Caucasus Report: October 7, 1999

The Limits To Strategic Cooperation. Georgian President Eduard Shevardnadze's equivocal response to the 1 October plea by his Chechen counterpart Aslan Maskhadov to act as mediator between Grozny and Moscow has highlighted the risks and limitations inherent in a relationship which both men two years ago acclaimed as a strategic partnership.

Following Maskhadov's election as Chechen president in January 1997, Grozny and Tbilisi embarked upon the search for a mutually acceptable and beneficial modus vivendi. Chechnya's motives in doing so were geo-strategic and economic: its 80 km frontier with Georgia constitutes its only gateway to the outside world that is not controlled by Moscow.

Georgia's position was more complex. Georgians have neither forgotten nor forgiven the participation of Chechen detachments in the 1992-1993 fighting in Abkhazia on the Abkhaz side, including one led by field commander Shamil Basaev. And while some Georgian politicians advocated forging a strategic partnership with Grozny on the principle "the enemy of my enemy is my friend," others were aware that too close an alignment with Chechnya would only anger Moscow, with which Georgia's relations are permanently strained. But again, Georgia could counter any Russian objections that in pursuing relations with Chechnya it is failing to respect the territorial integrity of the Russian Federation by accusing of Moscow of double standards, pointing to Moscow's alleged encouragement of Abkhaz separatism.

Tbilisi initially opted for caution. Rather than risk of offending Moscow by an overt demonstration of support for the new Chechen leadership, Shevardnadze chose not to attend Maskhadov's inauguration as president in February 1997. Then Minister of State Niko Lekishvili for his part affirmed that in pursuing relations with Chechnya, Tbilisi would be guided by the principle that the republic is part of the Russian Federation.

Following a series of low-level visits in the spring of 1997, and a surprise meeting in Nazran between President Maskhadov, his Ingushetian counterpart Ruslan Aushev, and Georgian Defense Minister Vardiko Nadibaidze, in August 1997 Maskhadov visited both Tbilisi, where he held talks with Georgian President Eduard Shevardnadze, and Georgia's northern Akhmeta Raion, which is home to an estimated 7,000 Chechens. The two presidents discussed both how to resolve conflicts throughout the Caucasus, and economic issues, in particular the feasibility of building an oil pipeline from Baku via Grozny to a Georgian Black Sea port. (That project may have been part of the grandiose plan for a Caucasus Common Market, for which Chechens were soliciting international support and financing in 1997-1998.)

Specifically, Maskhadov and Shevardnadze reached agreement on building an asphalt road connecting Grozny and Tbilisi that would give Chechnya an outlet to the sea. But Georgia made it clear at that time that it would not open its airspace to Chechnya. Within two months of the Shevardnadze-Maskhadov meeting, a Chechen highways official said that 19 km of highway on the Chechen side of the border had already been built. By April 1998, the Chechens had completed most of their section, but work on the Georgian section has still barely begun.

That failure on Georgia's part can be attributed to the desire not to exacerbate relations with Moscow unnecessarily, and to retain some degree of leverage over an unpredictable neighbor whose actions could indirectly pose a threat to Georgia's interests. But it also reflects many Georgians' animosity towards the Muslim Chechens in general, and the putative Wahhabi threat in particular. That animosity has been compounded over the past year by the abduction of a number of Georgian citizens by Chechen armed groups, and by reports, which it impossible to verify, that the Chechen community in Akhmeta is actively engaged in the smuggling and sale in Georgia of narcotics.

It would be wrong, however, to conclude that the Georgian leadership had no interest in maintaining high-level contacts with Grozny. Chechen Vice President Vakha Arsanov has spent most of the past few months in Tbilisi, undergoing and convalescing from back surgery. In early September, at the height of the fighting in Daghestan between Russian forces and Chechen-led militants, he met with both Shevardnadze and Minister of State Vazha Lortkipanidze. Interfax at that time quoted Lortkipanidze as saying that "we will support each other."

The repeated claims by senior Russian politicians, most recently by Foreign Minister Igor Ivanov, that both Georgia and Azerbaijan are either inadvertently or wittingly allowing arms and Islamic mercenaries to transit their territory en route for Chechnya (see "RFE/RL Newsline," 5 October 1999) demonstrate that Georgia's shared border with Chechnya constitutes both a dangerous liability and, for Moscow, a convenient pretext for exerting pressure on Tbilisi. What concrete form that pressure will take remains to be seen: Arsanov claimed in Tbilisi on 2 October that the Chechen leadership has grounds to believe that Moscow intends to occupy both Georgia and Azerbaijan once it has pacified Chechnya. (Liz Fuller)

Moscow Prepares For Final Expulsion Of Chechens. Police in the Russian capital are now operating under explicit, acknowledged but still unpublished instructions from above not to re-register any ethnic Chechens living in Moscow, a senior human rights monitor told a RFE/RL press briefing in Washington on 6 October.

Rachel Denber, deputy director of Human Rights Watch and former head of that organization's Moscow office, said that this step effectively criminalizes Chechens and leaves them open to persecution and ultimately expulsion from the Russian capital.

Many observers have decried recent Russian moves against Chechens and other ethnic groups from the North Caucasus, Denber said, but most have suggested that these actions arose in reaction to a recent series of bombings many Russians blame the Chechens for.

In fact, Denber noted, the current campaign is far less spontaneous and has far deeper roots: First of all, she said, the Russian and Soviet arrangements for registering all residents in major cities, the so-called "propiska" system, provided the basis for the current action. It gave the authorities the ability to control the population. While these arrangements are both illegal and unconstitutional in Russia now, Moscow Mayor Yuri Luzhkov has retained them.

Second, the current campaign really began with Luzhkov's response to the October 1993 conflict between Russian President Boris Yeltsin and the Russian parliament. Following this clash, Luzhkov issued a decree calling for the expulsion of "persons of Caucasian nationality" from the Russian capital, the sixth anniversary of which was marked this week. Under its terms, Luzhkov has carried out a series of expulsion efforts against the Chechens and other groups.

And third, Denber noted, there are broader bureaucratic and political calculations. By banning the re-registration of Chechens, Luzhkov has given the police a new and lucrative source of illegal income, allowing them to extract bribes from those subject to expulsion. And he has played to popular anger against the Chechens and thus gained additional political support.

Denber pointed out that it is unlikely Luzhkov was acting alone. Not only has his campaign been copied by leaders elsewhere in the Russian Federation, but it has received implicit support from the central government. (RFE/RL Press Release)

Tensions In Karachaevo-Cherkessia Stem Partly From Economic Discrimination. Two recent articles in "Nezavisimaya gazeta" by that paper's correspondent in Cherkessk suggest that one of the reasons for the animosity unleashed by the disputed presidential poll in Karachaevo-Cherkessia this summer were the discriminatory policies pursued by the republic's previous leadership vis-a-vis the Cherkess, Abaza and Cossack communities.

On 29 September, "Nezavisimaya gazeta" focused on the plight of the inhabitants of the Abaza village of Psyzh, who claimed that, in violation of Russian Federation law, and in contrast to the republic's Karachai community, local veterans of World War II do not receive any of the financial privileges to which they are entitled. That discrimination, which the villagers blamed on the predominantly ethnic Karachai ruling elite, in particular former President Vladimir Khubiev, has compounded resentment among a group in which unemployment is high, and most families owe thousands of rubles for gas and electricity.

But at least Psyzh has mains gas supplies, unlike the Cossack stanitsa of Ispravnaya that the "Nezavisimaya gazeta" journalist also visited. In that village, which was considered by its inhabitants relatively well-to-do, the unemployment level is almost one in four. But the stanitsa has no gas, unlike smaller and more remote village inhabited by representatives of other ethnic groups. One of the Cossacks commented to the Russian journalist that the needs of the Russians, who constitute 43 percent of the republic's total 431,000 population but are a tiny minority in the raion in question, are simply ignored.

Both the Russian Cossacks and the Abaza expressed bewilderment and incomprehension at what they considered Moscow's reluctance to take decisive measures to prevent further outbreaks of violence between supporters of rival presidential candidates Vladimir Semenov (a Karachai) and Stanislav Derev (a Cherkess). One of the Abaza even observed that "Our elders are convinced that as a general rule no elections should be held in the North Caucasus. Moscow should appoint its own candidate who absolutely must be a Russian." But while the Abaza affirm that they are no longer prepared to live within the same administrative-territorial formation as the Karachais, and advocate resolving the standoff by creating a separate Cherkess Autonomous Oblast, the Cossacks oppose any such dismembering of the republic along ethnic lines.

Meanwhile Semenov, who was inaugurated as president on 14 September, three weeks after the republic's Supreme Court ruled that his runoff victory over Derev was valid, continues trying to form a government in which all the republic's ethnic groups are represented. Having named an ethnic Russian construction engineer as premier, Semenov intends to select four deputy prime ministers--a Karachai, a Cherkess, and Abaza and a Nogai. He expressed confidence that it would be possible to find qualified Cherkess and Abazin candidates to fill those positions. He also vowed that none of the republic's national groups would be subjected to discrimination in future.

Asked how he assessed the danger posed by the ongoing pickets of the government building in Cherkessk by Derev's supporters, Semenov said he believes those protests are intended first and foremost to intimidate Moscow. The biggest threat to stability in the republic, he suggested, is the number of arms the population has at its disposal. (Liz Fuller)

EU Becomes Armenia's Top Trade Partner. As a result of the Russian economic crisis and its ongoing consequences, the European Union is reinforcing its recently gained position as Armenia's number one trade partner.

Armenia's trade with Russia and other members of the Commonwealth of Independent States took another tumble in the first half of this year, while reaching an all-time high with Europe, in what analysts see as the country's economic re-orientation. Official statistical figures show that the EU's share grew to over one-third of Armenia's foreign trade volume during the period in question, whereas that of the CIS plunged to a record-low level of 23.3 percent.

"The Armenian economy is gradually re-orienting itself from the CIS and eastern markets toward richer markets and Europe in particular," said Tigran Davtian, acting head of a foreign relations department at the ministry of trade and industry.

Tightly integrated with other ex-Soviet republics in the past, Armenia suffered a severe slump in the early 1990s following the collapse of the command economy. The plunge was exacerbated by a cut-off of traditional trade routes caused by the ethnic conflicts in Nagorno-Karabakh and elsewhere in the Caucasus. The radical change in the structure of foreign trade, Davtian said, results from Armenian businesses' "adaptation" to the loss of traditional markets and high transportation costs.

Anahit Melkumian, an economist with the EU's Armenia Economic Trends (AET) project, sees a "slow but steady integration in the world economy" amid the "obviously declining dependence" on Russia and other ex-Soviet republics. The Russian crisis that erupted in August 1998 accelerated this process. As the Russian ruble lost 70 percent of its value within a few months, many Armenian enterprises lost the main market for their production. The turmoil was responsible for last year's 2.5 percent fall in Armenia's industrial output, despite overall economic growth.

Exports to the CIS in the first half of the year shrunk by half compared with the same period in 1998. By contrast, exports to other countries were up 27.7 percent, which suggests that at least some of the enterprises affected have succeeded in re-orienting themselves. "Many of our [exported] goods changed direction, searching for new markets and finding them in some places," the trade ministry's Davtian agreed. The fact that Armenian goods can sell in more selective markets outside the ex-USSR, especially in Europe, is a "very positive phenomenon," according to him.

That there are more European goods imported to Armenia can be seen in Yerevan shops. They serve as an indication of increased consumer standards and purchasing power. It is also evidenced by a steady decline in trade with Iran, a leading trade partner as recently as three years ago. The Iranian production is cheap, but generally low quality.

Yet a closer look at the foreign trade structure reveals that Armenia still has a long way to go. Its trade deficit decreased by 10 percent but still was a staggering $315.7 million. The country continued to import three times more than it exports.

AET economist Melkumian is also concerned about the lack of diversity in the exports to Europe. Indeed, a large part of $57 million exports to the EU were still refined diamonds, mainly headed to Belgium. Together with Britain, Belgium had the biggest share in EU imports to Armenia worth a total of $143 million. Ties with other European countries lag behind.

Davtian described the huge deficit as "the most sad" of Armenia's economic indicators. Indeed, economists warn that without a sharp rise in exports the country will find it increasingly difficult to cope with a foreign debt nearing $800 million. The government is to unveil a program on reducing the deficit through an annual 10 percent rise in exports.

Membership in the World Trade Organization, which is expected later this year, could help matters, but analysts caution that it alone is insufficient to make a difference. Nor would a currency devaluation cause a breakthrough, they say.

The problem lies at the heart of the Armenian economy which badly needs substantial foreign investments. They are seen as vital for spurring more rapid growth. Melkumian reckons that growing trade with the West bodes well for the influx of capital, but other factors such as a high degree of risks throughout the region and inadequate domestic tax legislation still scare off investors. (Emil Danielyan)

Quotations Of The Week. "The government does not plan to use force in tackling political problems, including Chechnya's status. This will be done through political negotiations." -- Russian Prime Minister Vladimir Putin at a meeting on 5 October with leading Russian politicians (quoted by Interfax).

"The legitimate authority in Chechnya today is President [Aslan] Maskhadov, whether anyone likes it or not." -- Ingushetia's President Ruslan Aushev, quoted by Interfax , 1 October.

"The processes in Chechnya are a very dangerous attempt by Russia to restore its influence in the Caucasus, including the South Caucasus." -- Azerbaijan Popular Front Party Deputy Chairman Asim Mollazade, quoted by the "Financial Times," 30 September.

"If the problems of the North Caucasus are not solved now, they will never be solved." -- Russian State Duma Security Committee Chairman Viktor Ilyukhin, quoted by ITAR-TASS, 6 October.