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Email this citationCIAO DATE: 02/02
Fishing in Troubled Waters: Putin's Caspian Policy (Transcript)
Doug Blum and Carol Saivetz
May 2, 2001
Melissa Carr: On behalf of the Caspian Studies Program at the Belfer Center for Science and International Affairs at the Kennedy School, let me welcome all of you today to our seminar. Lest anyone be misled by the title, Doug and Carol are going to speak today about more than fishing — in fact they may not even speak about sturgeon or caviar at all, although those are important considerations in thinking about the Caspian Sea.
We are pleased to have Dr. Doug Blum and Dr. Carol Saivetz here today. They have both been active participants in our research community at the Caspian Studies Program and have participated in a number of seminars and conferences over the past few years.
We are pleased to have them here today to lead us in this discussion about Russia's Caspian policy. As many of you who have been following the region know, it is an ever changing policy and something that certainly — in comparison to what one might have said about Russia's Caspian policy under the Yeltsin regime a few years ago — has had some significant changes and developments. In many ways, numerous analysts are looking to Russia's policy in the region and pointing to examples of what some would term as "constructive" behavior. Others are pointing to other examples that they may consider less constructive. Of course it all depends on your perspective. But if one analyzes in terms of U.S. interests in the region and Russia's interests in the region and where they come together and where they diverge, the developments under Putin are certainly notable. Many of you were present at a seminar last week on the Nagorno-Karabagh peace process. That is one example of a place where there seems to be some significant cooperation.
Let me introduce our two speakers; many of you probably already know them, so I will do this quickly. Carol Saivetz is a research associate at the Davis Center for Russian Studies at Harvard. She is the executive director of the American Association for the Advancement of Slavic Studies. She has written a number of books on Soviet and now Russian policy in the Middle East. She has consulted for the U.S. government on Russia's Middle East policies and on the politics of the Caspian region. Some of her recent publications include "Russian Foreign Policy Freelancing: The Cases of LUKoil, Gazprom, and Rosvooruzhenie" in Post Soviet Affairs, "Russia and the Revolutionary Middle East, 1958,"and her policy brief that came out as part of the Caspian Studies Program policy brief series, "Putin's Caspian Policy." She is currently working on a book entitled Explaining Russian Foreign Policy: Domestic Policy and International Relations. Carol will speak first, and then I will introduce Doug.
Saivetz: Doug and I had a little difficulty trying to figure out what exactly we were doing, and how we were going to divide up the topic. I think I am doing the fishing, and he is doing the troubled waters. Just to frame the issue surrounding Russian policy towards the Caspian — Putin, since becoming first acting president and then president, has moved to correct the freelancing, which I wrote about in the article that Melissa mentioned, which was clearly rampant in the late Yeltsin period. He has moved to bring more coherence to Russian foreign policy, generally defined.
Nonetheless, despite this move towards a unified policy, whether it is towards China or the Caspian, a lot of people whom I talked to in Moscow describe the Putin administration as river with splits between — and these are their words, not mine — "integrationists and isolationists." The integrationists are those who are interested in reforming the Russian economy and linking Russia's economy to the outside world, whether it is World Trade Organization (WTO) membership, or at least taking advantage of globalization.
The isolationists, I read as the derzhavniks, are those who are longing for Russia's superpower status, and who would pursue a very different kind of policy from the integrationists.
I think that Russian has really been split between these two tendencies. Sergei Karaganov, a frequent commentator on Russian foreign policy issues, claimed that Russia had lost the post-Cold War peace. He said that Russia cannot afford a superpower's foreign policy and then he added, "We should concentrate on the spheres in which Russia really has vital interests."
Putin seems to have decided that the Caspian is one of those vital interests, and that its policy is too important to leave to LUKoil and the other oil companies by themselves. Just about a year ago, there was a Security Council meeting — the first after Putin took over as President — in which they discussed the new military doctrine. The other item on the agenda was Caspian politics and Caspian oil. At that meeting, he attributed the increasing Western and Turkish presence in the Caspian to Russian inactivity. He said that this is a matter of competition and "we must be competitive."
At the same time, he created a new department to deal with Caspian issues and, as many of you know, appointed Viktor Kalyuzhny, who is the former minister of fuel and energy, to head up Russia's Caspian operation. Kalyuzhny has taken it upon himself to increase Russia's presence in the region. As a matter of fact, when he was appointed, he stated, "The political role of Russia has to be raised in the Caspian."
Last year at this time, Kalyuzhny was promoting two specific ideas. One was something called the Center for Strategic Economic Planning for the Caspian, which seems to be going nowhere. But the idea is still out there. The second was a proposal for the joint development of disputed fields. In my view this is clearly an opportunity — if it were to be accepted — to get Russia involved with some of the development in the areas near Kazakhstan, which are disputed between the two countries.
The other significant thing about that meeting was that Putin talked about needing to balance the interests of the state with the interests of the oil companies. Following up on that, I think that we have seen the move, clearly encouraged by the Kremlin, for YUKOS, LUKoil and Gazprom to come together in a consortium, called the Caspian Oil Company, to begin developing the oil reserves that are in the Russian part of the Caspian Sea.
Skipping ahead to much more contemporary issues, Putin went to Baku in January of 2001. It was the first visit by a Russian president in over ten years. It had been scheduled earlier, cancelled, then postponed, and then finally Putin went. The two sides did compromise on the Caspian Sea issue. They agreed to divide the sea bottom, but not the waters of the Caspian. They talked about using not the territorial limits, but rather some kind of median mark, where there were disputed areas between the two. Kalyuzhny himself said that this was an improvement upon the earlier 1998 deal with Kazakhstan. In the official statements following the meeting, Azerbaijani President Heydar Aliev and Putin both referred to the Caspian as a "zone of peace and friendship." They said that all Caspian issues should be resolved by peaceful means and with common consent.
At the time of the Baku meeting, Russia was still trying to block the Baku-Tbilisi-Ceyhan pipeline. This is something we can talk about in discussion. They have wavered several times in the last several months about whether they would agree to it, whether they would acquiesce in its development, or whether they would do everything possible to stop it. At the time of the meeting in January, Kalyuzhny was quoted as saying that Russia is interested in making maximum use of its capacities for transit delivery; Baku-Ceyhan does not fit in here.
At that point, there was no agreement between Azerbaijan and Russia about Nagorno-Karabagh. Of course now we have seen the meetings in Florida, and there seems to be some movement, however slow. Russia is certainly not blocking the U.S. mediation effort.
There was no agreement on the disputed radar station, but they agreed to continue to disagree, and to continue negotiations. At the same time, a deal was signed between SOCAR and LUKoil on two more fields to be developed in the Caspian.
One of the things I have had to chuckle at is that if you look at the statements, Putin went up in front of the Azeri parliament and said, "Isn't it great that I can speak Russian here?" I loved that one, given that Russian language issues and the existence of Russian populations in the Newly Independent States has been such a troubling issue.
As of January of 2001, we have a situation in which three of the five Caspian littoral states have agreed to some kind of demarcation of the Caspian. But Turkmenistan and Iran are still really the odd-persons out. Immediately after the summit in Baku, Kalyuzhny traveled to Iran, and his agenda seems to have been two-fold. One was to ensure Russian investment in Iranian energy development. The second was to attempt to persuade the Iranians to buy into the idea of demarcating the Caspian. Neither of them got very far.
As many of you probably know, as this is a very Caspian oriented audience here, the Iranians are claiming 20 percent of the Caspian, whatever that means, when their coastline is really only 12 to 14 percent. And, none of the other states is going to give up some of its territory in order to give the Iranians 20 percent. So it is a non-starter from the very beginning.
In the meantime, Russia and Iran have concluded numerous new arms deals. There are negotiations for the second nuclear power plant in Iran, as well as this very public and very loud abrogation of the Gore-Chernomyrdin agreements that were supposed to limit the sales of certain kinds of weapons to Iran.
The result of Kalyuzhny's trip was Iranian president Mohammed Khatami's trip to Moscow in March. As Michael Lelyveld and others have written, the trip suddenly became all about arms transfers and not about the Caspian, because there was no agreement on the Caspian. One of the ironies of that visit is that while Khatami was in Moscow, and Russian foreign minister Igor Ivanov was saying, "Isn't this great; this was a spectacular meeting; everybody loves each other," [Russian defense minister] Sergei Ivanov was in Washington trying to do other business and was blasted, "How dare you sell these weapons to the Iranians!" So while Putin may have tried to rein in some of the freelancing, it is not the same kind of thing, but at some point, it looks as if the right hand doesn't know what the left is doing, and vice versa.
The main point about the Khatami trip in terms of the Caspian was that precisely because there was no agreement on the demarcation, they fell back on the old slogans about common agreement in order to do anything. This clearly angered the Azerbaijanis and the Kazakhs, because it seemed at that point as if Moscow was backtracking and reneging on these earlier agreements, which had been so loudly touted.
A couple of comments on wider implications. It is clear to me that Putin has made the Caspian a priority. There is just no question about it. While it may be restating the obvious, the attitude seems to be that the Caspian used to be part of the Soviet Union, and it is clearly within Russia's sphere of influence. One of the things that I find interesting about Putin's policy is this blending of economic and geopolitical calculations. It comes through from Putin's speech in front of the Azeri Parliament, and it came through shortly after Putin returned to Moscow. He went to the Foreign Ministry and blasted diplomats for not promoting Russia's economic interests enough, emphasizing that they need to take Russia's economic interests into consideration as they did their jobs.
Now Abe Becker of Rand had talked about macro and micro integration. When he uses the term macro-integration, he talks about state to state relations. What he is referring to in terms of micro-integration are trade and economic ties. It seems to me that Putin has shifted the emphasis from the macro ties alone to a combination of the macro and the micro. Not only are there bilateral state to state relations — the Khatami trip to Moscow and particularly [Russia's relationship] with the near abroad, like the trip to Baku — but he is looking to pull the countries in via some of these other more economically oriented deals between oil companies, etc.
A second point that we need to note is that there seems to be a militarization of the pressures on the other littoral states, particularly on Azerbaijan and Georgia — although Georgia is not a littoral state, it is clearly involved in the transport of the energy resources. At the same time Putin went to Baku, there were major exercises of [Russia's] Caspian flotilla in the center of the Caspian Sea. There were several Russian press commentaries that argued that the proposals to keep the waters in common were a way of ensuring for Moscow the right to project its naval power. The exercises in the center of the sea seemed to imply that the fleet could sail at Russia's will. And apparently, they have actually kept up the Caspian flotilla at a time when the rest of the Russian Navy is rusting and rotting away.
There was an interesting article in one of the Russian newspapers from a senior naval official who said, "If Russia fails to come to terms with its neighbors before large-scale development of Caspian oil deposits begins, then the fleet's strength will take an acute significance in the region." This is pretty blatant as far as I am concerned. And just within the past couple of days, the Caspian Fleet has issued new orders as to what they are going to do about foreign vessels in the sea. Now whether or not this is going to amount to some kind of interdiction of oil from Kazakhstan to Baku, I don't know. I may be reading too much into this, but it seems to me that the signs are not great.
A third thing that I think we should note is that the Caspian is not alone. It is a part of a larger Russian policy towards what they used to call the Near Abroad, and particularly towards the Caucasus. In several of these discussions, we have talked about the Chechnya spillover, and the pressures particularly on Georgia and Azerbaijan, with claims that they are harboring Chechen terrorists. We certainly saw the cut-off of oil to Georgia last winter, the business about the visa regime (visas suddenly being needed for people traveling between Georgia and Russia), and the dragging of the feet on the withdrawal of the military bases in Georgia. Then you get to the point: where is the hardware going after they close down these military bases in Georgia? Well guess where? It is going to Armenia, which can be read as pressure on Azerbaijan.
Last fall I had the chance to interview Sergei Karaganov in Moscow. He commented to me at the time that Russia still has levers of influence in the Caspian region. Then he went on to mention particularly the manipulation of Nagorno-Karabagh and the Armenia-Azerbaijan dispute.
I think the Ministry of Foreign Affairs attacks on GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan, Moldova) — now, I guess minus the M for Moldova — GUUA, with the open criticism in any number of statements about the pace of development of military cooperation among the members of the alliance, or quasi-alliance. I see this in part because Ukraine, among others, has offered to lend troops to Azerbaijan and Georgia to protect the pipelines, namely Baku-Supsa and eventually Baku-Ceyhan.
Finally, it seems to me that there is a debate at our [the Western] end. We have the integrationists and the isolationists in Moscow, but there is a debate at our end about whether Russian foreign policy today is being driven by the need for economic reform, the need to tap into international markets, etc. Or by what I would call an inferiority complex. You know, this drive, "We were a superpower. You have to pay attention to us." I think this mirrors the split that the people I talk to in Moscow were talking about and their parallelism clearly between the two schools.
The isolationists are obviously those who are driven by the loss of Russia's superpower status. It was what Steve Sestanovich called the "Geopolitical Temptation." I think that in this part of the world, that temptation is very strong.
For the moment, I think that Putin is trying to avoid making a choice; he seems to be doing both simultaneously. There is pressure on Georgia and Azerbaijan, while at the same time as Kalyuzhny has backed off opposing Baku-Ceyhan — at least this week. I would also argue that the model for pipeline development that Russia would like to have emulated is the CPC pipeline, from Tengiz to Novorossiisk. Outside investment goes through Russian territory. Russia gets transit fees for it. It goes to a Russian port. Of course it does not solve the problem of the Bosphorus. Russia is trying to offer itself as an attractive venue.
Kasyanov was just in Astrakhan within the last week. He was talking about improving north-south transportation infrastructure. I see this as, I guess, the integrationist piece of the isolationist policy — can I say that? This is an attempt to make the north-south transportation route more attractive. At the same time, we could read it as "Use us because..." as opposed to exporting any other way.
None of this temporizing is going to substitute for a final resolution of the question of Caspian demarcation. As you all know the summit that was supposed to be held two weeks ago was postponed rather unceremoniously with Russian advisors getting off the plane in Tehran and not knowing that the summit had been cancelled. I love that one too. So that one is still going. I think if I were really conspiratorial, I would say that a lot of the arms sales to Iran are "We'll give you all this stuff if you buy into the deal we are trying to promote about the Caspian." But again, that is my speculation. I cannot prove any of that. I think we have to wait and see if the summit takes place in the fall and see how the sets of bilateral relationships — which is what Doug is going to talk about — play themselves out.
Carr: Thank you Carol. Many of you have also already met Dr. Doug Blum. He is a professor of political science at Providence College and also adjunct associate professor of International Studies at the Thomas J. Watson Institute at Brown University. His general research interests include Russian foreign policy, globalization, the causes and consequences of Russian integration into the international economy, and the politics of environmental protectionism. He has published, spoken about, and focused much of his research recently on the Caspian Sea region. One of his recent publications, America's Caspian Policy under the Bush Administration is available here. We are glad to have him here to lead us in the second part of the discussion.
Blum: Thank you, Melissa. That was an excellent presentation, Carol. I agree that one of the problems here is that it is not going to be as feisty and interesting than if both disagree with each other. I agree with essentially everything that you said.
What I am going to do is try to complement what Carol has already said by focusing on those other bilateral relationships around the Caspian rim and how those countries are responding to this Putin policy. In declining order of success, I will focus on Kazakhstan, Azerbaijan, Iran, Turkmenistan, and I then I will also touch on Georgia.
I think it is important to understand right at the outset that in understanding how these countries respond to Russia's policy under Putin, it is pretty important to recognize that Russia's place is extraordinarily massive in all the significant issue areas. Therefore, in a lot of ways, there are shared and overlapping interests. This is not, in other words, simply a matter of Russia being effectively able to exert leverage on these countries. But it is also a matter of many shared interests coming together.
Obviously, it is true that Russia's leverage is most glaringly obvious in the military and political spheres. But economically, Russia continues to be a very important market and transit route for Central Asian goods at a time when they are unable to find many other niches in the international economy. They also have shared interests in combating terror, Islamic fundamentalism — whether or not that is a good idea, a bad idea, a wise or ham handed policy. Regardless, they have coinciding interests in combating crime, terror and drugs. Of course, Russia has the military and logistical resources at its disposal to be of service in those respects. No one else in the region does.
First, I will focus on Kazakhstan. Here, as I mentioned, Russia has been successful under Putin, and even before, but especially under Putin, in putting together quite close ties in a number of ways. Carol has mentioned some of these issues already, so I won't belabor them. The CPC line is extraordinarily important and has been for a long time for Russia. Also, Russia has offered and has already gained acceptance for increased volumes, not only through the CPC lines, but also from the Aktau route north to Samara. So that is one important thing that Russia has looked for and has been able to get from Kazakhstan — increased energy transit.
There have also been formal accords signed on trade and on the prospective implementation of a Eurasian Economic Union, something that incidentally Nazarbaev has been arguing for many years. So it is hard to say that this is simply a result of Russian leverage, but there is a coincidence of interests.
There is also now talk about forming an energy union that would include Kazakhstan and Russia as well as Turkmenistan and Belarus, and that would cover coal, oil, gas and electricity.
Even in the security sphere, there are some significant areas of overlap and cooperation. These include the air defense system, which is loosely involving many of the countries in this southern tier, as well as Russian cooperation in border patrol in the Caspian Sea, and of course Russia's access to something it very much wanted, the Baikonur Space Facility. Now there is also talk about establishing a rapid deployment force in the region under the CIS Collective Security Accord that has been redemified since its early 1992 origins, which really didn't go anywhere. Now there is talk of really animating those, and that would of course include not only Russia and Kazakhstan, but also Kyrgyzstan and Tajikistan.
So in a number of ways, Russia has been able to get things that it has been interested in getting, although not simply through coercive use of force or threatened use of force, but rather because the coincidence of interests in some regions.
At the same time, Kazakhstan continues — as it has ever since independence — to be acutely aware of the pressing need to remain balanced in its political orientation between Russia on the one hand, China on the other, and finally on the outside the West, and especially the United States. We may need to talk about this; Mike has already indicated some disagreement with me on this. I think [Kazakh president Nursultan] Nazarbayev and his cronies are very interested in and have been relatively successful in cultivating foreign investment. I think that continues to be one important source of their interest in their remaining, to some degree, substantially independent in the economic sphere.
There have also been some recent strains with Russia. Those are worth highlighting. One, of course, Carol eluded to, that is the "B" piece of the Baku-Tbilisi-Ceyhan line, and whether or not Kazakhstan is going to participate in that in any significant material way. There have been concerns that without those additional volumes from Kazakhstan, that thing may not be viable at all, even if its cost overruns don't torpedo the deal. There has been some friction over whether or not Kazakhstan will participate in that. It is not clear yet whether it will.
There have also been some interesting squabbles very recently about who owns some offshore oil islands in the area right between Kazakhstan and Russia. Finally, Kazakhstan's response to this naval operation during Putin's visit to Baku. An air defense squadron was sent, again probably as a symbolic thing. But it does signal something about Kazakhstan's reservations and misgivings regarding Russia's military presence in the region.
In other words, it is a mixed bag. But essentially, Kazakhstan represents a significant number of successes for the Putin regime so far in its Caspian policy.
Moving down the gradient of success, Azerbaijan is a much more complex picture of what I would call "balancing and bandwagon" — since we are here at the JFK School, which gives it at least some theoretical terminology. It is a mix. The key constraining factor for Azerbaijan of course is the Nagorno-Karabagh crisis, which continues to fester. Related to that, the Section 907 of the Freedom Support Act, which prevents state-to-state support from the United States. That really is important in limiting Azerbaijan's range of viable foreign policy options in the region.
Largely for that reason, I think reflecting accommodation to reality the need to work out some sort of modus vivendi with Russia as Putin has evinced much more flexibility towards Azerbaijan. We saw it in this January meeting between Aliev and Putin that Carol referred to. I think that was a really significant change in Azerbaijan's relationship over the Caspian, that is, if not a full breakthrough, then at least significant progress in coming together on the importance of sea-bed division. That is not a legal boundary, but it is the division of subsoil hydrocarbon resources for exploitation purposes.
They don't agree yet on the overarching regime. But I think that may well indicate a real shift away from Azerbaijan's previous insistence on having full sovereignty over its entire sector — including the seabed, the subsoil and the water. I think there may now be some flexibility.
Last week and back in January, there were a number of important agreements that were penciled. These included agreements in trade and investment, on coordinating VAT tax, on coordinating tariff policies, and also on allowing LUKoil to begin exploiting offshore oil and gas deposits.
Azerbaijan is also here, I think, largely knuckling under Russian pressure, but also for pragmatic reasons, has agreed to increase imports of Russian natural gas. That is partly tied to Azerbaijan's need, contractually, to export more oil through the Novorossiisk lines. So it is a way of compensating for the volume of oil that would flow north. And I have to think that is a mixture of leverage and pragmatic accommodation in order to increase exports in the short run.
There have been a number of other accords that are of lesser importance including information exchange, humanitarian relief, treatment of migrants and so forth. But even in the security sphere, I think we have seen some movement towards a modus vivendi with Russia - cooperation tentatively in combating terrorism, organized crime and drug smuggling. And Azerbaijan has entered into what I referred to earlier as that loose air defense system which Kazakhstan and a number of other countries have also been involved with.
Still, the relationship is quite limited in many other respects. Total trade turnover with Russia is roughly 20 percent. Although it grew about 12 percent last year, it is still relatively low. I think here, just as with Kazakhstan, the Aliev regime is very committed to trying to cultivate foreign investments. Of course they are pursuing lots of policies that make that essentially impossible. But they are in many ways interested in certainly diversifying their economic ties, and not becoming overly dependent on Russia, certainly.
There is also, as Carol mentioned, a lot of ongoing support about what is happening with Russia in Armenia — about bases in that region, about the use of naval force, and those exercises that were conducted during the Putin-Aliev summit. They anchored just off of Baku. Obviously this was nesluchaino, as our friends in Moscow would say.
Azerbaijan also remains a member of GUUA. Of course this is largely symbolic, but again it symbolizes something significant. There is clearly an interest in remaining independent of Russia in terms of its regional policing and peacekeeping functions.
And, as Carol mentioned, there is this issue of Gabala: The Russians very much want to have guaranteed access to that port and radar installation. That has not been worked out yet. There are significant gains and also some real problems.
I think what you see in both of those two really important countries, though, is a significant accommodation to reality — reality as it is perceived in that part of the world on a geopolitical level. That is, Russia is inescapably an important neighbor that has to be dealt with in some pragmatic and productive way. And, there is also a lack of any good alternatives for these countries. It is very clear that the U.S. and NATO are not going to become involved in any way. And they have to, as they see it, make the best of a difficult situation. I also want to emphasize too that here Azerbaijan and Kazakhstan have been extremely sensitive and very angry about repeated Western, and especially American, criticisms of the human rights and lack of political progress. You are seeing some degree of compromise, significant compromise with Russia.
I will try to be a little bit briefer on the other countries. On Iran — and I think Carol actually touched on this — there is really a very complex relationship involving important elements of conflict and cooperation. You have some significant military cooperation for the same sorts of limited regional policing of the regions we have talked about.
Obviously both sides have very similar shared feelings about the undesirability of enhanced NATO — and especially American — influence in the region. But there are also quite a lot of disagreements, and again Mike has pointed this out on occasion. They are very concerned about the Russian naval presence in the region. They are frustrated that Russia has rebuffed their requests for advanced conventional munitions. And, there is the disagreement over the ownership of the Caspian Sea, and the legal regime.
Iran's own position is quite incoherent. It ranges from an idea that we should have a condominium to this other notion of a 20 percent for everybody. But in either case, it is clearly an aggrandizement that doesn't correspond with their geographic position. There are ongoing frictions about that.
For Turkmenistan, much less is important. The relationship is quite strained especially over this issue of Caspian status and ownership, where Turkmenistan has essentially taken the Iranian position. But on the other hand, the one significant area of movement has been that finally — after a long time of being shut out of the Russian gas market — Turkmenistan has finally negotiated a significant deal for gas transit through the Itera system. It is interesting that they have been able to get essentially the conditions that they wanted. Not as much as they wanted, only 10 instead of 30 billion cubic meters of transit, but at a $40 rate, which is better than the Russians have been insisting on for a long time.
The major issue to understand about Turkmenistan is that it is still a very isolated, backwards, and removed country. In that way, in as much as I agree very much with what Carol said, one of the key things that Putin is trying to do now is to encourage more integration. Turkmenistan's status with regard to the international economy is such that it simply cannot enter into that sort of relationship with Russia in a productive way.
Again, just to touch on Georgia, because I don't think it is necessary to belabor this, relations with Russia are obviously extremely strained. Russians overwhelmingly frame that relationship as one of impending loss. It is seen as a zero-sum relationship, especially regarding that issue of energy transit, where what goes through Georgia does not go through Russia. The problem of losing bases in that region is taken very sorely. So there is really no love lost between those two.
On the other hand, Georgia has not really capitulated to Russian pressure either. There have been indications of some reluctant willingness to try to seek some kind of working relationship. But that is clearly a last resort for Eduard Shevardnadze's regime in Georgia. And parenthetically, I think there is a lot of evidence to suggest that significant elements of the Russian security apparatus are still intent on killing Shevardnadze, one of the other reasons that they are not very happy with the Putin policy.
The last thing I want to mention — I am picking up here on Carol's point — is the other thing that I think is very important to realize about Russia's policy under Putin. I think that this interest in promoting international integration is a cornerstone of Russia's policy right now. I think that emphasizing macroeconomic globalization is a very important element in Putin's strategy. It is interesting that at that same Astrakhan conference last week, Kasyanov was there, and also Minister of Transportation Sergei Frank was there. They had a large conference on north-south trade through Astrakhan. It is interesting, parenthetically, that the Russian administration clearly said that Astrakhan is it; that is where it is going to go. It is not going to go through Lagan in Kalmykia, it is not going to go through Makhachkala. It is going to go through Astrakhan and Olya and up the Volga.
And there has been a real push on the part of Russia and on the part of several of these Caspian littoral states to become involved in what is seen as a very important vehicle for entry into the international economy with all the benefits that that portends in terms of investment, in terms of infrastructural development, and in terms of post industrial technological improvements. This is seen as one of the really important ways to go. So the north-south route going from the Persian Gulf through India — perhaps involving Pakistan — but through Iran and then across the Caspian Sea through Russia and up perhaps to the Baltics and beyond. And then the east-west component which starts, really essentially with the TRACECA line, but now including Russia instead of having Russia isolated.
Here, what you see is that not only is Russia involved in this process, but so are the other littoral states. Not so much Azerbaijan, but certainly Kazakhstan has made a major push to develop its ports, especially Aktau and Atyrau, to develop its internal transport system of rail and road, including now a line from Almaty that has been started all the way to Istanbul, and coordinating better their internal rail system. And, interestingly, avoiding Orenburg territory in Russia as way of avoiding Russian pressure on that newly integrated rail line.
Also in Iran, there are efforts to build new ports in Astara, to improve the port in Astara in Bandar Anzali, in Neka and to improve the rail system from Tabriz to Tehran and down to those three ports. So in all those ways, I think you see that Russia is getting what it wants. But here again, this is because this particular issue coincides so clearly with the interests of these other regional states. So overall, what you see is a push and a pull in this region in terms of how Russia's policy is being accepted.
There is a lot of lingering anxiety about Russia. There is an ideology of state building, which by definition is predicated on promoting a self-image and identity that is independent of Russia in all those ways. Those are important obstacles to the full integration that the Putin policy envisions.
On the other hand, there are real objective pressures that are pushing them to some significant cooperation with Russia in all these ways that I have referred to: shared economic and security interests as well. A key variable here is of course leadership: leadership on the part of the Putin regime, leadership on the part of the regional states involved and the kind of strategy, whether or not it is flexible on Russia's terms.
I will stop there.
Carr: At this point, I will open it up to questions.
Nana Gibradze: I am from the Kennedy School, graduating this year. I am from Georgia. Carol, could you please elaborate a little bit more on the integrationist and isolationist policies of Russia? What are the components and what are the possible scenarios for each of these policies?
Saivetz: That is a huge question. The terms are not mine. The terms come from several foreign policy experts whom I talked to in Moscow. They are used widely because everybody used the same terminology. What I read into it — because I did not get down to the nitty-gritties of the components — are that the integrationists are pursuing the policy that, I think, we would hope Putin would pursue, representing "What does Russia need for economic reform at home, for Russia no longer to be a second-rate power? How can Russia restore its economy so that it is functioning and taking part in globalization, and that translates into a foreign policy that means not angering the United States, rather trying to develop relations with them?"
Every time I ask, just as an example, "How do you make coherent the idea that you are developing this strategic alliance — again, Russia's terms not mine — with China and India that is clearly anti-U.S. and anti-U.S. unilateralism, and at the same time you are still talking about wanting aid, assistance and trade with the West and the U.S.?" No one even saw this as a contradiction, which I found rather unusual.
On the isolationist side, I think it is the old hardliners. I think it is Sergei Ivanov, I think it is people from the security services and the military establishment who would really like the old thinking. You know, "Russia and Turkey are in the Caspian. It is our area. They need to get out. And we need to push them out."
Gibradze: If I may follow up on that, integration means integration with the Western world and the rest of the world, whereas the isolationist policies also imply integration but sort of retroactive integration?
Saivetz: If you think about it, look at the states where Putin has either visited or is talking about visiting. In addition to all the West European countries, he has been to North Korea, Iran, and he has talked about going to Libya. Part of this reads like the old Soviet client list. I see that as the isolationist push.
Blum: Again, I unfortunately agree.
Michael Lelyveld: Radio Free Europe/Radio Liberty and Radio Free Asia. This is a multi-part question. I am trying to figure out what happened when the summit did not happen. The collapse of the summit gets to all the thematic issues that you both talked about: freelancing foreign policy, etc. There was the wonderful thing where Kalyuzhny got off the plane on the Saturday after the summit. They were announcing at the Kremlin that the summit had been canceled. After a phone call between Putin and Niyazov, nobody else had been informed. Tikaev hadn't been informed. These people were supposed to show up; they had these meetings scheduled at the foreign ministry in Tehran so that they flew there, and they had the meetings on Sunday anyway. Does that mean that Kalyuzhny was freelancing foreign policy in dealing with the Caspian? Or does it mean that Kalyuzhny is Putin's representative and Putin just has so much contempt for a guy that he fired as fuel and energy minister that he did not even bother to inform him that a summit had been called off?
Depending on how you answer that question, are Kalyuzhny — his representations when he goes from capital to capital — do those have the authority of the Kremlin or don't they? What are these proposals?
Just to finish, there is a 90 percent agreement supposedly on a joint declaration. So I don't know what you assume about this joint declaration. Perhaps extremely general in nature. But then if it is extremely general in nature, why call the thing off for six months on the fiction that it had to do with the schedules of certain leaders, like Aliev?
Saivetz: But the one thing you didn't put into your chronology is this business about the Turkmen offering tenders for the disputed fields between Azerbaijan and Turkmenistan.
Lelyveld: Just after the Iranian visit? I think the Iranians sabotaged that and that they did it second hand. But what is your assumption with regard to why it was called off for six months, what the nature of the joint declaration is, and with what authority Kalyuzhny speaks? Do you have a sense of what this joint declaration is, and what has been agreed and what has not?
Blum: My guess is that it was called off because it was so clear — on the basis of the recent Turkmen moves and on the basis of recent Iranian moves to call for bids and tenders for offshore extraction in an area that was clearly disputed — it was so clear that there was not going to be a breakthrough on the cardinal issue of ownership. There was really no point in having yet another meeting when the end result was already a foregone conclusion — that there would be no progress.
So my sense has been that Russia is interested in using this interim period as a way of trying, behind the scenes, to cultivate some preliminary agreements that could then reach fruition and be culminated formally.
In terms of Kalyuzhny's position, I don't know. I guess I just thought of that as a screw up.
Saivetz: Right.
Blum: I don't tend to read into it that Kalyuzhny's authority is undermined in some way. I see him as someone who does have the imprimatur of the Russian presidency when he goes to visit. What he was interested in exploring — he takes an exploratory stance — bruits the Russian line and sees what he gets. And then he comes back to parlay the results with people in the Kremlin. But I don't read more into it than that.
Saivetz: I think we agree again. I don't think we can read too much into it except again, that the right hand and the left hand did not know what the other was doing. I guess I am a little bit more cynical in terms of two things. One, I think the gas deal between Turkmenistan and Gazprom or ITERA was part of a bribery scheme, if you will, to get the Turkmen on board, which would have then increased the pressure on the Iranians because they would have been the only state that had not signed on. By the same token, as I said before, I think that the arms deals — and this very loud abrogation of the Gore-Chernomyrdin accord &3151 serves both of their purposes in terms of thumbing their noses at the United States. But that it also could be seen — and again, maybe I am reading into this — but I see it as a way of saying, "Come on. We will give you all this stuff, and then won't you acquiesce into this agreement about the Caspian?"
On the other hand, I am surprised they did not cancel it after Khatami's trip to Moscow. It was clear that there was no point when there was no agreement. Khatami went in mid-March, the summit was scheduled for mid-April. They had a month in there to cancel it because the Iranians weren't budging to begin with. If you look at it that way, then they were just stupid even to go forward.
Now this is, what, the umpteenth postponement of this summit? Unless something dramatic happens, I am not sure it is going to happen in the fall either. I don't see either Turkmenistan or Iran changing its position.
Blum: One thing I would differ with. This is really a minor issue. You mentioned the Turkmenistan deal. I think what strikes me about that is here you had an essentially monopolistic pricing position, which Niyazov — for his own idiosyncratic reasons, maybe defiance, maybe because he just couldn't bear it — was unwilling to go along with. Then finally, when there was a significant increase in the current and prospective deliveries of gas through Iran, which meant that suddenly, for the first time, Turkmenistan stands to have some bargaining leverage, at the same time of course when Putin's more pragmatic policy of trying to get more transit — these two things come together at the same time. But I tend to see that deal as reflecting both Russia's increasing pragmatism and the newfound significant degree of Turkmenistan leverage in that area.
Kazim Azimov, Caspian Studies Program at Harvard: Will Russia be able to become a dominant influence in the Middle East and Central Asia?
Blum: I don't see it, personally. My feeling about Russia in that regard is that Russia is far too weak, and it will remain far too weak for the foreseeable future to be able to conceivably play that kind of role. On the contrary, Russia is really becoming a regional power. I think that many of the significant players, including Karaganov, recently have said that "we really need to understand ourselves as a regional player for the foreseeable term."
There is, of course, this wish to play a productive role as a negotiator, as an arbiter, in the Middle East process and to curry favor with the old Middle Eastern allies. So the Middle East will always have some significant symbolic political and possibly economic benefits to offer Russia. But with regard to Russia really becoming, resuming its former superpower status as a dominant influence in that region, I don't see that.
Saivetz: I think I would just tweak that a little bit. I think there are two issues here. One is, I think, that a weak Russia could be more dangerous than a strong Russia. A weak Russia, if you follow my argument about having an inferiority complex, I think that one of the instincts in all of this is to make U.S. policy more difficult and more expensive. Now having said that, I would agree with you that I don't think that Russia is in any position, whether economically or militarily to challenge the U.S. role in the Middle East, for example, the way it did in the days of the Cold War.
But, there are things, like Russian companies, whatever the new arms export agency is called, Rosoboroneksport. It has been at all the Abu Dhabi arms fairs and all these other places trying to peddle their wares. They clearly want a slice of that market. Some of this is economically driven. One of the few things that Russia has to export is these arms, because there is certainly no domestic market for arms.
On the other hand, there is the other piece of "how do you remain involved?" I think Russia's goal is to remain involved. One way may be if the Bush administration can get its act together and perhaps broker some sort of peace deal between the Palestinians and the Israelis — I told this to my class this morning — I could foresee another handshake on the White House lawn with Mr. Putin or Igor Ivanov or somebody there, the same way Andrei Kozyrev was in 1993. Russia is still the co-convener of the Madrid process out of which all these negotiations have occurred. If Bush is smart, if it ever gets that far, he would involve Russia so that Russia then has a stake as the co-guarantor of an agreement as opposed to as a spoiler in the region.
Nastra Gray: I am a research fellow at the Belfer Center. I am listening to both lectures about Putin's policy in Central Asia. My feeling is that since the time of these states' independence ten years ago, there has not really been any important change in Russian policy in the whole region except for a very short period after independence when Russia wanted really wanted to get rid of these states. But then they reeled them back and tried to re-find power in the region. But, of course, during the Yeltsin period, that was not a very active policy or not very wise anyway. The result was very few. The only difference with Putin is that he is more active and is perhaps a wiser politician.
It means that during these ten years, we were following one line — that is, the attempts of Russia to regain its power in the region. But, of course, it has not had the power it needs. The U.S. remains almost absent from the region. Russia remains close. Iran remains close to Russia, as it was. Turkmenistan remains a special case, as it was. So I don't see any significant change since Putin. He is just more active than Yeltsin and a little bit more powerful. Am I right to think that during these ten years, we are just following the same line?
Blum: I think there are some differences, although I think they are subtle differences in comparison to the way that you framed it. You framed it in a way that I think is so broad, that I would be forced to agree that there is overriding continuity in the sense that Russia does seek — as it has sought in the past — to maximize its power in that region. There is no doubt about that. And in fact, if you conceptualize what would be a fundamentally different policy in those terms, it is hard for me to imagine that — given the way Russia is institutionalized right now, given the prevailing ideologies at play in Moscow — it is hard for me to imagine the emergence of a Russian policy that would not be fundamentally oriented towards the projection of power and consolidation of power in that region.
So in those terms, yes, I think you are right. There is a central continuity. And yet, I think what you do see is a not only a more active, but a more flexible, and in some respects a more pragmatic Russian policy. One that is variously pursuing different policies with different bilateral actors, multilateral cooperation where feasible, but much more differentiated policies with individual Central Asian states than his predecessor.
Saivetz: I think one of the things that we have seen in terms of Russian policy towards all the successor states under Putin is a move towards bilateralism and away from trying to make the CIS anything at all. I mean, the CIS is virtually dead. All of the agreements exist on paper. Yeltsin kept talking about it as some instrument of... well it was seen as an instrument of Russian influence as well as a way to keep some of the old Soviet infrastructure together. So in that sense, I think we see sets of dyads as opposed to this institutionalized approach.
Having said that though, I would take a look at the Shanghai Five arrangement because that then is a brand new multilateral approach to Central Asia. It involves the Central Asian states, but it also brings in China, which has more force to project if it wants to. There are some people who have been arguing that Russia and China have reached some kind of a deal and that Russia recognizes its weakness, and it is going to allow China to police Central Asia. I cannot prove this, but I think this is an interesting question to look for. An interesting tendency to look for.
Russia has been involved in Tajikistan since the very beginning. It has been there. The fear of the Islamist insurgence is a convenient way for Russia to get back in, because these countries really do need Russian help to fight the insurgencies.
Now if you want to be really conspiratorial, you could say that Russia has been promoting it precisely so that this will happen. I am not sure I buy that. Some people argue that. But it is certainly convenient at this time that these states now need Russia's help, and that is going to facilitate more intensive Russian involvement.
You also have characters like Karimov who have been up and back five times about what they want their relationship with Russia to be. They have argued, "We are independent. Russia should get out." Then suddenly since the assassination attempt two years ago, Uzbekistan has done a 180-degree turn and moved back towards Russia's orbit. I agree with you, I think it has been basically a straight line, but it is something like a sine curve, or something, that goes up and back, as opposed to in the same general direction.
Gray: Can I add the second part of my question? So does it mean, or I am just imagining, are we going back to the world again where we have Russia and its allies and the Western world and its allies?
Saivetz: I guess my answer would be that this is precisely what I have been talking about. There are forces and groups in Moscow that would say that is not the way to go. They feel that it is a dangerous policy in terms of its impact on Russian domestic development. There are others for whom this is as a way of again, thumbing one's nose at the United States, and U.S. unilateralism. I think unfortunately our president is feeding this with the proposals for national missile defense. He is going to drive Russia and China further together.
But I don't think we are moving back towards "them vs. us" or a real cold war pattern. I think there are these gyrations. One thing that Putin has done, though, is that the U.S.-Russian bilateral relationship has been downgraded. When Putin talks about the West, he is talking about Europe, he is not talking about us. I think that is very important. In a sense he has gotten away with it so far, because our European allies are not happy about national missile defense. There are negotiations between Germany and Russia over debt forgiveness and all of these other arrangements. So he is really trying to pull them on board at the same time that he is promoting this trilateral relationship among Russia, China, and India. And he is cutting us out. But he is also, again, not having to choose.
Blum: I agree with you. The Europeans are also extraordinarily interested in oil and gas transit, and freight transit. The TRACECA program is a European project.
Emily Van BU.S.Kirk: I am a Research Assistant at the Caspian Studies Program. I have one comment about this integrationist/isolationist definition. I think those words are used vis-ô-vis the West. Isolationist could be, as Nina was pointing out, could actually be integrationist in the Near Abroad. Or simply a turning away from the West. So it is interesting that the foreign policy people you were talking to in Moscow, Russians, are defining these terms vis-ô-vis the West.
The question is, Carol, can you talk a little bit more about the relationship of Russian companies to Russian politicians in making Caspian policy? Is it companies leading now when we see pragmatism? Is there a conflict between the companies wanting a legal definition of the Caspian, and others wanting to keep things vague so as to keep Western companies out?
Saivetz: I have argued in some of the stuff that I have written that the companies were clearly leading a kicking and screaming foreign ministry into the whole idea of even being allowed to participate. To go back to 1993 and 1994 as the first deal was being negotiated with Azerbaijan, the ministry was saying "No, no, no. You cannot do this." They threatened sanctions against Azerbaijan, and LUKoil was one of the signatories to that original deal.
In some of my research I have tried to trace "who said what to whom, when" and you can take it up to a certain point. I think that one of the things that Putin is trying to do is to make sure that both prongs, or both policy instruments go the same way. So that the companies have clearly had an influence on the kinds of policies ... I am not sure who on the Russian side is blocking the demarcation question. I think they are looking for the best angle for Russia both geopolitically and economically. The very fact that as Putin goes to Baku and LUKoil signs a brand new agreement, I think, says that they are trying to work much more hand in glove.
I don't know where you fit into that the Itera vs. Gazprom stuff. And Gusinsky fits into that picture somewhere too, but I am not exactly sure where. Some of the those pieces, because they tried to get rid of Vyakhirev, and then they didn't and they backed off of that, but you have Fyodorov on the Gazprom board calling for much more transparency, and "where have all the assets gone" kind of thing. But Itera is now the one that is in charge of all the deliveries of the natural gas to the other successor states.
Blum: I don't see that there is any Russian blocking of it. I think that Russia is very interested in dividing the thing up and getting the oil out. It is very clear that on a national level and on a local/regional level, the littoral regions in Russia, the energy companies in Russia have been at the forefront of this effort to try to compose a rational regime to get the oil out. And in doing that, they have been opposed by these ideological types, whatever you want to call them.
Van Buskirk I guess when Ambassador Elizabeth Jones was here, she may have been talking about the past, but she said that Russia had been trying to play different actors off of one another to stall demarcation. I think she described a trend where first companies were pushing Russia to work for demarcation, and then Kalyuzhny was trying to play different people off of one another.
Saivetz: I see that much more in 1993 to 1995. Those disputes were very open and were reported in the Russian press. My sense is that that is not happening nearly as much. And if we want to give Putin credit, he has reigned in all of the freelancers, and they are all working together.
Vladimir Boxer I would just like to turn to this matter of integration vs. isolation.
Saivetz: I am sorry I started this whole thing; it is not mine.
Boxer I have a brief comment. Actually I think there is some understanding in the West that Russian business and generally Russians who would like to promote their economy are just getting their hopes up with the West. The problem, however, is that in the short term, Russia has many more liabilities with the West; for the year 2002-2003 and maybe 2004, there are huge debts. Almost nobody in the circles of big Russian businesses believes that there is going to be big investment in Russia. That is very important. The biggest part of Russian exports to the West is just oil and other raw materials. However, the trade with Eastern countries is growing rapidly. For this year alone, Russian exports to China increased more than 125 percent. Right now it accounts for approximately 10 percent of all of Russian exports. I don't know the exact numbers for Iran and other countries, but the trend is the same.
So from my point of view, there is a growing globalism among Russian business circles toward these Eastern-oriented politics. This is not only that some folks from the security forces are doing this; the problem is that a lot of former — I don't know, can we call them oligarchs since they are losing influence, but they are still quite influential — Oligarchs are actually trying to drive this policy.
Of course they understand that for two or three years, we can get money from the East. Then we can suddenly make some kind of return. Of course it is then very difficult to achieve. But the whole experience of the world shows that short-term considerations are much more influential than long-term considerations, because this is what politicians are usually driven by.
Psychologically, after 1998, a lot of Russians who were involved in business suddenly understood that they could not find money in America and in the West generally. But suddenly, they turned to the East, and they see it. And what is more important, if one subtracts raw materials, then almost the whole military-industrial complex looks to the East. They just do not have business in the West. This is a very important consideration which will actually influence politics.
Putin and others in the government are quite attentive to the needs of the military-industrial complex. And that is a very important consideration.
Blum: I think those are very excellent comments. I agree with what you said. I just would underline that there is not necessarily any incompatibility between pursuing in the short run those available markets and outlets for Russian goods, which are very important, and in the medium to long haul also pursuing a more thorough-going integration into the international economy. My sense is that Putin and those who support that kind of integration are interested in doing both simultaneously.
Saivetz: I think the danger, though, is that some of these arms sales, etc., could foreclose some of those other options, as the United States and the Bush administration get increasingly angry at the kinds of transfers that are taking place.
I would also corroborate that there is a lot of mention in the Russian press of an Iran lobby in Moscow. The articles don't mention specifically which guys are involved in this, but this whole thing that there are business interests, there are people from the military-industrial complex particularly and from the atomic energy ministry pushing this relationship with Iran even as several commentators are saying, "This is really dangerous. We shouldn't be doing this."
Again, I would agree with you that it is this very short term, "We can make a buck here and now," without thinking about what the ramifications might be.
Mitchell Orenstein:If I could take up on that point briefly. Obviously Russia has been pulled in a lot of directions economically. Do you see more generally a trend towards fragmentation of state interests? It occurs to me that that has been a large part of the problem in Russia, that there are considerations for the East and considerations for the West. There are a variety of strategic actions and different lobbies. This seems to all add up to paralysis in a lot of cases in decision-making. Is that what you have seen in these countries?
Blum: I guess I would not see it that way. I think there are clearly divided counsels; there are different ideological perspectives in Russia. But I think more important than an active fragmentation proceeding in a dynamic fashion in Russia right now, is very weak institutionalization. There is an abiding problem of institutionalization. Not that it is becoming more fragmented. There is the metaphor of lots of strong thumbs and no fingers. It has not been able to develop a finely articulated institutional strategy that has been able to rein in regional oligarchs, except in the most gross macroeconomic fashion — to try to squeeze out more tax monies. But in terms of a more fine tuned, sensitive, reciprocal interaction between the center and the regions, I don't think that is really developed well.
My sense of what is going on there is that you still have a hypertrophied state which is no longer in danger of becoming fragmented or really dissolving into smaller principalities. But it has not yet been able to achieve either an ideological or a pragmatic institutional integration in a way that would allow for the propagation of a consistent legal regime that would have a clear set of regulations governing collateral, that would have consistent enforcement of contracts, that would overcome corruption problems and that would then allow for the influx of a significant amount of foreign investment. I see that as an institutional weakness.
Orenstein: And you would relate that to the broader integration issues — that Russia is having trouble deciding what part of the international economy it is going to be a part of.
Blum: That is right. I think that the institutional obstacles that would need to be overcome under political forces that are resistant to allowing a degree of openness and transparency, that Putin has neither the effective authority or the institutional leverage at his disposal in order to accomplish those fine grained political breakthroughs.
Saivetz: I interpreted your question somewhat differently. Not so much about the fragmentation of the Russian state, but the fragmentation of the sort of decision making bodies in Moscow.
Orenstein That is probably more what I meant, but I found the answer very interesting.
Saivetz: And I think if I were to contrast the Yeltsin era with the Putin era as much as we have had it so far, one of the striking differences is that we knew more about the decision making processes under Yeltsin than we do under Putin. There is a remarkable opacity that has occurred since his taking over. We knew that Sergei Ivanov was calling the shots when he was secretary of the Security Council. We don't know anything about what was going on in the Security Council. He seems to be plugging in his old KGB types in various types, having now moved Ivanov over to defense, in order to try to get certain things done. But my feeling is that their tendency is not to be open and to increase transparency.
The other thing I would add is that if you go back and look at history of U.S. foreign policy, how many times have we had the State Department arguing with the Defense Department or the NSC. Some of this institutionalized rivalry, if you will, is built into any system. And we shouldn't go overboard in saying "Oh my God. Everything is falling apart," if Sergei Ivanov does not agree with Igor Ivanov.
What we were seeing, though, in the earlier period with this freelancing was where each of these guys in the earlier incarnations of the oil companies, and some of these people were actually going out and making policy without anyone in the center being the arbiter of any of those conflicting interests.
Comment: You certainly see that in economic policy with Illiarionov popping off every once and while and saying things are much worse than they appear to be.
Blum: He is a loose cannon.
Audience follow up: He is wonderful. Gref is totally shocked!
Saivetz: But look at that whole business about the Russian debt — Russia threatening to abrogate all the debt agreements, and they weren't going to pay, and they weren't going to pay. Then all of a sudden, the Foreign Ministry said, "Hey guys. You can't do that. What is that going to do to us?" And they backtracked immediately.
Follow Up: Well, immediately over the course of four or five months.
Saivetz: Well, but the reversal came very suddenly and very fast.
Blum: It is a wonderful example that the tension that I think is so fundamental in Russia right now in all areas of his policy, that is between globalization on the one hand, and this old mentality of "we are still the great power." The derzhavnik mentality. I think that is the struggle that is going on in Russia right now. I don't know what is going to win out. My guess is that it is the globalization. I see that as such a massive force.
Saivetz: Well I think every state is grappling with globalization, however you define globalization, and what the impact of those forces is on any given state in society. I think it may be exacerbated in Russia because you have this KGB clique, or Security Services clique now, in power whose instincts are definitely old school. "We have got to keep it in. We have got to be in charge all by ourselves and we don't want to buffeted by these outside forces."
Comment: Or, "We want to have globalization and integration, but only on our terms."
Saivetz: Right, which doesn't work. Nobody has figured out how to do that now.
Comment: The same is happening in the U.S. now.
Comment: But it is much more on our terms. And think that is one of the fascinating things is that the U.S. still remains the dominant international power economically, and the entire Bretton-Woods and post Bretton-Woods system has been authored largely by American power. I think that is one of the fascinating things that underscores Russian ambivalence. Even for those like Karaganov who is interested in becoming integrated into the international economy, that is seen as in some ways inherently, and I think accurately, a capitulation to an American strategic concept.
Saivetz: That is a pessimistic notion.
Carr: I actually have a question that comes back more specifically to Russian policy towards each of the states and the Caspian region. I would be interested in hearing each of your speculations on some of the upcoming potential successes for Russia and potential pitfalls for Russia in policy towards the states of this region, given this new switch towards bilateralism vs. stressing the CIS or another way that Russia would play the central role of coordinating everyone else. We have seen with the example of the summit that you each discussed. There was an example of where there were some bilateral things happening, but it did not all come together in a way that Russia's policy towards the region satisfied their interests. I would be interested in hearing your speculations about some ways in which this policy you predict will be more successful for Russia perpetuating their interests and if there are pitfalls that you foresee.
Saivetz: I think Doug very successfully outlined that there have been some increasing synergies almost in the interests of the littoral states, at least the four former Soviet littoral states, and what Russian foreign policy interests are. Despite the offers of putting NATO bases in Azerbaijan, it is not going to happen. We are not that silly as to get involved in that forum. And we are not going to allow ourselves, I hope, to be used against Russia in that way. That may allow for some more Russian flexibility in terms of these sets of bilateral relations.
In Iran, the levers of influence are very different. Iran is a major power in its own right, not only in the Caspian region, but in the Middle East more generally. One way out of that, and it is something that I argued in the piece that I wrote for the Caspian Studies Program, if we were suddenly to lift sanctions or allow some sort of Iranian participation in some of these deals, then this community of interests between Russia and Iran begins to disintegrate. That would change the dynamic among the five states.
Having said that, I think it is going to depend on how deft a leader Putin can be. I think if Russians overplay their hand, the other states are going to get their backs up against the wall and say, "No way in hell!" If he does it softly and manages to convince and cultivate them, then I think that Russia may have some more success than we have seen thus far.
Now the other question, obviously, is whether or not that is good or bad ultimately for the other states.
Blum: Well put. I think you are right that it comes down a lot to how deft his leadership is. The one thing that I would add to that is that in terms of what Russia is ultimately trying to achieve, to the extent that we are correct that Putin is really ultimately after substantially promoting integration into the international economy in a variety of ways that we have outlined, then overplaying his hand and not being flexible or accommodating of legitimate interests of these littoral states is going to backfire and is going to end up perpetuating a condition in which Russia has been unable to attract any substantial amount of foreign investment, which they need so crucially.
Saivetz: You use the terms "balancing"and "bandwagoning." So far we have seen bits of each on the part of the other states. But the calculus for each of the other leaders is very different. Kazakhstan has played it very carefully because 38 percent of the population is Russian speaking; it is in the industrialized part; that is why they moved the capital. Azerbaijan has less of a stake in that, but it has to be aware of what is happening with the Russian/Armenian relationship. Uzbekistan, while not a Caspian littoral state, as I mentioned before has to deal with the fundamentalist movements there, and has sort of manipulated or has allowed itself to be manipulated by Russia, depending on how cynical you want to be. So I think that the calculus for each of these states is different and again it is going to depend on how fine tuned Russia sets its bilateral policy towards each of these states, to fit their needs and then to pull them in.
Carr: We have time for one last question.
Question: I am a journalist writing for some Moscow communications. Fishing in troubled waters was mentioned. As far as I understand, this drilling for oil will not make the Caspian Sea cleaner. What are the different positions of the parties? What is Putin's policy? Are there any environmental protection measures planned?
Blum: That is a complex question. The brief answer is that Putin is interested in a variety of ways in promoting an ecological regime. At the same time, he is first and foremost interested in promoting rapid energy extraction. And you are right, there is to some extent an inherent incompatibility between those aims. But I think that it is an issue that he does want to manage in a reasonably environmentally sensitive manner.
He is also concerned of course not just about oil, but also about caviar. He is concerned about the littoral communities in Astrakhan, Dagestan, and Kalmykia where there are fishing villages and refineries that are important to those local economies. And, there are some significant constituencies within the Russian elite that are pressing for some degree of responsible environmental protection of the Caspian. So he is trying to be responsive to those needs, while at the same time pursuing his rapid extraction.
Saivetz: While at the same time, the pollution is floating down the Volga.
Blum: Right. And the other problem is lack of capacity. It is a very expensive proposition to do this. The major problem of the Caspian is not, and short of a catastrophic oil spill, will not be oil and gas extraction. It is offshore pollution from an infinite number of sites: the Volga is a floating sewer that drains into the Caspian, so are all the other rivers that drain into the Caspian. Air precipitants condense and come down to earth in the form of rain from an untold number of sites. So in all those ways, Russia's capacity to manage the problem thoroughly just outstrips its resources.
