The Caucasus: Loss of balance

Date: 08/11/03

Political turmoil is growing in the Caucasus, and so is the region's importance. But is the rest of the world paying attention?

IMAGINE holding a cannonball packed with explosive up on three fingers, while several people push from various sides with increasing force. That gives an idea of what the Caucasus is like. The pushers are Russia, Europe and the United States, for which the region's location and energy reserves are starting to matter more and more. The explosive is the internal ethnic and political strife that could flare at any moment. And the three aching fingers are the leaders who have kept the Caucasus countries under control until now.

Two of those fingers have suddenly been weakened. In Azerbaijan, a blatantly rigged election on October 15th pushed Ilham Aliyev into the presidency, replacing his father, Heidar, who has not been seen since his hospitalisation (first in Turkey, now in America) in June. In Georgia, parliamentary elections on November 2nd - also fraudulent, though less so - reduced the size of the block of parties loyal to President Edward Shevardnadze. Both changes herald new uncertainties.

Ilham Aliyev, say optimists in Baku (many foreigners among them), may be a dynastic heir with little political experience; but he is well-educated and progressive, and he has a cadre of like-minded people in the government who will help him to reduce Azerbaijan's rampant corruption and to stimulate its atrophied non-oil economy. He was also the least-bad choice: the opposition is a gaggle of bickering has-beens, many from the coalition that ran the country unhappily for a year in 1992-93.

The new president's critics, on the other hand, say he is a lazy playboy (one man who worked down the corridor when Mr Aliyev was a vice-president at the state oil company says that the future president used to come to work at noon and leave in the early afternoon). He will, they claim, be a puppet of his father's cronies, who still hold all the most powerful jobs. And he will be unable to cope with the internal rivalries and delicate geopolitical negotiations that his father managed so adroitly. His biggest test will be the 15-year-old conflict with Armenia over Nagorno-Karabakh, which is populated by Armenians but internationally recognised as part of Azerbaijan. Heidar Aliyev tried but failed to make peace with Armenia; his son will struggle even to maintain the ceasefire. (Armenia's president, Robert Kocharian, is little better, as he owed his own rigged election earlier this year to hardliners, who will not permit a compromise over Karabakh either.)

In Georgia, meanwhile, the worry is whether Mr Shevardnadze, due to retire in 2005, will go quietly, try to impose a successor, or even wangle a third term. The parliamentary election was lively, with many different parties and people queuing for hours to vote; but lots of them couldn't because of a mix-up of voter lists that many think was deliberately engineered to weaken the opposition. The official result put the pro-government block in the lead, but after exit polls and a parallel count by outside observers, whose presence prevented more serious fraud, the biggest single vote was awarded to an opposition coalition. If similar tricks are played in the 2005 presidential election, the winner will have little popular support. As it is, Mr Shevardnadze's approval rating already stands no higher than 11-14%, according to Gorbi, a pollster.

Legacy habits

That old practices are still so evident 12 years after the Soviet Union's collapse is beginning to disturb locals. Georgians like to see themselves as the last hope for democracy in the region. If Mr Shevardnadze's successor is not fairly elected, he will be vulnerable to other forces, notably Russia, which has much sway over Georgia's semi-autonomous republics of Abkhazia and South Ossetia. In Baku, critics of the regime talk darkly of a populace, sick of fake democracy, being tempted into radicalism or even Islamic fundamentalism. Such talk is to some extent scare-mongering, but flashpoints certainly exist. Last year religious conflict, rare in Azerbaijan, reared its head in the village of Nardaran, when a headmaster's refusal to let girls wear headscarves ignited bigger protests over unemployment and other ills.

This might all be business as usual in the Caucasus, were it not for one other factor. Foreign oil firms that signed big exploration contracts in Azerbaijan are beginning to see them bear fruit. Over the next 20 years the country will make about $29 billion from its oil, according to the International Finance Corporation, which this week confirmed that it will finance a pipeline already being built to carry oil from Baku to Ceyhan, on Turkey's Mediterranean coast. Another pipeline will bring gas from the Caspian to Erzurum. Georgia, across which the pipelines will run, will collect a small but tidy sum in transit fees.

This “energy corridor” should enrich the region. But there are complications. One is the risk that the Azerbaijani windfall will be misspent. It will go into a state oil fund, which will dispense it in measured doses to the state treasury. The fund, most analysts think, is fairly transparent and will do its job properly, but the treasury is another story. If Mr Aliyev cannot control the corrupt ruling cliques and the money does not go into education and development, people will start wondering what has happened to their promised bonanza. That could spark more unrest.

The other big problem is Russia. Although it meddles less overtly than it once did in Georgia's breakaway republics and in Karabakh (where it sided with Armenia), it has now turned to economic influence. The Caspian energy corridor competes with its own pipelines. Earlier this year Russia's state-owned gas giant, Gazprom, signed a framework agreement on supplying gas to Georgia. Its terms are vague, but they could make it easier for Russia to cut off the gas in winter, as it has before, as a form of political pressure. It might, says Gia Chanturia of the Georgian International Oil Corporation, a partner in the pipelines, allow Gazprom to steal a march on the Baku-Erzurum pipeline, by getting its gas to Turkey first through the existing network. Whatever the motive, this increases Russia's foothold in Georgia, and so its interest in weak leadership.

In short, both countries need leaders whom the people actually voted for, and who are not in thrall to other forces. In Baku, the opposition complains that foreign observers did not criticise the election harshly enough, and that the oil firms would rather prop up the existing regime than deal with the uncertainty of a new one. In Tbilisi, they say America is too soft on Mr Shevardnadze, who still commands respect as one of the Soviet Union's demolishers. It is, of course, in the opposition's interests to say such things. But foreign donors are also frustrated that aid money goes astray. Nobody seems to know how to promote democracy here.

Political turmoil is growing in the region, and so is the region's importance. But is the rest of the world paying attention?