Caucasus Report: May 5, 2006

AZERBAIJAN'S REGIONAL STAR ON THE RISE. Much of the public comment on Azerbaijani President Ilham Aliyev's recent visit to the United States focused on energy security and Azerbaijan's southern neighbor, Iran, a focus that reflects Washington's priorities. But there was a much more significant aspect to the visit, one that stems more from Azerbaijani interests than U.S. priorities.

Specifically, Aliyev's first official visit to the United States since his election in October 2003 served an Azerbaijani agenda much more than a U.S. one. And although both energy and Iran are integral parts of this Azerbaijani agenda, they are only elements of a grander aspiration to emerge as a regional power. In this context, Azerbaijan now holds the initiative over the United States, with a latent leverage that has, so far, gone unnoticed and unchallenged. And it is Iran that provides the first indication of Azerbaijan's initiative.

Despite the historic tension between Azerbaijan and Iran, largely kept alive by Baku's concerns for its ethnic Azeri kin in northern Iran, Azerbaijan does not see Iran as much of a real threat. In fact, like Russia, Azerbaijan is gaining more from the "status quo" in Iran, as its strategic location bordering Iran enhances its importance. For the Aliyev leadership, this position has brought significant benefits in the shape of increased U.S. military involvement. And with the Pentagon's recognition of the need to secure Iran's northern border in the event of either multilateral sanctions or unilateral intervention, Azerbaijan's military and geostrategic importance has expanded well beyond its earlier limited role as an air corridor to Central Asia and Afghanistan. This is important to Baku not only in maintaining U.S. military engagement in the country, but as part of its bid to secure U.S. support for -- or at least acquiescence in -- its quest to regain control of Azerbaijani territory along the Iranian border that is currently occupied by Armenian forces.

It is this geostrategic advantage that has allowed Azerbaijan to ignore U.S. concerns over its dismal electoral record. And even more importantly, it has also fostered a powerful preference for proximity over politics, with U.S. military considerations sidelining other concerns.

Yet at the same time, Baku has been actively developing its ties with Tehran. A 2004 visit to Baku by then Iranian Defense Minister Ali Shamhani raised defense cooperation to a new level, and a reciprocal visit to Tehran last year by Azerbaijani Defense Minister Colonel General Safar Abiyev resulted in the signing of an intergovernmental agreement on defense cooperation.

Moreover, Aliyev's Washington visit was sandwiched between visits to Baku by both the Iranian defense minister and the Iranian president. On April 20, Aliyev met with Shamhani's successor, Mostafa Mohammad Najjar, to review plans for defense cooperation and, in turn, was warmed by Najjar's assurance that Iran stands "ready to provide" any assistance necessary to "develop Azerbaijan's military."

The expansion of relations with Iran is only one part of a broader strategy, however. Azerbaijan is also looking increasingly away from the West and has deepened its ties with Russia, Pakistan, and the Central Asian states. The underlying driver of this Azerbaijani strategy is a new assertive bid to achieve regional dominance -- a bid launched not under Turkish tutelage, but from a new position of strength that rests on three factors.

First, the promise of an imminent influx of oil wealth that will fuel a consolidation of state power and fund a military revival. That hoped-for consolidation is seen as the answer to the country's social weakness and internal division.

The second element of this bid for regional power stems from Azerbaijan's linkage to Central Asia, specifically, the agreement (scheduled for signing later this month) under which Kazakhstan will commit to exporting 25 million tons of oil annually via the Baku-Tbilisi-Ceyhan oil pipeline and the possibility of building a new Caspian pipeline from Kazakhstan to link up with the South Caucasus Gas Pipeline. A related factor here is the benefit to Azerbaijan of being the center of gravity for Caspian Sea security, exploiting U.S. military assistance to dominate its rivals.

Thirdly, Azerbaijan is further seeking to combine the first two elements in order to preposition itself for a future revolution in Iran and for a possible withdrawal of U.S. military forces from the South Caucasus and Central Asia. The prerequisite here is an effective and rebuilt Azerbaijani military that would be capable not merely of confronting Armenia, but of boosting a future Azerbaijani role as a regional power.

There is, however, a crucial difference between seeking and securing a position of regional dominance. And Azerbaijan's strategy for regional power is lacking in one essential aspect: it fails to address or solve Azerbaijan's most fundamental impediment to state power -- a lack of legitimacy. Thus, even if Azerbaijan succeeds in exploiting each of those opportunities, it will still remain hostage to the internal constraints inherent in a dynastic regime that has still to hold its first free and fair election. The lesson here is of the centrality of legitimacy as the foundation for true state power. (Richard Giragosian)

NEXT ARMENIAN-AZERBAIJANI SUMMIT MAY TAKE PLACE IN EARLY JUNE.' The next meeting of the presidents of Armenia and Azerbaijan, which international mediators hope will yield a breakthrough on Nagorno-Karabakh, could take place early next month, Armenian Foreign Minister Vartan Oskanian said on May 5. "The co-chairs [of the OSCE Minsk Group] believe that the presidents should meet again," Oskanian told reporters. "They have already made relevant proposals and are trying to agree them with the presidents. But neither the venue nor the date [of the meeting] has been ascertained yet."

Armenian President Robert Kocharian's spokesman, Victor Soghomonian, told RFE/RL that final agreement on the Armenian-Azerbaijani summit is likely to reached by Oskanian and his Azerbaijani counterpart Elmar Mammadyarov later this month. The two ministers are due to hold talks on the sidelines of a high-level Council of Europe meeting in Strasbourg.

Preparations for Kocharian's next face-to-face encounter with Azerbaijan's President Ilham Aliyev may be at the center of the most recent diplomatic activity by the Minsk Group's U.S., French, and Russian co-chairs. Earlier this week, they held two-day consultations in Moscow that were followed by a separate visit to the conflict zone by French co-Chairman Bernard Fassier. Fassier met with Kocharian in Yerevan on May 4 and arrived in Baku the next day.

Echoing comments he made in an interview with the private Shant television channel two months ago (see "RFE/RL Newsline," March 14, 2006), Oskanian said the success of the next Aliyev-Kocharian meeting depends on Azerbaijan. "Appropriate steps are expected from the Azerbaijani side. If those steps are taken, I think we will be able to move forward. If not, it will be hard [to make further progress]," he said without elaborating.

Oskanian also claimed that U.S. President George W. Bush warned Aliyev during their meeting at the White House on April 28 against attempting to resolve the conflict by force. "I think Azerbaijan was clearly told in Washington that a military solution is not an option, and we find that positive," he said. "Azerbaijan will be ready for compromise only if it rules out that option." (Astghik Bedevian)

WILL ARMENIAN PARLIAMENT SPEAKER QUIT RULING COALITION? Armenian Parliament Speaker Artur Baghdasarian has publicly distanced himself from one of the key tenets of the country's foreign and security policy -- nonmembership of NATO -- hinting that his Orinats Yerkir (OY, Law-Based State) party may even pull out of the government over the issue. But some analysts question whether Baghdasarian, who is widely regarded as populist and opportunistic, would risk doing so with 12 months still to go before the 2007 parliamentary election.

In an interview published in the daily "Frankfurter Allgemeine Zeitung" (FAZ) on April 19, Baghdasarian affirmed that while Armenia has good relations with Russia, "Armenia's future is the EU and NATO," and "Russia must not block our way to Europe." The Armenian leadership is not averse to close cooperation with either NATO or the EU: Armenia finalized an Individual Partnership Action Plan with NATO in December 2005, and is a participant in the EU's New Neighborhood Program. But it draws the line at formal membership in either organization. President Robert Kocharian and Defense Minister Serzh Sarkisian -- currently regarded as the most likely successor to Kocharian, whose second presidential terms expires in the spring of 2008 -- have both repeatedly said that close military cooperation with Russia is a more reliable guarantee of national security than NATO membership.

Baghdasarian's statement incurred a swift and negative response from President Kocharian, who told the independent Armenian daily "Golos Armenii" that "Armenia is not going to join NATO," and does not aspire to EU membership either, Noyan Tapan reported on April 27. Kocharian stressed that according to the Armenian constitution, it is the president who determines the country's foreign policy, adding that he expects an "explanation" from Baghdasarian. But Baghdasarian made clear on May 2 that he will pull his Orinats Yerkir party out of the three-party government coalition rather than retract his statement of support for eventual NATO and EU membership. At the same time, he stressed that he sees NATO membership as a long-term, rather than immediate, goal.

Representatives of the other two coalition parties immediately distanced themselves from Baghdasarian's statement. Galust Sahakian, who heads the parliament faction of Prime Minister Andranik Markarian's Republican Party of Armenia (HHK), told journalists that the other coalition members do not share what he termed Baghdasarian's "private view," Noyan Tapan reported. Vahan Hovannisian of the Armenian Revolutionary Federation--Dashnaktsutiun (HHD) said Baghdasarian should have consulted the National Security Council, of which he is a member, before publicly commenting on foreign and security policy.

Baghdasarian's unequivocal expression of support for NATO and EU membership was not the first issue on which he has crossed swords with the HHK. Last month, he voted against the report submitted by the government to parliament on the 2001-2003 privatization program. And in early 2005, he engaged in a bitter war of words with Prime Minister Markarian, responding to Markarian's criticism of his unilateral decision to create additional parliament committees by accusing the HHK of corruption and mismanagement (see "RFE/RL Newsline," February 23 and 28 and March 2, 2005 and "RFE/RL Caucasus Report," March 11, 2005). Kocharian intervened on that occasion, downplaying the dispute and denying that he planned to dismiss Markarian. And last December, Baghdasarian accused unspecified local officials of stuffing ballot boxes to boost the turnout figures in the November 29 referendum on a package of draft constitutional amendments (see "RFE/RL Newsline," December 5, 2005).

Other remarks by Baghdasarian in his FAZ interview may equally have been directed against Markarian. Baghdasarian characterized Armenian politics as a fight between the younger generation and an older generation that is unable to break free from a Soviet mindset. A directory of Armenian parliament deputies published in 1996 gave Baghdasarian's date of birth as December 1965, which would make him 40; the official biography released on his appointment in June 2003 as parliament speaker said he was born in December 1968. Markarian is 54; it would not, however, be entirely fair to brand him as an archetypal Soviet-era relic, given that he joined a dissident movement in the 1960s, for which he was sentenced to two years in a Soviet prison camp.

Baghdasarian also told the FAZ that he is in favor of "peaceful reforms," and that all those who oppose such reforms indirectly contribute to revolutions, which are "not the right way" to bring about change in the 21st century. He continued: "We are fighting to ensure reforms continue, and for that to happen we need free elections in Armenia.... The people who still believe that they can falsify elections must realize that those times in Armenia are past." He predicted that attempts to falsify the upcoming elections as blatantly as during previous ones would lead to "very great changes."

It is not clear, however, whether Baghdasarian's criticisms of the government to which his party belongs reflect a personal dislike of Markarian; whether he is simply hoping to capitalize on widespread popular dissatisfaction with the present leadership; or whether his expressed support for a pro-Western orientation was intended primarily to identify him in the minds of Western policymakers as a possible alternative to Sarkisian in the 2008 presidential ballot. Nor is it clear why he has risked defying Kocharian over the issue of NATO membership at this juncture, with 12 months still to go before the next elections.

If Baghdasarian makes good on his threat to pull out of the government, he risks forfeiting the post of parliament speaker, together with the influence, opportunities, and media visibility it provides. Moreover, doing so could split his parliament faction, which currently numbers 22 deputies: the opposition daily "Haykakan zhamanak" noted on April 14 that only seven of those deputies voted with Baghdasarian to reject the government report on privatization. On May 3, the same paper reported that the Armenian opposition has expressed support for Baghdasarian, and it predicted that Kocharian may retaliate by pressuring members of the OY parliament faction to defect. If that hypothesis is true, Baghdasarian may find himself forced into overt opposition sooner than he planned -- assuming he really does intend to break with the present leadership. (Liz Fuller)

GEORGIA TO ASSESS REPERCUSSIONS OF QUITTING CIS. For years, Georgian legislators and oppositionists alike have suggested periodically -- generally when relations with Russia take a down-turn -- that Georgia might quit the Commonwealth of Independent States (CIS). But President Mikheil Saakashvili has consistently rejected that option -- until May 2, when he announced that he has asked the cabinet to produce within two months an assessment of the benefits Georgia can expect from remaining a CIS member, compared with the anticipated repercussions if it does indeed quit that alignment.

Georgian politicians' arguments in favor of leaving the CIS range from the general to the specific. Some point out, as have politicians from other CIS member states, that the CIS is virtually moribund as a political organization and that only a tiny percentage of the agreements its members have signed since its inception in late 1991 have been implemented. By contrast, subsidiary organizations such as the CIS Collective Security Treaty Organization, which numbers only six members (Georgia declined in 1999 to renew its membership), and the Single Economic Space have proven more effective in promoting or defending specific interests.

Georgian Prime Minister Zurab Noghaideli, for example, commented to Ekho Moskvy on November 24, 2005 that the CIS does not draw fully on its potential. But both Noghaideli and Saakashvili, still ruled out leaving the CIS. Speaking at the CIS summit in Kazan in late August 2005, Saakashvili said Georgia will not quit the CIS, which "can still be revived," rustavi2.com reported on August 27. And three months later, on December 1, Saakashvili similarly said that he personally is against Georgia leaving the CIS. But on that occasion too, he added that the CIS needs to be reformed, its declarations should be acted on, and its members should have greater freedom to act independently, Caucasus Press reported.

The Georgian parliament, on the other hand, has consistently taken a more aggressive stance with regard to the CIS, calling on the country's leaders on several occasions to withdraw from it. Such calls were, however, clearly intended less as a vote of no-confidence in the CIS per se than as a slap in the face to Russia, perceived as the "glue" that binds 11 other former Soviet republics to it within the commonwealth. And Saakashvili made clear on May 2 that the catalyst for the current assessment of the benefits of CIS membership was not the actions of CIS member states as a whole, but the ban Russia imposed in March on imports of Georgian wine and other agricultural produce. (Russia has already responded to his implicit threat by imposing another ban, this one on imports of Georgian mineral water.)

Georgia has already secured an agreement on the closure of Russia's two remaining military bases in Georgia, and hopes to secure the replacement of the Russian peacekeepers deployed in Abkhazia and South Ossetia by international contingents. Georgian Deputy Foreign Minister Valeri Chechelashvili told Caucasus Press last December that Georgia's secession from the CIS was directly contingent in securing the withdrawal of the Russian peacekeepers.

Having thus set about minimizing the military-political leverage available to Russia to pressure Georgia (the two military bases and the peacekeeping forces), Saakashvili apparently feels that Georgia is now in a strong enough position to defy Russia by threatening to quit the CIS. It should be noted that there is a precedent for doing so: Azerbaijan withdrew from the CIS in 1992 following the election of Abulfaz Elcibey as president, but rejoined the following year after Heydar Aliyev returned to the helm in the wake of a coup that toppled Elcibey.

Speaking on May 4 in Vilnius, Saakashvili adduced the experience of Lithuania, which with Estonia and Latvia declined to join the CIS when the USSR collapsed in December 1991, as proof that Georgia could survive outside the CIS. But some Georgian experts believe otherwise. Parliament majority leader Maya Nadiradze argued in November 2005 -- even before Russia doubled the price of gas it supplies to Georgia from $55 to $110 per 1,000 cubic meters -- that "withdrawal from the CIS would have a negative effect on Georgia's economy," according to Caucasus Press on November 22. Given that Moscow would almost certainly choose to construe Georgia's withdrawal from the CIS as a deliberate affront delivered at the behest of the United States with the aim of undercutting even further Russia's rapidly dwindling influence in the South Caucasus, Moscow could well retaliate by cutting completely supplies to Georgia of oil and gas; it is currently the primary supplier of both commodities. True, as of 2007, Georgia will be able to draw on gas supplies from Azerbaijan's Shah Deniz field, but the total volume it will receive in transit payments (200 million cubic meters in 2007 rising to 850 million cubic meters in 2010), augmented by the additional 500 million cubic meters that Georgia is entitled to purchase at the discount price of $55 per 1,000 cubic meters, will still initially fall short of the total 1.2 billion cubic meters Georgia consumes annually, Energy Minister Nika Gilauri told ministers on April 26, Caucasus Press reported.

Moreover, in 2005 Russia was Georgia's single largest trade partner, accounting for 14.5 percent of bilateral trade (closely followed by Turkey with 12.9 percent). In 2005, bilateral trade with Russia stood at $105.9 million, compared with $122.9 million with all other CIS states. Georgia may seek to compensate for the loss of the Russian market by increasing its exports to other CIS states, in the first instance Ukraine, which has similarly signaled that it might leave the CIS (see "RFE/RL Newsline," May 5, 2006). Kazakhstan, for example, is considered a possible alternative market for Georgian wine. But Russia might seek to pressure fellow CIS members not to accommodate Georgia in this way, a possibility that Georgian Minister for Economic Reform Kakha Bendukidze may have had in mind when he argued that Georgia should conclude bilateral agreements with other CIS member states before it opts out of the CIS. (Liz Fuller)