Troubling news from the Caucasus - March, 2008

Although it does not have any oil or gas reserves, Armenia today is playing an integral part within the region's oft called "Great Game." With Moscow pressing the West with its virtual monopoly of Central Asian gas and oil distribution networks, western pipeline projects such as the Nabucco and the Baku-Tbilisi-Ceyhan are gaining great strategic importance. So, why didn't the West jump on the Levon Ter-Petrosian bandwagon? Most probably this was because the West knew Petrosian could not succeed against the well entrenched authorities in Yerevan and any resulting political turmoil could potentially undermine Armenia's stability. In the eyes of many political analysts, an unstable Armenia could mean resumption of war in the Caucasus; a risk no one today is willing to take. These are some of the geostrategic factors that shape regional politics.

Arevordi

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Troubling news from the Caucasus

Bloodshed in Armenia worries both Russia and the West

March, 2008

THE day after Dmitry Medvedev's presidential victory, Moscow's leading papers turned their attention away from the long-predicted result to the unexpected bloodshed in Armenia. At least eight people were killed in clashes between security forces and opposition supporters protesting against alleged fraud in the country's presidential elections. “An election won with some blood”, ran the headline in Kommersant, a leading business daily. Small, complicated and with names that are hard to spell, Armenia has long been out of the mainstream of world news. Yet what happens in this country has implications not only for the whole of the Caucasus, a region vital for Europe's energy security, but also for Russia. The story of rigged elections, corrupt officials and dead protesters is particularly unnerving for Russia, a country that prides itself on its stability. On February 19th Armenia held presidential elections. The incumbent prime minister, Serzh Sarkisian, assisted by a biased media and occasional stuffing of the ballot boxes, won 53% of the vote. If the election had been conducted fairly, there is a good chance he would have faced a second round and a possible defeat. But Mr Sarkisian had the backing of Robert Kocharian, the current president, which swung the result. (Mr Kocharian, it is said, fancies the job of prime minister—not unlike his Russian counterpart.)

International observers did not cover themselves in glory. The Organisation for Security and Co-operation in Europe pointed out many shortcomings, yet said in an initial statement that the ballot was “mostly in line with the country's international commitments”. The opposition, led by Levon Ter-Petrosian, an academic and Armenia's first president, demanded a re-run of the election. His supporters took to the streets. Mr Ter-Petrosian is no democratic angel. In 1996 he is widely believed to have rigged the presidential election in his favour. Still, those who voted for him this time did so largely in protest against the local mafia, corruption and unemployment now associated with Mr Kocharian. For 11 days the government put up with the peaceful protest. But on March 1st, the police moved in on the pretext that protesters were carrying firearms, which some observers say were planted. Mr Ter-Petrosian was placed under de facto house arrest and the crowd was dispersed. Predictably it regrouped and gathered in front of the French embassy in Yerevan. Mr Kocharian sent in the army, and the area was soon lit up with tracer fire. Eight people were killed, cars were torched and shops were looted. Many protesters were armed with stones and metal poles. But the responsibility ultimately lies with the government which allowed the situation to deteriorate into chaos. The state of emergency now imposed by Mr Kocharian for 20 days, including a media blackout and the arrest of opposition figures, may temporarily suppress the protests, but it is unlikely to resolve the underlying problems. These include corruption, low living standards and an economic blockade by Azerbaijan and Turkey because of Nagorno-Karabakh, the Armenian-populated enclave inside Azerbaijan that was conquered by Armenia in 1994. This conflict has long been frozen. But three days after the violence in Yerevan, Armenian and Azerbaijani forces were involved in their worst firefight in a decade. Both Armenia and Azerbaijan accuse each other of starting the skirmish, which caused a disputed number of deaths on both sides.

Claiming that Kosovo's declaration of independence last month has emboldened Armenian separatists, Azerbaijan's president, Ilham Aliev, has given warning that he is buying weapons to retake Nagorno-Karabakh by force, if necessary. A renewed war could destabilise the region and jeopardise a strategic oil pipeline to Turkey that runs only 15 kilometres (ten miles) from the ceasefire line. Nagorno-Karabakh remains an open sore. Mr Ter-Petrosian's downfall in 1998 was mainly caused by his hints of a more flexible approach to a peace settlement with Azerbaijan. Both Mr Kocharian and Mr Sarkisian are from Nagorno-Karabakh and fought in the war, but they have done little to move towards peace. In a recent commentary in the Washington Post, Mr Ter-Petrosian dismissed the notion that only hardliners from Nagorno-Karabakh can solve the conflict. Indeed, he argues that Mr Sarkisian, whose presidency is now marred by bloodshed and incompetence, will be even less able to govern. Russia and the West have an interest in Armenia's stability, and they need to work to maintain it. This could be Mr Medvedev's first foreign test as president.

Source: http://www.economist.com/world/europ...ry_id=10809006

In related news:

Q&A: Why Europe needs Russian gas

The threat from Russian state monopoly Gazprom to cut off the gas flow to one of its neighbours, Ukraine, has again raised questions about the security of Europe's energy supply.

Why is this a worry for European countries?

Gazprom controls about a third of the world's gas reserves and it is responsible for a quarter of Europe's supplies. Most of Europe's gas is piped via Ukraine, and when Gazprom shut down the pipeline in 2006, the flow to the rest of Europe fell, in some areas, by 40%.

Is the latest deal between the two presidents the end of the matter?

For the moment, yes. President Putin has said that Gazprom is satisfied with Kiev's commitment to begin paying its bills. Gazprom says Ukraine amassed debts of $1.5bn since November 2007, while Kiev argues the figure is closer to $1bn. But it is the way payments are made that is at the heart of the dispute and that may not have been resolved. The debt is owed not to Gazprom but a subsidiary RosUkrEnergo, part-owned by two Ukrainian businessmen. Ukrainian Prime Minister Yulia Tymoshenko wants an end to the system that allows RosUkrEnergo to import the gas and another intermediary, UkrGasEnergo, to sell it. Gazprom says it is prepared to negotiate once the bills are paid.

Is this politics or economics?

Analysts in Moscow say it is all about cash, and Western Europe has dramatised it as a political dispute. But Europeans are edgy. It seemed odd that the threatened cut-off coincided with a rare visit to Moscow by Ukrainian President Viktor Yushchenko. Ukraine's ambition to join Nato was as high on the agenda as the Gazprom crisis.

Is Moscow doing anything to secure Europe's supply?

Gazprom has embarked on plans for pipelines that bypass Ukraine and Belarus, former Soviet states which are currently essential for transit. Gazprom has two major projects, Nord Stream and South Stream. Nord Stream will run for 1200km along the bed of the Baltic Sea, and South Stream under the Black Sea. Gazprom has signed up big European partners: Italy's ENI for South Stream, and German companies E.ON Ruhrgas and Wintershall - along with Dutch provider Gasunie - for Nord Stream.

Is the EU happy about relying on Russian gas?

The EU has major concerns about security of supply and is moving ahead with a pipeline plan of its own. Nabucco will bring gas from Central Asia and the Caspian across Turkey into the European Union. But it will have only enough capacity to provide a small proportion, perhaps 5%, of Europe's needs.cSo Europe needs Gazprom, and that is why European companies and their governments have actively embraced the two projects. Austria is likely to serve as a hub for both. EU officials say that even during the Cold War the Russian gas supply was stable, so it is better to rely on Gazprom than potentially unstable sources such as Turkmenistan and Uzbekistan.

Source: http://news.bbc.co.uk/2/hi/europe/7240462.stm