by its geographic location. The Caucasus has always been viewed as a regional formation with immense geostrategic importance and as a unique region where East and West, North and South, Christianity and Islam directly meet. The Caucasian region is a field where several lines of international politics come together and intersect. It was and still is a link between the Middle and Near East and the basins of the Caspian, Black, and Mediterranean seas. The Great Silk and Volga-Caspian trade routes being currently revived run through its territory, as well as several military and strategic routes of important political significance. A multitude of different peoples have been living here for many centuries, and the region is a melting pot of different cultures and religions. Admittedly, the socioeconomic relations between these peoples usually developed in different empires, which cannot help but have a certain, primarily negative, effect on them.
The unflagging interest in the Caucasus shown by the leading world nations and political forces clearly testifies to the geopolitical and geo-economic attractiveness of this region. A large number of foreign scientific-research centers and analysts are directly engaged in studying the problems of the Caucasus’ socioeconomic development. The collapse of the Soviet Union had an immense impact on the policy of the interested countries toward the Caucasian region.18 In some cases, Western politi-
18 The possibility of a so-called second coming of Western capital to the region has emerged. Western countries have been given the most favorable geopolitical and geo-economic conditions for penetrating areas of the Caucasus previ-
cians include the Caucasian-Caspian region in the so-called Eurasian Balkans, to which areas of Southeastern Europe and Central Asia and parts of South Asia and the Middle East, characterized as conflict-prone zones, belong. What is more, powerful neighbors are tempted to interfere in the countries of this area, and each of them could put up resistance to another neighboring state in the region.19
The place and role of the Caucasian region in the world economic community must be urgently defined. Researchers interpret this question differently and have still not come to a clear and unanimous opinion. Determining the actual geo-economic and geopolitical functions of the Caucasus and the extent to which reality differs from the scientific viewpoints put forward is an urgent, although highly complex task.
The geo-economic and geopolitical importance of a particular region is characterized by longterm economic, management, territorial-spatial, and other factors, as well as their impact on foreign relations and international processes. The Caucasus has always been a zone of interest of many states of Europe and Asia, as well as a cluster of sociopolitical and economic contradictions. The current state of the world is such that more and more countries are inclined to view the Caucasus as a zone of their interests, which is largely due to the rising need of highly developed states for energy and raw material resources and their interest in international projects aimed at producing and transporting Caspian oil and gas, laying communication lines, building infrastructure, and so on.
The Caucasus’ significance as an integral socioeconomic entity, according to Zbigniew Brzezinski, is invariably rising. In so doing, he emphasizes in particular the promising role of the entire Caucasian region first as a source of massive, but still undeveloped, supplies of natural resources, primarily gas and oil, and second, as a crossroads of Eurasian transportation routes. However, he also points out the existing and potential sources of instability in the region.20
The Caucasian region is indeed rich in natural resources, and not only in energy, but in iron, copper, and chromium ore deposits as well. The Caspian Sea possesses 90% of the world supplies of sturgeon, which is a source of immense profit for the countries (including Azerbaijan) that have access to it. In addition to everything else, the region has every opportunity to become a vital junction in the transportation systems running South-North and East-West as well as a transportation-commu-nication corridor joining Europe and Asia. Caspian oil and its transportation routes are a target not only of competition among companies, but also of political rivalry among the large nations. Both regional (Russian, Turkish, and Iranian) and global (American, EU, APR, and Greater Near Eastern) interests intercept and intertwine here. So this region is currently in the zone of special attention of the so-called world government.21 Each of the entities of the latter has its own “spheres of attraction” here and its own idea of Caucasian integrity, whereby it uses its financial and power levers to have a bearing on the integration of the Caucasian state formations and the rates of their development.
What is more, the correlation of forces among the entities of the “world government”—Eurasian and Euro-Atlantic powers—periodically changes. This, in turn, leads each time to a transformation in the region’s integrity, the interstate relations among the Caucasian components, and the rates and forms of their movement.
ously closed to them. Powerful oil-and-gas and transportation-communication corporations were the first to react, but in the past few years Western states have stepped up their activity in every vector. Taking advantage of the status of such organizations as the U.N., OSCE, and others, Western and Eastern countries are participating in the settlement of ethnic and territorial conflicts. Observers from international organizations monitoring the execution of various agreements are permanently in the region.
19 See: A. Derbskiy, Kavkaz v sisteme geopoliticheskikh interesov stran mirovogo soobshchestva, available at [http://www.kavkazweb.net/view.cgi?m=1&name=ana/geo].
20 See: Z. Brzezinski, The Grand Chessboard. American Primacy and Its Geostrategic Imperatives, Basic Books, New York, pp. 124.
21 “World government” here means a community of the most developed nations on the planet, which directly or indirectly (by means of supranational organizations) carries out global governance of the processes going on in the world.
In the 21st century, the Caucasian state formations gained the opportunity for the first time to become integrated into a single economic union that meets the urgent development interests of the region as a whole and each of its components individually. The Caucasian states, which are in favor of ensuring smooth entry of their national economies into the system of world economic relations, believe it necessary to participate in international economic and financial unions and organizations. This is manifested primarily in their socioeconomic integration with their closest neighbors (for example, GUAM, the CIS, BSECO, CAREC, and others), as well as in the active establishment of relations with other regional economic unions (for example, the EU, APEC, NAFTA, the SCO, and others).
What is more, the absence of a global system of economic cooperation is making it difficult to develop national and regional mechanisms to achieve an optimal balance of interests. This is manifested in particular in the relations between the Caucasian countries and Russia. As Georgian political scientist and internationalist Alexander Rondeli has noted, the Central Caucasian states are “in a rather indeterminate state” with respect to Russia, being involved both in reintegration and disintegration processes with it.22 In his opinion, there are objective reasons for their reintegration: the special features of the economic structure, technological and raw material demands, acute energy problems, the need to export products to the Russian market, the need for guarantees of sovereignty, territorial integrity, and external security, and the existence of long-term friendly relations and close cultural ties. The new economic and political realities are conducive to disintegration, as well as Russia’s inability, which is in a state of transformation itself, to render full-fledged assistance to the states of the postSoviet space, the inability of new Russian business to establish relations with them, and, particularly, its tendency to periodically apply forceful pressure on certain countries, which is arousing mistrust and a negative reaction among the population.
These conclusions were drawn several years ago and unfortunately the effect of the negative factors is still going on. Russia’s foothold in the Caucasus has slipped somewhat during this time due, in particular, to its involvement in the prolonged military conflicts in Nagorno-Karabakh, Abkhazia, South Ossetia, and Chechnia, which greatly complicate Russia’s relations with Azerbaijan and especially with Georgia. What is more, centrifugal trends have been observed in the policy of the Central Caucasian states, their striving for priority cooperation both with the Euro-Atlantic, and with the Asia Pacific world has been designated at the global level.
Emin Makhmudov thinks that “it is stretching the point to apply the concept ‘regionalism’ to the Central Caucasian countries at present, since only its beginnings are manifest here, primarily due to the implementation of international economic projects.”23 As we know, Armenia’s policy and particularly its military aggression against Azerbaijan have ostracized this country not only from such major projects as the “Contract of the Century,” SPECA, and the BTC and BTE pipelines, in which Azerbaijan and to a certain extent Georgia are involved, but it also essentially plays only a token role in the TRACECA (restoration of the Great Silk Road), TAE (laying of a Trans-Asia-Europe fiber optic cable), and INOGATE (cooperation program for increasing the safety of energy resource deliveries to the EU) projects.
What is more, it is worth noting that the most important and effective regional union in terms of harmonious development of the Caucasian (primarily Central Caucasian) entities would be their accord with each other. This would make it possible to jointly and comprehensively resolve the entire range of economic, social, and environmental problems that affect the Caucasus as a whole. But the transition period proved extremely arduous and essentially changed both the external conditions under which the Caucasian countries function (the collapse of the single Soviet national economic complex, the significant weakening in economic ties with the former Union republics, the declaration of
22 See: A. Rondeli, “Gruzia na postsovetskom prostranstve,” in: Kavkazskie regionalnye issledovaniia, No. 1, 1996, p. 98.
23 E. Makhmudov, Problema iuzhno-kavkazskoi bezopasnosti i integratsii segodnia, available at [http://ija.hetq.am/ ru/r-emakhmudov.html].
their sovereignty, the reorientation of foreign trade toward states of the Far Abroad, and the formation of the CIS) and the internal economic environment (transition to liberal market relations, the acute socioeconomic crisis, the profound production slump, and the drop in standard of living).
In the post-Soviet economic space, the Caucasian countries have certain special features. First, their weaker dependence on Russia—the system-forming state of the CIS.24 This distancing was expressed primarily in the creation of an alternative system for producing raw materials and their transportation to the world markets, the building of the Baku-Supsa, Baku-Tbilisi-Ceyhan, and Baku-Tbi-lisi-Erzurum pipelines as alternatives to the new Russian route, and the creation of GUAM—an organization aimed at freeing itself from energy and transportation-communication dependence on Russia. Second, the increase in interdependence between the Caucasian countries (Azerbaijan and Georgia) and Ukraine and Moldova within the regional associations of GUAM and BSECO. Third, the expansion of regional cooperation, particularly of Azerbaijan, with the Central Asian states within the framework of CAREC, ECO, and SPECA.
In this way, both throughout the Commonwealth as a whole, and within the Caucasian countries, regionalization of the economic space took place during the reforms when regional groups were created, the development rates of which significantly differ.25 Experts point out the significant integration potential of the latter, which is currently not being made use of. This in turn requires intensification of the integration trends emerging in the regional associations of the Caucasian countries. What is more, despite certain objective conditions, the inertial natural complementariness of the economic systems, and the corresponding factors of production (in particular, natural, production, and intellectual resources), Caucasian regionalization is being held back by disintegrating factors, for example, by the military conflicts in the region and the impact of the contradictory trends of the world market.
This gives reason to talk about the uniqueness of new regionalism in the Caucasian states: “.. .regionalism in the foreign political relations of the Caucasian countries implies something more. And by this I mean, just to what extent these countries understand in their activity that they are a single region—the Caucasus. Today, the Caucasian countries do not have enough interests and political references in common, as a result of which they are defending their interests separately on the international arena. There are valid reasons for this: the burden of their historical past (the long unsettled disputes between Armenia and Turkey, the Caucasian war of the 19th century etched on the Chechens’ memory, and so on), and the development of events after the collapse of the Soviet Union. Finally, special mention should be made of the geopolitical orientation of the South Caucasian states, which is the clearest manifestation of their disunity.”26
Under these conditions, drawing up a realistic model of Caucasian integration is becoming a top priority. The short historical review of the system of governance in the Caucasus in the 18th-20th centuries showed that the peoples of the region, both during periods of dependence on regional powers, and during the years of independence, strove for integration. As a result, different types of integrated state formations emerged with their own special government and financial-institutional structures and common currencies. These integrated state formations largely appeared in Russia’s geopolitical space, that is, in the Northern and Central Caucasus. As for the Southern Caucasus, parts of which belonged and still belong to Turkey and Iran, it could not be incorporated into the integration process. The same goes for the integration processes within the Southern Caucasus—between its Turkish and Iranian parts. In these areas, either independent state formations appeared periodically,
24 With the exception of Armenia, whose unilateral dependence on Russia tends to increase, since the latter is its largest trade partner: Russia’s share in Armenia’s foreign trade turnover amounted to approximately 13.0 percent in 2005.
25 See: D. Matsnev points in particular to this trend (see: Rossiiskii ekonomicheskii zhurnal, No. 9-10, 1999, pp. 6263; Central Asia and the Caucasus, No. 2, 2000, pp. 90, 98).
26 M. Bichashvili, Regionalizm vo vneshnei politike iuzhno-kavkazskikh stran, available at [http://ija.hetq.am/ru/r-mbichashvili.html]. In so doing, the author points out the formation of two regional alliances: on the one hand, Armenia-Russia-Iran, and on the other, Azerbaijan-Georgia-Turkey.
or they were drawn into the sociopolitical and economic life of the Caucasus, which was part of the Russian Empire.
Today, the Northern Caucasus, which consists of eight republics (Adigey, Daghestan, Ingushetia, Chechnia, Kabardino-Balkaria, Karachaevo-Cherkessia, North Ossetia-Alania, and Kalmykia) and four administrative units (the Krasnodar, Stravropol, Rostov, and Astrakhan regions), belongs to the Southern Federal District of the Russian Federation. In the Northern Caucasus, as during the Soviet era, a common currency is still in circulation—the ruble, as well as integrated organizational-legal institutions and financial mechanisms of regional integration.
Under current conditions, each of the entities located in the Central Caucasus independently establishes financial-institutional ties with each other, whereby the degree of independence of these ties differs and the relations between the countries are developing differently.
After acquiring their independence, the republics of the Central Caucasus joined several regional associations—the ECO, CIS, BSECO, GUAM, and others—although they have still not gleaned any significant benefits from this participation. In our opinion, there are objective reasons for this. One of them is the politicization of the mentioned associations, another lies in the fact that they have only just formed and have not yet accumulated sufficient experience of cooperation under the new conditions. For example, the ECO is a club of Muslim states uniting countries of different orientations from a large region, beginning with Islamist Afghanistan and ending with secular Azerbaijan. There are also significant differences in the goals, principles, methods, and forms in which they function.
In the economic space of the former U.S.S.R., steps are also being taken to form a regional integrated association, but at present, due to a whole slew of objective reasons, they have not yielded the anticipated results. A graphic example of this is the significant political difficulties in creating the CIS in 1991. In addition to this, at present, 27 tariff and approximately 200 non-tariff customs restrictions exist among the CIS countries, which there are plans to gradually abolish over the next ten years. The economic goals set in GUAM are also being implemented slowly. Cooperation among the countries belonging to the BSECO is developing more dynamically. As of the end of 2005, the participation of the Central Caucasian states in various regional unions and programs can be singled out as the main area of their cooperation (see Table 2).
Table 2
Membership of the Central Caucasian States in Regional Groups and Programs
CIS GUAM BSECO ECO CAREC TRACECA INOGATE SPECA
Armenia X X X X
Azerbaijan X X X X X X X X
Georgia X X X X X
It should be noted that Azerbaijan and Georgia participate in GUAM; the Central Caucasian states are all members of the CIS and BSECO, while only Azerbaijan belongs to the others (CAREC and ECO). An analysis of this activity shows that the most integrated of the Central Caucasian countries is Azerbaijan, while the least integrated is Armenia. Azerbaijan’s leading position adequately reflects its state policy, its advantageous geographical location (access to the Caspian Sea and participation in regional groups with the Central Asian countries), rich natural resources, and highest economic potential and investment performance. In terms of these parameters, Armenia lags behind essentially all the countries of the region, which is explained to a certain extent by its policy and low level of participation in regional unions.
At the beginning of the 1990s, the possibilities of expanding foreign trade with neighboring states helped to accelerate the formation of these regional associations. The Central Caucasian countries believed that the benefits from this cooperation could more likely be realized if there was integration among countries with different, but mutually complimentary production possibilities in the most profitable industries, and if integration itself was accompanied by a significant reduction in tariff restrictions and the granting of extremely moderate regional preferences. In practice, however, the entities of regional associations were not guided by the aforementioned considerations in their activity, so the effect from it was insignificant.
Let’s take, for example, the plans to put the Rustavi Metallurgical Combine back into operation. In Soviet times, this enterprise put out millions of tons of steel and pig iron every year, and the ore for production was delivered from the Azerbaijani town of Dashkesan. At present, due to unsuccessful attempts to attract investments, the combine has long been standing idle. This and other similar circumstances are hindering the revival of economic integration between Georgia and Azerbaijan to a certain extent.
The level of integration in the systems of governance is also acquiring vital importance. For example, the CIS can be considered the best formed integration union, while GUAM is only just beginning this process. Along with this, attention should be focused on the fact that the benefits of integration are determined not only by measures of foreign trade policy, but also by joint efforts to improve the infrastructure and service sphere. For example, such a regional union as BSECO has a banking structure—the Black Sea Trade and Development Bank, while the CIS and GUAM are making their first attempts to create a common interstate bank.
When talking about regionalization in the Caucasus, it should be noted that from the geopolitical and geo-economic viewpoints, the most promising is not so much a Caucasian regional group (for example, a Caucasian Common Market or a Caucasian Common Home), as regional unions of Caucasian and Central Asian states. As already mentioned, GUUAM and CAREC can be considered prototypes of this kind of union. For example, in addition to Ukraine and Moldova, Georgia, Azerbaijan (since 1997), and Uzbekistan (since 1999) belonged to GUUAM, which essentially made it possible to ensure efficient relations with the states of Eastern Europe, the Caucasus, and Central Asia via these countries. But in May 2005, due to Uzbekistan’s withdrawal from this structure, GUUAM was reorganized into GUAM. In so doing, the chain linking the Caucasus and Central Asia into a single whole was broken. In addition to Afghanistan, China (the Xinjiang-Uighur Autonomous Region) and Mongolia, four Central Asian republics (apart from Turkmenistan) and Azerbaijan belong to CAREC, which was founded in 1997. Keeping in mind that Azerbaijan has ethnogenetic communality and linguistic kinship (the Turkic group) with the peoples of Central Asia, it could become a link in the Caucasus-Central Asia chain and play one of the leading roles in forming the Central Eurasian union—CEA.
This approach is justified by the fact that CEA, which became one of the most rapidly transforming regions integrating into the world economy at the end of the 1990s, has significant advantages (large supplies of natural resources, a relatively developed infrastructure, human capital). In other words, it has the resources and significant development potential necessary for a self-reproducing entity of the world economy. The main goal of a possible regional group of CEA countries located in the center of the Eurasian space, where Europe and Asia intersect,27 consists of ensuring multi-vector integration—Western Europe and Eastern Asia (West-East), as well as Russia and South Asia (North-South). This advantageously distinguishes it from the regional integration agreements existing in the world, such as NAFTA in North America and MERCOSUR in South America, which are mainly to do with trade and have a purely intra-continental sphere of activity.
27 According to the conception of Samuel Huntington’s “clash of civilizations” (see: S.P. Huntington, The Clash of Civilizations and the Remaking of World Order, Simon & Schuster, New York, 1996, 368 pp.), after the collapse of the Soviet bloc, the main world rivals are three super civilizations (Western-Christian, Muslim, and Chinese-Confucian). The CEA states are the juncture of all three super civilizations.
The Central Eurasian countries will ultimately have to find their own approach to regional cooperation and integration. Despite the common threats to economic and social stability, at present they are not only lacking strong political motivation and leadership for intensifying regional integration, but also foreign sources of financing. Integration of Central Eurasia into a single socioeconomic region has been dictated not so much from the viewpoint of its potential and market volume, that is, trade and investment possibilities and attractiveness, as from the perspective of functional value, which lies in its unique territorial location. For many centuries, the world trade routes—the Great Silk Road and Volga-Caspian Trade Route—have passed through this region, and now their contemporary modifications—the West-East and North-South international transportation-communication corridors, linking the markets of the EU and APEC, as well as of Russia and South Asia—have been laid. Under present-day conditions, there are plans to restore the new Silk Road based on three supporting branches of the economy: power engineering, the transcontinental transport system, and telecommunications. The fulcrum of this project, which is attracting global, regional, and local interest at the same time, should not only be development of the natural resources of the Caucasian-Caspian region in its broad sense, but also simultaneous incorporation of the natural riches of the Central Asian and Central Caucasian countries into the world economy.
In other words, at the beginning of the 21st century, the principles, forms, and methods of new regionalism in the Caucasus should be largely determined based on joint use of the economic potential of the Central Caucasian and Central Asian countries and their transportation-communication networks in the system of world economic relations. In this way, the Central Caucasus, after becoming a fundamental component of a single and integrated Central Eurasian region, will be able to fully perform its geo-economic function, which, in turn, will promote the creation of favorable conditions for dynamic growth of the economy and national prosperity in the region’s countries.
