The Caspian in 2012 - Kazakhstan

This is the last in my series of guarded predictions for the year ahead in the Caspian region.

I have left Kazakhstan until last for the simple reason that it is the trickiest to predict. The three biggest political and security issues in the country – the labour unrest in the west, the militant threat and the presidential succession – are complex and defy easy forecasts.

After the crackdown on strikers in Zhanaozen on December 16, which led to at least 16 deaths and sparked riots elsewhere, the situation appears to have stabilised. President Nazarbayev’s response to the violence has been fairly efficient: regret has been expressed for the loss of life, prosecutors have begun investigating the police who shot protestors, reconstruction work has been launched, and Mangistau provincial governor Krymbek Kusherbayev has been sacked.

Equally telling is who is not being investigated or sacked – the senior security officials who orchestrated the operation. This may be distasteful for those who want justice to be done, but in practical terms it probably won’t mean that much.  As Joshua Foust notes, “Even if the punishment to the police is limited to a few symbolic prosecutions, that will in all likelihood be enough to halt any attempts to convert this horrible tragedy into a regime-ending event.”

The Caspian in 2012 - Turkmenistan

From now until the end of the year, I will be running a series of posts offering some (guarded) predictions for 2012.

The biggest news in Turkmenistan is February’s presidential election – if you can call an entirely rigged and stage-managed vote ‘news’ at all. President Gurbanguly Berdimuhammedov faces fourteen opponents at the time of writing (summarised by Catherine Fitzpatrick), all of them state officials or managers from state-controlled industries. They include such political luminaries as Myrat Charykulyev, MD of the Mary-Ozot chemical company, and Rejep Bazarov, deputy mayor of Dashoguz region.

So, needless to say,  Berdimuhammedov will win another resounding mandate. None of the other candidates will probably break the 5% mark, although the sheer number of them which have been nominated suggests that the government is keen to give the president a lower and more ‘realistic’ share of the vote - last time, in 2007, he won 89.2% against five opponents, each of which got an average of 2.2%.

The Caspian in 2012 - Georgia

From now until the end of the year, I will be running a series of posts offering some (guarded) predictions for 2012.

Like Armenia, Georgia has parliamentary elections in 2012 (in October) preceding a presidential vote the following year. Like Armenia, the vote pits an entrenched but tainted government against a controversial opposition.

President Mikheil Saakashvili’s United National Movement still dominates Georgia, in politics and in media. UNM offices are central to local politics, often doubling as the seat of the local government. Most of the opposition is divided, under-funded, and in some cases presumed to be backed by either Moscow or the government.

The Caspian in 2012 - Azerbaijan

From now until the end of the year, I will be running a series of posts offering some (guarded) predictions for 2012.

The Azerbaijani government has enjoyed a pretty good 2011, with solid economic growth, no changes on the political front and some small but symbolic foreign policy victories, winning the Eurovision Song Contest and (more importantly) securing a temporary seat on the UN Security Council for 2012 and 2013. Although relations with Iran have been testy, and Karabakh still smoulders, this is nothing new.

In energy, the scramble to choose a pipeline route to Europe for Azerbaijan’s gas may have energy analysts and companies in a spin, but whatever route is picked, Baku wins – it has fully emerged as a critical player in regional energy politics.

The Caspian in 2012 - Armenia

From now until the end of the year, I will be running a series of posts offering some (guarded) predictions for 2012.

For Armenia 2012 will be dominated by parliamentary elections in May, the first since a disputed poll in 2008 led to street protests in which at least eight demonstrators were killed by police.

President Serzh Sarkisian’s Republican Party of Armenia, which heads the ruling coalition, will probably win another parliamentary majority. But it is likely to be significantly reduced by a number of factors, leaving the country’s political landscape in flux after a period of relative stability.

The Caspian in 2012 - Turkey

From now until the end of the year, I will be running a series of posts offering some (guarded) predictions for 2012.

2011 was, on balance, a good year for Turkey. Despite the challenges posed by the Arab Spring, and the demise of the ‘zero problems with neighbours’ policy, Turkey has made huge strides in building itself as a regional power. At home the economy has been solid; the AKP won a resounding third term, solidifying political stability; and the army has been confined to barracks. 2012 is not likely to be so successful.

In 2012 the biggest foreign-policy challenges will remain Syria and Iran. A total collapse into chaos in Syria, or direct clashes on the border, could prompt Ankara into mounting a limited military intervention (under humanitarian auspices, probably).

Natural Gas Europe - Iran’s Caspian Discovery Could Change the Regional Gas Game

Below is my latest article for Natural Gas Europe.

Iran’s recent announcement that it has found a huge new gas field in the Caspian has been touted as a major event, which will “will change the energy and political balance around the Caspian Sea”, according to President Mahmoud Ahmadinejad. With estimated reserves of 1.4 trillion cubic metres of natural gas and 8 billion barrels of oil, the find is undoubtedly significant, but perhaps not for the reasons which Iran means.

Khamenei arrests his own son for 'assassination plot'

Divisions within the Iranian elite are nothing new, but this story takes things to another level:

Iran’s Supreme Leader Ayatollah Ali Hoseyni Khamenei has ordered the arrest of a number of senior members of the Revolutionary Guards he suspects of planning to assassinate him. . . Mojtaba Khamenei, Khamenei’s son and an ardent supporter of Iranian President Mahmoud Ahmadinejad, was one of the officials that was arrested.

Politics, policy and the Turkish economy

On the surface, the signals coming from the Turkish economy are enough to make anyone in Europe envious. 8.2% growth in the third quarter; foreign direct investment between January and October up 84% year-on-year; exports at a historical high of $134 billion in the past year.

But every piece of good news is now accompanied by a warning that the economy is overheating and heading for a crash. Citigroup says (via the FT) that “the composition of growth remains grossly unbalanced”.

Natural Gas Europe: Risks and Opportunities of Shell's Turkey Deal

Below is my latest article for Natural Gas Europe.

As reported on 23rd November, Royal Dutch Shell signed a major deal with Turkey’s state energy firm TPAO to begin prospecting for gas and oil onshore in southeastern Turkey, and offshore in the southwest. The deal could have major implications for Turkey’s long-term energy security but carries its own risks.

Interviews with Trend news agency, Azerbaijan

Below are two interviews I've recently given to Azerbaijan's Trend News Agency.


South-Eastern Route has more chances to deliver Azerbaijani gas to Europe

Azerbaijan, Baku, Dec. 6 / Trend A.Badalova/

The South-Eastern Route (SEEP) has more chances to be chosen by Shah Deniz consortium to transport Azerbaijani gas to the European market, political risk analyst at Menas Associates in London, focusing on Caspian energy and political issues Alexander Jackson said.

A truce in the Baku-Tehran cold war

The relationship between Azerbaijan and Iran has been tense for years, but things got especially difficult this year. Border shootings, Iranian warnings of revolution to the north, protests by ethnic Azeris in Iran, and the recent murder of an anti-Iranian journalist in Baku have driven the relationship to a low ebb.

It now seems that both sides have realised things have gone too far and are keen to patch up the damage: to that end, Azerbaijan’s Presidential Administration Chief Ali Hasanov flew to Tehran recently. Hasanov announced that the neighbours have come to an agreement on non-interference and mutual understanding. This was diplomatic boilerplate, but Hasanov’s comments to the media were remarkably direct, given how euphemistic both sides usually are.

“If you respect my values, I will respect you," he said. "If you do not interfere in my domestic affairs, I will not interfere either. . . We oppose the artificial introduction of any sects, religious groups, as well as various political, ideological, spiritual currents in Azerbaijan. They aim to create anarchy in Azerbaijan under the guise of democracy. We stop and will stop this."

He said that neither state had hostile propaganda towards the other at the state level. Iranian clerics may make an anti-Azerbaijan statement, but Azerbaijani historians might make anti-Iranian statements too. He also expressed support for the Iranian political system and made it clear that the same should apply to Azerbaijan.

Azerbaijan’s communication minister has also got involved, saying that the two states would work towards improving the protocols on cross-border broadcasting. This reflects a longstanding Azeri complaint that pro-Iranian propaganda, spreading support for hardline Islam, is beamed into southern Azerbaijan. Iran also complains that broadcasts promoting separatism among its ethnic Azeris are transmitted from across the border, although less loudly.

Hasanov’s visit is fairly significant, much more than the usual protocol-heavy trips. The substance of his comments is that Baku and Tehran have explicitly agreed an end to their recent cold war, most of which was, in any case, out of the hands of the upper echelons of government.

It remains to be seen whether the truce will hold, but in this neighbourhood and at this time, both of them need all the friends they can get.

Upcoming Kazakh reshuffle paves the way for Nazarbayev’s succession

This is pretty serious news:

Kazakh Prime Minister Karim Massimov will probably leave his post following the creation of a new government, Kazakh president's adviser Yermukamet Yertysbayev told Kazakh republican newspaper Liter.

Speculation has been swirling about the presidential succession for months, and it now seems we are getting a clear signal: Yertysbayev is known as the “president’s nightingale” for his role in cautiously communicating Nazarbayev’s intentions, so his pronouncements carry a lot of weight.

Ambassador Bryza on his way out?

Observers could be forgiven for thinking the long-running saga over Matt Bryza’s tenure as US ambassador to Azerbaijan had finished.

The seasoned Caucasus hand has been in the ambassador’s residence since February, after President Obama bypassed a block on his appointment which was imposed by two pro-Armenian Senators (Barbara Boxer  (D-CA) and Robert Menendez (D-NJ) questioned whether Bryza’s close links to Turkish and Azerbaijani officials compromised his judgment). Now, the appointment is back in the news, and the possibility has been raised that Bryza will be dragged back from Baku.

Natural Gas Europe: China Undercuts Russia and Europe with New Turkmen Gas Deal

From now on I'll be writing regular pieces for Natural Gas Europe, the go-to site for news and analysis on European gas issues, and will reblog them here.

A new gas deal between Turkmenistan and China suggests that Beijing is seeking to steal a march on both Russia and Europe for Turkmen gas supplies. Further signs of an eastward shift by Turkmenistan could have a profound impact on regional energy geopolitics, but there may be less to the latest news than meets the eye.

New publications

I've realised that my paper on 'Next Steps In The Nagorno-Karabakh Conflict' from earlier this year has been published on the new website of Caucasus International, available at: http://caucasusinternational.org/article/4

My piece on Turkish-Iranian relations, for the Azerbaijan Diplomatic Academy's 'Azerbaijan In The World', is also now online, at: http://ada.edu.az/biweekly/issues/vol4no22/20111201041158825.html

Saakashvili pushes ‘United Caucasus’ dream again

Critics have been comparing Georgia’s Mikheil Saakashvili to his arch-rival Vladimir Putin for a while now. Their authoritarian tendencies, colourful language, and fondness for switching political offices (speculative in Misha’s case, confirmed in Putin’s) make uncomfortable parallels between the Russian strongman and his Westernising nemesis.

There may be another reference to add to the list: both like espousing fanciful and unwanted integration projects in which they would (naturally) take the lead. Putin has his Eurasian Union concept, likely to be a cornerstone of his third presidential term, and Saakashvili has his own, provincial version: the United Caucasus.

Parsing Iran's threat to Turkey

Iran's threat to bomb a NATO radar site in Turkey, in case of an attack by Israel or the US, doesn't seem to have gathered as much press attention as you might expect. Iranian rhetoric to "deal a firm blow" against Israel and the US - or even Gulf Arab allies - is one thing, but for a senior Revolutionary Guards official to threaten an attack on Turkish soil is a serious change in tone.

And yet the Turkish government has made no official response, which is rather surprising given Prime Minister Erdoğan's speedy and vocal denunciations of anyone else who would threaten Turkey's interests. According to columnist Lale Kemal, there are splits emerging within the Cabinet over Iran:

Some ministers, such as Turkish Energy and Natural Resources Minister Taner Yıldız, reportedly ran out of patience during a Cabinet meeting where he complained about Iran, accusing the country of being unappreciative of Turkey’s gestures, and criticized [Foreign Minister] Davutoğlu over his handling of Iran. 

Such splits have yet to be made public (unsurprising, given the tight rein which the PM tends to keep his ministers on). Nonetheless such an open threat to Turkey - even if it was, in theory, directed at Washington and Tel Aviv - is surely causing concern in the establishment, particularly in the military.

The warning comes bundled up with the decline in Turkish-Iranian relations over Syria. It is, depending on your point of view, either a coded and specific warning to Ankara to stop backing the Syrian opposition, or a sign of general frustration with Turkey and part of a gradual return to perceiving Turkey as a threat (largely due to its decision to host NATO's missile shield).

Ankara's official silence on the matter suggests one of two things, again depending on your viewpoint. Firstly, that Turkey doesn't take the threat seriously in the slightest, and refuses to bother responding to a message which was intended for domestic consumption. Secondly, that the threat is being taken very seriously, and that alarm bells are ringing in Ankara as officials scramble to defuse tensions.

It's not an easy one to read, but it may mark something of a sea-change in relations.

UPDATE: Ankara has sent a formal protest note to Tehran in response to the threat, whilst Davutoğlu has expressed “unease” to his Iranian counterpart Ali Akbar Salehi, who said that the statement did not reflect official Iranian policy. A fairly mild reaction from Turkey, it must be said.

Turkey boosts energy security with Chinese deal

China and Turkey have signed a major deal to build a gas storage facility in central Anatolia, underscoring China’s growing investment profile and Turkey’s progress towards secure gas supplies.

Energy security has long been a major headache for Turkey for a number of reasons, from the PKK blowing up pipelines to less headline-grabbing issues like inefficient distribution networks and the slow pace of privatisation.

Karabakh snipers, a microcosm of the conflict

One of the signal failures of the Nagorno-Karabakh peace process has been an inability to persuade the belligerents to withdraw snipers from the front line.

This relatively small step – which would leave untouched the vast numbers of infantry, heavy machine guns, mortars and artillery along the Line of Contact (LoC) – would cost little and would indicate at least some commitment to the peace process. But neither side has been willing to pull back snipers and, if anything, have boosted the capabilities of their sharpshooters.

Umarov appeals to Turkey to stop execution of Chechens

It seems that Doku Umarov, the leader of the North Caucasus rebel movement, isn’t content with fighting a David-and-Goliath struggle against Russia. He now has Turkey in his sights too.

In a video on North Caucasus jihadist clearing-house Kavkaz Center, Umarov warned PM Recep Tayyip Erdoğan and President Abdullah Gul that unless the assassination of Chechen exiles in Turkey ceased, the North Caucasus rebels would take “retaliatory action”.

Did the US just give up on Nabucco?

The US government has never championed the Nabucco project as much as Europe, for obvious reasons – unlike Caspian oil pipelines which Washington lobbied for extensively back in the 1990s, the US will receive no direct benefit from huge quantities of Caspian gas being piped to central Europe.

But the US has remained a heavyweight player in the debate, and American diplomats have been very useful to Brussels in leaning on Turkey, Azerbaijan and Turkmenistan to get things moving.

Now, with the choice of pipeline project being weighed up in Baku by the Shah Deniz consortium which will supply the first tranche of gas, Washington’s top Caspian energy specialist seems to have just delivered a major blow to the EU’s favoured project.

US-Turkey helicopter deal approved

The US Congress has given final approval to sell three attack helicopters to Turkey's military, in another indication that the bilateral relationship is back on track.

The sale of three AH-1W Super Cobra helicopters, drawn from the Marine Corps inventory, has been on the table for some time. There was some opposition in the House, spearheaded by Democratic congressmen, who said that they were "deeply concerned by Turkey’s increased saber rattling, its threats against Israel, its outlook toward the European Union, its occupation of Cyprus and its unrelenting blockade of Armenia”.

Israel aside, there's nothing new in that list, certainly that's not stopped previous US Administrations from selling weaponry to Turkey and closely cooperating in the military-technical sphere. Like so many critics, the objections also seem to overlook the rather salient fact that Ankara remains a fully paid-up member of NATO, a vital partner in post-American Iraq and soon to be the host of an anti-Iranian missile defence system.

The $111 million sale will give Ankara a fillip in its renewed fight against the PKK. According to Hürriyet, Turkey purchased ten Super Cobras in the 1990s but only six are now operational, so the new acquisition will help to restore the military’s airborne capabilities.

A shortage of helicopters is a serious Achilles’ heel in taking the fight to the PKK’s mountain hideouts, and Turkish Aerospace Industries is working with Italy’s AgustaWestland to produce over 50 T-129 attack choppers to the tune of $3.2 billion.

The Super Cobra sale is a direct quid pro quo for hosting the missile shield, but it’s also just the prelude to a much more significant sale: of armed Predator and Reaper drones. If the impasse between Turkey and Israel continues, the Pentagon and pro-Turkish groups on Capitol Hill are going to have a fight on their hands to secure that particular prize.

An evolution in Kazakh militant tactics?

Another militant attack has hit Kazakhstan, this time in the southern city of Taraz near the border with Kyrgyzstan. The country's deputy prosecutor general said that a lone gunman went on the rampage, killing five security officers, two civilians, and finally, setting off his explosive belt, himself. 

The attack is the single most deadly to have hit Kazakhstan in its year of discontent, which began with the suicide attack in Aktobe on May 17. It also marks a geographic expansion of the militant campaign, which has so far been concentrated in the west (with rare attacks in Almaty and Astana).

The full details of the Taraz attack are still a little sketchy and may never be fully revealed, but two things stand out from existing accounts. 

Firstly, the attacker - identified as 'Kariyev' - was fairly amateurish. He began by shooting dead two police officers who were tailing him, suggesting he was unable to disguise his intent and forced to begin his operation before intended. This goes some way to explaining the rest of the attack, in which Kariyev travelled between locations shooting police officers - and two civilians - as he did so, before blowing himself up as a police officer attempted to disarm him.

This is in line with other militant attacks in Kazakhstan, which appeared to have been the work of fairly unskilled operators who have, for instance, killed only themselves in premature bombings. The attacker was also alone, suggesting that a multi-member team could not be assembled for the attack. 

However the second point is that this may mark a tactical evolution of sorts. Kariyev may have simply been a suicide bomber on his way to a security service target, and armed as a precaution, when his cover was blown. But the Associated Press claims that at one point Kariyev went home to pick up a grenade launcher, a serious piece of kit which raises the possibility that this was a complex attack - a gun and grenade rampage ending with a suicide bombing, the favoured tactic of the Haqqani network in Afghanistan (among many others).

Previous attacks in Kazakhstan this year have been direct suicide bombings or gun attacks on security personnel. A combined attack suggests that the militants are becoming more confident, and capable of launching attacks outside their usual area of operations. The relative amateurishness of the attack does not contradict this.

Suspicion will fall on the Jund Al-Khilafah, the little-known militant group based on the Afghan-Pakistan border which threatened attacks in response to Kazakhstan's new restrictive law on religion, and claimed responsibility for the unsuccessful October 31st bombings in Atyrau. 

But questions remain over the relationship between Jund Al-Khilafah and the Kazakh militants. Are they sending ethnic Kazakh fighters back from Afghanistan to start a new wave of violence? Are they providing local militants with arms and training? Or are they simply inspiring religious Kazakhs to take up arms against the government?

Answers will be difficult to come by, but given the pace of attacks, it seems that the Taraz attack won't be the last in Kazakhstan's new struggle with Islamist militants.

Interviewed by APA on South Caucasus issues

Below is an interview with me published by APA, one of Azerbaijan's leading news agencies:



Washington. Isabel Levine -APA. APA Washington DC correspondent’s interview with Alex Jackson, an independent analyst on security, political and economic issues in the Caspian region

Turkish generals resign - confrontation or surrender?

Turkey's whole top brass has resigned en masse, just days before a crucial high-level meeting to confirm promotions and resignations. The story is still unfolding so I won't give an in-depth analysis until the dust has cleared, particularly when we see how the AKP government responds.

Strictly speaking the heads of the Army, Navy and Air Force, as well as the Chief of the General Staff Işık Koşaner have not resigned so much as sought early retirement, but the overall message is the same. 

Caspian Energy Update

A few interesting recent developments in the Caspian energy field from last week.

Firstly, the dispute between Turkey and Azerbaijan over an agreement for the Nabucco pipeline continues. Officials at Azerbaijan's state energy firm SOCAR have complained that they have yet to receive a copy of the Product Support Agreement, signed on June 8 in Turkey by the Nabucco project partners and the Turkish government. Azerbaijani representatives declined to attend the signing ceremony - apparently because Baku was unwilling to give its full approval to Nabucco whilst various legal, political and commercial issues are outstanding. 

Azerbaijan's hunger for military hardware

Baku's military build-up continued apace in 2010, according to recent figures from the UN Register on Conventional Arms. 

Azerbaijan imported a fair number of armoured vehicles, multiple rocket launchers, and small arms throughout 2010 (as well as a single helicopter from Ukraine and a single Su-25 fighter jet from Belarus). The information available seems to be patchy: according to Azeri media, the data is collected only from the countries which submitted their information to the Register. So no word yet on which other suppliers Baku has been buying from. However, the excellent Stockholm International Peace Research Institute has more detailed figures from 2010 drawn from a range of sources, which paints a better picture of the volume of Azeri arms imports. 

Turkey's silence over Hezbollah's 'Istanbul bombing'

A rather dramatic security story from Turkey: the leading Italian daily  Corriere della Sera has reported that, acording to US sources, the bomb which injured eight civilians in Istanbul on May 26 was not the work of the Kurdish militant group the PKK, as believed. Instead, it was a botched assassination attempt against the Israeli Consul in Istanbul, carried out by the Lebanese Shiite militia Hezbollah on the orders of Iran's Revolutionary Guards.

The alleged attack was in revenge for the May 2010 assassination of Masoud Alimohammadi, an Iranian nuclear physicist, in Tehran. That attack was blamed on Israel's spy service Mossad. The Istanbul bomb attack was planned as retaliation by the elite Revolutionary Guards, who monitored Moshe Kahmi's movements before contracting the attack out to members of Hezbollah.

This all sounds rather like a deliberately complicated spy novel, but given the globe-spanning proxy war between Israel and Iran it isn't impossible. What is significant is the silence of the Turkish government. Reports suggest that Turkish intelligence soon realised that Hezbollah was behind the attack and backtracked on their initial assumption that the PKK was responsible. And yet no public accusations have been made against either Hezbollah or Iran.

Although Ankara probably made its complaints in private, the absence of public allegations against Tehran is striking, given that a number of innocent Turkish citizens were almost killed. Consider the reverse scenario: that Israel attempted to knock off an Iranian diplomat with a bicycle bomb in a busy Istanbul street. Turkish-Israeli relations would hit rock bottom, and make the current bilateral relationship look like a cordial embrace.

Turkish-Iranian relations are indeed a sensitive issue. Turkey prizes the access which its economic clout, geopolitical influence and Islamic credentials grant it in Tehran; more bluntly, it is also increasingly dependent on Iranian gas. Avoiding even a perceived confrontation with Iran is a pillar of Turkey's Middle Eastern policy. Similarly Hezbollah's impeccable revolutionary and populist credentials chime well with Prime Minister Erdoğan's independent, assertive and, arguably, 'anti-Western' style of politics.

This doesn't mean approval or complicity within the Turkish government. Nor to suggest that stylistic affinities with Hezbollah define Turkey's approach to terrorist bombings., for example However it does show that when it comes to dealing with its awkward eastern neighbour, and when it comes to preserving its carefully cultivated image in the 'Arab street', Ankara seems to believe that discretion is the better part of valour.

Is Azerbaijan trying to change the Karabakh mediators?

Following up on an earlier post I wrote on the shifting dynamics of the Karabakh mediating process, comes an interesting comment from Azerbaijan's Deputy Foreign Minister (via Hurriyet):

“We observe the leading position of Russia in the Minsk Group [of the OSCE, tasked with mediating the negotiations] when the U.S. and France, the other partners of the trio, stay behind. The last nine meetings being led by Russian President Dmitry Medvedev is a result of this development,” Azimov said. “We would like to see the U.S. and France become more active to create a balance.”

In addition Azimov criticised the absence of Turkey and - interestingly - Germany from the Minsk Group. The lack of a formal Turkish presence has long been a point of complaint for Azeri diplomats, which views the three co-chairs as too pro-Armenian for either geopolitical or domestic political reasons. That said, Ankara has exercised plenty of informal leverage over the years. 

Germany is an unexpected choice. Azerbaijan probably calculates that another major European power is needed, and that Germany's large Turkish diaspora would place it in the pro-Baku camp, as a counterweight to France, which is perceived to be pro-Yerevan due to its vocal Armenian diaspora.

The Deputy Foreign Minister also complained about the lack of a coherent NATO or EU strategy for the region, which has been a perennial issue - and one which is unlikely to change if the current process, dominated by the OSCE and driven by Russia, continues.

However calling for Turkey and Germany to be brought on board, encouraging NATO and the EU, and pushing for a more active role by the US and France, suggests that Baku is striving to alter the parameters of the existing peacemaking format. In particular it implies that Azerbaijan believes that the current arrangement is being overly influenced by Russia, which sent both Azerbaijan and Armenia a revised (and so far under wraps) peacemaking framework earlier this month. 

Grist to the mill is Azerbaijani Foreign Minister Elmar Mammadyarov's proposal to start drafting a peace agreement now, even before the existing disputes on the peace blueprint are settled. This will reinforce suspicions that Baku is seeking to circumvent the current process, avoiding excess pressure from Moscow which damages Azerbaijan's national interests. Which raises the question - just what has Russia been pushing  Baku to do?

Turkmenistan dispute underlines limits of Turkish economic lobbying

 Via Bloomberg’s Businessweek:

A group of Turkish companies are preparing to seek legal action against Turkmenistan in a bid to recover what they say is more than $1 billion in unpaid bills for construction work in the Central Asian country, the group's spokesman said Wednesday.

The legal claim indicates that a low-key visit by Turkish President Abdullah Gul to Turkmenistan in May, intended to settle the matter, was unsuccessful. Subsequent talks between representatives of the Turkish companies and officials from the opaque Central Asian state achieved nothing: the Turkmen government "did not understand the seriousness of the situation".

Interpreting the Diplomatic Chatter on Karabakh

In advance of the Kazan summit in late June, when Azerbaijan’s President Ilham Aliyev and his Armenian counterpart Serzh Sarkisian met to discuss the deadlocked Nagorno-Karabakh peace process, there were rumblings among international mediators that this was the last chance. If the two sides failed to make headway on the current blueprint (the Basic Principles), the OSCE’s Minsk Group warned, they would go back to the drawing board and produce a new plan.

This announcement may have encouraged intransigence in Kazan, as both sides held out in the hope of getting a more beneficial blueprint – what Tom De Waal has referred to as ‘forum shopping’ – but more critically it put the OSCE mediators in a corner. They now have to follow through on their warning, and adjust or abandon the Basic Principles, or risk losing even more credibility in the eyes of cynical and wary officials in Baku and Yerevan.

Recent days have seen a lot of diplomatic chatter on the issue. On July 8^th the Russian Foreign Ministry handed over its own proposal on the conflict to Baku and Yerevan. To date no details have emerged whilst the two sides study the proposal. According to the Russian daily Izvestia, the ‘interim status’ for Karabakh during the settlement process was the stumbling block during Kazan, so the new Russian proposal may seek to address this without overhauling the Basic Principles entirely.

There seems to be a slight thawing of the two sides’ positions since the Russian proposal was delivered, notably Azerbaijan. On July 13 senior official Ali Hasanov told an Azerbaijani newspaper that the OSCE-backed principles for peace “should not be viewed as aimed at providing an unambiguous victory to Azerbaijan or Armenia in the issue” and that mutual concessions were inevitable.

On the same day, Foreign Minister Elmar Mammadyarov seemed positive, saying that Baku and Yerevan should “continue negotiations with no hysterics and work on rapprochement of positions.” However, he also insisted that the Basic Principles should be used and that progress should continue “without waiting for the next phase of negotiations on basic principles”. This suggests that Azerbaijan, at least, is happy with them as they are. President Aliyev echoed this, insisting that the original Basic Principles drawn up in 2009 were acceptable, although the unspecified ‘new’ version is not.

Whilst the details and the effects of Moscow’s new proposal are unclear, other parties have been drawn into the peace-making arena. Firstly, high-level US officials have been undertaking one of their perennial rounds of telephone diplomacy. This is welcome acknowledgement of the problem for Azerbaijani and Armenian officials, but is never sustained or forceful enough to change the situation.

Secondly, the OSCE’s Parliamentary Assembly may not be the most heavyweight organisation, but it has been taking a greater interest since Kazan under a new Special Representative, Joao Soares. On July 10 the PA adopted a resolution deploring growing tensions in Karabakh, and the Azerbaijani representative has been lobbying for greater involvement by the OSCE PA. This is probably just the usual empty statements, but it probably reflects growing frustration with the Minsk Group.

Finally the EU, long content to leave Karabakh to Russia and the OSCE, has also stepped up its calls for peace. Speaking on July 6 the EU foreign policy chief Baroness Ashton declared that the EU is “ready and committed to step up its efforts in support of the work of the Minsk Group Co-Chairs.” An EU official reiterated the message some days later, revealing that Brussels was talking to the OSCE about concrete ways to get involved and play a more active role.

And of course the Karabakh mediation underdog, Iran, has also weighed in, with a speech by Parliament Speaker Ali Larijani on July 2. Like an enthusiastic but not particularly welcome neighbour, Tehran regularly calls for a peaceful settlement, offering its own assistance and warning darkly of ‘distant powers interfering’. This is rather undercut by a recent Wikileaks cable (I can only find it through third-party sources) in which Armenian officials bluntly stated that Tehran does not really want a resolution of the conflict.

So does any of this mean a sea change in the mediation format? Probably not for now, but it suggests that the standard approach - occasional meetings coordinated by the Minsk Group, repetition of the same blueprint – is losing its appeal.

A more nuanced approach may be in the works, with unilateral Russian mediation (which has always been a feature) supplemented by greater EU assistance and some additional ‘soft power’ influence from the OSCE Parliamentary Assembly. A revised or adjusted settlement blueprint might also be forthcoming, although getting both Baku and Yerevan to agree on a new formula will be a Herculean task.

China and Azerbaijan – a new player in town?

For most states in Eurasia, it is a regular routine to express satisfaction with one’s bilateral relationships, welcoming the development of ties and expressing satisfaction that the partnership will only deepen in the future. Azerbaijan and China may not have a lot in common at first glance, but parsing their recent ties does suggest that we are seeing the development of China’s profile to the west of the Caspian.

Trade between the two has just hit $1 billion, according to Azerbaijan’s media. This may be chicken feed for China (in perspective, China’s trade with the US is $385 billion) but it is significant for Azerbaijan, with a total trade turnover in 2010 of $27 billion.

A full third of the trade is between Azerbaijan and Xinjiang in China’s west, heavily populated by Uighur Muslims (the news of the trade milestone came at the inaugural meeting of the Azerbaijan-Xinjiang intergovernmental commission on economic affairs). 

Vague ethnic links aside, most of the basis for trade probably comes from the energy sector. Azerbaijan’s oil and gas sector remains its biggest economic strength, and Xinjiang is western China’s energy hub – particularly for gas and oil coming from the Caspian region.

Recent discussion of free-trade zones does suggest that the two sides are trying to diversify their relations, although whether these will be implemented and how much economic impact they will have is debatable.

More broadly, the rise in trade reflects two things. Firstly, Beijing’s determination to increase investment in Xinjiang, which remains poorer and less developed than many other parts of China. Poverty and economic disenfranchisement were cited as key reasons behind riots among Xinjiang’s Uighur community back in 2009. Encouraging investment from majority-Muslim states may seem like a simple and efficient part of the solution to the Xinjiang issue.

Secondly, it reflects growing Chinese interest on the ‘far side’ of the Caspian, with all the energy, political and security ramifications that implies. This isn’t a novelty – China’s first stumble was back in 1999 when it sold multiple-launch rockets to Azerbaijan’s arch-rival Armenia, provoking anger in Baku. Although Beijing has avoided any subsequent such errors, it has certainly been building ties with Yerevan too. In 2009 it became Armenia’s second-largest trade partner and President Hu Jintao praised Armenia as a “trustworthy friend” during a meeting in May 2010.

As China’s profile in the Caucasus increases, building strong relationships with both Azerbaijan and Armenia will increasingly be a balancing act. In an echo of the 1999 incident, Baku has been pushing to acquire long-range Chinese missiles. This could create a diplomatic spat with Armenia. 

And although China certainly prioritises Azerbaijan out of the two, for its location and its energy resources, Chinese policy in distant areas is usually based on careful balance and non-interference. Indeed, its official policy on Nagorno-Karabakh has been studiously neutral: calling for support of Azerbaijan’s territorial integrity, but abstaining from a 2008 UN vote tabled by Azerbaijan which called for an immediate Armenian withdrawal from occupied Azerbaijani territories.

This is without mentioning the other geopolitical dynamics that would change if China began to assert itself on the western side of the Caspian – with Iran, Turkey, and particularly Russia. Reaching $1 billion in trade turnover with Azerbaijan isn’t a sign that ‘the Chinese are coming’, but it does indicate the shape of things to come. As time passes, China will increasingly become an alternative pole for Azerbaijan’s ‘multi-vector foreign policy’ to take account of.