Blank. Every Shark

Central Asian Survey
ISSN: 0263-4937 (Print) 1465-3354 (Online) Journal homepage: http://www.tandfonline.com/loi/ccas20
Every shark east of Suez: Great power interests,

policies and tactics in the Transcaspian energy
wars
STEPHEN BLANK
To cite this article: STEPHEN BLANK (1999) Every shark east of Suez: Great power interests,
policies and tactics in the Transcaspian energy wars, Central Asian Survey, 18:2, 149-184, DOI:
10.1080/02634939995669
To link to this article: http://dx.doi.org/10.1080/02634939995669
Published online: 01 Jul 2010.
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Central Asian Survey (1999) , 18(2), 149±184
Every shark east of Suez: great

power interests, policies and tactics
in the Transcaspian energy wars
STEPHEN BL ANK
Downloaded by [University of Cambridge] at 10:10 17 November 2015
Introduction
Allegedly geoeconom ic rivalry is supplanting the classical form s of geostrategic
competition. But the intensifying struggle over Transcaspian energy sources
reveals a m uch m ore bare-knuckled and traditional rivalry than a mere compe-
tition for econom ic preference. For Russia, the United States, Turkey, Iran,
Pakistan, China and Eurasia’ s oil and gas produc ing states, control of those
energy sources and of their transportation to m arket has com e to mean leverage,
if not control, over the produc er states’ destinies. As The Economist wrote about
oil ® rm s and govern m ents, `T hey and every shark east of Suez have realized that
over the next decades, the greatest of gam es will be played around the Caspian’ . 1
Politics, not econom ics, will dominate future decisions about pipelines and m ajor
investm ent projects. As Ambassador to the CIS Stephen Sestanovich acknowl-
edges, US policy does not begin from an assessment of our economic interests,
but rather from a strategic standpoint. And he is not alone in underscoring the
strategic m otivations of Am erican policy.2
This outlook, which gives prim acy to strategic considerations and sees them
as closely linked to controlling energy supplies as an economic as well as
strategic asset, is one that is not generally attributed to US policy. However, in
contrast to Russian policy as described below, US policy has steadily cooperated
with private corporations to ensure a footho ld for them in the area and to back
up their presence with traditional form s of political and even m ilitary presence. 3
Very likely a sim ilar policy process where geopolitical considerations dominate
policy is occurring among all the contenders for in¯ uence and leverage over
local energy deposits and govern m ents. Certainly, until quite recently it could be
said that Russia’ s traditional emphasis on geopolitical dominance and monopol y
Professor Stephen Blank is a MacArthur Professor of Research at the Strategic Studies Institute, US Army War
College, Carlisle Barracks, Pennsylvenia, 17013-5050, USA This paper is not for quotation or citation without
consent of the author. The views expressed here do not necessarily represent those of the US Army, Defence
Department or the US Government. This is an expanded version of the author’ s chapter `Washington’ s new
frontier, the Transcaspian and US policy’ in Michael Croissant, editor.
0263-4937/99/020149-36 Ó 1999 Central Asian Survey

STEPHEN BL ANK
of the region was obstructing the ability of its private interests to m ove
forward and gain their com mercial footho ld in the region. W hile private and
state interests in Am erica work together, in Russia the con¯ ict between rival
sectoral and bureaucratic interests, in the context of a weak state, has weak-
ened Moscow’ s ability to pursue its strategic objectives. 4 More generally,
the econom ic importance of Transcaspian energy is though t of in strategic
term s as m uch as it is conceived of as a purely economic good. Hence politics,
more than econom ics, dom inates the decision-m aking calculus of the m ajor
players.
As the entire Transcaspian area is riddled with intrigues and wars, this
hardheaded assessm ent suggests just how m isplaced the paci® c, liberal
paradigm of geoeconomics that dom inates m uch writing about international

affairs is. Notwithstanding its rhetoric about win-win outcom es, the United
States, in practice, does not share the view tirelessly preached by m any US
academics and of® cials about the autom atic benevolence of the new world
order. The growing involvement of the United States in the Transcaspian
region is, in the highest degree, strategic, or even geopolitical, and aim s to
enhance the in¯ uence of the US’ and not that of other contenders. It combines
all the traditional instrum ents of power, superior econom ic potential and m ili-
tary prowess as well as a com m itm ent to integrating the area m ore fully into
the W est in terms of both defence and economics. States and analysts m ay talk
of international relations as if a new liberal dispensation had com e to pass.
But, as in earlier times, they act according to long-standing tenets of realism
and realpolitik. 5 The quest for energy, the source of all the talk of a new great
game between Russia and the United States, cannot be understood or separated
apart from m ore traditional and com petitive geostrategies aim ing to integrate
the Transcaspian into a W estern, or Russian ècum ene’ .
Nor is this strategic aspiration con® ned to the United States and/or Russia
alone. Aspirations to gain and use in¯ uence over the region in order to play a
major, or at least greater, role in world politics have driven Turkish policies
since 1991, even if Turkey’ s aim s are now considerably m ore scaled back than
was the case in 1991±93.6 Chinese analysts share this same ambition for China.
Their analyses highlight only some of the fundam ental strategic issues for
China’ s future direction in world affairs that will be affected by the compe-
tition for energy and in¯ uence. For exam ple, Xu Xiaojie writes that China has
a great advantage to expand its political and econom ic position in Asia. Its
involvement in the Transcaspian is an important com ponent of this `geopo liti-
cal gam e’ . Related issues involve US±China relations regarding both govern -
ments’ Middle Eastern oil supplies, Sino-Russian energy relations, and China’ s
regional role in Northeast, Central, and Southeast Asia. Thus, `China’ s future
geopolitical priority certainly will be to regenerate an aggressive geostrategy
that reestablishes a leading role in not just Asia, but the world scene.’ 7
Similar ambitions, based on calculations of energy prices and availability,
the uniquely Am erican sensitivity to oil and gas prices, and to traditional issues
of security in Europe, the CIS, and the Middle East drive US policy. Elizabeth
150
THE TRANSCASPIAN ENERGY WARS
Sherwood-Randall, Deputy Assistant Secretary of Defence for Russia, Ukraine

and Eurasia, in 1994±96 observes that a coherent Caucasus policy began to
emerge from Washington in 1994, earlier than had previously been suspected.
The Pentagon’ s m ain concern was the role of the region’ s armed forces, not
least Russia’ s efforts to subvert the new states and intervene in the area.
Therefore W ashington sough t to supplant the prim acy of bilateral ties to Russia
with other unilateral (i.e. Am erican and Turkish) and multilateral relationships.
W ashington aimed to suppor t democratization, liberal, m arket economies, inte-
gration with the European com munity of states, rem ove weapons of mass
destruction and nuclear m aterials, and open the area for US business invest-
ment. 8 In practice, energy and security have com e to dominate the agenda as
means to achieving this broader W esternization to the point where it is clear

that little pressure is effectively being directed towards democratization of local
govern ments. Political conditionality as a condition of investm ent, trade and aid,
is fast receding in visibility throug hout the area and in US policy as well.9
Sim ilarly, the regional defence establishm ents have proven dif® cult to dem ocra-
tize. This is not surprising given the continuing authoritarianism of local
govern ments, their pervasive personalism and the prevalence of arm ed forces
loyal only to persons and not to laws or parliam ents. 10
Meanwhile, the concurrence of rising US interest in the Transcaspian with
that area’ s emergence onto Europe’ s security agenda since 1992 has brough t
about a veritable strategic revolution. An area that was essentially a strategic
backwater for centuries has suddenly become and is deem ed to be an area of
vital strategic importance for European, Middle Eastern, Am erican and Asian
security. 11 Nato Secretary-General Javier Solana has m ade it clear that Europe
cannot be fully secure if the Caucasus rem ains outside European security. 12
W hether or not the Transcaspian’ s importance is as advertised, the perception of
its importance is real and therefore drives the multiple actors’ policies, rivalry
and fears of exclusion as they com pete for in¯ uence and leverage.
More speci® cally, the Transcaspian has becom e perhaps the m ost important
area of direct W estern±Russian contention today. If there is any arena where it
is likely that either US and Russian forces or their proxies’ forces may m eet
either in a military contest or a joint peace or stability operation, it is here,
especially in the Caucasus. Europe has put the area on its agenda throug h the
OSCE, and the determ ination of the United States to prevent Russia from
gaining a sphere of in¯ uence here becam e public by 1995, if not earlier.13
And those areas of contention with Russia embrace econom ic issues of energy
routes, pipelines and so forth as well as classical issues of security, territorial
integrity of states, and defence. Indeed, as the oil produc ing states are
now members of the Partnership for Peace, and Azerbaijan, Kazakstan and
Georgia are overtly seeking Nato’ s direct participation in the area, this contest
with Russia and Iran has assum ed a m ore overt m ilitary aspect. 14 Furthermore,
given the spiralling strategic stakes in the Transcaspian, Nato’ s collective
engagem ent, as well as the speci® cally US engagem ent, with the region is likely
to grow.
151
STEPHEN BL ANK
The United States’ strategic engagem ent

US involvement across the entire Transcaspian has taken off since 1994±95
when W ashington conclusively rejected Russia’ s claims for an energy m on-
opoly. From seeking to supplant the prim acy of Russian af® liations with local
govern ments’ defence establishm ents and energy produc ers, W ashington has
moved to try to com pel Russia to accept a very inferior position compared to
Russia’ s regional ambitions. In September 1995, US experts on Central Asia m et
at Nato headquarters and cited the extensive US interests in Caspian energy
deposits as a reason why W ashington m ight have to extend its Persian Gulf
security guarantees to this region.15
W hile US of® cials piously intone visions of a win-win situation for everyone,
where everyone has shared interests in developing these energy m arkets, they
have really aim ed to deny and break Russia’ s monopoly over the energy
produc ing states. 16 Talk of security guarantees only reinforces the notion that this
is the true objective. Indeed:
It is dif® cult to escap e the conclusi on that Am erica’ s Caspian policy has been predicat ed
on the illusio n of a ùnipol ar m om ent’ ; the notion that W ashingto n can orchestr ate, and
subseque ntly m aintain a convivi al alignm ent of internati onal forces. The im plicatio n is that
it is possibl e to fashio n relation s in the Caspian regio n so as to constrai n Russian
decision -m akin g with little or no blow back from Mosco w. 17
Naturally Russia resists this policy because it believes its vital interests are at
stake here. Moscow increasingly fears a new Am erican-led cordon sanitaire in
the area. In that case:
Forces potentia lly hostile to Russia would gain opportu nities to contro l the principa l
transpor t arterie s used for Russia’ s im ports and exports , som ething , that, in view of the
depende nce of entir e econo m ic branche s and region s of Russia on export s of raw m aterial s
and im ports of food and othe r goods, could prove to be a very effectiv e level of pressur e
on Russia ’ s leadership. 18
Speci® cally Russia has m ade integration of the CIS around itself its greatest
foreign policy priority. W hile Russia has not been particularly successful,
pursuin g that aim is essential to the recovery of Moscow’ s sense of itself as a
great power and to its security. 19 Hence Moscow feels that the United States
should keep out of the region and strives valiantly to proclaim a Monroe
Doctrine type condition for the area. 20
These contrasting views highlight the strategic quality of the Russo-Am erican
competition for leverage and in¯ uence over regional energy. Adding to that
competition is the fact that as the region’ s states depend on energy for capital
and any future development, whoever controls their lifeline controls their
destiny, a regional strategic consideration of utm ost importance. 21 Hence Wash-
ington attaches an ever-increasing importance to this region as the struggle for
energy heats up and parallels the efforts of the US to construct a world order in
Europe and the Middle East. Regional policies of the US are closely tied to
Nato’ s enlargement and the dual containment of Iran and Iraq. US writers
152
increasingly call this area and the `greater Middle East’ which it is deemed to
be part of, the `strategic fulcrum of the future’ or the `strategic high ground ’ , due
to its energy resources. 22 Robert Blackwill and Michael Stuerm er claim that `no
W estern power has been safe without some m easure of in¯ uence or control over
the southern and eastern shores of the Mediterranean’ . 23 This geographical area
now includes the Transcaspian, since the Southeastern Mediterranean is pre-
cisely where W ashington and Turkey want the term inus of Transcaspian oil and
gas to be. Nor are US of® cials shy about spelling out their grander vistas of the
future. Ambassador Matthew Nimetz postulates the growing importance of the
Mediterranean region as a whole. Therefore a clear US comm itment to remain-
ing a m ilitary power here will m arkedly enhance regional security. This is true
for the major Nato powers as well: France, Germ any, Italy, Great Britain, Spain,
Greece and Turkey.24 To maintain regional security, Nato m ust not only integrate
the entire region into the Western economy and foster the developm ent of
`pluralistic institutions’ , but m ust also grasp the m ilitary nettle.
T he Pax NA TO is the only logica l regim e to m aintain securit y in the traditio nal sense. As
N AT O m aintain s its dom inan t role in the M editerra nean , it m ust recogniz e a need for the
expansio n of its stabilizi ng in¯ uence in adjacen t areas, particul arly in Southeast ern E urope ,
the Black S ea regio n (in concert , of course , with the regiona l powers, prim arily Russia,
U kraine , Rom ania , Bulgaria , and T urkey ) and in the Arabian /Persian Gulf. T he U nited
States must continu e to play the m ajor role in this securit y system . T he Sixth Fleet will be
the vehicl e to im plem ent this com m itm ent for years to come, althoug h this is som ethin g
that m ight be review ed som e tim e dow n the road . 25
Supposedly Russia’ s views either do not count or Russia will blithely accept this
outcom e.
The emphasis on the Near East and Southern Mediterranean is increasingly
loud as of® cials echo Nimetz’ s call for Nato to emphasize a new southern
strategy. Given the centrality of energy to Russia’ s econom y and to the West,
what is the approp riate conclusion about Nato’ s future activities here that a
Russian planner or policymaker should adopt when confro nted by Nimetz’
words or by the following statem ent by form er Secretary of State, W arren
Christopher and form er Secretary of Defence, W illiam Perry?
T he allianc e needs to adapt its m ilitary strateg y to today’ s reality : the danger to the securit y
of its m em bers is not prim arily potentia l aggressi on to their collecti ve territor y, but threats
to their collectiv e interest s beyon d their territor y. Shifting the alliance ’ s em phasis from
defens e of members’ territor y to defens e of com m on interest s is the strategi c im perative .
T hese threats includ e the prolifer ation of w eapons of m ass destruct ion, disrupti on of the
¯ ow of oil, terroris m , genocida l violence , and w ars of aggressi on in other region s that
threate n to cause great disrupti on. T o deal with such threats allianc e m em bers need to have
a w ay to rapidly form m ilitar y coalitio ns that can acco m plish goals beyon d N AT O
territor y.26
According to Nimetz, while ensuring Central Europe’ s integration, Nato m ust

also look to the Near East as the seat of instability and should be obligated to
conduct internal negotiations on threats like Iraq or Algeria. W hile this new
153
STEPHEN BL ANK
strategy m ay require m odifying Nato’ s current process of allied consultations,

and leave to the Europeans the lead on operations relating to peacekeeping,
failing states, evacuation and refugee m anagem ent, the United States would
retain prim acy over high-intensity m ilitary operations.27
However, the US could relatively easily be drawn in the future into local
ethnic con¯ icts in a peacem aking or peacekeeping role. President Edvard
Shevarnadze of Georgia has increasingly frequently proclaimed his intention to
pursue a `Bosnia’ or `Dayton’ type solution to the con¯ ict with the Abkhaz
nationalist m ovem ent. Shevarnadze evidently seeks a com mitment of US m ili-
tary power in order to impose peace and supplant the Russian forces who are
now m aintaining a truce on the Abkhaz±Georgian border .28
For now W ashington has wisely eschewed the direct com mitm ent of US
troops to any of the many con¯ icts in the area, but that is not a com m itm ent of
principle. There have been reports of the United States’ willingness to entertain
sending peacekeeping troops should the OSCE Minsk process lead to a solution
in the Armenian±Azeri war over Nagorno -Karabakh. And US military involve-
ment in the region is growing. General John Sheehan (USMC), CINC of the US
Atlantic Com m and (ACOM) and Nato’ s SACLANT (Suprem e Allied Com man-
der Atlantic) announ ced America’ s willingness to take part in regional peace
suppor t operations involving Central Asian forces under UN authorization,
further extending the United States’ stated willingness to offer security cooper-
ation to those states. 29 However, the strategic implications of such a m ilitary
comm itment are extrem ely serious given the region’ s volatility, unsettled secur-
ity pro® le, and Russia’ s paranoia about foreign military involvement in the
CIS.30
And beyond Nimetz’ s and other analysts’ and of® cials’ calls for an expanded
US regional presence, we also ® nd a strong and evidently increasingly successful
lobbying effort underway to forge a rappro chem ent with Iran to get Transcaspian
energy supplies out and effectively isolate Russia. In¯ uential observers like
Zbigniew Brzezinski prom ote a neo-Mackinderian schem e of a grand anti-
Russian Eurasian coalition led by the United States and embracing Europe,
Turkey, Iran and China. This coalition will seek to obtain Eurasia’ s energy
supplies and orchestrate a renovated global anti-Russian containment policy
under US leadership. 31 He and other lum inaries from the Carter, Reagan, and
Bush Adm inistrations are actively lobbying for a vigorous US regional energy
policy, displaying their strong personal interest in the US policy debate’ s
ultim ate outcom e. Recent US willingness to allow a Turkemnistani pipeline
throug h Iran and not impose sanctions upon Franco-Russian-Malaysian ® rm s
dealing with Iran, and efforts to initiate a rappro chement with Iran show that
their cam paign is gaining ground . But, it can only be at Russia’ s expense.
Nato too is playing an increasing role in the area. This is not just a question
of conducting Partnership for Peace (PfP) progra mm es with local states and
exercises in the region. Nato m embers like Turkey are playing an increasing role
in offering m ilitary training and assistance to local govern ments and their arm ed
forces. 32 Nato’ s increasing interest (and this applies also to the EU) in a
154
southern, Mediterranean exposur e can only lead it to assume a m ore prom inent
institutional role in the ® elds of con¯ ict prevention, security assistance, and
military-political integration.33 Certainly Solana’ s interest in the region speaks
for a continuing and expanding Nato engagem ent with it.
The pressure to m ake the Transcaspian a critical area for US interests and
policy is not just rhetorical. Daily policymaking is intense throughout the
executive branch and has led the United States to a deepening regional involve-
ment since 1995. The US govern m ent m ade a crucial decision by 1995 to
counter Russian attempts to m onopol ize Transcaspian energy holdings. In
February 1995 the United States decided to support pipelines runnin g throug h
Turkey and not Russia. This m ay have also been a response to the invasion of
Chechnya. 34 At the time,

State D epartm ent source s have told New sw eek that the endorse ment re¯ ects a major shif t
in U .S . polic y toward Central Asia. The new approac h, coordin ated by the Nationa l
Security council , is designe d to break Russia’ s grip on Centra l Asia’ s oil export . T he
objectiv e is both to help ensure the surviva l of independ ent states in the regio n and to
protec t U .S. corpora te interests . 35
By then, W ashington had already intervened in the regional energy economy by

urging Turkemnistan to send gas to Ukraine in spite of the latter’ s failure or
inability to pay for it. Washington also approached Kazakstan at this tim e,
apparently offering it certain guarantees if Moscow did `turn off the oil faucet’ .
This was one of the ® rst decisions by the United States that started the policy
of inserting itself as an arbiter between Russia and another CIS state in the event
of disputes between them over the com m only used Russian pipeline system . In
May 1995 Under-Secretary of Energy W illiam W hite toured Central Asia,
urging the republics to regard them selves as important produc ers of oil and
natural gas and to treat Russia and Iran as competitors. 36 Also in 1995, Glen
Rase, head of the State Departm ent’ s energy policy section, bluntly rejected
Russian efforts to dominate the Caspian, stating that Russian talk of condo-
minium there was, à guarantee of inaction’ .37 He further said that `T he Russian
position must not be imposed on the states that prefer a m ore norm al division
of the Caspian’ ¼ W ashington `does not recognize any spheres of in¯ uence’ . 38
Since then policy interest has grown almost exponentially. The only con-
stantly functioning inter-agency working group led by the National Security
Council m onitors Transcaspian energy deposits and trends. US investors are
¯ ooding the region with capital, searching for contracts, leverage and in¯ uence.
W ashington has announ ced its readiness to use its good of® ces to mediate the
dispute on the legal regim e of energy drilling in the Caspian Sea. The United
States now insists that any new pipeline m ust bypass Russia and go from Central
Asia, undern eath the Caspian Sea, throug h Georgia and Azerbaijan all the way
to Ceyhan on Turkey’ s Mediterranean coast. This insistence has been the m ajor
factor enabling Azerbaijan and Kazakstan to resist successfully Russian dem ands
for a Caspian Sea regim e that would give Moscow a veto over anyone’ s
activities there and force all pipelines to go throug h Russia. 39
155
STEPHEN BL ANK
The United States’ ostensible com mitm ent to multiple pipelines clearly aim s
to exclude Russia and Iran as far as possible from all future pipeline decisions.
Although the US has maintained that it support ed only pipeline ventures that
were based on econom ic pro® tability, W ashington’ s efforts on behalf of lines
throug h Georgia and Turkey that would bypass Russia have redoub led even
though prices of energy have fallen to a level that m akes such pipelines’
econom ic pro® tability extrem ely dubiou s. 40 Here is another exam ple where
strategic considerations have supplanted economic ones and econom ic logic as
the drivers of policy. Until now Washington had insisted that any pipeline
progra mm e be pro® table and based on sound econom ic ground s. Now it is
abandoning that course owing to political and strategic factors. 41 The United
States also offered to send peacekeepers to Nagorno -Karabakh as part of an

international operation under the OSCE and leads m anoeuvres in Kazakstan and
the Black Sea. 42
Accordingly, its increasing interest in preserving the area as à zone of free
competition’ and denying either Russia or Iran any lasting in¯ uence in the region
makes W ashington the arbiter or leader on virtually every interstate and
international issue in the area. These include the Minsk process to negotiate
Nagorno -Karabakh, the opening of a `new Silk Road’ and/or East-W est trade
corridor, apart from energy and pipeline routes for oil and gas. The consum ing
interest in pipeline routes has led the US govern ment to take public positions as
well on questions such as the international status of the Caspian Sea, to arbitrate
or mediate com peting claim s between Azerbaijan and Turkmenistan, and to take
the lead in organizing or guaranteeing regional investm ent projects. 43 Contrary
to the United States’ stated intention that Nato enlargement and associated trends
would not lead it to becom e further embroiled in all kinds of local issues, the
exact opposite is happening placing W ashington at the centre of international
adjudication and in¯ uence for local issues.
Thus, First Lady, Hilary Rodham Clinton, Energy Secretary Frederico Pena,
and Vice President Albert Gore now claim that proper use of Kazakh energy
resources can prom ote not only stability, but even democracy, an outcom e not
known to be high on Kazakh President Nursultan Nazarbayev’ s agenda. 44
W ashington has also told Georgia that any oil shipped out of the Caspian
throug h its ports should go, in part, to Ukraine to alleviate its energy dependence
on Russia. The Defence Department has discussed strengthening m ilitary coop-
eration with Uzbekistan and Azerbaijan and even training Azerbaijan’ s arm y,
thereby alarming Arm enia and Russia. A recent agreem ent on training Georgia’ s
forces has also been signed. 45 The Pentagon also recently allocated areas of
responsibility (AOR’ s) to US com mands for the Transcaspian. The US European
Comm and (USE UCOM) got the Caucasus and the Central Com m and (USCENT -
COM) received Central Asia. Although this is m ainly an adm inistrative device
to supervise the current progra m mes of m ilitary cooperation bilaterally and
throug h Nato, it also is a m ajor step for contingency planning, and Moscow
know s it.46
Indeed, all these actions signal an ever-deepening and broader US regulation
156
of the region’ s security agenda. Thus the potential for using truly coercive
diplom acy in suppor t of the W est in the area is growing as is Nato. The fear that
Nato will encroach upon the CIS is one of the m ajor causes for the anger with
which enlargement is being received in Moscow. 47 Accordingly, m ost observers,
and even som e of® cial US statem ents, view the totality of the diverse form s of
the United States’ regional engagem ent as intended to further the goal of
breaking Russia’ s m onopol y, dem onstrate the United States’ power projection
capability, help tie the region to the W est throug h the Partnership for Peace
progra mm e, enhance local military capabilities for self-defence, prevent a
military reliance upon Moscow and cement a local presence to defend our
energy interests. 48
US interests
The interests and policies of the United States are easy to analyse. However, the
pursuit of those interests has saddled W ashington with a policy that is at once
disingenuous and ambivalent, attributes that are clearly emerging in US policy.
The United States views three aspects of the Transcaspian equation as crucial:
increasing the supply of energy to consumers; excluding Iran from in¯ uencing
the exploration, shipm ent, development and marketing of energy produc ts; and
preventing any one state (i.e. Russia) from obtaining a m onopol y over the local
energy supply. Certain fundamental corollaries ¯ ow from this list of objectives. 49
Of® cially US policy aim s to enhance local states’ capability to produc e and
ship oil abroad, to obtain equal, i.e. competitive, access for US energy ® rms and
other businesses that want to invest in these republics, to use US diplomatic
auspices to negotiate settlem ents to local wars, and to create stable, democratic
govern ments as an ultim ate outcom e of these processes. Job one, according to
Under-Secretary of State Strobe Talbott, is con¯ ict resolution to prom ote all the
other desirable outcom es. This aspiration does not conceal, though it does not
advertise, the fact that the m anagement of peace operations is today the
functional equivalent of the kind of control exercised years ago throug h gunboa t
diplom acy. 50
Therefore the logic of Talbott’ s rem arks suggest that Am erican forces m ay
well have to participate in some future peace operation, probab ly Nagorno -
Karabakh, if the OSCE or UN so authorizes it. Furtherm ore, such authorization
would not com e unless Russia approv es and unless the United States ® rst tells
these organizations that it will com m it those forces. Since either or both of these
outcom es is quite unlikely anytime soon, it is not clear how US rhetoric alone
can solve Talbott’ s `job one’ . And the Georgian-Abkhaz ® ghting of May 1998
as well as the overthrow of the Arm enian govern ment in February 1998 and its
replacement by hard-liners also suggest that peace cannot come throug h the
actions of the local states, but rather from outside suasion backed up by force.
W hile the aspiration to break Russia’ s monopoly and the proliferation of US
® rm s m aking investments and obtaining govern ment support suggests a m ore
traditional form of the expansion of US in¯ uence, e.g. dollar diplomacy or
157
STEPHEN BL ANK
something close to it; such diplom acy, without a com mitm ent to use force where
needed, faces an uphill battle.
Still, it is clear that the United States strongly opposes Russian efforts to
obtain a m onopol y and an exclusive sphere of in¯ uence over Transcaspian
econom ies, politics, m ilitary agendas, and energy supplies. Indeed, W ashington
professes that it simply wishes to counter any regional monopol y and does not
see the area as a region for com petition with Moscow. 51 But this profession does
not com port with the progra m m e of m ilitary exercises throug h the Partnership
for Peace progra mm e whose avowed aim is to integrate the region ® rm ly with
the West in both econom ics and security. US m ilitary analysts are quite frank in
how they see these kinds of activities, not only in Europe or Central Asia, as
essential aspects of the United States’ strategy of èxtraordinary power projec-

tion’ .
It is often the action and activitie s of these forces that provid e the dominan t battlespa ce
know ledge necessar y to shap e regiona l securit y environ m ents. Multinati onal exercises , port
visits, staff-to -staf f coordin ationÐ all designe d to increase force interope rabilit y and access
to regiona l militar y facilitie sÐ alon g with intellig ence and surveilla nce operatio ns, are but
a few exam ples of how nava l forces [and the sam e undoubt edly applie s to other service -
authors ] engage activel y in an effor t to set term s of engage m ent favorab le to the U nited
States and its allies. These activitie s are conduct ed at low politica l and econom ic costs,
consider ing the tangibl e evidenc e they provid e of U .S . com m itm ent to a region . And they
are designe d to contribu te to deterren ce.
D eterrenc e is the produc t of both capabili ty and will to deter a nuclea r attack agains t the
U nite d States, its allies, or others to whom it has provide d securit y assuranc es ¼
D eterrenc e of other undesira ble action s by adversar ies or potentia l adversar ies is part and
parcel of everythi ng naval forces do in the course of their operati onsÐ before , during , and
after the actual applicati on of com bat force.
T hat the United States has investe d in keepin g these ready forces forw ard and engage d
deliver s a signal that cannot be transm itted as clearly and unequiv ocally in any othe r w ay.
Forward deploye d force s are backed by those w hich can surg e for rapid reinforc em ent and
can be in plac e in seven to thirty days. T hese, in turn , are backed by formidable , but slow er
deploye d, force s which can respon d to a con¯ ict over a perio d of m onths. 52
Thus the United States and Nato use these operations to prepare either for
peace or for short or protracted m ilitary operations in crucial security zones, and
point to the Transcaspian’ s rising pro® le as one of these zones. But here is where
the ambivalence sets in. Because W ashington regards Russia as a potential, or
even actual, stable democratic partner, it has also cautioned Georgia, Azerbaijan,
and presum ably other regional states, not to infringe on Russia’ s interests. 53
Shevarnadze has publicly stated that President Clinton has advised him not to
try to rush the withdrawal of Russian troops from Abkhazia. In general
Shevarnadze has stated that the entire Caucasus, not just Abkhazia and Georgia,
should not become an area of international com petition between Russia and the
United States. 54 Unfortunately the logic of the evolution of US policy com es
close to converting the entire Transcaspian into just such an arena. Yet, even as
158
we engage in actions to `prepare the theatre’ , we are unlikely to deploy or

sustain those forces after building up expectations to the contrary. But as long
as the Transcaspian basin is alleged to be larger than the Ghawar ® eld in Saudi
Arabia, the largest oil ® eld in the world, a stake of this magnitude justi® es
W ashington’ s com pelling interest in the Transcaspian. 55 Thus US policy is
impaling itself upon a ± contradictory logic. Moreover, there is good reason to
believe that its underlying fundamental assum ptions are also untenable.
Foreign observers like the International Institute for Strategic Studies in
London (IISS) deride the US claim concerning the size of regional oil and gas
deposits which would make the entire region’ s holding larger than Prudho e Bay,
the East Texas ® elds, and the Ghawar ® eld com bined. Other energy industry
® gures and the calculations of specialists like Robert Ebel of the W ashington-
based Centre for Strategic and International Studies argue that of® cial US
estimates are far too high and claim that Caspian holdings will amount to no
more than about 3±4 per cent of global energy reserves. 56 Furtherm ore the IISS
argues that the cost of m oving equipm ent into the area, the expense of
construction and the transit fees that m ust be paid make Caspian investm ent one
of m arginal utility at the low end of current oil prices. As oil prices have fallen
further to their lowest point in a decade since the IISS went to press, investm ent
will probab ly be affected and could becom e unviable. Oil and gas com panies
would probab ly then return to the Middle East because of the preexisting
infrastructure and business arrangements. 57
But that outcom e would underm ine the whole thrust of US policy which seeks
to m inim ize the need for Gulf oil and gas and look elsewhere. As the IISS
rem arked, due to the cheaper cost involved in transporting Iraqi oil and gas,
opening those produc ts up to international markets and overturning the sanctions
regim eÐ an increasingly likely denouem entÐ represents a m ajor challenge to
further developm ent of Caspian energy holdings. 58 This is one m ajor explanation
of why Russia pushes so hard to end the sanctions regim e on Iraq, an outcom e
that can only be seen as a major American defeat and an equal setback to the
Transcaspian states. 59
And that consideration underlines the strategic linkages tying this region to the
Middle East. To the extent that the Caspian region can be stabilized the United
States can afford to further dim inish its need for Middle Eastern gas and oil and
reduce Iran’ s, Iraq’ s, and Russia’ s potential to play decisive roles in the W estern
and Am erican energy economy. 60 The diversi® cation of supplies so as to avoid
excessive reliance on all too unstable and volatile areas constitutes a m ajor
American objective. But at the m acro or geostrategic level US policy strikes at
Russia’ s main regional objectives as well as Iran and Iraq’ s hopes for a way out
of their current strategic and econom ic impasses.
Local US diplom ats and the Adm inistration now regard the Transcaspian area
as a `backup’ to the Middle East if oil supplies from there becom e problem atic.
In fact, some US analysts call on the United States not only to take the lead in
pacifying the entire area nowÐ arranging peace in Georgia, Nagorno -Karabakh,
the North Caucasus. Tajikistan, Afghanistan, perhaps the Kurdish war with
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STEPHEN BL ANK
TurkeyÐ but also to overthrow the govern m ent of Iran or to orchestrate Brzezin-
ski’ s grand coalition. 61 The United States has already respond ed to such
pressures. Therefore, in order to achieve even the m inimum US interests, it
wants to display the United States’ ability to m ake its presence and even forces,
if need be, felt here.62 That reasoning explains the manoeuvres and exercises
under the PfP rubric, but it does not resolve the contradiction between lim ited
military m eans and expansive geopolitical ends.
Current US energy policy

The forego ing analysis suggests the growing breadth and scope of American
policies and interests. Washington has incurred an enorm ous burden in trying to
create a trans-regional order here to secure cheap and uninterrupted energy
supplies. As Energy Secretary Frederico Pena told Congress, US energy policy
in the Caspian is both supported by and embodied in the Administration’ s new
Comprehensive National Energy Strategy (CNES). The goals of the CNES are
to ensure energy supplies against disruption, improve the ef® ciency of the
overall energy system, promote energy produc tion that respects our environm en-
tal and health interests, expand future energy choices, and seek international
cooperation on energy issues. Caspian policy speci® cally addresses two of these
energy issues: ensuring against disruption in supply and fostering international
cooperation. 63
Thus W ashington seeks to stabilize Transcaspian supplies by prom oting
democratic regimes, m arket econom ies and regional global energy exports.
These objectives rest on the fundamental principles of prom oting energy secur-
ity, US geopolitical aim s, and fostering comm ercial opportunities. Achievement
of these aim s strengthens the regional states and diversi® es international sup-
plies. But that also m eans cutting Iran and, though this is not voiced, Russia, out
of the region’ s oil and gas industry to the m axim um degree possible. However,
if the recently announ ced American initiative to improve relations with Iran
takes wing, it will almost certainly take place at the expense of Russian energy
interests, leading one to surmise that Iran is a secondary obstacle compared to
Russia in US energy policy.64
W ashington support s an East-W est energy corridor and multiple pipeline
routes linking Kazakstan, Azerbaijan and Turkm enistan with ports on the Black
Sea and pipelines culm inating in Ceyhan on Turkey’ s Mediterranean coast. This
means reducing the environm ental threat to the Bosphorous and also excluding
Russia from most of the pipeline business. 65 Although the Administration denies
that it seeks to exclude Russia, Pena announced that we would strongly oppose
any route that greatly increased shipping throug h the Straits of Horm uz or the
Bosphoro us, Russia’ s sole outlet to the Mediterranean from the Black Sea. 66 As
a `consolation prize’ we would instead welcom e Russian participation in the
East-W est corridor and through the existing pipeline through Novorossisk. That
should increase Russia’ s econom ic interests in the region, by participating on US
term s in a US-led international economic and comm ercial regime. Therefore we
160
seek to engage Russia and the other states throug h ongoin g bilateral and
multilateral fora and discussions. 67
According to Sestanovich the Clinton Adm inistration rejects the concept of a
sphere of in¯ uence for Russia or anyone else there. And, in fact, of® cials of the
local govern m ents acknowledge that US interests and policies there are m uch
more benevolent than Russian interests appear to be. 68 Certainly the United
States is not resorting to support for ethnic wars or coups d’ eÂtats, let alone
outright war as in Chechnya. Still, its suppor t for dem ocratic values and
principles of liberal, open-m arket econom ies and polities is hardly disinterested.
US energy policy and ongoin g progra m m es of dem ocratic assistance suppor t US
objectives of regional cooperation, con¯ ict resolution, strengthening the region
against efforts to create an Iranian (and Russian) sphere of in¯ uence and
democratization.69 And US assistance to regional security integration and coop-
eration throug h institutions like the Central Asian Battalion (Centrazbat) exem-
pli® es this policy in the security sphere. 70
US of® cials thus solemnly insist that US policy aims not to divide the
Transcaspian into rival spheres of in¯ uence or to exclude Russia, but rather at
a `win-win’ solution for all parties. Russia and the United States supposedly
share a com m on interest in extracting this region’ s m ineral wealth and prosper -
ing from it. And W ashington should graciously integrate or include Russia in its
plans to integrate this region into the W est because its interests are above
suspicion. 71
US rivalry with Russia

Given regional conditions and m entalities, not to m ention actual US policy, this
view seem s misplaced, if not naive. Russia ® nds it dif® cult to accept this notion
of a win-win policy. As President Boris Yeltsin stated, Russia m ust energetically
counter the United States’ Transcaucasian presence. Russian elites believe the
Transcaspian (and the CIS) must rem ain an exclusively Russian sphere of
in¯ uence. They believe Russia is entitled to this and the United States’ policy,
were it intelligent and benevolent, would give them this entitlement. 72 Recent
Russian analyses, joint US±Russian studies, and Deputy Prime Minister and boss
of the energy industry Boris Nemtsov, on his trip to Latin Am erica, openly asked
Americans to recall that Russia sees this area as we view Latin Am erica, i.e. a
backyard where no strangers are allowed.73 As form er Russian diplom at Nikolai
Sokov has observed, liberal ideas on international relations generally remain
alien to Russian elites’ cognitive universe. 74 Such ideas contradict the prevailing
Russian govern m ental and Transcaspian m entality of zero-sum realpolitik which
suggests that integration means either US mastery and Russian subordi nation or
Transcaspian subord ination to Russia.
And, in fact, it is hard to disprov e the Russian conclusion about US policy
from an observation of current policies and trends. Few Russian, local, or
probab ly US observers regard the US presence in m anoeuvres, `war games’ or
joint exercises as innocent. Indeed, the kinds of exercises described above are
161
STEPHEN BL ANK
regarded by Russian naval writers (and the sam e applies undoub tedly to airborne
and land-based forces as well) as constituting direct threats for they may be the
camou¯ age or springb oards for surprise military operations against Russia and/or
the CIS.75 This may be paranoia, but we should remember the stated purpos e of
such exercises given above. Here we m ust rem ember that current Russian
military planning, including the current Russian military reform progra mm e,
starts with the axiom , clear to Russians, but contested everywhere else, not least
in the CIS itself, that CIS m embers are thirsting for Russia’ s extended deterrence
and cannot defend themselves unaided. 76 Consequently anything that enhances
the CIS states’ capacity to defend them selves or draws the W est into the CIS is
a mortal threat to Russian defence planning and security policy and undoes their
chief founda tional axiom .

Accordingly the United States’ strategic approach to the Transcaspian seem s
to include a considerable and willful m isapprehension of reality. At the sam e
tim e, the professed policy of not challenging Russia, as opposed to the real one,
also handicaps the United States vis-aÁ -vis Russia. Dollar diplom acy in its current
form seem s to mean that in the Transcaspian we will m ake no truly costly
investm ents to obtain our goals. Rather, we will rely on economic in¯ uence and
exercises, but avoid costly, protracted m ilitary involvements. We do war games,
not low-intensity or ethnic con¯ icts. The United States will not de® nitively
comm it resources to peace operations in the Caucasus or Central Asia unless
Russia approves or so it says, even though the logic of this stance is contradicted
by the logic of its previous m ilitary exercises there.
Thus the previous offer to provid e peacekeepers to Nagorn o-Karabakh was
only possible with Russian troops’ participation there as well in an international
force under OSCE control, an obviou s non-starter for Russia. 77 Likewise, the
United States has done little or nothing to criticize or penalize Russia’ s m ilitary
interventions or the war in Chechnya. Nor does it appear to face the conse-
quences of our and Nato’ s burgeo ning involvement with the area. US rhetoric
and proclamations rem ain detached from reality even when they display an
ability to airlift thousands of troops into the area. W hile undoub tedly the
capability is real, what happens if a new crisis breaks out and there is the real
prospect of force? Will the United States then com mit itself to use this capability
and can it sustain forces in those theatres? Will neo-Mackinderianism then prove
to be a viable or sustainable policy? The ambivalence with which such com mit-
ments are now viewed, e.g. vis-aÁ -vis Iraq, has continued to render the United
States unable or unwilling to do anything substantive to counter Russian
gun-ru nning and military suppor t for Arm enia, Russian backed coups in Azer-
baijan, Russia’ s m ilitary intervention in Georgia, or to counter Russia’ s constant
econom ic warfare against the energy produc ers. Nobody should be easily
sanquine about US ability or will to defend energy com panies with power should
local or Russian forces attack their highly leveraged and expensive projects. Nor
should anyone think that Russia will sim ply let us take the lead in integrating
this area into an Am erican sphere of in¯ uence.
US policies lead to the following situation: on the one hand it is determined
162
to use econom ic power to integrate the Caucasus and Central Asia into
W estern economic and security system s, and attain a geopolitical mastery even
in Russia’ s self-proclaimed backyard. Military forces will follow in the now
sanctioned guise of peacekeepers or peace enforcers, a sure con® rm ation of
the fact that peace operations have now replaced gunboa t democracy as the
main military instrument for the establishment of great power spheres of
in¯ uence. 78 US statements have previously m anifested the belief that it can
successfully and cheaply isolate both Iran and Russia and m anage those two
strategic challenges in the energy area, not to mention Iraq. On the other
hand, that delusion now lies in the dust of the Russian solution to the Iraqi
crises of 1997±98. But the pursuit of the now established Caspian policy will
undoub tedly continue along with a search for a way to m aintain this failed
strategy on the cheap, e.g. by a very protracted reappraisal of policy towards
Iran. 79
And those pursuits will probab ly intensify along with the United States’
search for alternatives to the insecure Middle East oil supply even though
W ashington can neither secure the `peaces’ that are locally crucial to a stable
energy regim e across Eurasia, secure oil and gas lines if they are threatened,
or guarantee and secure access to these lines if unfriendly elem ents take
power locally. 80 Neither is it clear how stable any govern ment in the Caspian
basin is, including Russia. Azerbaijan and Turkmenistan already show ad-
vanced signs of becoming like Nigeria, hardly an inspiring or optim istic
example. 81 Thus the United States is overextending its com mitm ents at a tim e
when its resolve, intelligent understanding of the region, and resources, as
shown in Iraq, are insuf® cient to bring pressure to bear even on our allies, not
to speak of our rivals and actual enem ies.
Furtherm ore, the system atic US-led worldwide econom ic warfare against
Iran precludes reasonable alternatives to Russia in energy issues. Nor has it
substantially harm ed Iran or advanced US interests. Instead, that policy is now
a sham bles. Energy considerations in Central Asia, Turkey, France, Malaysia,
Russia, Kazakstan, Turkm enistan and China have led all these states to ® nd
ways to avoid, ¯ out, or circumvent this boycott at little or no cost and give
Iran many opport unities to get back into the energy game. As the Iranian
policy crum bles, something else must replace it both in national security and
energy agendas. US policy in regard to Iran clearly faces dom estic and foreign
attacks that make it increasingly insuppo rtable, very much due to the fact that
it gives Russia preem inence in energy affairs by default and gains little for the
United States either in energy or security. 82 In fact, in June 1998 the Ameri-
can initiative to Iran signi® ed of® cial recognition of the bankru ptcy of the
United States’ previous Iran policy. 83
That policy’ s second drawback is that it drives Iran and Russia to cooperate
on regional policies and Russia to sell Iran arm s and technology, including
nuclear m issile technology. Yet because W ashington will do little to Russia or
publicize Russia’ s of® cial com plicity with violating key US interests in energy
and arm s sales we cannot discern any costs coming from W ashington that
163
STEPHEN BL ANK
accrue to Russia from its intim ate relationship with Iran that has deep roots in
their strategic convergence.
This strategic failure highlights a third, deeply embedded aspect of US foreign
policy that has led to failure. As Sestanovich wrote before his appointment, it is
impossible to discern any strategic context for the Adm inistration’ s Russia
policy. The United States’ Russia policy rem ains astrategic or devoid of any
geopolitical context whatsoever. 84 Consequently Moscow has no reason to
accomm odate US pressures against Iran and m uch to lose from doing so. Nor
does Russia have a suf® cient external incentive to desist from coercive m easures
in the Transcaspian, whether econom ic or m ilitary. Indeed, US probes only
enhance Russia’ s sense of regional threat and propen sity to reply in kind while
not preventing it from doing so. Russian leaders are convinced that they m ust do
more to resist Am erican penetration here, not suppor t or tolerate it.85 Indeed, one
may argue that their recent successful efforts to bolster Iraq and enhance
Russia’ s regional status are tied to an effort to get Iraqi oil back on line and thus
forestall, if not destroy hopes for a large-scale Caspian basin energy economy.
The fourth failing of US policy is that W ashington, for all the instruments of
global policy it possesses, rem ains singularly unable to use them to obtain a
comprehensive and insightful understanding of regional trends and their implica-
tions throug hout m uch of the Third W orld. All the unfore seen crises since 1990,
the unexpected Iraqi attack on Kuwait, Som alia, and the recent Iraqi crisis
suggest that this is a structural failing of US policy. Infor m ation has not brough t
deeper understanding or foresight.86 The United States’ burgeo ning economic-
political-m ilitary presence in the Third W orld upsets older relationships and
regional structures which it may not understand and does so in ways that we do
not fully com prehend or to which it can easily reply.
Speci® cally US policy could trigger renewed Russian pressure in the CIS,
either directly or throug h Moscow’ s surrogates, that assum es a m ilitary form . Or
else the United States could contribute, as in the Shah’ s Iran, to the destabiliza-
tion of fragile and traumatized Transcaspian societies.
It is by no m eans clear that the United States presence and in¯ uence in the
Transcaspian will help local states develop energy policies that lead to increased
stability and economic progre ss, rather than the usual pattern of misrule and
misplaced economic policies. Those outcom es characterize too m any oil produc -
ing states. Past experience of the already visible effects of large-scale US
in¯ uence are not altogether encouraging here with regard to the question of
whether these states becom e Norway or Nigerias. For if they do become like
NigeriaÐ and there are already signi® cant indicators pointing in that directionÐ
W ashington has bough t a large stake in long-standing crises and the future
potential for failed states and perennial violence. 87
Regional power politics

The regional structure of political forces does little to encourage optimism
concerning a positive strategic outcome for anyone here. In 1997 Armenia allied
164
itself to Moscow and Azerbaijan allied itself to Ankara. 88 Under these circum -
stances, and given the uncertain domestic political outcom es among oil and gas
produc ers, the United States’ ambivalence about comm itting forces and the
dangerous regional situation of rival alliances create the potential for wider and
more protracted regional con¯ icts. And those con¯ icts could becom e proxy wars
for the great powers like the Third W orld con¯ icts of the 1980s. Azerbaijan and
Georgia’ s growing efforts to secure Nato’ s lasting involvement in the region,
coupled with Russia’ s determination to exclude the West foster a polarization
along traditional lines. 89 Moreover, US efforts to tie energy supplies through and
to Arm enia if it makes peace with Baku encounter strong opposition in Erevan
and Nagorn o-Karabakh, Karabakh, both of whose forces could easily undermine
a pipeline to Turkey through Arm enia or other Transcaucasian states. Moreover,

Baku will not build a pipeline through Arm enia even after peace. 90 So, peace
will probab ly not bring pipelines to Arm enia, rem oving this incentive to m ake
peace. So too the Kurds could destroy pipelines in Turkey. W e m ust also
rem ember that this is a territory with a high incidence of powerful earthquakes.
Therefore there are already high odds against com pletion of the United States’
favour ite project regardless of Russian policy. Naturally we can expect that
policy to abet Armeno-Ku rdish obstacles to energy pipelines.
Yeltsin’ s warnings about US efforts to obtain military-political-economic
leverage in the Transcaspian and the Russian elite’ s extrem e sensitivity regard-
ing this region show that Moscow too will resolutely contest the expanded
presence of the United States. Shevarnadze and Azerbaijan’ s President Gaidar
Aliyev believe that assassination attempts against them in February 1998 (and
neither was the ® rst such effort) were orchestrated by elements in Moscow. 91
And the concurrent Arm enian coup that brough t hard-liners to power in Erevan
appears to have had Russian suppor t as well.92
Past experience suggests Moscow will threaten even W orld W ar III if there is
Turkish intervention, yet the new Russo-Ar m enian treaty and Azeri-Turkish
treaty suggest just such a possibility. 93 Conceivably the two larger states could
then be dragged in to rescue their allies from defeat. The Russo-Ar m enian treaty
is a virtual bilateral m ilitary alliance against Baku, reaf® rm s Russia’ s lasting
military presence in Armenia, comm its Armenia not to join Nato, and could
justify further ® ghting in Nagorno -Karabakh or further military pressure against
Azerbaijan that will impede energy exploration and m arketing.94 It also re-
con® rms Russia’ s determination to resist US presence and rem ain the exclusive
regional hegem on.
Thus m any structural conditions for conventional war or protracted ethnic
con¯ ict where third parties intervene now exist in the Transcaucasus. And
similarly many conditions exist for internal domestic strife if the leadership of
any of these govern ments changes or if one of the many disaffected minority
group s revolts. Many Third W orld con¯ icts generated by local structural factors
have a great potential for unintended escalation. Big powers often feel obliged
to rescue their proxies and proteÂgeÂs. One or another big power m ay fail to grasp
the stakes for the other side since interests here are not as clear as in Europe.
165
STEPHEN BL ANK
Hence com mitm ents involving the use of nuclear weapons or perhaps even
conventional war to prevent defeat of a client are not well established or clear
as in Europe. For instance, in 1993 Turkish noises about intervening on behalf
of Azerbaijan induced Russian leaders to threaten a nuclear war in that case.
This episode tends to con® rm the notion that `future wars involving Europe and
America as allies will be fough t either over resources in chaotic Third W orld
locations or in ethnic upheavals on the southern fringe of Europe and Russia’ . 95
Sadly, m any such causes for con¯ ict prevail across the Transcaspian.
Precisely because Turkey is a Nato members but probab ly could not prevail
in a long war against Russia or if it could, would conceivably trigger a potential
nuclear blow (not a sm all possibility given the erratic nature of Russia’ s declared
nuclear strategies), the danger of m ajor war is higher here than almost every-
where else in the CIS or the so-called arc of crisis from the Balkans to China.
As Richard Betts has observed:
T he greates t danger lies in areas where (1) the potentia l for seriou s instabili ty is high ; (2)
both superpo wers perceiv e vital interests ; (3) neithe r recogni zes that the other’ s perceive d
interes t or com m itm ent is as grea t as its own; (4) both have the capabili ty to injec t
convent ional forces and; (5) neithe r has willin g proxie s capabl e of settlin g the situation . 96
Betts’ analysis implies that for each side the interest or area in question is a
vital one. This does not mean that con¯ ict between the superpowers or their
proxies is foreordained. Rather this analysis drives hom e the region’ s dangerous
structural conditions. Great power rivalry does not necessarily impart stability to
an already troubled region; quite the contrary. One potential source of protracted
violence is the North Caucasus. It is part of Russia, adm ittedly a region that is
close to being out of control, and yet is vital to any coherent Russian energy and
regional policy. Russia’ s perception of the Transcaspian’ s criticality to its
interests is therefore bound up with its continuing and increasingly incoherent
and unsuccessful efforts to perpetuate and extend the vast regional disprop ortion
in power it can muster due to past policies, extend its econom ic-political-military
endowm ent relative to the other littoral states, and preserve its territorial and
political integrity. These are all vital Russian interests.
This disproportion between Russia and the smaller Transcaspian states m eans
that no natural equilibrium is possible there. Russia neither can be self-restrained
nor be restrained by any local institution or power in its pursuit of unilateral
advantage and the CIS’ reintegration.97 The only restraints it now accepts are
objective ones like the lim its of its faltering econom ic and m ilitary power that
preclude the easy attainm ent of its goals of regional hegem ony and com pel it to
pursue its aims by m ore paci® c and less coercive m eans. And even the
perceptions of waning power are dif® cult to accept and translate into Russian
policy. Often Russia still ® nds it hard to accept the lim its on its capability to
achieve its vital interests. And where it has m oved from using m ilitary coercion
to econom ic efforts to retain its preem inence, it has done so as much for lack of
a viable military as from the insight that it stands to gain more from a m ore
purely economic approach.98
166
W hile this local disprop ortion in Russia’ s favour hardly m eans that Russia can
succeed at will across the region, it does m ean that if any regional balance, on
energy or other m ajor security issues, is to be achieved, someone else m ust lend
power to the smaller littoral states to anchor that balance. But that outside
balancer m ust be ready to play a protracted and potentially even military role in
the region and risk the kind of con¯ icts described above. That power, to retain
in¯ uence over the long term , cannot rem ain a detached and unmoved mover.
There is little to suggest that the United States can or will play this kind of role,
indicating that ultim ately its bluff can be called. For an outside regional balancer
to prevail, it m ust abet the local produc ers’ current efforts to diversify foreign
investm ent in local energy deposits, encourage the growth of these states’
econom ic and m ilitary power, and stabilize them from within and without.
W ashington can only achieve part of this agenda. But even partial failure here
will trigger a reversion to the phenom ena we seek to avoid.
The Nato connection

Therefore, for a stable situation to ensue, som e external factor must be perm a-
nently engaged and willing to com mit even military forces, if need be, to ensure
stability and peace. This conclusion is not congenial to US planners. But this
does not necessarily mean a unilateral US comm itm ent; m ore likely it means a
multilateral one, e.g. under the UN’ s or Nato’ s auspices as in the PfP pro-
gram m e, but actually under US leadership. Still, without such a permanent
presenceÐ and it is highly unlikely that the United States or its allies can afford
or will choose to m ake their presence felt other than through economic
investm entÐ Russia has little reason, apart from the lim its of its own power, to
desist from efforts to m onopolize the energy business and subordi nate the
produc ers to its dictates. Sadly, the UN and OSCE’ s records to date give little
ground s for hoping that a regional balance can come about on its own or by their
actions. 99
W hile Russian m ilitary power has failed dram atically, leading Moscow to
conclude treaties with Azerbaijan and seek negotiated settlem ents with Chechnya
and between Georgia and Abkhazia, Moscow still conducts a two-pron ged
policy of waging economic warfare and of preparing for future m ilitary contin-
gencies. Moscow’ s continuing activities against Azeri, Kazakh, Turkm en,
Chechen, and even Ukrainian interests, illustrate the ® rst prong of the policy.
And the treaty with Armenia re¯ ects the military prong by virtue of its alm ost
overt threats to Azerbaijan illustrates the second prong of the policy.100
Therefore, the US belief in a win-win policy or that Russia will happily accept
integration and a subord inate role on American term s that concede local
econom ic hegem ony to the United States and its allies handicaps the United
States and clouds its vision regarding Transcaspian policy. The belief that such
US hegem ony can be achieved at low cost throug h state suppor t for foreign
investm ent, negotiated peace to local wars, and occasionally showing the ¯ ag is
naive and insuf® cient as policy because it allows Russia, and/or its clients, or
167
STEPHEN BL ANK
local actors to frustrate any and every peace effort in Nagorno -Karabakh,
obstruct international agencies like the UN and the OSCE, and delay or disrupt
the export of energy. Baku already reports Armeno-Russian intelligence efforts
to subvert its authority over the minority Lezgin people of Azerbaijan. 101
Given the dangerous context, it is by no m eans certain that Nato can play the
role assigned to it by Nimetz and others. W hat is clear is that som ebody m ust
help construct a lasting and legitim ate regional order, and that the high potential
for danger is not abating. Azerbaijan, for example, approached Turkey about
selling it F-16s it bough t from the United States, and Ankara has approached
W ashington on this question. 102 Second, it approached Turkey to expand its
already large progra mm e of foreign m ilitary training and cooperation with states
across the region to include guarding the pipelines throug h Azerbaijan. 103 Baku
also approached Nato in general about this. 104 Clearly Turkish involvement
increases the Stakes in any future military contingency, for that could constitute
a legitim ate argument for bringing Nato into the area.
Nato’ s regional involvement, especially throug h PfP, is taking off and intensi-
fying on a yearly basis. 105 The exercises in 1997 showed, or were supposed to
show, that US and Nato forces could go anywhere. 106 W hile that m ay be true,
it overlooks the fact that it is very easy to project a division or so of troops into
the area in peacetime, but that in war, sustaining them for a longer duration in
a typical èthnic con¯ ict’ is an entirely more dif® cult and different question.
But it is not clear that Europe, i.e. Nato, can avoid hard choices regarding the
Transcaspian’ s security. It certainly is not the case that our Nato allies see the
area in any degree as being as important to their security as do Turkey and the
United States. 107 And that is the case even though the EU and its m embers are
devising a plan to integrate regional energy supplies into Europe’ s energy plan
for the future.108 For exam ple, as Georgia and Azerbaijan look to Ankara,
Arm enia has looked successfully to Greece for a patron and intends to exploit,
along with Russia, the abiding Greco-Turkish rivalry.109 Nato could conceivably
® nd itself divided in the event of a m ajor contingency in the region.
Similarly the CFE agreem ent could be undon e by events in the region. Russia
is apparently still covertly transferring weapons to Arm enia in contravention of
that treaty’ s dem ands for transparency. Should Russia continue that policy or
keep troops in the Southern Zone past 1999, Nato would have to consider
whether to accept those treaty violations in order to safeguard the CFE treaty in
the Central Region or protect Turkey and the Transcaucasian states. Certainly
Russia continues to claim that it should be allowed to circumvent the treaty in
the Caucasus due to security challenges it faces there. 110 It is not a far-fetched
proposition that one or another of the local powers will demand conditions for
greater forces than are allowed by the CFE treaty during the next round of
negotiations. They may do so because of the unsettled local conditions or due to
the fact that in each of these states num erous uncontrolled param ilitary forces are
still operating. They could conceivably claim a threat to security or else shift
large forces that can be used to destabilize their neighbours. 111 Russian fears
about this region and the unsettled conditions throug hout the North Caucasus,
168
even if they are largely due to Moscow’ s ham handed policies since 1991, could
easily provide a pretext for these kinds of developm ent after 1999. But Russia
could also rely on surroga tes like Arm enia or m inorities in all of the regional
govern ments. Or else they them selves could take such initiatives. These are
hardly signs of a tranquil region.
The obviou s implication of current policy is that Nato, under US leadership,
will now m ove closer to becom ing an international policeman and hegemon in
the Transcaspian and de® ne the lim its of Russian participation in the region’ s
expected oil boom . By doing so they will thereby foreclose what Russian elites
believe is the objective necessity for both those states and Russia of som e form
of integration or even amalgam ation as called for in Russian policy m ani-
festos. 112 It is highly unlikely that Russia will accept such a position `lying
down’ . And then what? In truth, nobod y can answer that question.
The energy producers

For the energy produc ers, including Russia, but particularly for Kazakstan,
Turkmenistan, Azerbaijan, and to a lesser extent, Uzbekistan, control over all
aspects of their local energy econom y is the only way they can obtain the capital
and foreign investm ent and compete in the world econom y. Control over those
produc ts is vital because otherwise their economic independence rem ains largely
® ctitious, their political independence is severely constrained, and they remain
neo-colonial dependants in the global econom y, that is they rem ain dependent on
the produc tion of raw m aterials whose world market prices are subject to great
¯ uctuation. As it is, they also have been forced into energy deals with W estern
produc ers where the latter get the bene® ts up front while they have to wait for
several years to cash in. Furtherm ore, they already face severe com petition from
other produc ers and are seriously disadvantaged relative to them because they
lack the capital needed to explore their holdings, and build up the pipeline, port,
and transport infrastructure to m arket those holdings. As extractive sites without
major foreign investment, they will stay in the backwash of the global econom y
and rem ain dependent on outside forces. Consequently, their foreign policies are
driven by an effort to diversify their foreign trade, aid, and investm ent relation-
ships and to cultivate multiple foreign patrons in order to escape excessive
reliance on any one state or bloc.113
Nor is tim e necessarily on their side. To the extent that Iraq and Iran can
freely return to the world market, their produc ts will be shunted aside and their
recovery derailed. Iran and Iraq’ s infrastructures are m uch m ore developed and
have proven reserves of known quality, which Central Asian states lack. Indeed,
much of the confusion about Caspian energy is arguably due to the arti® cial
restriction of Iraqi and Iranian energy supplies imposed by the failed policy of
dual containm ent.
The Transcaspian states still have no other choice but Russia for all existing
pipelines and virtually all shipm ent routes for their goods go throug h Russia to
the Black Sea. Soviet planners built this structure to integrate the Soviet Union
169
STEPHEN BL ANK
and prevent any republic or region from having a capacity for independent
econom ic life. Until or unless this situation is redressed and other avenues
becom e available to them , the potent threat of Russian economic warfare
rem ains ever present. Therefore foreign investm ent is highly desirable, especially
if they can use it, like Azerbaijan, to in¯ uence Russia and other great powers to
desist from unwanted intervention in their affairs and to use the oil weapon to
term inate regional civil and ethnic con¯ icts.
Baku pursues a highly visible and adroit strategy, using oil to bring in Turkish
and Am erican interests to internationalize the search for peace in Nagorno -
Karabakh and frustrate Moscow’ s search for monopol y in that peace process. It
has used the prom ise of oil and gas sales and alternatives to Russian pipelines
to attract Ukraine, Georgia, and Uzbekistan to a kind of bloc aiming to moderate,

if not minimize, Russian energy and economic threats against them . 114 For the
Caspian littoral states, energy supplies are often the only card they can play in
world politics. W hile they certainly m ust consider econom ic realities, energy is
seen as a preem inently strategic good that can confer strategic bene® ts and m ake
them either secure or lucrative targets.
Energy issues also re¯ ect deeper political-economic challenges to these states.
Precisely because the infrastructure was built to reinforce their dependence on
Russia and little or no investm ent in ports, ferries, transport, pipelines, etc. has
taken place for alm ost a decade, Russia’ s and their capacity to satisfy all the
rising foreign dem and is questionable. But without foreign investm ent they
cannot resolve their infrastructural problem s, let alone other econom ic chal-
lenges. And because such projects take enorm ous amounts of tim eÐ the one
factor they do not have in abundanceÐ they rem ain exquisitely vulnerable to all
kinds of overt and hidden Russian threats, blackm ail, sabotage, etc. of all aspects
of their energy supplies. 115 Moreover, due to the nature of the Soviet economy,
these govern ments still face built-in structural irrationalities throughout their
econom ies that both preclude the optim al use of their energy resources and
ef® cient econom ic policy. Kazakstan, despite its abundance of natural gas,
depends on Uzbekistan and Russia for natural gas imports because there is still
no adequate republic-wide system for exploiting and distributing natural gas. 116
Finally, energy revenues are crucial to every state in the region, including
Russia, for reasons connected to their own internal political economy. We can
view these states as rentier states whose main revenue com es from an external
royalty or rent, namely oil and gas sales, the produc tion of which is largely
unrelated to the rest of the domestic econom y. The concept of the rentier state
originated with regard to Iran under Shah Mohamm ad Pahlavi (1941 ±79) but has
grown to include other oil-producing Arab states, e.g. Kuwait or Qatar. Som e
analysts use the term àllocative state’ as a substitute for rentier state, but both
refer to the sam e phenomenon. 117
The establishm ent of rentier states in the CIS m eans that their stability
depends on a continuing ¯ ow of energy revenues. To the degree that those
revenues are interrupted or interdicted, these states’ internal and thus external
stability becomes open to question. The fact that all these states, including
170
Russia, are rentier states poses the Norway or Nigeria conund rum as a lasting
structural issue which will not go away anytim e soon even with foreign
investm ent. It is not enough for these govern ments to obtain foreign investm ent
and diplom atic-m ilitary support, they m ust use those newly acquired advantages
wisely over a long time to develop and stabilize.
Paradoxically the fact that all these states are rentier states means that the
Transcaspian states and Russia are both oriented to the sam e export m arkets for
energy. This shared orientation will probab ly m ean the com m on neglect or
deterioration of their industrial base and m anufacturing sector and the stagnation
of their dom estic investment markets which are the only true basis for overcom -
ing that deterioration. Accordingly, since none of these countries can truly hurdle
their obstacles to growth, they will rem ain colonial econom ies, rentier states, for
a long time. This means that Russia’ s goal of econom ic integration is an utterly
unrealistic goal and pursuing it de® es both econom ic logic and political capacity.
Yet Moscow persists in this delusion because it cannot let go of its colonialist
mentality or of its need to suppress com petitors in the energy industry. 118 Here
again the primacy of geopolitical or geostrategic considerations over purely
econom ic considerations or the lure of international integration has harm ed
Russian efforts to secure key strategic goals.
Russian interests
Russia’ s energy interests are no less vital to the survival of the govern ment and
state in their present form . This does not mean that Russia’ s survival as such is
endangered by a failure to attain those interests. But Yeltsin’ s system is indeed
jeopardized by such a failure. Russia’ s energy interests are m ore extensive, if
perhaps less intensive, than those of its neighbours. Therefore Russian policy is
determ ined to retain control over the CIS energy network.
From the Russian perspect ive it is not sim ply a questio n of reconcil ing contrad iction s that
m ight arise in the course of an am icable `divorce ’ of the form er republi cs, but som ethin g
far more serious . W hat is really at issu e is oil and natura l gas, which constitut e the very
foundat ions of the Russian econo m y and accoun t for more than half the country ’ s entir e
export earnings . As one of the world’ s leadin g produce rs and exporter s of hydroca rbons,
Russia canno t ignore pleas for Centra l A sia and Azerbaija n to increas e the extracti on and
export of oil and natura l gas. T he em ergenc e of m ajor new produce rs could cause a
recon ® guratio n of the entir e globa l m arke t for these good s and would also have a profou nd
im pact on pric e dynam ics, which , in turn , would also have direct conseque nces for the
Russia n econom y. Althoug h the govern m ent has issued no of® cial pronou ncements on the
subject , it is clea r that the coordin atio n of its own energy strateg y with plans to increas e
the product ion and expor t of hydroca rbon s in the CIS constitut es a prim ary nationa l interest
for Russia. T hat is why Russia reacts negative ly toward any externa l meddlin g in a m atte r
of such interest . 119
Russia’ s efforts to take over the Caspian energy econom y becam e visible in
1994 but its m ost recent form al policy was outlined in 1996 when the Security
Council and the Ministry of Fuel and Energy proclaimed energy a m ajor factor
171
STEPHEN BL ANK
in safeguarding Russia’ s security. The fuel economy faces internal threats from
the low level of energy ef® ciency in Russia, the non-pa ym ents crisis where
debtors do not pay their bills for goods and services, and the lack of foreign
investm ents. The solution to the internal econom ic failure is econom ic imperial-
ism, i.e. àccess to internal m arkets of neighboring countries, preserving and
expanding reliable external m arketing outlets, and thus ensuring the transit
throug h Russia energy carriers’ .120
Russia’ s `fuel diplom acy’ should focus on establishing a comm on CIS system
of energy security, including shared proper ty, com mon developm ent, integrated
produc tion companies, and free access to markets and resources. CIS states
should regard Russia as their m ajor partner and that collaborations with other
countries was èconom ically inexpedient’ . The Russian govern m ent would
encourage the outreach of Russia’ s oil giants, Gazprom, Lukoil (the prem ier gas
and oil companies) and Transneft (the main pipeline company) into Kazakstan
and Turkm enistan to preserve Russia’ s dominance over those states’ econom ies
and perpetuate a closed, exclusive sphere of in¯ uence there.121
Russia has com pelling reasons for so acting. Russia rem ains the largest
exporter and re® ner of oil and gas and controls the shipm ent of all petroleum
produc ts throug h its `steel umbilical cord’ throug hout the CIS. On economic
ground s alone, it has every reason to oppose any expansion of its rivals’ m arket
share should they be able to sell freely abroad. Therefore it wages economic
warfare against them and dem ands a cut from all of their projects, either in the
exploration or in the transshipm ent of the produc t. Russia has repeatedly
blackm ailed Kazakstan, Turkm enistan, and Azerbaijan to force them to admit
Russia, often on concessionary term s, to their energy projects. 122
At the sam e tim e Russia’ s own produc tive capacity has steadily declined from
1991±97 in both oil and gas, and its energy industries are entangled in num erous
dysfunc tional economic and political relationships for all their apparent riches
and pro® tability. Although prelim inary reports state that produc tion increased in
1997, we m ust rem ember that few, if any Russian statistics, are accurate. 123
Serious com petition for Russia’ s current m arkets, especially from m odernized
produc ers using foreign capital, technology, and infrastructure and enjoying
W estern political support , would undermine Russia’ s domestic and foreign
econom ic position. Moreover, the new economic crisis ignited by the Asian
crisis in late 1997 will oblige Russia to export m ore oil to obtain scarce foreign
capital and squeeze dom estic produc ers who will be under m ore domestic
pressure to pay taxes. So energy produc ers too will be driven for internal reasons
to export more and restrict com petition.
This is because Russia’ s main source of foreign exchange derives from its
energy exports. W ere those exports to decline substantially, Russia’ s ability to
earn foreign exchange and meet its large and growing international debts would
greatly decline as would its ability to sustain itself at hom e through access to
foreign capital markets and international econom ic agencies. Indeed, num erous
Russian observers worry greatly that Russia m ight remain consigned for years to
come to a semi-peripheral state in the world economy as an exporter of raw
172
materials like oil and gas, and be unable to attain m odern levels and forms
of econom ic, industrial, and technological developm ent. They fear a lasting
econom ic-technolog ical, and hence m ilitary, backwardness, leaving Russia at the
mercy of the United States or other foreign coalitions. 124 Unhappily for them,
there seem s no way out unless Russia can convert its foreign earnings into
developm ent and internal investm ent capital. Until then Russia must rely
excessively on its energy econom y for foreign exchange and seek to drive out
competition as be® ts a true aspirant to m onopol y status. But Russia’ s political
econom y promotes rent-seeking, not investm ent, and recycles econom ic-political
pathologies throug hout the system.
Com plicating matters for Russia is its declining capacity to produc e energy
produc ts. Its infrastructure is dilapidated and worsening, its new sources of
energy face form idable costs to explore and ship because of their location in the
inhospitable Siberian north and east, and because there has been precious little
investm ent from abroad or internally for over a decade. Furthermore the present
Russian political climate does not favour external or even internal energy
investm ent and foreign ® rm s are leaving in frustration and disgust. 125 If anything
this clim ate will worsen because Yeltsin recently terminated efforts to legislate
a new tax code that would have attracted foreign investors. Since the entire
econom y depends on foreign investm ent, this is a devastating long-term blow to
the Russian econom y. Even recent decrees perm itting foreigners to own even
100 per cent of Russian energy industries will not overcom e this obstacle. Nor
is this decree likely to stick given the hostility to foreign investm ent among wide
sectors of the economic and political elites and the absence of correspondin g tax
bene® ts for foreign owners.
Meanwhile Russia and the CIS states too rem ain extrem ely wasteful con-
sumers of energy, dependent on the subsidization of consum ption at below
market prices and on the big oil and gas ® rm s’ subsidization of housing, social
welfare functions, etc. Without foreign income, because CIS and Russian
purchases are way down since 1991, this whole rickety structure could come
apart. Indeed, when the governm ent started pressing Gazprom to pay more taxes
in m id-1998 as a major ® nancial crisis hit it, Gazprom predictably began
demanding more paym ent from its foreign custom ers in the CIS.126 Once it goes
after Russian custom ers, the consequences are truly unfore seeable. Since energy
companies and banks own billions in frozen assets in a cash-poor econom y, any
source of real money becom es that m uch m ore precious, especially in the present
crisis. Gazprom ’ s situation exem pli® es the precariousness of this house of cards.
Gazprom receives only 5±15 per cent of its receipts for its goods and services
in cash. Its exports therefore m ust subsidize its domestic operations which are in
any case endangered as the infrastructure declines. It exploits this situation to
justify its m onopol y position and enormous tax arrears by citing its willingness
to continue subsidizing non-cash paying customersÐ a category that includes
most of Russia’ s city govern m ents. Gazprom effectively replaces the failing state
and takes its paym ent for services rendered in the taxes that it does not pay. Yet
its pro® ts and those of other energy com panies from exports are not being
173
STEPHEN BL ANK
ploushed back into the econom y either as taxes or investments or even to cover
current costs. 127
Thus if Gazprom ’ s exports decline while other states provid e cheaper gas and
more of it throug h better pipelines and with foreign backing, its ability to
subsidize the collapsing dom estic econom y and to avoid taxes declines with it.
But worse, m uch of the m unicipal sector’ s econom y declines with Gazprom for
lack of gas and with that sector banks, housing, and others are all severely
endangered. The dependence of key sectors of Russia’ s economy on the fortunes
of a single protected and privileged sector, energy and Gazprom , the ® rm that
was form er Prime Minister Viktor Chernom yrdin’ s form er employer, exem pli® es
the pathology of the rentier state. And the skewed dependence upon state
protection, tax breaks, and non-cash paym ents underscore the extent to which
Russia has failed to make the economic transition to a genuine market economy.
Certainly such dangers and the bene® ts of state protection that accrue to ® rm s
like Gazprom , can explain the purely econom ic motives of Russia’ s energy
barons and govern m ent when facing the prospect of enhanced rivalry from
form er satrapies whose independence Moscow still cannot accept.
The forego ing analysis illustrates why Gazprom has obstructed any Turkm en
penetration of the Russian market, pipelines or access to custom ers outside
Russia. However, Gazprom’ s energy war against Turkm enistan, abetted by
Moscow, drove Ashkhabad to Iran, Turkey, Germ any and the United States for
® nancial, econom ic and political suppor t and weakened Moscow’ s future ability
to leverage the situation in Turkm enistan. Neither Russian consum ers nor the
econom y, nor Russian national interests bene® t from such policies, but Gazprom
does and its unassailable connections display how the privatization of Russian
foreign policy undermines regional stability and development.
This privatization ® nally emerged as the dom inant factor in policy as the
energy com panies were able to forge a coalition of regional and central
institutions that overwh elm ed the Ministry of Foreign Affairs’ efforts to forge a
geostrategically driven policy. 128 But the consequence of this victory, which is
driving Russia to rely on more econom ic approaches and now to renounce
efforts to veto Caspian development, exacts the price upon the state of the
privatization of foreign policy. As Russia gropes towards a more purely
econom ic m otivation for policy, it ® nds that it cannot m eet its dom estic and
foreign responsibilities as a result of that trend.
Therefore, if we consider only the econom ic side of the Russo±CIS equation
we ® nd that the prospect of large-scale foreign capital com ing into Azerbaijan,
Turkmenistan and Kazakstan or the redirection of their trade routes around
Russia and outside of it will trigger severe econom ic and political dislocations
inside Russia’ s energy industry. These dislocations will quickly register as
profou nd shocks to the already stagnant and vulnerable Russian econom y and
state that could put unbearable pressure on the economy and the polity. That has
already happened in 1998. On purely economic ground s, economic warfare to
prevent the emergence of other produc ers m akes sense for Russia, leaving it with
two basic options. Either it shuts down competing sources or it uses its current
174
monopoly power to force itself into a powerful, even dom inant position inside
rival produc ers’ projects. Both these options, though , have undesirable conse-
quences.
Attem pts to shut down other countries’ resources will produc e imm ense
political dislocations within them that could then reboun d on Russia. Russia
cannot take over their energy economies or m ake up the slack from its own
resources because of its dilapidated infrastructure, and the absence of either
dom estic or foreign sources of investm ent. Sentiment is strong against the latter
and the resources are absent for domestic investm ent. Thus it probab ly cannot
shut down its rivals or bear the costs of doing so, either in econom ic, political
or m ilitary terms. Russia can only seek to force its way into projects or threaten
to obstruct them by coercive, and often non-economic m eans. But in doing so,
it drives these states to other patrons. Econom ic warfare only works when the
target state has no other option but the state that is attacking it. Transcaspian
states increasingly have options like the United States, Iran, China and Japan
who have entered this contest. Russia wins very little in real term s from its
policies of econom ic warfare. Yet it has few other real options.
Even though the Transcaspian countries have been gravely hurt by Russia’ s
econom ic warfare, they are still standing and acquiring ever more foreign
econom ic and political suppor t that sustains their own independence. They are
signing new deals with a wider circle of states and ® nding ways to trade among
them selves and with Ukraine and circum vent Russian policies of economic
warfare.129 Their overall trade with Russia and foreign investm ent from Russia
is declining relative to their integration with the general global econom y. They
are even apparently beginning to exclude Russia from m ilitary planning as they
get W estern support .130 These facts, taken with Russian weakness, prevents
Moscow from shutting them down totally.
Nonetheless, Russia can do great harm to them , has shown its readiness to do
so on numerous occasions, and rem ains ready to threaten them again either by
econom ic warfare or by m ilitary-political means, e.g. its new alliance with
Arm enia, a true m ilitary alliance against Turkey and Azerbaijan. While econ-
omic logic dictates an attempt to use m onopol y pressure to gain Russian
leverage over each and every energy project, Russia’ s interest here is not m erely
econom ic. It has a large and, vital strategic interest in the region as well and this
complicates efforts to pursue a policy based purely on econom ic m otives and
gain.
Russia’ s political interest boils down to the belief that reintegration around
Moscow is objectively necessary for both the weaker states and for Russia and
rem ains the preem inent task of all Russian state agencies. Indeed, Russian elites
apparently believe that without hegem ony in the CIS, Russia itself m ight
fragm ent or no longer be a great power.131 Therefore Russia and the Caucasus
presum ably share an objectively given sphere of natural interests that m andates
integration with Russia. 132 The prevailing line in Moscow is that without such
reintegration neither CIS m embers nor Russia can be stable internally or
externally. Essentially there is a belief that if Moscow does not have exclusive
175
STEPHEN BL ANK
leverage here, it is perm anently under threat from other states, a view with
long-term Tsarist and Soviet antecedents. There also is continuing disdain for
disbelief in these countries’ ability to govern them selves. 133 Russian thinking
rem ains wedded to concepts and contingencies of zero-sum gam es and classical
realpolitik or geopolitics.
Russia’ s policies regarding Transcaspian oil and gas

Further com plicating this scene is the fact that Russian policy on energy issues
is still inconsistent and the governm ent is riddled with factional in® ghting over
energy issues. This in® ghting goes back at least to 1994 when Lukoil, protected
by Prim e Minister Chernom yrdin, de® ed Andrei Kozyrev’ s Foreign Ministry and
signed deals with Azerbaijan. By doing so Lukoil implicitly recognized Baku’ s
claim s to the Caspian Sea and brough t it into the ® rst contracts for exploring oil
off the latter’ s coast. 134 While the govern m ent can now prevent oil and gas ® rm s
from signing contracts with CIS states against its will, these com panies still want
to do just that despite what others de® ne as the national interest. 135 They want
to m ake m oney, gain m arket share and leverage as insiders to prevent or at least
manage the emergence of rivals. At the sam e time, the govern m ent often gives
the impression that its attitude is if it cannot have the oil and gas then nobod y
should.
Nor are these uniform postures. Gazprom , for exam ple, has refused to ship
Turkmenistan’ s gas to Europe throug h 1997 even though the govern m ent now
seem s willing to allow such transshipment in return for Russian participation in
future projects and for suppor t on the nature of the Caspian regim e and against
Azerbaijan and Kazakstan. 136 Unless this is all som e sort of deep conspiracy or
an as yet unanno unced `good cop, bad cop’ routine, it is impossible to speak of
a consistent energy policy.
Nonetheless there are som e abiding dispositions in Russian activities and
instrum ents. One is, of course, monopolists’ efforts to shut out com petitors
totally. Hence Russia frequently blocks other states’ shipments of oil and gas,
inducing great hardship among them in order to obtain either econom ic leverage
on them or political leverage. This applies as well to debtors in energy like
Ukraine which has been the repeated target of m any instances of economic
warfare, not just energy. 137 Russia apparently has also decided to contest
Kazakstan’ s claim s to part of the Caspian to prevent it from drilling there.138
More generally, Russia has striven to frustrate every Kazakh project or take
exorbitant pro® ts once it has forced Almaty (now Astana is the new capital) to
let its ® rm s into those projects. These efforts at economic coercion have often
driven com petitors out of m arkets for a while or certain other policy gains but
have also perpetuated regional tensions and accelerated CIS m embers’ search for
other partners. Thus these gains seem to be lim ited in their duration and may not
be worth the long-term costs involved.
A second instrum ent is not to actually use blockades, but to threaten them
unless Russia is included. This tactic is another form of `getting them by their
176
pipelines’ , and has often won Russia inclusion in m any projects on easy term s.
But it incurs the sam e costs and sets the oil com panies against the govern ment
factions that want to drive out rival produc ers because once they have a contract,
they have som ething to lose.
A third instrum ent of policy is the fom enting of coups as in Azerbaijan, to
unseat a hostile govern ment and install a more pliant one. W hen these fail, as
in Baku or in Chechnya, the costs are enorm ous and in Chechnya they led
Moscow foolishly to reinforce failure all the way up to the tragic war of
1994±96. A com plem entary, fourth instrum ent of policy is the time-hono ured
one of fom enting ethnic war among disgrun tled minorities in the area. This
policy has roots deep in Russia’ s imperial history. And it has been a constant
feature of Russian imperial projects to suppor t m inorities in these republics

against the titular peoples and to suppor t Christians against Muslims, secession-
ists against their state, and one faction against another. As Dmitry Trenin writes
of Russian policy in the Caucasus’ s post-19 91 con¯ icts: `Russia’ s aim appears
to have been to try and restore its in¯ uence throughout the region, on all sides,
in every con¯ ict, in order to prevent developm ents from slipping out of control
and so opening the ¯ oodgates to outside interference’ .139 Both the Tsars and
Lenin and Stalin displayed no sm all m astery of this tactic, and Yeltsin has been
their apt pupil as events cited above in Azerbaijan indicate.
The actuality or threat of such insurgences forestalls investm ent and foreign
in¯ uence in war-torn areas and puts both sides in a position of dependence on
Moscow, destabilizes potential econom ic rivals and grati® es the imperial urge
which dis® gures internal politics as well. It also con® rm s Russian statesmen in
their belief that security in these peripheral `shatterbelts’ is a zero-sum gam e.
Of course, this tactic risks either a Chechen scenario or a wider war as with
Turkey. But it is a measure of Moscow’ s strategic fecklessness that it has not
shied away from falling into this trap and wound up with a host of protracted
con¯ icts on its periphery that have resisted political solution, due to Russia’ s
methods.
As a result the m ilitary factor’ s effectiveness is now waning as is Russian
military capability. 140 Nonetheless, econom ic warfare rem ains a trum p and
Russia’ s m ilitary power still dwarfs everyone else’ s in the region. Even with the
rising US involvement and Russia’ s continuing poverty and weak military base,
these instrum ents give Moscow many opport unities for frustrating US objectives
and it is not leaving the area.
A ® fth tactic is to try to bypass rivals altogether by snapping up their m arkets
or making alternative arrangements to ship oil and thus freeze them out. It seeks
to coerce them by pressure at the distribution, rather than produc tion side of
things. This tactic appears in Gazprom ’ s efforts to deprive Turkm enistan of
Turkish and Arm enian markets and in efforts to create Balkan networks that
would bypass Turkey and force Caspian energy to go throug h less pro-W estern
routes to market.
A sixth aspect of Russian policy is that in general, these actions are part of
the broader campaign of economic warfare to subjugate CIS econom ies to
177
STEPHEN BL ANK
Russian preferences in both trade and investment issues. Russia’ s lim ited
success, which appears to be dim inishing even now, signi® es CIS m embers’
rising capability to ® nd alternatives to Russia and thus, as is generally the case
with sanctions, minimize or even evade the full force of Russian economic
warfare and sanctions.
A seventh aspect of Russian energy policy takes place throug h the obstructive
tactics of local govern ments, energy ® rm s, banks, etc. They resort to obstructing
foreign ® rm s and govern ments by rival claims to energy sources, the routes
throug h which pipelines will go, crime, corrup tion, and con® scatory taxation.
An eighth tactic is to try to obtain a legal regime for the Caspian Sea where
Russia and every other littoral state has a veto on all drilling operations there.
W hile Russia has advanced compromises once its original proposal was re-
buffed , those com prom ises too have been rejected and the Sea’ s legal status
rem ains indeterminate at this tim e. Russia has also supported Turkmen claim s to
the Kaypaz ® elds in the Caspian against Baku in a clear effort to override
its energy ® rm s’ desire to participate in that project and counter BakuÐ its
main oppone nt on the Caspian issueÐ by supporting Turkm en claims against
Azerbaijan.
Finally, another element of Moscow’ s policy is its effort to use this issue to
force Chechnya back into Russia’ s fold. Since m ilitary force failed, the econ-
omic alternative of forcing Chechnya to accept a Moscow dictated price for
energy throug h the Groznyi pipeline has replaced it. Thus Moscow threatens
Groznyi with the prospect of building an alternative pipeline throug h Dagestan
or with alternative m odes of transporting energy to m oderate Chechen dem ands
for econom ic and political independence. That pipeline would also strengthen
Dagestan and the North Caucasus’ overall econom ic position, preserve the North
Caucasus’ dependence on Russia and tighten its integration with the Russian
econom y. 141 Here Russia uses its relatively strong economic position in the local
energy economy not only to attem pt regional integration, but also to preserve
and maintain its integrity.
However, this policy paradoxically undermines Russia’ s cohesion because it
gives Chechnya’ s factions every incentive to destabilize the North Caucasus.
They are now doing so to the point where Dagestan must raise its own militia
because Moscow cannot protect it. This militia further weakens Moscow’ s
monopoly of legitim ate force which is the hallm ark of state power, further
ethnicizes m ilitary force in the area, arms crim inals and m ilitants of various
stripes, and has led neighbouring Ingushe tia to threaten to follow suit and
continue the spiral to local violence. Therefore the entire North Caucasus is on
the verge of prolonged ethnic and civil war.
These activities underscore the centrality of the energy economy for the
Transcaspian’ s political future and the stakes involved in the effort to control
that energy economy. But this overview also graphically illustrates the respective
roles of the key players, Russia, the United States, and the produc ing states.
Russia’ s energy capabilities appear to be prim arily negative ones: it can obstruct
the developm ent of the Caspian Sea’ s energy deposits, or the optimal exploi-
178
tation of energy sites around its shores, but it cannot prevent foreign in¯ uence
and capital from com ing into the region. Hence Russia’ s increasingly visible
inability to hold onto to its form er satrapies is directly tied to its failure to
reverse econom ic decline. As nature and politics abhor a vacuum , foreigners are
supplanting Russia’ s form er m onopol y in Caspian trade and investm ent. But
their presence does not m ean that Russia cannot later frustrate them . W hile
Russia cannot do much positively for the entire region, it can certainly impede
its restabilization even if it imports that instability into itself by doing so. Hence
its negative capability, a power that will rem ain for a very long tim e and puts
the entire area under a lasting question m ark.
Conclusions
Since Russian power is not leaving the scene it m ust be channelled construc-
tively. W hile W ashington says this is its preferred tactic and objective, i.e. a
win-win solution, we have good reason to suspect that US aim s are broader in
scope. But these ambitions cannot be realized without a m uch greater public and
private investm ent over time. Nor can one expect Brzezinski’ s grand coalition to
rescue a vacillating Am erica by subordi nating other states to his dream of a new
form of containm ent. W orse yet, American policy is increasingly in strategic
disarray as dual containm ent collapses and our allies not unnaturally pursue their
own unilateral interests in this region.
It is not the US presence alone, but the m ultilateral competition among
Europe, China, Japan, Russia, the United States, Ukraine, Israel, Turkey and
Iran, for in¯ uence, leverage, and shares in the energy econom y that ensures the
independence of these states and helps stabilize them . Indeed, China by all
accounts is ready to enter the world, as well as the regional, m arket in a big way
as its purchase of Kazakh pipelines in 1997 shows. And some analysts believe
that in energy affairs, it, rather than the United States, will be Russia’ s biggest
rival for Transcaspian energy and in¯ uence. 142
Likewise it is the choices of the Russian and Transcaspian govern m ents that
determ ines whether we will see a Norwegian or a Nigerian scenario. And the
current is already runnin g towards Nigeria. As current events in Africa dem on-
strate, that latter scenario is not just one of m assive dom estic m isrule, but also
entails increasingly assertive and forceful intervention in the affairs of other
African states.
Given the stakes involved here, the disarray of Russian and of US strategies,
and, m ost crucially the fragility of dem ocratic statehood across the region,
complacent W ilsonianism and talk of win-win outcom es seem s unjusti® ed even
though econom ic forces are propelling Am erican and other ® rm s into the local
energy sweepstakes. Econom ic forces may drive their actions and impel them to
put pressure on their govern ments for political support. But it is the political
decisions that will be m ade in many capitals regarding energy, not the economic
forces acting on energy ® rm s, that will decide the issue. Geoeconom ics still
takes a back seat to geopolitics in the new great game.
179
STEPHEN BL ANK
Notes and References

1. For examples of this view see Charles Blandy, The Caspian: A Sea of Troubles, Con¯ ict Studies Research
Centre, Camberley, 1997, pp 1, 27; Michel Croissant, Ù.S. Interests in the Caspian Basin’ , Comparative
Strategy, XVI, No 3, 1997, pp 353±367; Robert Ebel, Energy Choices in the Near Abroad: The Haves
and Have-Nots Face the Future, Washington: Centre for Strategic and International Studies, 1997, p 7;
Stephen Blank, Energy and Security in Transcaucasia: Carlisle Barracks, PA: Strategic Studies Institute,
US Army War College, 1994, and idem, Energy, Economic, and Security in Central Asia: Russia and
Its Rivals, Carlisle Barracks, PA: Strategic Studies Institute, US Army War College, 1995.
2. Statement of Stephen Sestanovich, Am bassador-at-Large, Special Adviser to the Secretary of State for the
New Independent States, Before the House International Relations Committee, 30 April 1998, Turkistan
Newsletter Volume 98±2: 089±06±May±1998 (henceforth Sestanovich, Testimony).
3. Jean-Christoph Peuch, `Caspian oil: the role of private corporations’ , Fletcher Forum of W orld Affairs,
XXII, No 2, Summer/Fall 1998, pp 27±41.
4. Ibid, Douglas W. Blum, `Domestic politics and Russia’ s Caspian policy’ , Post-Soviet Affairs, XIV, No
2, 1998, pp 137±164.
5. See for example, Stephen M. Walt, `The Gorbachev interlude and international relations theory’
Diplomatic History, Vol XXI, No 3, Summer, 1997, p 478; James Goodby, `Can collective security work:
re¯ ections on the European case’ , Chester A. Crocker, Fen Osler Hampson with Pamela Aall, eds,
M anaging Global Chaos: Sources of and Responses to International Con¯ ict, Washington, DC: United
States Institute of Peace, 1996, pp 239±242.
6. For Turkey’ s aspirations in 1993 in this part of the world see, Stephen Blank, Ìntroduction’ `Turkey’ s
strategic emplacement in the former USS R and US interests’ , and `Conclusions and recommendations’ ,
in Stephen J. Blank, LTC, William T. Johnsen, USA, Stephen C. Pelletiere, Turkey’ s Strategic Position
at the Crossroad s of W orld Affairs, Carlisle Barracks, PA, Strategic Studies Institute, US Army War
College, January 1994, pp 1±3, 55±87, and 89±98 respectively.
7. Xu Xiaojie, `China reaches crossroads for strategic choices’ , W orld Oil, April 1997, p 99.
8. Elizabeth Sherwood-Randall, ÙS policy and the Caucasus’ , Contemporary Caucasus Newsletter,
Berkeley Program in Soviet and Post-Soviet Studies, Berkeley, CA: University of California, Berkeley,
Issue 5, Spring 1998, pp 3±4.
9. Martha Brill Olcott, `The Caspian’ s false promise’ , Foreign Policy, No 112, Summer 1998, pp 101±102.
10. Ibid, Stephen Blank, Ìnstability in the Caucasus: new trends, old traits’ , Part I, Jane’ s Intelligence
Review, April 1998, pp 14±17, Part II, May 1998, pp 18±21.
11. Geoffrey Kemp and Robert Harkavy, Strategic Geography and the Changing M iddle East, Washington,
DC: Carnegie Endowment for International Peace, 1997, pp 3±108.
12. Solana is quoted in Glen E. Howard, `Nato & the Caucasus: the Caspian axis’ , paper presented to the
IV Annual SSI-CSI S Conference on NATO Enlargement, W ashington, DC 26 January 1998, forthcoming
in Stephen Blank, ed., NATO After Enlargement: New Challenges, New M issions, New Forces, Carlisle
Barracks, PA: Strategic Studies Institute, US Army War College.
13. Stephen Blank, `Russia and Europe in the Caucasus’ European Security, IV, No 4, Winter 1995, pp
622±645.
14. Howard, Rachel Bronson, Nato’ s expanding presence in the Caucasus and Central Asia’ , paper presented
to the IV Annual SSI-CSI S Conference on NATO Enlargement, W ashington, DC, 26 January 1998 and
forthcoming in Blank, ed., NATO After Enlargement, Nezavisimoye Voennoye Obozreniye, No 8, 27
February±5 March 1998, as cited in Johnson’ s Russia List, No 2095, 5 March 1998, davidjohn-
son@erols.com.
15. Ìf we clash it’ ll be on the Caspian’ , Current Digest of the Post-Soviet Press (henceforth CDP P), XVII,
No 21, 21 June 1995, p 21; Dm itri Vertkin, Kazakhstan Security & the New Asian Landscape, Bailrigg
Paper No 26, Centre for Defence and International Security Studies, Lancaster University, 1997, pp
17±18; Robin Morgan and David Ottaway, `Drilling for in¯ uence in Russia’ s back yard’ , W ashington
Post, 22 September 1997, pp A1, 15.
16. Ibid.
17. Douglas Blum, Sustainable Development and the New Oil Boom: Comparative and Competitive outcomes
in the Caspian Sea, Programme on new approaches to Russian security, Davis Centre for Russian Studies,
Harvard University, Cambridge, M A, Working Papers Series, No 4, 1997, p 21.
18. Quoted in Hall Gardner, Dangerous Crossroads: Europe, Russia, and the Future of NATO, Westport, CT:
Praeger Publishers, 1997, p 117
19. Stephen Kinzer, Àzerbaijan has reason to swagger’ , New York Times, 14 September 1997, p A12;
Gennady I. Chufrin and Harold H. Saunders, `The politics of con¯ ict prevention in Russia and the near
180
abroad’ , W ashington Quarterly, XX, No 4, Autumn 1997, pp 40±43; Viktor Israelyan, `Russia at the
crossroads: don’ t tease a wounded bear’ , W ashington Quarterly, XXI, No 1, Winter 1998, pp 55±58; P.
Terence Hopmann, Stephen D. Shen® eld and Dominique Arel, Integration and Disintegration in the
Former Soviet Union: Implications for Regional and Global Security, Occasional Paper No 30, Thomas
J. Watson Institute for International Studies, Brown University, Providence RI, 1997, pp 35±36.
20. Ibid. Moreover Russia naturally fears the consequences of any foreign state holding a predominant or
merely a large share of its energy future in its hands.
21. Stephen Blank, Ènergy, economics and security in Central Asia: Russia and its rivals’ , Central Asian
Survey, Vol 14, No 3, Fall 1995, pp 373±406.
22. Kemp and Harkavy, Ìntroduction’ , p xiii.
23. Robert D. Blackwill, Michael Stuermer, Ìntroduction’ , Robert D. Blackwill and Michael Stuermer, eds,
Allies Divided: Transatlantic Policies for the Greater M iddle East, Cambridge, MA: MIT University
Press, 1997, p 2.
24. Am bassador Matthew Nimetz, `Mediterranean security after the Cold War’ , M editerranean Quarterly,
Vol VIII, No 2, Spring 1997, p 29.

25. Ibid.
26. Warren Christopher and William J. Perry, `Nato’ s True Mission’ , New York Times, 21 October 1997, p
25.
27. Hans Binnendijk, `Next, Nato needs to give itself a southern strategy’ , International Herald Tribune, 17
March 1998.
28. Dm itry Trenin, `Russian security interests and policies in the Caucasian region; and Dm itri Danilov,
`Russia’ s search for an international mandate in Transcaucasia’ , both in Bruno Coppieters, ed., Contested
Borders in the Caucasus, Brussels, VUB University Press, 1996, pp 91±102, 137±152 respectively.
Moscow, Interfax, in English, 19 February 1997, Foreign Broadcast Information Service Central Eurasia
(henceforth FBIS SOV), 97±033, 19 February 1997, Moscow, NTV, in Russian, 22 September 1997,
Foreign Broadcast Information Service M ilitary Affairs (henceforth FBIS UM A), 97±265, 22 September
1997.
29. `The fortnight in review’ Prism, III, No 15, Pt. 1 October 1997, Bronson, Howard.
30. Frederick P.A. Hammersen, `The disquieting voice of Russian resentment’ , Parameters, XXVIII, No 2,
Summer 1998, pp 39±55.
31. Zbigniew Brzezinski, The Grand Chessboard: American Primacy and its Geostrategic Imperatives, New
York: Basic Books, 1997 and, À geostrategy for Eurasia’ , Foreign Affairs, LXXVI , No 5, September±
October 1997, pp 50±64.
32. Bronson, Howard,
33. Ibid.
34. Peuch, p 32.
35. Steve LeVine, `High Stakes’ Newsweek, 17 April 1995, p 10.
36. Boris Rumer, `Disintegration and reintegration in Central Asia: dynamics and prospects’ , Boris Rumer,
ed., Central Asia in Transition: Dilemmas of Political and Economic Development, Armonk, New York:
M.E. Sharpe & Co. Inc., 1996, p 10; Oksana Reznikova, `Transnational corporations in Central Asia’ , in
Rumer, pp 82±83
37. CDP P, 21 June 1995, p 21.
38. Ibid.
39. Bronson, Howard, op cit.
40. As a result, Washington is now prepared to invest its own money despite earlier insistence that pipeline
investments in the area be pro® table ones; Michael Lelyveld, `Caucasus: deadline nears on oil transit
routes’ , Radio Free Europe/Radio Liberty, Newsline, 16 May 1998 (henceforth RFE/RL Newsline).
41. Ibid.
42. Bronson, Howard.
43. Moscow, ITA R-TA SS, in English, 16 April 1998, FBIS SOV, 98±106, 21 April 1998, Statement of
Under-Secretary of State Thomas Pickering to the Senate Foreign Relations Committee, 3 March 1998,
in Johnson’ s Russia List, No 2092, 4 March 1993, davidjohnson@erols.com.
44. Glen E. Howard, `Nato expansion & Azerbaijan’ s search for security’ unpublished paper, presented to
the CSIS Project on Russia and the CIS, Washington, DC, 15 July 1997 (henceforth Howard-2).
45. US National Security Council, Caspian Region Energy Development Report, 1997.
46. Reuters, 17 November 1997, Pipeline News, No 79, 10±17 November 1997, Òil rush’ , W ashington Post,
20 November 1997, p 24.
47. Moscow, Nezavisimaya Gazeta, in Russian, 13 September 1997, Foreign Broadcast Information Service,
M ilitary Affairs (henceforth FBIS UM A), 97±259, 16 September 1997; R. Jeffrey Sm ith, ÙS leads
181
STEPHEN BL ANK
peacekeeping drill in Kazakstan’ W ashington Post, 15 September 1997, p 17, Charles Clover and Bruce
Clark, Òil politics trouble Central Asian waters’ , Financial Times, 23 September 1997, p 9.
48. Caspian Region Energy Development Report.
49. Voice of America, `Testimony of Secretary of Energy Frederico Pena to the House International Relations
Committee’ 30 April 1998, Sestanovich, Testimony, Pickering.
50. Caspian Region Energy Development Report, Deputy Secretary of State Strobe Talbott, À farewell to
¯ ashman: Am erican policy in the Caucasus and Central Asia’ , address at the Johns Hopkins School of
Advanced International Studies, W ashington, DC, 21 July 1997 (henceforth Talbott); Bradford R.
McGuinn, `From the Caspian to the Gulf: the assertion of US power’ , M iddle East Insight, November±
December 1997, pp 10±14.
51. Ibid. Ìnterview with Bill Clinton, President of the United States’ , International Affairs, Moscow, No 2,
1997, p 5.
52. Roger W . Barnett, Extraordinary Power Projection: An Operational Concept for the US Navy, Strategic
Research Development Report 5±96, US Naval War College, Centre for Naval Warfare Studies,
Occasional Papers, Newport RI, 1996, pp 7±8.

53. Talbott, Interview with Bill Clinton, pp 2±5.
54. Tbilisi, Radio Tbilisi Network, in Georgian, 9 August 1998, FBIS SOV, 97±230, 19 August 1997.
55. Charles Fenyvesi, `Caspian Sea: US experts say oil reserves are huge’ , RFE/RL Newsline, 5 May 1998.
56. Ebel pp 11±12, International Institute of Strategic Studies, Strategic Survey 1997/98, London: Oxford
University Press, 1998, pp 22±29.
57. Ibid.
58. Ibid.
59. Ibid.
60. Ibid.
61. Brzezinski, op cit; Sm ith, p 17, Moscow, Nezavisimoye Voennoye Obozreniye, in Russian, 10±16 October
1997, FBIS SOV, 97±345, 11 December 1997.
62. Sm ith, p. 17.
63. Pena, Testimony,
64. In June 1998 Secretary of State Albright proclaimed an initiative to improve and normalize relations with
Iran. It is too early to determine how successful that move will be, but clearly energy considerations were
a factor behind it. Secretary of State Madeleine K. Albright Remarks at 1998 Asia Society Dinner
Waldorf-Astoria Hotel, New York, New York, 17 June 1998, as released by the Of® ce of the Spokesman,
18 June 1998, US Department of State, W ashington, DC (henceforth, Albright, Remarks) The text can
be found at http:;dRsecretary.state.gov/www . statements/1998/980617a.html.
65. Ibid.
66. Ibid.
67. Sestanovich, Testimony.
68. Ibid.
69. Ibid.
70. Sm ith, p A17.
71. Talbott, US Department of State, Of® ce of the Spokesman, `Remarks by Secretary Madeleine K. Albright
to Students at Vilnius University and Question and Answer Session’ , 13 July 1997, Vilnius, Lithuania,
USIA `The end of the beginning: the emergence of a new Russia’ , an address by Strobe Talbott, Deputy
Secretary of State, Stanford University, Stanford, CA, 19 September 1997, from Johnson’ s Russia List,
davidjohnson@cdi.org, No 1220, 23 September 1997 (henceforth Talbott-2); Caspian Region Energy
Development Report, p 17; Floriana Fossato, `Russia: the amount of change has been extraordinary’ ,
RFE/RL, 12 December 1997, as transcribed in Johnson’ s Russia List, No 1428, 12 December 1997,
davidjohnson@erols.com.
72. Kinzer, p A12, Chufrin and Saunders, pp 40±43; Israelyan, pp 55±58.
73. Ibid. Hopmann, Shen® eld and Arel, pp 35±36.
74. Nikolai Sokov, À new Cold War? Re¯ ections of a Russian diplomat’ , International Journal, XL IX, No
4, Autumn 1994, pp 914±915.
75. FBIS UM A, 16 September 1997.
76. Ibid. Moscow, Nezavisimaya Gazeta, in Russian, 22 January 1997, FBIS SOV 97±015, 24 January 1997.
77. Stephen Blank, `The OSCE, Russia, and Security in the Caucasus’ , Helsinki M onitor, VI, No 3 1995, pp
69±71; McGuinn, pp 10±14.
78. Ibid.
79. The new US initiative towards Iran is evidence of that reappraisal, Albright, Remarks.
80. Ibid.
182
81. Olcott, pp 96±113, Alec Rasizade, Àzerbaijan and the oil trade: prospects and pitfalls’ Brown Journal
of W orld Affairs, IV, No 2, Summer/Fall 1997, pp 277±294.
82. David B. Ottaway and Dan Morgan, `The crumbling wall around Iran’ , W ashington Post W eekly, 20
October 1997, p 9.
83. Albright, Remarks.
84. Stephen Sestanovich, `Why the United States has no Russia policy’ , Robert J. Lieber, ed., Eagle Adrift:
American Foreign Policy at the End of the Century, New York: Longman, 1997, p 166.
85. On the Iranian-Russo connection see, Stephen Blank, `Russia and the Gulf’ , Perceptions, I, No 2,
December 1996±February 1997, pp 30±55; see also Reuters, 21 November 1997, as transcribed in
Johnson’ s Russia list, No 1386, 22 November 1997, davidjohnson@erols.com.
86. Ephraim Karsh, `Cold War, post-Cold War: does it make a difference for the Middle East?’ Review of
International Studies, Vol XXIII, No 3, September 1997, p 281. On p 283 he noted that Saddam
Hussein’ s build-up prior to the invasion of Kuwait in 1990 was `treated in Washington with the disbelief
that commonly accompanies a warning that another government is about to break a basic international
rule’ , exactly as occurred in Chechnya in 1994. See also, Stephen J. Blank, `Yugoslavia’ s wars and
European security, stephen J, Blank, ed., Yugoslavia’ s W ars: The Problem From Hell, Carlisle Barracks,
PA: Strategic Studies Institute, US Army War College, 1995, pp 123±159.
87. Rasizade, pp 277±294; Olcott, pp 96±113.
88. Moscow, Rossiyskaya Gazeta, in Russian, 13 September 1997, FBIS SOV, 97±258, 15 September 1997,
Howard, `NATO & the Caucasus’ , passim.
89. Ibid.
90. Moscow, Interfax, in English, 10 December 1997, FBIS SOV, 97±344, 10 December 1997.
91. RFE/RL Newsline, 4 February, 10 February, 11 February 1998.
92. Ibid.
93. Blank, `Turkey’ s strategic emplacement’ , pp 55±87.
94. FBIS SOV, 15 September 1997.
95. Jim Hoagland, `The end of armies’ , W ashington Post, 18 September 1997, p A21.
96. Richard Betts, `Nuclear peace and conventional war’ Journal of Strategic Studies, XI, No 1, March 1988,
pp 90±91.
97. Paul D’ Anieri, Ìnternational cooperation among unequal partners: the emergence of bilateralism in the
former Soviet Union’ , International Politics, XXXIV , No 4, December 1998, pp 417±448.
98. Gerhard Simon, `Russia’ s identity and international politics’ Aussenpolitik, English Edition, No 3, 1997,
pp 245±256, Tatiana Parkhalina, Òf myths and illusions: Russian perceptions of NATO enlargement’
NATO Review, M ay-June 1997, p 14.
99. S. Neil MacFarlane, `The UN, the OSCE, and the Southern Caucasus’ , Caspian Crossroad s, III, No 1,
1997, pp 18±22.
100. FBIS SOV, 15 September 1997.
101. Baku, Zerkalo, in Russian, 18 October 1997, FBIS SOV, 97±311, 7 November 1997.
102. Baku, Zerkalo, in Russian, 11 April 1998, FBIS SOV, 98±126, 7 May 1998.
103. Istanbul, W addmnhhmmyy Instanbul M illiyet, Internet Version, in Turkish, 21 April 1988, Foreign
Broadcast Information Service, W estern Europe (henceforth FBIS WEU), 98±111, 21 April 1998.
104. Baku, Turan, in Russian, 29 January 1998, FBIS SOV, 98±029, 2 February 1998.
105. Bronson, Howard, `NATO & the Caucasus’ .
106. Ibid.
107. F. Stephen Larrabee, US and European Policy Toward Turkey and the Caspian Basin, Blackwill and
Stuermer, eds, pp 143±173.
108. Howard, `NATO & the Caucasus’ .
109. Moscow, M oskovskiye Novosti, 20±27 July 1997; FBIS SOV, 97±208, 22 July 1997.
110. Bronson.
111. I owe this insight to Susan L. Clark of the Institute for Defence Analysis in Alexandria, VA.
112. Blum, Sustainable Development p 21.
113. Stephen Blank, `Central Asia’ s international relations in the Asian context’ , Issues & Studies, XXXII, No
5, May 1996, pp 96±99.
114. `Guam’ group formed to promote common interests’ Prism, III, No 21, 19 December 1997 via e-mail
transmission, Ìnterstate Relations’ , CDP P, XL IX, No 41, 12 November 1997, pp 16±17, and The
M onitor, 11 December 1997 for signs of an Azeri-Turkmen rapprochement on disputed issues.
115. See the works by Stephen Blank above for examples of how Russia has sought to pressure and coerce
these states.
116. Sarah J. Lloyd, `Pipelines to prosperity?’ The International Spectator, XXXII , No 1, January-March
1997, pp 53±63.
183
STEPHEN BL ANK
117. Jill Crystal, Oil and Politics in the Gulf: Rulers and M erchants in Kuwait and Qatar, Cambridge:
Cambridge University Press, 1990; Giacomo Luciani, `The oil rent, the ® scal crisis of the state and
democratization’ , Ghassan Salame, ed., Democracy W ithout Democrates: The Renewal of Politics in the
M uslim W orld, London: I.B. Tauris Publishers, 1994, pp 130±155; Jacques Delacroix, `The distributive
state in the world system’ , Studies in Comparative International Development, XV, No 3, Fall 1980, pp
3±21; Hazem Bebalwi and Giacomo Luciani, eds, The Rentier State, Volume II, London: Croom Helm,
1990; H. Mahdawy, `The problems and patterns of economic development in rentier states: the case of
Iran’ , M.A . Cook, ed., Studies in the Economic History of the M iddle East, London: Oxford University
Press, 1970, pp 428±467.
118. Rumer, pp 32±34.
119. Reznikova, pp 83±84.
120. Elaine Holoboff, `Russia’ s strategic pipelines’ , Brassey’ s Defence Yearbook, 1997, London: Brassey’ s, pp
119±120.
121. Ibid.
122. Blank, Energy, Economics, and Security in Central Asia, passim.

123. Reuters, 17 December 1997, The M onitor and Radio Free Europe/Radio Liberty Daily Digest, 19
December 1997.
124. Hopmann, Shen® eld, and Arel, passim, and Primakov’ s interview in Moscow, Obshchaya Gazeta, in
Russian, 14±20 August 1997, FBIS SOV, 97±227, 18 August 1997.
125. Moscow, Radiostantsiya Ekho M oskvy, in Russian, 23 November 1997, FBIS SOV, 97±327, 23 November
1997.
126. Sebastian Allison, `Gazprom threats seen as empty’ M oscow Times, 16 June 1998.
127. The M onitor, 23 December 1997.
128. Blum, `Domestic Politics’ , pp 237±264; Peuch, pp 27±41.
129. ` ª Guamº group formed to promote common interests’ , Interstate Relations, pp 16±17.
130. Moscow, Nezavisimaya Gazeta, in Russian, 28 October 1997, FBIS SOV, 97±301, 29 October 1997;
Dianne L. Sm ith, `Central Asian militaries breaking away from the bear’ , Post-Soviet Prospects, V, No
7, December 1997.
131. Israelyan, pp 56±58, FBIS SOV, 97±227, 18 August 1997.
132. Ibid Rossiya-SNG: Nuzhdaetsia li v Korrektirovke Pozitsiia Zapada, Moscow: Sluzhba Vneshnei
Razvedki Rossiyskoi Federatsii, 1994. This brochure or monograph was edited by Russia’ s Foreign
Intelligence Service, led by Primakov at the time, and undoubtedly re¯ ects his views.
133. Hopmann, Shen® eld and Arel, p 13; Lee Hockstader, `Prospect of new USS R is new Russian electrion
issue’ , W ashington Post, 15 March 1996, p A25.
134. For an analysis of the independent energy policies of Russia’ s oil companies see Igor Khripunov and
Mary M. Matthews, `Russia’ s oil and gas interest group and its foreign policy agenda’ , Problems of
Post-Communism, XLIII, No 3, May-June 1996, pp 38±48.
135. Peuch, pp 27±41; Blum, `Domestic politics’ , pp 237±264, Baku, Sharg, in Russian, 27 August 1997,
FBIS SOV 97±239, 28 August 1997.
136. Pipeline News, No 78, 3±9 November 1997.
137. Paul D’ Anieri, Èconomic interdependence and Ukrainian security policy’ , paper presented to the
International Studies Association Convention, Chicago, IL, February 1995, pp 18±25.
138. Moscow, Interfax, in English, 17 October 1997; FBIS SOV, 97±290, 17 October 1997, RFE/RL Daily
Report, 20 October 1997.
139. Dm itry Trenin, `Russia’ s security interests and policies in the Caucasus region’ , Bruno Coppieters, ed.,
Contested Borders in the Caucasus, Brussels, VUB University Press, 1996, p 99.
140. Pavel Baev, Challenges and Options in the Caucasus and Central Asia, Carlisle Barracks, PA: Strategic
Studies Institute, US Army War College, 1997, pp 6±8, 15; Taras Kuzio, `Nato enlargement: the view
from the East’ , European Security, VI, 1, Spring, 1997 pp 57±58.
141. Moscow, Rossiyskaya Gazeta, in Russian, 20 September 1997, FBIS SOV, 97±266, 23 September 1997.
142. Rumer, pp 14±15; Blank, `Central Asia’ s international relations’ , pp 117±122, `The geopolitical sleuth:
the view through the fog’ , The Economist, 3 January 1998, p 19.
184

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Central Asian Survey

ISSN: 0263-4937 (Print) 1465-3354 (Online) Journal homepage: http://www.tandfonline.com/loi/ccas20

Every shark east of Suez: Great power interests,

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Every shark east of Suez: great

0263-4937/99/020149-36 Ó 1999 Central Asian Survey

paradigm of geoeconomics that dom inates m uch writing about international

Sherwood-Randall, Deputy Assistant Secretary of Defence for Russia, Ukraine

means to achieving this broader W esternization to the point where it is clear

The United States’ strategic engagem ent

According to Nimetz, while ensuring Central Europe’ s integration, Nato m ust

strategy m ay require m odifying Nato’ s current process of allied consultations,

Chechnya. 34 At the time,

By then, W ashington had already intervened in the regional energy economy by

States also offered to send peacekeepers to Nagorno -Karabakh as part of an

essential aspects of the United States’ strategy of `extraordinary power projec-

we engage in actions to `prepare the theatre’ , we are unlikely to deploy or

Current US energy policy

US rivalry with Russia

chief founda tional axiom .

Regional power politics

a pipeline to Turkey through Arm enia or other Transcaucasian states. Moreover,

The Nato connection

The energy producers

to attract Ukraine, Georgia, and Uzbekistan to a kind of bloc aiming to moderate,

Russia’ s policies regarding Transcaspian oil and gas

feature of Russian imperial projects to suppor t m inorities in these republics

Notes and References

Vol VIII, No 2, Spring 1997, p 29.

Occasional Papers, Newport RI, 1996, pp 7±8.

122. Blank, Energy, Economics, and Security in Central Asia, passim.

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