The quest for Caspian oil - at what human cost?

by Lindsay Barnes

International interest in the resource-rich former Soviet states in Central Asia and the Caucasus has surged over the past decade. Why has Caspian oil and gas suddenly become so significant to the global energy market? What are the consequences for the region's inhabitants as they struggle to forge fledgling democracies?

The Caspian basin is rich in oil and gas. The states bordering the basin are set to generate great wealth from the sales and transport of these reserves. Yet the Caspian reserves, though large, do not compare with the more abundant and cheaper Persian Gulf resources. Why is the world's most powerful nation, the US, investing so much time and financial resources in securing a stake in the Caucasus (Armenia, Azerbaijan and Georgia) and Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan)?

History of US Strategy

The US and some of its strongest supporters are dependent on an abundant supply of oil and gas. Yet the US is facing deteriorating relations with Saudi Arabia -its major supplier of oil - and Iran. Coupled with the rather volatile nature of the Middle East, it has become increasingly critical for the US to seek alternative supplies in order to reduce dependence on this source. To date, the injection of cash into the Caspian basin has been heavy.

It is estimated that the US and the West have invested over $50 billion in the area since it gained independence from the Soviet Union, according to a report by the Atlantic Council and the Central Asia - Caucasus Institute at Johns Hopkins University. Part of this has been the US funding of multi-billion-dollar pipeline projects in the south Caucasus. Yet the influx of foreign capital is proving to be a double-edged sword for the local people.

On the one hand, this investment means there is an external stake in promoting stability in strategic states. For instance, the US needs to maintain access to the region by encouraging a stable geopolitical order, allowing it to pursue its own direct economic interests. But the US stake is not this narrow.

New US plans

The US also has wider political and strategic interests that require stability in the region. Conflict in the territories would have an impact on other areas of key strategic importance to the US - the Middle East, Europe and northeast Asia. To this end the US has focused on establishing a military presence.

Plans in progress for US military bases in Kyrgyzstan and Uzbekistan will help the world power implement a longterm strategy. "By entering into Central Asia, the US has achieved two important goals simultaneously - it occupied a strategic location between Russia and China, and has military bases from which it can operate in Afghanistan and Iran" said Ucha Nanuashvili of War Resisters' International in Georgia. Afghanistan in particular presented a dilemma for the US.

Neighbouring three of the five Central Asian states, it was a hindrance to any attempt to stabilise the region. The country's civil war and the general impoverishment of its people threatened the security of its neighbours, including the South Caucasus. It was evident that support from some of Eurasia's major powers - China, Iran, Pakistan and Russia - for opposing sides in the Afghan conflict would decrease the likelihood of them accommodating each other's interests in the South Caucasus. The latter region, meanwhile, is also of critical interest.

The South Caucasus forms a transportation corridor for Caspian oil and gas, providing a link to the Black Sea and Mediterranean Sea, and hence to supply the West. The US thus has a keen interest in ensuring the stability of the South Caucasus, particularly Georgia and Azerbaijan. Both look set to benefit from US diplomatic efforts to boost security-but similar encouragement for Armenia and the Central Asian states is less certain.

Armenia is the only one out of the eight states in question to remain in partnership with Russia and it also maintains close economic ties with Iran. As a result of US relations with both Russia and Iran declining in recent years, Armenia remains likely to be excluded from Western economic investment unless it becomes willing to compromise. On the other hand, continued foreign investment is almost guaranteed for the development of the oil and gas reserves of Azerbaijan, Kazakhstan and Turkmenistan, but tougher security measures almost certainly will be required to satisfy the investors.

Fragile security

Security in the region is fragile, however, symptomatic in part of poor social, economic and political development in the former Soviet Union. The new states are facing growing political discontent internally, while cross-border skirmishes are increasingly frequent. Another threat to stability is the drugs trade, especially in opium, yet a greater threat to securing peaceful development comes from a different source.

Ironically, while the countries bordering the Caspian Sea basin face the potential to generate great wealth from the sales and transport of their natural resources, there is considerable fear within these nations for their future. Of utmost importance is the question of who gets to control the resources and how will they be used?

Groups including Caspian Revenue Watch and the Central Eurasia Project are determined that the funds generated from these natural resources should benefit the inhabitants. By pushing for transparency in the use of revenues and accountability on the part of extraction companies and governments, they aim to ensure the promotion of civil society and the development of the region. They advocate the use of funds for poverty reduction, education and public health. Yet investment in education, health and similar services is actually waning, according to a report by the Atlantic Council and Central Asia - Caucasus Institute at Johns Hopkins University. The governing regimes present a considerable dilemma.

On gaining independence from the Soviet Union and beginning a period of rapid transition, the states of Central Asia and the Caucasus briefly dealt in democratic rhetoric. However, their political leaders have since ruthlessly enforced their authority and exerted tight control over their respective populations, ironically mimicking the former Soviet-style government.

As such, many of the basic tenets of open society-such as rule of law, democracy, civic organisations and access to information-are under dire threat. Political leaders have tightened the reigns in response to growing political discontent, thus accentuating internal instability, according to a report in "Open Society News".

Civil society under pressure

The prognosis for civil development in the near future is bleak.

The ranks of those voicing political and social alternatives have been thinned out. On the whole, political opposition has either been driven out, rendered ineffectual or forced to compromise. The only significant threat to state authority in Central Asia comes from armed militants of the Islamic Movement of Uzbekistan, Open Society Institute editor Justin Burke says.

Conflict and violence have led to widespread displacement of people. According to Ucha Nanuashvili, "In the past decade, millions of people have suffered the tragic effects of ethnic, religious, nationalist, racially-inspired and gang-related warfare waged in the South Caucasus region." It is estimated that this area has over one million refugees and internally displaced persons.

The independent press in the region has faced increasingly repressive measures in recent years. In consequence, a growing number of human rights activists and journalists have taken up the cudgel of issuing alerts of human rights abuses, using the internet to network and to source and disseminate information. "Their hope is to keep public discussion of democratic values on the agenda until the existing governments give way to a new political generation, one that is perhaps more willing to embrace pluralistic principles", said Justin Burke.

He reported that in an interview with Open Society News, human rights activist Ramazan Dyryldaev said human rights were not respected in Central Asia-there was no independent mass media and citizens could not realise their political rights, even though these rights were provided for in their constitutions.

The informational vacuum on human rights is a major problem, and has been since Soviet rule. People lack elementary knowledge of their rights, leaving them vulnerable to the tyranny of officials and their employers. Furthermore, "Ignorance of human rights hampers the development of democracy", said Vladislav Okishev, chairman of the Pavlodar Consultative Information Center. His organisation is to set up a library in Kazakhstan containing information on human rights and will hold discussions and publish legal information to further inform people. Yet it is reported that the governments in question have shown increasing concern over the work of these activists and are cracking down on their activities.

Since 11 September 2001, the authoritarian regimes of Central Asia have used the US-led ┬┤war on terrorism' as an excuse to increase control over their respective societies by strengthening the role of security forces and going after political dissidents in the name of fighting extremism.

Yevginiy Zhovtis, director of the Kazakhstan International Bureau for Human Rights and Rule of Law, described all five states as "presidential republics with excessive concentration of power in the hands of the heads of state" under which the executive branch of power prevails over that of the judiciary and legislature.

"Western criticism of the authoritarian regimes of Central Asian countries has been somewhat silenced, especially after a number of the countries of the region have allowed the usage of their territory or airspace by the anti-terrorist coalition."

While many hoped that international interest would-and might still-increase the pressure for stability, and with it movement towards democracy, if anything the acts of repression have worsened in recent years. As the world energy market prepares to gain from the rich resources of the Caspian, what prospect there is for peace and development in the region remains unclear.


EurasiaNet & Open Society News
Strategic Assessment of Central Eurasia, The Atlantic Council of the United States Central Asia Caucasus Institute, Johns Hopkins University, by C. Fairbanks et al, 2001
UN Office for the Coordination of Humanitarian Affairs' Integrated Regional Information Network (IRIN)


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