the caspian region at a crossroad challenges of a new...

The

Casp

ian

Regi

on

at a

Cro

ssro

ad

Cha

lleng

es o

f a N

ew F

ront

ier

of E

nerg

y an

d D

evel

opm

ent

Edite

d by

Hoo

shan

g Am

irahm

adi

St. M

artin

's Pr

ess

New

Yor

k

Part

IV

: Sec

urity

and

Geo

-Pol

itics

11.

The

Geo

-Pol

itics

of t

he C

aspi

an R

egio

n

175

Piro

uz M

ojta

hed-

Zade

h

12.

Am

eric

a's

Dri

ve to

the

Cas

pian

18

7 Br

adfo

rd R

. McG

uinn

and

Moh

iadd

in M

esba

hi

13.

The

Mili

tary

Bal

ance

in th

e C

aspi

an R

egio

n

213

Ali M

asso

ud A

nsar

i

Part

V: L

egal

Per

spec

tives

14.

Evo

lutio

n of

Iran

ian

Sove

reig

nty

in th

e C

aspi

an S

ea

Guive

Mirf

ende

resk

i

15.

Lega

l Sta

tus

of th

e C

aspi

an S

ea

Scot

t Hor

ton

and

Natik

Mam

edov

16.

Iran

's V

iew

on

the

Leg

al R

egim

e of

the

Cas

pian

Sea

M

oham

med

Ali

Mov

ahed

Not

es o

n C

ontr

ibut

ors

Inde

x

227

263

273

287

295

vi •

Con

tent

s

9.T

rans

port

atio

n of

Cas

pian

Oil

Thr

ough

Rus

sia

Felix

N. K

oval

ev

10.

Pipe

line

Polit

ics

in th

e C

aspi

an R

egio

n H

oosh

ane A

mira

hmad

i

155

163

[— P

refa

ce a

nd A

ckno

wled

gmen

ts

For c

entu

ries,

the

Cas

pian

regi

on w

as th

e st

rate

gic

cros

sroa

ds fo

r the

di

ffer

ent e

mpi

res

of E

urop

e, A

sia,

and

Afr

ica.

Con

trol

of v

ital l

and

and

wat

er r

oute

s, p

artic

ular

ly f

or tr

ade

in s

pice

s, a

ssur

ed g

reat

po

wer

and

wea

lth; i

t als

o in

vite

d riv

alry

. As

tech

nolo

gica

l cha

nges

dim

in-

ishe

d th

e si

gnif

ican

ce o

f th

ese

rout

es, t

he c

ontr

ol o

f th

e re

gion

's ri

ch

hydr

ocar

bon

reso

urce

s ha

s be

com

e th

e fo

cus

of in

tern

atio

nal b

usin

ess

and

polit

ical

pla

yers

. Dur

ing

the

cold

war

, the

are

a re

mai

ned

in th

e cr

ossf

ire

of d

iffe

rent

inte

rest

s, a

s a

faul

t lin

e of

Eas

t-W

est s

trug

gle.

T

he d

emis

e of

the

Sov

iet U

nion

sin

ce th

e la

te 1

980s

onc

e ag

ain

chan

ged

the

regi

onal

dyn

amic

s. A

pow

er v

acuu

m w

as c

reat

ed, w

ith li

nes

of c

ontr

ol le

ss c

erta

in. N

otw

ithst

andi

ng le

sser

heg

emon

ic c

ontr

ol, t

here

ha

s be

en n

o co

rres

pond

ing

abat

emen

t of i

nter

est.

App

roxi

mat

ely

70 p

er-

cent

of t

he w

orld

's kn

own

oil r

eser

ves

and

40 p

erce

nt o

f its

gas

rese

rves

ar

e fo

und

in a

sph

ere

stre

tchi

ng f

rom

sou

ther

n R

ussi

a in

the

nort

h to

Sa

udi A

rabi

a in

the

sout

h. W

ith a

gro

win

g de

pend

ence

on

this

reso

urce

, th

e re

gion

has

onc

e ag

ain

beco

me

a fr

ontie

r. Th

ose

who

sen

se a

loss

of c

on-

trol

in th

e ar

ea, t

hose

who

wan

t to

prot

ect n

ewly

acq

uire

d in

tere

st a

nd

pow

er, a

nd th

ose

who

wan

t to

gain

a fo

otho

ld a

nd e

xpan

d th

eir i

nter

est

in th

e ar

ea jo

stle

for p

ositi

on a

nd in

flue

nce.

It

is, h

owev

er, a

fro

ntie

r va

stly

dif

fere

nt f

rom

that

of

the

past

. At a

tim

e w

hen

the

hege

mon

ic p

ower

s an

d in

fluen

ces

of th

e U

nite

d St

ates

and

R

ussi

a ap

pear

to b

e di

min

ishi

ng, o

ther

pow

ers

are

emer

ging

. The

are

a is

in

vitin

g ne

w e

xter

nal i

nter

est,

part

icul

arly

from

the

oil-

thir

sty

Eas

t Asi

a an

d W

este

rn o

il co

mpa

nies

. The

Sov

iet c

olla

pse

led

to th

e fo

rmat

ion

of

fifte

en in

depe

nden

t nat

ion-

stat

es in

the

regi

on. T

oday

, the

are

a is

hom

e to

so

me

300

mill

ion

peop

le, p

redo

min

antly

you

ng, m

any

of th

em p

oor,

and

it is

und

er s

ever

e en

viro

nmen

tal s

tress

. In

past

scr

ambl

es, t

he n

eeds

of c

it-iz

ens

and

the

qual

ity o

f the

ir e

nvir

onm

ent w

ere

ofte

n fo

rgot

ten.

Thi

s ca

n

Pre

face

and

Ack

now

ledg

men

ts •

ix

viii

• P

refa

ce a

nd A

ckno

wle

dgm

ents

no lo

nger

be

the

case

; the

asp

irat

ions

of t

he p

eopl

e an

d th

e de

man

d fo

r a

prec

autio

nary

app

roac

h to

the

envi

ronm

ent c

anno

t be

wis

hed

away

. The

new

fro

nti

er c

onta

ins

more

—an

d v

arie

d i

nte

r-re

rha

n el/

Fr

befo

re.

Old

and

new

pla

yers

are

eng

aged

in v

ario

us in

tere

st-s

eeki

ng g

ames

, un

der

diff

eren

t ban

ners

, with

dif

fere

nt a

gend

as. W

hat d

omin

ates

thes

e ga

mes

is g

ross

sho

rtsi

ghte

dnes

s, a

sta

te o

f aff

airs

that

can

exa

cerb

ate

the

brut

al c

ircl

e of

pow

er, m

oney

, and

cor

rupt

ion

evid

ent i

n th

e re

gion

, and

is

sur

e to

bec

ome

a re

cipe

for d

isas

ter.

For e

xam

ple,

the

Rus

sian

ene

rgy

sect

or s

eeks

to s

ecur

e pa

rtne

rshi

ps in

inve

stm

ents

mad

e in

the

oil a

nd g

as

indu

stry

of t

he n

ewly

inde

pend

ent s

tate

s; th

ese

stat

es th

emse

lves

see

k to

br

eak

stru

ctur

al d

epen

denc

e on

Rus

sia;

and

Wes

tern

oil,

gas

, and

eng

i-ne

erin

g co

mpa

nies

see

k m

ajor

con

trac

ts. A

mix

ture

of m

yth

and

real

ity,

arro

ganc

e an

d hu

mili

ty, d

espa

ir a

nd h

ope

char

acte

rize

s th

is e

ngag

emen

t. T

he p

eopl

e an

d en

viro

nmen

t do

not a

lway

s fi

gure

hig

h on

the

agen

das

of

the

play

ers,

and

refl

ectio

n on

the

long

-ter

m fu

ture

of t

he re

gion

is s

acri

-fi

ced

for i

mm

edia

te g

ains

. Pro

blem

s ar

e co

nfro

nted

on

the

basi

s of

exi

st-

ing

prac

tice

and

appr

oach

es, o

ften

from

afa

r and

in a

man

ner i

ll su

ited

to

the

new

and

rapi

dly

chan

ging

con

text

. Beh

avio

r is

ratio

naliz

ed in

term

s of

pas

t met

apho

rs a

nd rh

etor

ic, b

orn

unde

r dif

fere

nt c

ircu

mst

ance

s. Y

et,

the

forc

es o

f tra

nsfo

rmat

ion

have

cre

ated

a la

byri

nth

in th

e re

gion

, aff

ect-

ing

all a

ctor

s an

d se

ctor

s. B

oth

new

com

ers

and

thos

e w

ho h

ave

been

ar

ound

for

cen

turi

es h

ave

to a

djus

t to

the

new

rea

litie

s of

the

Cas

pian

fr

ontie

r; n

o on

e es

cape

s th

e im

pact

, whe

ther

goo

d or

bad

. T

he fo

rces

of t

rans

form

atio

n em

erge

from

larg

er p

roce

sses

of g

loba

l ch

ange

and

cir

cum

stan

ces

inte

rnal

to th

e re

gion

, as

wel

l as

from

spe

cifi

c co

untr

ies

and

sect

ors.

The

Uni

ted

Stat

es is

sub

ject

to a

two-

fold

adj

ust-

men

t: it

is a

rel

ativ

e ne

wco

mer

to th

e ar

ea a

nd a

sel

f-pr

omot

ed s

ole

supe

rpow

er, f

ollo

win

g th

e de

mis

e of

the

cold

war

bip

olar

wor

ld o

rder

. As

such

, it h

as to

lear

n "n

ew ru

les

of d

oing

" in

an

unfa

mili

ar a

rea,

at a

tim

e of

gro

win

g T

hird

Wor

ld r

eass

erti

on, r

isin

g st

reng

th o

f na

tion

s an

d re

gion

s, d

eclin

ing

Am

eric

an e

cono

mic

pow

er, a

nd d

imin

ishi

ng u

tility

of

offe

nsiv

e fo

rce.

' As

U.S

. Nat

iona

l Sec

urity

Adv

iser

Sam

uel R

. Ber

ger

rem

arke

d af

ter

an I

raqi

—U

.S. s

tand

off:

"W

e ha

ve a

str

ong

trad

ition

of

non-

enga

gem

ent a

nd s

elf-

relia

nce

in th

e w

orld

; yet

her

e w

e ar

e in

a p

osi-

tion

whe

re o

ther

cou

ntri

es lo

ok to

us

to le

ad. B

ut if

we

lead

with

too

heav

y a

hand

, the

y re

sent

it."

' At t

he ti

me

of th

e re

new

ed c

risi

s ov

er th

e Ir

aqi w

eapo

ns o

f mas

s de

stru

ctio

n ea

rly

in 1

989,

som

e se

nior

Am

eric

an

polit

icia

ns w

ere

dism

ayed

at K

ofi A

nnan

for "

calli

ng th

e sh

ots"

in d

efus

-in

g a

very

vol

atile

situ

atio

n.

Rus

sia

has

to c

ome

to te

rms

with

the

fact

that

thei

r old

repu

blic

s ar

e no

w in

depe

nden

t and

can

not b

e en

gage

d in

the

gam

es o

f the

pas

t. It

als

o ha

s to

man

age

sign

ific

ant c

onse

rvat

ive

and

retr

ogre

ssiv

e fo

rces

with

in it

s ca

dre,

see

king

a m

indl

ess

re-u

nifi

catio

n of

the

Sovi

et U

nion

. Ira

n is

face

d

by a

new

set

of n

eigh

bors

alo

ng it

s no

rther

n bo

rder

s. In

tern

ally

, it i

s ne

go-

tiatin

g a

diff

icul

t tra

nsiti

on fr

om a

n ea

rly p

an-I

slam

ic p

ositi

on to

an

even

-tu

al p

an-I

rani

sm. I

ts r

evol

utio

n is

stil

l an

inco

mpl

ete

proj

ect.

The

new

re

publ

ics

in th

e C

auca

sus

and

Cen

tral

Asi

a fa

ce a

dau

ntin

g ta

sk: a

tran

s-fo

rmat

ion

from

bei

ng m

erel

y a

supp

ly h

ouse

to M

osco

w to

gen

erat

ing

inte

rnal

dev

elop

men

t and

nat

ion

build

ing.

For

mos

t, in

depe

nden

ce c

ame

unex

pect

edly

. The

se c

ount

ries

are

exp

erie

ncin

g th

e pr

oble

ms

asso

ciat

ed

with

a "

collu

sion

" be

twee

n a

fixat

ion

with

ele

men

ts o

f the

old

sys

tem

and

a

desi

re to

find

a "

thir

d w

ay,"

inte

grat

ing

cert

ain

trad

ition

al v

alue

s w

ith

thos

e th

at a

re e

mer

ging

or s

ubdu

ed fo

r man

y ye

ars.

Mul

tinat

iona

ls a

re

tryi

ng to

do

busi

ness

in a

n en

viro

nmen

t in

whi

ch e

cono

mic

sen

se a

nd

polit

ical

real

ity a

re o

ften

at o

dds

and

inst

itutio

nal f

ram

ewor

ks a

re la

ckin

g or

evo

lvin

g. T

he fu

ndam

enta

l tra

nsfo

rmat

ion

from

cen

tral

ized

con

trol

to

inde

pend

ence

cre

ates

loop

hole

s an

d va

cuum

s, in

vitin

g co

rrup

tion

and

othe

r cri

min

al a

ctiv

ities

. T

he tr

ansf

orm

atio

n is

als

o m

anif

este

d in

uns

ettli

ng s

hift

s be

twee

n ex

clus

iona

ry a

nd in

clus

iona

ry p

oliti

cs, b

etw

een

the

sove

reig

nty

of n

atio

n-st

ates

and

regi

onal

ism

, bet

wee

n et

hnoc

entr

ism

and

plu

ralis

m, b

etw

een

inte

grat

ion

and

self

-cen

tere

d de

velo

pmen

t, be

twee

n se

ctor

al a

nd h

olis

tic

grow

th, b

etw

een

anth

ropo

cent

ric

and

envi

ronc

entr

ic d

evel

opm

ent,

and

betw

een

trad

ition

al a

nd e

mer

ging

val

ues.

His

tory

teac

hes

us th

at n

ew

fron

tier

s br

ing

sign

ific

ant d

ange

rs a

nd r

isks

for

all

invo

lved

. In

the

Cas

pian

regi

on, t

he m

ixtu

re o

f glo

bal c

hang

e an

d th

e ra

pid

open

ing

of a

ne

w fr

ontie

r hav

e cr

eate

d a

part

icul

arly

vol

atile

situ

atio

n as

val

ues

clas

h.

The

pre

senc

e of

rich

and

str

ateg

ical

ly s

igni

fica

nt h

ydro

carb

on re

sour

ces,

th

e gr

adua

l slip

ping

of S

ovie

t con

trol

ove

r its

"ne

ar-a

broa

d,"

and

the

ris-

ing

aspi

ratio

ns o

f citi

zens

are

all

amon

g co

ntri

butin

g fa

ctor

s to

this

situ

-at

ion.

The

cla

sh is

refl

ecte

d in

num

erou

s co

nflic

ts a

nd p

ostu

res,

mili

tary

an

d no

n-m

ilita

ry, w

hich

con

tinue

to b

eset

the

regi

on. H

ow th

ese

will

be

man

aged

repr

esen

ts a

new

cha

lleng

e fo

r the

Cas

pian

Reg

ion.

The

pot

en-

tial i

s ri

ch: o

vera

ll th

ere

coul

d be

a tr

ansf

orm

atio

n fr

om a

con

test

ed a

nd

expl

oite

d re

gion

to o

ne th

at is

sta

ble

and

sust

aina

ble,

from

bro

ken

and

stra

ined

rela

tions

hips

to m

ende

d an

d ne

w s

olid

arity

. Thu

s, fr

om a

regi

on

in th

e cr

ossf

ire,

the

Cas

pian

cou

ld e

mer

ge a

s a

bast

ion

of s

ecur

ity f

or

ener

gy a

nd d

evel

opm

ent i

n th

e tw

enty

-fir

st c

entu

ry. T

he k

ey c

halle

nge

is

how

to e

ngag

e an

d di

rect

the

vast

pot

entia

l tha

t can

be

rele

ased

if n

ew

thin

king

and

col

lect

ive

actio

n ca

n be

ado

pted

. T

his

book

atte

mpt

s to

bri

ng s

ome

orde

r to

the

curr

ent e

nvir

onm

ent o

f di

sord

er in

the

stud

y of

the

regi

on, i

ndic

atin

g co

mm

onal

ties

and

thre

ats,

as

wel

l as

sugg

estin

g w

ays

in w

hich

exi

stin

g an

d em

ergi

ng c

halle

nges

co

uld

be a

ddre

ssed

. It a

ims

at s

timul

atin

g th

inki

ng a

bout

the

chal

leng

es

of th

e re

gion

and

faci

litat

ing

the

cons

truc

tive

enga

gem

ent o

f all

play

ers.

Th

e ov

eral

l mes

sage

of t

he b

ook

is th

at th

ere

is a

nee

d fo

r ref

lect

ion

prio

r to

act

ion

in th

e ar

ea, r

efle

ctio

n ai

med

not

onl

y at

the

spec

ific

cont

ext,

but

x •

Pref

ace

and

Ack

now

ledg

men

ts

Pre

face

and

Ack

now

ledg

men

ts •

xi

also

at t

he n

atur

e of

the

rela

tions

hips

bet

wee

n th

e la

rger

wor

ld a

nd th

e fr

ontie

r are

a. T

o ac

hiev

e th

is, t

he b

ook

focu

ses

on fi

ve m

ajor

them

es: t

he

peop

le a

nd re

sour

ces,

dev

elop

men

t and

env

iron

men

t, pi

pelin

es a

nd o

ut-

lets

, sec

urity

and

geo

polit

ics,

and

lega

l reg

imes

of t

he C

aspi

an S

ea. T

hese

ar

e th

emes

that

are

cur

rent

ly e

ither

too

hast

ily e

xpla

ined

or t

heir

stu

dy is

fo

cuse

d on

ser

ving

par

ticul

ar p

laye

rs o

r int

eres

ts. A

rich

ana

lysi

s of

the

them

es e

mer

ges

in th

is b

ook

as th

e co

ntri

buto

rs, w

ho c

ome

from

dif

fer-

ent b

ackg

roun

ds, p

rese

nt d

iffe

rent

per

spec

tives

and

pro

spec

ts. T

here

has

be

en n

o at

tem

pt to

impo

se m

etho

dolo

gica

l, id

eolo

gica

l, or

sty

listic

uni

-fo

rmity

and

ort

hodo

xy o

n th

e co

ntri

buto

rs—

it is

bel

ieve

d th

at a

mor

e pr

ospe

rous

and

sec

ure

futu

re fo

r the

regi

on c

an o

nly

be a

chie

ved

thro

ugh

airi

ng a

nd re

spec

ting

the

cont

rast

ing

pers

pect

ives

of a

ll ac

tors

invo

lved

. T

he b

ook

does

, how

ever

, hav

e an

Iran

ian

focu

s. Ir

an h

as e

mer

ged

as a

m

ajor

reg

iona

l pla

yer

from

the

U.S

.-Ir

aq c

onfl

ict.

In th

e re

gion

, Ira

n is

al

so o

ne o

f the

"ol

dest

" an

d, a

rgua

bly,

the

mos

t pol

itica

lly s

tabl

e co

untr

y;

it po

sses

ses

cons

ider

able

res

ourc

es a

nd s

kills

and

enj

oys

a un

ique

geo

-gr

aphi

c po

sitio

n. D

espi

te th

e "d

ual c

onta

inm

ent"

pol

icy

of th

e U

nite

d St

ates

, Ira

n ha

s m

aint

aine

d a

stro

ng in

flue

nce

in th

e re

gion

. In

the

rece

nt

past

, it h

as a

lso

disp

laye

d pr

agm

atis

m in

regi

onal

pol

icy

and

man

ifes

ted

incr

easi

ng p

oliti

cal m

atur

ity. T

here

is li

ttle

doub

t tha

t Ira

n w

ill p

lay

a si

gnif

ican

t if n

ot p

ivot

al ro

le in

futu

re re

gion

al p

oliti

cs a

nd d

evel

opm

ent.

Thi

s, h

owev

er, d

oes

detr

act f

rom

a p

rim

ary

conc

lusi

on o

f all

the

cont

rib-

utor

s, n

amel

y th

at re

gion

al c

oope

ratio

n is

the

key

for f

utur

e st

abili

ty a

nd

pros

peri

ty in

the

Cas

pian

regi

on. I

ndee

d, Ir

an, a

nd p

artic

ular

ly th

e na

ture

of

its

rela

tions

with

the

Uni

ted

Stat

es, m

ay b

e co

nsid

ered

the

key

in

achi

evin

g su

ch c

oope

ratio

n. T

he Ir

ania

n fo

cus

of th

e bo

ok a

lso

follo

ws

from

the

edito

r's lo

ng-s

tand

ing

rela

tion

with

the

regi

on. B

orn

and

rais

ed

on th

e so

uthe

rn s

hore

of

the

Cas

pian

Sea

, he

grew

up

enjo

ying

the

nat-

ural

bea

uty

of th

e T

alis

h re

gion

in Ir

an's

Gila

n Pr

ovin

ce. H

is h

ope

is th

at

the

Cas

pian

's en

viro

nmen

t will

be

pres

erve

d fo

r the

enj

oym

ent o

f fut

ure

gene

ratio

ns.

Org

aniz

ed in

to f

ive

part

s, a

n in

trod

uctio

n, a

nd s

ixte

en c

hapt

ers,

the

book

pro

vide

s th

e m

ost u

p-to

-dat

e st

atem

ent c

urre

ntly

ava

ilabl

e ab

out

the

emer

ging

Cas

pian

fro

ntie

r. I

n th

e in

trod

ucti

on, t

he e

dito

r ti

es

toge

ther

the

man

y di

spar

ate

aspe

cts

of th

e ne

w fr

ontie

r in

an a

ttem

pt to

of

fer a

mor

e co

ncep

tual

and

hol

istic

und

erst

andi

ng o

f its

cha

lleng

es a

nd

pros

pect

s. In

the

firs

t cha

pter

of P

art I

, on

peop

le a

nd re

sour

ces,

Sch

oe-

berl

ein

and

Ilkh

amov

exp

lore

the

regi

on's

geog

raph

ical

and

pop

ulat

ion

dive

rsity

, as

wel

l as

the

orig

ins

of n

atio

nal i

dent

ities

and

thei

r rol

e in

cur

-re

nt p

oliti

cs. I

n th

e fo

llow

ing

chap

ter,

Skag

en a

naly

zes

the

exte

nt o

f the

C

aspi

an re

gion

's oi

l and

gas

rese

rves

and

the

pote

ntia

l of d

iffe

rent

cou

n-tr

ies

to b

ecom

e si

gnif

ican

t pro

duce

rs. F

ocus

ing

on I

ran,

Kha

jehp

our-

Kho

uei i

n th

e ne

xt c

hapt

er d

iscu

sses

the

sign

ific

ance

of n

on-p

etro

leum

reso

urce

s an

d ot

her f

orm

s of

eco

nom

ic a

ctiv

ity in

the

Cas

pian

Sea

are

a, a

n as

pect

oft

en ig

nore

d in

the

scra

mbl

e fo

r oil

and

gas.

Pa

rt I

I, o

n de

velo

pmen

t and

env

iron

men

t, be

gins

with

Mos

tash

ari's

co

ntri

butio

n, in

whi

ch s

he e

xplo

res

the

hist

ory

of th

e A

zerb

aija

n's

earl

y oi

l ind

ustr

y w

ith a

vie

w to

dra

w p

aral

lels

with

cur

rent

app

roac

hes.

The

au

thor

sug

gest

s th

at-u

nwis

e po

licie

s to

day

may

con

tain

in th

em th

e se

eds

of s

ocia

l and

pol

itica

l ins

tabi

lity,

sim

ilar t

o th

at w

hich

gri

pped

Bak

u at

th

e tu

rn o

f the

cen

tury

. In

his

chap

ter,

Sezn

ec w

arns

that

the

expo

rt fo

cus

of th

e re

gion

's hy

droc

arbo

n in

dust

ry w

ill n

ot n

eces

sari

ly m

ake

a si

gnif

i-ca

nt c

ontr

ibut

ion

to th

e w

elfa

re o

f the

Cau

casu

s an

d C

entr

al A

sia.

Oth

er,

mor

e su

stai

nabl

e de

velo

pmen

t opt

ions

war

rant

con

side

ratio

n, p

artic

ular

ly

usin

g oi

l and

gas

reso

urce

s to

fuel

the

regi

on's

indu

stri

aliz

atio

n an

d th

e de

velo

pmen

t of v

alue

-add

ed e

cono

mic

act

iviti

es. I

n th

eir r

espe

ctiv

e ch

ap-

ters

, Nam

azi a

nd G

ooda

rzy

disc

uss

the

vari

ed e

nvir

onm

enta

l cha

lleng

es

and

conc

omita

nt m

anag

emen

t ini

tiativ

es o

f the

Cas

pian

Sea

—th

e fo

cal

area

of i

nter

natio

nal h

ydro

carb

on in

tere

st.

The

cou

ntri

es o

f the

Cau

casu

s an

d C

entr

al A

sia

are

land

lock

ed. T

hey

mus

t the

refo

re r

ely

on e

xpen

sive

pip

elin

es th

roug

h ot

her

coun

trie

s to

tr

ansp

ort t

heir

oil

and

gas

to m

ariti

me

term

inal

s an

d fo

reig

n m

arke

ts.

Part

III,

on p

ipel

ines

and

out

lets

, ana

lyze

s th

e pr

os a

nd c

ons

of th

e va

ried

pipe

line

prop

osal

s de

vise

d to

faci

litat

e th

e ex

port

of o

il an

d ga

s fr

om th

e re

gion

. In

his

chap

ter,

Gho

rban

ana

lyze

s th

e ec

onom

ic re

ason

s w

hy Ir

an

prov

ides

the

best

pos

sibl

e op

tion

as th

e co

ndui

t for

oil

and

gas

from

the

Cau

casu

s an

d C

entr

al A

sia.

He

emph

asiz

es th

e si

gnif

ican

ce o

f sw

ap

arra

ngem

ents

with

Iran

as

an e

cono

mic

alte

rnat

ive

to m

ore

conv

entio

nal

pipe

line

prop

osal

s. K

oval

ev m

akes

the

case

for R

ussi

a as

bei

ng th

e m

ost

expe

dien

t rou

te fo

r exp

ortin

g C

aspi

an o

il an

d ga

s. In

the

last

cha

pter

of

this

par

t, A

mira

hmad

i giv

es a

n ov

ervi

ew o

f pip

elin

e po

litic

s an

d su

gges

ts

that

pro

s an

d co

ns o

f var

ious

line

s ca

ll fo

r a m

ultip

le p

ipel

ine

appr

oach

w

here

mos

t nat

ions

in th

e re

gion

will

ben

efit

from

the

econ

omic

and

st

rate

gic

adva

ntag

es th

at n

ew o

il an

d ga

s pi

pelin

es o

ffer

. In

the

firs

t cha

pter

of P

art I

V, o

n se

curi

ty a

nd g

eopo

litic

s, M

ojta

hed-

Zade

h pr

ovid

es a

gen

eral

per

spec

tive

on th

e ge

opol

itica

l fac

tors

that

hav

e be

en in

flue

ncin

g in

tern

atio

nal r

elat

ions

in th

e C

aspi

an re

gion

. In

part

ic-

ular

, he

disc

usse

s th

e ro

le o

f Ira

n in

any

regi

onal

alig

nmen

t as

a m

atte

r of

geo-

econ

omic

and

stra

tegi

c ne

cess

ity. I

n th

eir c

hapt

er, M

cGui

n an

d M

es-

bahi

exa

min

e th

e U

nite

d St

ates

' dri

ve fo

r inf

luen

ce in

the

regi

on a

nd th

e ro

le th

at T

urke

y an

d A

zerb

aija

n ha

ve p

laye

d in

that

eff

ort.

In th

e la

st

chap

ter o

f thi

s pa

rt, A

nsar

i exa

min

es th

e po

tent

ial f

or m

ilita

ry c

onfl

ict i

n th

e re

gion

, giv

en a

new

env

iron

men

t of e

cono

mic

and

reso

urce

com

peti-

tion

in th

e po

st-S

ovie

t era

. T

he c

halle

nges

of

coex

iste

nce

in a

com

petit

ive

envi

ronm

ent w

ill

dem

and

Cas

pian

cou

ntri

es to

ado

pt n

atio

nal l

aws

and

inte

rnat

iona

l reg

u-

xii •

Pre

face

and

Ack

now

ledg

men

ts

latio

ns to

gov

ern

thei

r re

latio

ns in

are

as s

uch

as o

verl

appi

ng r

esou

rce

expl

oita

tion,

fish

ing,

san

itatio

n, p

ollu

tion

cont

rol,

cont

raba

nd, i

mm

igra

-tio

n, ta

xatio

n, a

nd s

o on

. Thi

s st

rugg

le is

illu

stra

ted

in th

e se

arch

for

an

appr

opri

ate

lega

l reg

ime

for t

he C

aspi

an S

ea. I

n Pa

rt V

, on

lega

l per

spec

-tiv

es, c

hapt

ers

by M

irfe

nder

eski

, Hor

ton

and

Mam

edov

, and

Mov

ahed

pr

esen

t a b

road

fram

ewor

k fo

r dev

elop

ing

a le

gal r

egim

e fo

r the

Cas

pian

Se

a, a

s w

ell a

s th

e di

ffer

ent p

ersp

ectiv

es o

f A

zerb

aija

n an

d Ir

an o

n th

e is

sue.

Rus

sia'

s pe

rspe

ctiv

e is

cov

ered

in th

e ch

apte

r by

Kov

alev

. In

edi

ting

this

boo

k, th

e ed

itor h

as re

ceiv

ed e

ncou

rage

men

t and

sup

-po

rt fr

om m

any

of h

is s

tude

nts,

col

leag

ues,

and

frie

nds.

Am

ong

them

, Dr.

Gui

ve M

irfe

nder

eski

and

Ste

phen

Bos

hoff

des

erve

spe

cial

men

tion.

G

uive

's co

ntri

butio

n w

as e

spec

ially

impo

rtan

t as

he h

elpe

d re

wri

te a

nd

edit

the

chap

ters

, whi

le S

teph

en h

elpe

d in

the

rese

arch

and

dra

ftin

g of

the

intr

oduc

tion.

I am

als

o in

debt

ed to

Sia

mak

Nam

azi f

or h

elpi

ng w

ith th

e in

itial

set

up o

f th

e pr

ojec

t, pa

rtic

ular

ly in

com

mun

icat

ing

with

the

key

cont

ribut

ors

to th

e bo

ok. C

aspi

an A

ssoc

iate

s, In

c., a

stra

tegi

c re

sear

ch a

nd

cons

ultin

g fi

rm s

peci

aliz

ing

in th

e C

aspi

an re

gion

, pro

vide

d ad

min

istr

a-tiv

e su

ppor

t and

spo

nsor

ship

for t

he p

roje

ct. N

eedl

ess

to s

ay, t

he in

divi

d-ua

l aut

hors

and

the

edito

r rem

ain

acco

unta

ble

for a

ny s

hort

com

ings

and

er

rors

of t

he v

olum

e.

Hoo

shan

g A

mir

ahm

adi

New

Bru

nsw

ick,

Jan

uary

200

0

Not

es

1.Se

e H

oosh

ang

Am

irahm

adi,

"Glo

bal R

estru

ctur

ing,

the

Pers

ian

Gul

f W

ar, a

nd th

e U

.S. Q

uest

for W

orld

Lea

ders

hip,

" in

The U

nite

d St

ates

and

th

e Mid

dle E

ast:

A Se

arch

for N

ew P

ersp

ectiv

es

(Alb

any:

Sta

te U

nive

rsity

of

New

Yor

k Pr

ess,

1993

). 2.

See

Stev

en E

rlang

er, "

Am

eric

a, th

e Lo

ne W

olf w

ith a

Fol

low

ing,

" Ne

w Yo

rk T

imes

(M

arch

1, 1

998)

.

INTR

OD

UC

TIO

N

Chal

leng

es o

f the

Cas

pian

Reg

ion

Hoo

shan

g Am

irahm

adi

The p

urpo

se o

f thi

s in

trod

uctio

n is

to ti

e to

geth

er th

e is

sues

rais

ed

in th

e pr

esen

t vol

ume

and

to p

roje

ct th

ese

conc

erns

into

a p

ossi

ble

scen

ario

for

the

regi

on in

the

next

dec

ade.

Mos

t wri

tings

on

the

area

dea

l with

spe

cifi

c an

d is

olat

ed to

pics

, suc

h as

oil

and

gas

rese

rves

, pi

pelin

es, t

he C

aspi

an S

ea le

gal r

egim

e, a

nd U

.S.—

Iran

ian

rela

tions

. A

lthou

gh th

ese

issu

es a

re in

divi

dual

ly im

port

ant,

ther

e is

a n

eed

to a

na-

lyze

thei

r co

mm

on b

asis

. Onc

e th

is is

don

e, it

will

be

easi

er to

bet

ter

unde

rsta

nd th

e cu

rren

t cir

cum

stan

ces

and

spec

ulat

e ab

out t

he fu

ture

tra-

ject

orie

s of

the

regi

on.

It w

ill b

e ar

gued

that

the

Cas

pian

regi

on s

uffe

rs fr

om a

pri

miti

ve s

tate

of

res

earc

h an

d an

alys

is, a

fic

tiona

l per

spec

tive

of it

s pr

oble

ms

and

pros

pect

s, a

par

tial v

iew

of i

ts d

evel

opm

ent r

equi

rem

ents

, and

a d

omi-

nanc

e of

glo

bal i

nter

ests

ove

r loc

al n

eeds

. Sim

ilarly

trou

blin

g is

the

dom

-in

ance

of r

heto

ric, o

bliv

ious

ness

to h

isto

ry, t

he z

ero-

sum

min

dset

of m

ost

maj

or re

gion

al p

laye

rs, d

eep-

root

ed s

ourc

es o

f reg

iona

l ins

tabi

lity,

inse

n-si

blen

ess

to th

e ne

ed fo

r reg

iona

l coo

pera

tion,

and

the

entre

nche

d le

ader

-sh

ip o

f the

larg

ely

unde

moc

ratic

per

sona

litie

s.

For t

he C

aspi

an re

gion

to p

rosp

er, t

hese

pro

blem

s ha

ve to

be

addr

esse

d in

a s

ubst

antiv

e m

anne

r. T

his

will

requ

ire

deve

lopi

ng n

ew a

cade

mic

pro

-gr

ams,

edu

catio

nal f

acili

ties,

and

rese

arch

inst

itutio

ns. L

eade

rs m

ust r

eal-

ize

the

need

for d

evel

opm

ent o

f ope

n so

ciet

ies

and

publ

ic p

artic

ipat

ion.

B

ut th

e m

ost i

mpo

rtan

t cha

nge

has

to b

e in

itiat

ed a

t the

inte

rnat

iona

l po

licy

leve

l. Th

e C

aspi

an p

laye

rs m

ust c

ome

toge

ther

in c

omm

on p

urpo

se

and

for t

he g

ood

of th

e re

gion

's pe

ople

as

wel

l as

for t

heir

own

priv

ate

self-

ish

inte

rest

s. R

egio

nal c

oope

ratio

n m

ust b

e th

e gu

idin

g pr

inci

ple

for

thes

e pl

ayer

s to

reco

nstr

uct t

heir

rela

tions

on

a su

stai

nabl

e ba

sis.

Muc

h ca

n be

lear

ned

from

his

tory

and

exp

erie

nces

els

ewhe

re in

the

wor

ld.

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

3 2

• H

oosh

ang

Am

irah

mad

i

The

Cas

pian

Reg

ion

Def

ined

Not

with

stan

ding

the

incr

easi

ng re

cogn

ition

of i

ts s

igni

fica

nce,

ther

e is

no

clea

r def

initi

on o

f wha

t con

stitu

tes

the

Cas

pian

regi

on. D

oes

it co

mpr

ise

the

new

ly in

depe

nden

t sta

tes,

the

litto

ral s

tate

s, s

tate

s w

ithin

the

catc

h-m

ent a

rea

of th

e C

aspi

an S

ea, s

tate

s w

ith n

otew

orth

y hy

droc

arbo

n re

serv

es,

or s

tate

s th

at c

onta

in th

e pr

imar

y ne

twor

k of

hyd

roca

rbon

res

erve

s an

d ro

utes

to tr

ansp

ort o

il an

d ga

s? D

espi

te th

e ch

angi

ng c

onfi

gura

tion

of

empi

res

in th

e re

gion

, sig

nifi

cant

pop

ulat

ion

mov

emen

t ove

r tim

e, a

nd

the

focu

s of

act

ivity

aro

und

the

Cas

pian

Sea

, the

are

a is

not

vie

wed

as

an

inte

grat

ed w

hole

, but

rat

her

as a

col

lect

ion

of is

olat

ed g

eogr

aphi

c fr

ag-

men

ts. A

mor

e ro

bust

met

hodo

logi

cal a

ppro

ach

to d

efin

ing

the

regi

on is

of

pri

mar

y im

port

ance

for

pre

pari

ng a

reg

iona

l vis

ion

and

for

plan

ning

an

d po

licy

form

ulat

ion

in in

divi

dual

cou

ntri

es.

The

new

em

phas

is o

n th

e C

aspi

an S

ea a

rea

resu

lts f

rom

its

regi

onal

de

velo

pmen

t pot

entia

ls. F

ew c

ount

ries

, per

haps

with

the

exce

ptio

n of

Ir

an, c

an h

ope

to a

chie

ve m

uch

deve

lopm

ent w

ithou

t reg

iona

l coo

pera

-tio

n. M

ost a

re la

ndlo

cked

and

dep

end

on o

ther

cou

ntri

es to

tran

spor

t oil

and

gas

to w

orld

mar

kets

. Als

o, g

iven

thei

r lon

g hi

stor

y of

exp

loita

tion,

m

ost a

re d

evoi

d of

suf

fici

ent i

nfra

stru

ctur

e, m

oder

n te

chno

logy

, app

ro-

pria

te e

xper

tise,

con

sum

er p

rodu

cts,

and

dom

estic

mar

kets

. Suc

h a

stat

e of

aff

airs

doe

s no

t far

e w

ell w

ith a

wor

ld w

here

eco

nom

ic fo

rces

dom

inat

e in

tern

atio

nal r

elat

ions

. T

he a

ccum

ulat

ion

of c

apita

l, ag

glom

erat

ion

of p

rodu

ctio

n, a

nd e

xpan

-si

on o

f m

arke

ting

oppo

rtun

ities

is im

port

ant f

or a

uton

omy

of th

e ne

w

Cas

pian

eco

nom

ies.

In to

day'

s w

orld

, reg

ions

form

bec

ause

of t

he n

eed

for

tran

snat

iona

l syn

ergy

and

the

conc

omita

nt p

rosp

ect f

or d

evel

opm

ent.

Thi

s is

dif

fere

nt fr

om th

e pa

st, w

hen

regi

ons

wer

e de

fine

d on

the

basi

s of

re

ligio

n, c

ultu

re, c

olon

ial l

egac

y, a

nd li

ke c

rite

ria.

Whi

le e

cono

mic

inst

i-tu

tions

are

key

to re

gion

al d

evel

opm

ent,

non-

econ

omic

net

wor

ks a

re a

lso

need

ed fo

r man

agin

g ch

alle

nges

that

may

thre

aten

bal

ance

and

gro

wth

. T

he C

aspi

an re

gion

may

be

defi

ned

as c

ompr

isin

g Ir

an, A

fgha

nist

an,

Paki

stan

, Tur

key,

Geo

rgia

, par

t of

the

Rus

sian

Fed

erat

ion,

Arm

enia

, A

zerb

aija

n, T

urkm

enis

tan,

Uzb

ekis

tan,

Taj

ikis

tan,

Kyr

gyzs

tan,

and

K

azak

hsta

n. T

his

excl

udes

Indi

a an

d th

e A

rab

wor

ld. B

oth

polit

ical

and

ec

onom

ic f

acto

rs u

nder

lie th

is p

ropo

sed

grou

ping

of

coun

trie

s.' E

ven

thou

gh th

e C

aspi

an re

gion

is p

redo

min

antly

Mus

lim, I

slam

is n

ot v

iew

ed

as a

n im

port

ant p

oliti

cal f

orce

in th

e ar

ea. R

athe

r, th

e pr

opos

ed c

onst

el-

latio

n "c

onst

itute

(s)

an e

cono

mic

ally

via

ble

asse

mbl

age

of s

tate

s w

ith

com

mon

dev

elop

men

tal i

nter

ests

and

an

awar

enes

s of

thei

r pot

entia

l for

de

velo

pmen

t syn

ergy

."2

Thr

ee in

terr

elat

ed b

ases

for

the

deve

lopm

ent p

oten

tial o

f th

e re

gion

m

ay b

e id

entif

ied:

cap

ital,

tran

spor

tatio

n, a

nd e

cono

mic

rec

ipro

city

. G

row

ing

wor

ld d

eman

d fo

r hyd

roca

rbon

fuel

gua

rant

ees

capi

tal,

whi

ch

coul

d be

dis

trib

uted

am

ong

all c

ount

ries

to a

n ex

tent

bec

ause

of t

he la

nd-

lock

ed n

atur

e of

mos

t litt

oral

sta

tes

and

the

need

for p

ipel

ines

that

tra-

vers

e se

vera

l cou

ntri

es. R

ail n

etw

orks

cou

ld b

e ex

pand

edI

to l

ink

rnii

ntr

iec

in th

e re

gion

and

the

netw

ork

coul

d be

inte

grat

ed w

ith o

ther

tran

spor

t sys

-te

ms

to fa

cilit

ate

inte

ract

ion,

par

ticul

arly

via

mar

itim

e ac

cess

. As

mos

t ec

onom

ies

are

in a

sta

te o

f se

ctor

al im

bala

nce,

thou

gh n

ot in

the

sam

e w

ay, s

igni

fican

t pot

entia

l for

intra

-reg

iona

l tra

de e

xist

s. Ir

an, T

urke

y, R

us-

sia,

and

Chi

na fo

rm a

ring

of o

utle

ts to

the

rest

of t

he w

orld

for t

he re

gion

. T

he fu

nctio

ning

of t

he E

cono

mic

Coo

pera

tion

Org

aniz

atio

n (E

CO

), es

tabl

ishe

d to

fac

ilit

ate

econ

omic

aff

ilia

tion

and

coo

pera

tion

in th

e re

gion

, has

bee

n in

hibi

ted

beca

use

it ha

s no

t bee

n fo

rmed

with

a c

lear

re

gion

al fo

cus.

Tur

key,

for e

xam

ple,

has

tend

ed to

sub

ordi

nate

EC

O to

its

ambi

tion

to jo

in th

e E

urop

ean

Uni

on (

EU

) an

d to

its

rela

tions

hip

with

th

e U

nite

d St

ates

, Isr

ael,

and

Aze

rbai

jan.

On

the

othe

r han

d, th

e C

aspi

an

focu

s of

the

Org

aniz

atio

n fo

r Reg

iona

l Coo

pera

tion

of th

e C

aspi

an S

tate

s (O

RC

CS)

may

be

too

narr

ow to

repr

esen

t the

var

ied

inte

rdep

ende

ncie

s of

co

untr

ies

in th

e re

gion

. Th

ere

are

also

pol

itica

l obs

tacl

es to

regi

onal

coo

pera

tion.

For

exa

mpl

e,

Paki

stan

is n

ot o

n go

od te

rms

with

Indi

a, w

hile

Rus

sia

has

tenu

ous

rela

-tio

ns w

ith th

e co

untr

ies

in it

s "n

ear a

broa

d."

Sim

ilarl

y, th

e cu

rren

t pol

icy

of th

e U

nite

d St

ates

tow

ard

the

Cas

pian

reg

ion

and

its s

o-ca

lled

Eas

t-W

est d

irec

tiona

l str

ateg

y ex

clud

es Ir

an a

s a

play

er in

the

regi

on. I

nste

ad,

the

Uni

ted

Stat

es e

mph

asiz

es r

elat

ions

with

cer

tain

so-

calle

d pi

vota

l st

ates

, par

ticul

arly

Tur

key,

Aze

rbai

jan,

Geo

rgia

, and

Arm

enia

, whi

ch a

re

not e

cono

mic

ally

link

ed o

r pol

itica

lly a

llied

. The

U.S

. vie

w o

f the

regi

on

nega

tes

the

impo

rtan

t dev

elop

men

t int

erde

pend

enci

es th

at e

xist

bet

wee

n Ir

an a

nd it

s no

rthe

rn n

eigh

bors

. It i

s no

t als

o co

nduc

ive

to re

gion

al s

ta-

bilit

y, w

hich

is a

pre

requ

isite

for d

evel

opm

ent i

n th

e re

gion

. W

ithin

the

larg

er re

gion

, the

re a

re o

ther

def

initi

onal

issu

es. F

or e

xam

-pl

e, in

rel

atio

n to

the

envi

ronm

ent,

how

sho

uld

the

regi

on b

e de

fine

d?

Doe

s it

only

incl

ude

the

Cas

pian

Sea

are

a an

d th

e ri

vers

that

feed

it, o

r al

so th

e B

lack

Sea

, whi

ch w

ill h

ave

to c

arry

the

risk

of a

ctin

g as

con

duit

for C

aspi

an o

il? A

part

from

con

cern

s ab

out t

he a

dequ

acy

of p

rese

nt n

avi-

gatio

nal s

yste

ms,

the

Tur

kish

gov

ernm

ent,

in p

artic

ular

, is

conc

erne

d ab

out t

he e

nvir

onm

enta

l ris

k to

Ista

nbul

ow

ing

to in

crea

sed

tank

er tr

af-

fic

thro

ugh

the

stra

its o

f B

osph

orus

and

the

Dar

dane

lles.

With

this

in

min

d, h

ow s

houl

d th

e C

aspi

an S

ea le

gal r

egim

e be

reso

lved

? Fo

r exa

mpl

e,

a le

gal r

egim

e ba

sed

on th

e so

-cal

led

donu

t prin

cipl

e of

com

mon

reso

urce

us

e op

ens

the

oppo

rtun

ity fo

r joi

nt d

evel

opm

ent w

hile

a d

ivis

ion

of th

e se

a w

ill re

duce

suc

h po

ssib

ility

. Fro

m a

n en

viro

nmen

tal p

ersp

ectiv

e, th

e fi

rst o

ptio

n is

cer

tain

ly m

ore

desi

rabl

e, a

s it

incr

ease

s th

e ch

ance

for

a

regi

on-w

ide

man

agem

ent o

f res

ourc

e ex

trac

tion

and

pollu

tion

cont

rol.

Rus

sia'

s ro

le in

the

regi

on s

houl

d no

t be

unde

rest

imat

ed. I

t is

a lit

tora

l st

ate

cont

rolli

ng a

sig

nifi

cant

str

etch

of t

he C

aspi

an s

hore

. For

exa

mpl

e,

4 •

H

oosh

ang

Am

irahm

adi

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

5

it is

diff

icul

t to

envi

sage

how

the

Cas

pian

Sea

lega

l reg

ime

can

be re

solv

ed

with

out R

ussi

a's

coop

erat

ion,

not

to m

entio

n m

eetin

g its

cha

lleng

es o

f re

sour

ce m

anag

emen

t and

env

iron

men

tal

prn

tert

inn

Fur

ther

, Rus

sia

can not be ignored as an outlet for some oil and gas from the region, and as a

part

ner i

n in

tra-

regi

onal

oil

and

gas

swap

s, tr

ansp

ort,

and

trad

e. S

idel

in-

ing

Rus

sia

in r

egio

nal d

evel

opm

enta

l pro

gram

s co

uld

also

unl

eash

its

cons

ider

able

"sp

oilin

g" p

oten

tial,

illus

trat

ed b

y its

con

trol

of

pipe

line

acce

ss f

or C

entr

al A

sian

oil

and

gas.

It w

ill a

lso

stre

ngth

en th

e ha

nd o

f co

nser

vativ

e an

d re

trog

ress

ive

elem

ents

with

in R

ussi

a's

as y

et fr

agile

new

po

wer

str

uctu

re. T

he P

rim

itive

Sta

te o

f Cas

pian

Stu

dies

The

re is

a d

eart

h of

em

piri

cal s

tudy

of

the

Cas

pian

reg

ion,

a f

acto

r th

at

unde

rlie

s th

e si

gnif

ican

t mis

unde

rsta

ndin

g of

the

area

's re

sour

ces,

pro

b-le

ms,

and

nee

ds. F

or e

xam

ple,

des

pite

sev

ere

stre

ss o

n th

e C

aspi

an's

nat-

ural

env

iron

men

t, re

leva

nt in

form

atio

n in

the

fiel

d is

sca

rce.

As

a co

nseq

uenc

e, a

spec

ts o

f the

env

iron

men

tal r

egim

e ar

e po

orly

und

erst

ood.

In

rece

nt y

ears

, a s

igni

fican

t ris

e in

sea

leve

l has

cau

sed

loss

of l

ife, d

amag

e to

infr

astr

uctu

re, a

nd a

n in

crea

se in

pol

lutio

n. W

hat c

ause

s th

e ri

se in

C

aspi

an's

wat

er le

vel?

A g

ener

ally

acc

epta

ble

answ

er is

yet

to b

e fo

rmul

ated

. M

ore

empi

rica

l stu

dies

are

requ

ired

for t

heor

y bu

ildin

g an

d co

ncep

tu-

aliz

atio

n if

a d

eepe

r, m

ore

anal

ytic

al u

nder

stan

ding

of

the

regi

on a

s a

who

le a

nd in

term

s of

its

vari

ous

build

ing

bloc

ks is

to b

e ac

hiev

ed. T

he

initi

ativ

e of

Ira

n an

d R

ussi

a to

est

ablis

h a

cent

er f

or C

aspi

an s

tudi

es in

M

osco

w in

199

2 w

as a

imed

at a

ddre

ssin

g th

e ne

ed fo

r env

iron

men

tal d

ata

colle

ctio

n an

d an

alys

is. U

nfor

tuna

tely

, ina

dequ

ate

reso

urce

s an

d co

oper

a-tio

n ha

ve in

hibi

ted

this

ven

ture

. Fur

ther

mor

e, d

isag

reem

ent o

ver

the

lega

l reg

ime

of th

e C

aspi

an S

ea r

epre

sent

s a

maj

or im

pedi

men

t to

regi

onal

stu

dies

. For

exa

mpl

e, c

urre

nt d

ebat

e on

the

issu

e fo

cuse

s la

rgel

y on

pas

t leg

al a

rran

gem

ents

and

und

erst

andi

ngs

of u

se r

ight

s. W

hat

expl

icit

impl

icat

ions

the

lega

l reg

ime

of th

e C

aspi

an S

ea w

ould

hav

e fo

r th

e en

viro

nmen

t, fo

r exa

mpl

e, re

mai

ns c

opio

usly

dev

oid

of s

tudy

bec

ause

ce

rtai

n st

ates

do

not w

ish

to e

nter

tain

the

idea

. T

here

is n

o do

ubt t

hat t

he C

aspi

an b

asin

con

tain

s si

gnif

ican

t hyd

ro-

carb

on re

sour

ces.

How

ever

, est

imat

es o

f the

regi

on's

oil a

nd g

as re

serv

es

vary

, ow

ing

to a

lack

of r

elia

ble

info

rmat

ion.

In p

artic

ular

, ind

ivid

ual g

ov-

ernm

ents

, des

pera

te to

attr

act f

orei

gn in

vest

men

t and

to m

anag

e th

eir

own

frag

ility

in th

e fa

ce o

f hig

h ex

pect

atio

ns a

nd s

ocio

-eco

nom

ic h

ard-

ship

, ten

d to

pre

sent

a ro

sy p

ictu

re o

f the

ext

ent o

f res

ourc

es. A

naly

sts

and

cons

ulta

nts,

hop

ing

to s

ecur

e co

ntra

cts,

fuel

this

opt

imis

tic a

nd ro

man

tic

imag

e of

the

area

's ric

hes.

Wes

tern

com

pani

es s

tand

to b

enef

it fr

om e

xag-

gera

ting

the

exte

nt o

f the

regi

on's

rese

rves

, as

they

see

k fa

vora

ble

trad

ing

cond

ition

s w

ith o

il pr

oduc

ers

in a

nd o

utsi

de th

e re

gion

. The

U.S

. Gov

-

ernm

ent h

as a

lso

tend

ed to

igno

re th

e pr

oble

m b

ecau

se s

uch

exag

gera

-tio

ns s

erve

to ju

stif

y its

gro

win

g in

volv

emen

t in

the

regi

on. Y

et, i

n or

der

to s

ecur

e th

e so

cio-

econ

omic

and

pol

itica

l sta

bilit

y of

the

Cas

pian

fron

- tie

r, re

alis

tic ra

ther

than

fict

itiou

s es

timat

es o

f its

reso

urce

s ar

e re

quir

ed.

Mor

e si

gnif

ican

tly, w

e ar

e re

min

ded

that

judg

emen

t is

still

out

as

to

whe

ther

the

oil a

nd g

as re

serv

es o

f the

regi

on, a

nd p

artic

ular

ly th

e ex

port

of

suc

h re

sour

ces,

will

mak

e a

sign

ific

ant c

ontr

ibut

ion

to th

e w

elfa

re o

f th

e C

auca

sian

and

Cen

tral

Asi

an s

tate

s an

d th

eir

inha

bita

nts.

As

com

-pa

red

to th

e Pe

rsia

n G

ulf,

the

oil a

nd g

as e

xpor

t ind

ustr

y in

thes

e co

un-

trie

s fa

ce s

ever

e in

hibi

ting

fact

ors.

For

exa

mpl

e, g

as fr

om th

e C

aspi

an

regi

on m

ay n

ot b

e as

eas

y to

be

plac

ed o

n w

orld

mar

kets

as

man

y w

ould

lik

e to

bel

ieve

. No

doub

t, m

ore

thor

ough

stu

dies

are

requ

ired

abo

ut h

ow

best

to u

tiliz

e th

e C

aspi

an's

hydr

ocar

bon

reso

urce

s fo

r sus

tain

able

long

-te

rm s

ocio

-eco

nom

ic d

evel

opm

ent.

At a

mor

e ge

nera

l lev

el, t

he la

ck o

f em

piric

al s

tudi

es is

als

o ill

ustra

ted

in e

xter

nal a

ctor

s' p

erce

ptio

ns a

nd v

iew

s of

the

Cas

pian

Reg

ion

as a

w

hole

. It i

s un

fort

unat

e th

at th

e C

aspi

an R

egio

n, h

ome

to o

ne o

f th

e w

orld

's ol

dest

civ

iliza

tions

, and

an

ethn

ical

ly d

iver

se c

omm

unity

, con

tin-

ues

to b

e se

en in

the

Wes

t in

term

s of

cer

tain

ste

reot

ypes

, nam

ely

hydr

o-ca

rbon

wea

lth, g

eopo

litic

al im

port

ance

, int

erna

l con

flic

ts, a

nd I

slam

ic

fund

amen

talis

m. T

he c

onco

mita

nt d

iplo

mac

y an

d po

licie

s of

the

Wes

tern

pl

ayer

s to

war

d th

e ar

ea a

re A

nglo

-cen

tric

and

cha

uvin

istic

, ign

orin

g th

e ne

w re

ality

of a

wor

ld w

here

diff

eren

t wor

ldvi

ews

and

cultu

ral f

orce

s ar

e be

ing

reas

serte

d.

The

nee

d to

cha

nge

thes

e ou

tdat

ed s

tere

otyp

es f

orm

s th

e ba

sis

for

futu

re p

ositi

ve e

ngag

emen

t in

the

regi

on b

y th

e ou

tsid

e pl

ayer

s. F

or

exam

ple,

it s

houl

d be

reco

gniz

ed th

at Is

lam

and

Isla

mic

fund

amen

talis

m

are

not o

f sim

ilar s

igni

fica

nce

as c

ultu

ral a

nd p

oliti

cal f

orce

s th

roug

hout

th

e C

aspi

an r

egio

n. B

esid

es, a

s A

li M

azru

i rem

arks

: "ag

ains

t Wes

tern

cl

aim

s th

at Is

lam

ic 'f

unda

men

talis

m' f

eeds

terr

oris

m, o

ne p

ower

ful p

ara-

dox

of th

e tw

entie

th c

entu

ry is

oft

en o

verl

ooke

d. W

hile

Isla

m m

ay g

en-

erat

e m

ore

polit

ical

vio

lenc

e th

an W

este

rn c

ultu

re, W

este

rn c

ultu

re

gene

rate

s m

ore

stre

et c

rim

e th

an Is

lam

. . .

. Wes

tern

libe

ral d

emoc

racy

ha

s en

able

d so

ciet

ies

to e

njoy

ope

nnes

s, g

over

nmen

t acc

ount

abili

ty, p

op-

ular

par

ticip

atio

n, a

nd h

igh

econ

omic

pro

duct

ivity

, but

Wes

tern

plu

ral-

ism

has

als

o be

en a

bre

edin

g gr

ound

for r

acis

m, f

asci

sm, e

xplo

itatio

n, a

nd

geno

cide

. If h

isto

ry is

to e

nd in

arr

ival

at t

he u

ltim

ate

polit

ical

ord

er, i

t w

ill re

quir

e m

ore

than

the

Wes

t's m

essa

ge o

n ho

w to

max

imiz

e th

e be

st

in h

uman

nat

ure.

" 3

Stud

ents

in W

este

rn e

lem

enta

ry a

nd h

igh

scho

ols

lear

n ve

ry li

ttle

abou

t the

geo

grap

hy, c

ultu

res,

or h

isto

ry o

f the

Cas

pian

are

a. A

t the

sam

e tim

e, c

ente

rs o

f Cas

pian

stu

dies

at U

.S. u

nive

rsiti

es la

rgel

y fu

nctio

n as

is

olat

ed e

ncla

ves,

div

orce

d fr

om th

e in

tern

al d

ynam

ism

and

pol

icy

proc

esse

s of

the

Cas

pian

regi

on. N

o w

onde

r tha

t thi

s ed

ucat

iona

l sys

tem

6 •

H

oosh

ang

Am

irah

mad

i

shou

ld m

old

the

curr

ent m

isun

ders

tand

ing

of th

e ar

ea, p

artic

ular

ly in

the

Uni

ted

Stat

es.

The

Dom

inan

ce o

f Fic

tion

al P

rosp

ects

The

dis

mal

sta

te o

f Cas

pian

stu

dies

has

pro

duce

d m

ore

fict

ion

than

fact

ab

out t

he r

egio

n, n

egat

ivel

y ef

fect

ing

a m

ore

real

istic

ass

essm

ent o

f re

gion

al p

robl

ems

and

pros

pect

s. F

or e

xam

ple,

cur

rent

and

pro

ject

ed

med

ium

-ter

m p

rodu

ctio

n of

hyd

roca

rbon

reso

urce

s in

the

Cau

casu

s an

d C

entr

al A

sia

is r

elat

ivel

y m

eage

r. Y

et, g

over

nmen

ts k

een

on a

ttrac

ting

fore

ign

inve

stm

ent a

nd a

ssis

ted

by a

naly

sts

in s

earc

h of

sho

rt-t

erm

opp

or-

tuni

ties

ofte

n in

flat

e es

timat

es o

f res

ourc

es. T

his

coul

d le

ad to

an

unre

al-

istic

est

imat

ion

of th

e ex

tent

to w

hich

oil

expo

rts

can

boos

t dev

elop

men

t, gu

aran

tee

fore

ign

assi

stan

ce, a

nd im

prov

e th

e st

abili

ty o

f gov

ernm

ents

for

man

agin

g na

tiona

l aff

airs

. A

mor

e ba

lanc

ed v

iew

of r

esou

rces

and

con

stra

ints

to e

xtra

ctio

n w

ould

fa

cilit

ate

a de

eper

und

erst

andi

ng o

f the

inte

rdep

ende

nce

of c

ount

ries

, as

wel

l as

the

inte

rcon

nect

edne

ss o

f diff

eren

t fac

ets

of d

evel

opm

ent.

It w

ould

al

so te

mpe

r th

e re

gion

al h

egem

onic

asp

irat

ions

of

som

e co

untr

ies.

For

ex

ampl

e, in

flat

ion

of C

aspi

an r

esou

rces

and

the

cons

eque

nt in

crea

se in

U

.S. a

ctiv

ities

ther

e gi

ves

an o

utw

ard

expr

essi

on o

f inc

reas

ingl

y de

eper

A

mer

ican

invo

lvem

ent i

n th

e re

gion

. Yet

, it i

s no

t for

cer

tain

that

the

Uni

ted

Stat

es, g

iven

the

real

siz

e of

regi

onal

reso

urce

s, th

e lik

elih

ood

of

reac

tion

from

Mos

cow

, and

the

min

imal

inve

stm

ents

by

the

Wes

t thu

s fa

r in

the

area

, will

eng

age

in th

e lo

ng-t

erm

"he

gem

onic

man

agem

ent"

of

the

area

. Fi

ctio

nal n

otio

ns a

lso

unde

rlie

pop

ular

geo

polit

ical

and

dev

elop

men

-ta

l str

ateg

ies

for

the

regi

on, p

artic

ular

ly th

ose

orig

inat

ing

in th

e W

est.

The

so-

calle

d N

ew S

ilk R

oad

prop

osal

aim

ed a

t a w

este

rn-o

rien

ted

infr

a-st

ruct

ure

and

pipe

line

corr

idor

str

etch

ing

from

Cen

tral

Asi

a to

Tur

key

to

mar

kets

in th

e W

est i

s a

case

in p

oint

. It f

ails

to c

onsi

der t

he s

igni

fica

nce

of R

ussi

an a

nd I

rani

an p

oliti

cal i

nter

ests

in th

e re

gion

, as

wel

l as

thei

r ca

paci

ty to

ass

ist i

n its

dev

elop

men

t. Fu

rthe

r, it

is o

bliv

ious

to th

e un

der-

deve

lopm

ent o

f the

Cau

casu

s an

d C

entr

al A

sia

as a

mar

ket f

or W

este

rn

good

s an

d to

the

stru

ctur

al d

epen

denc

e of

thes

e co

untr

ies

on it

s no

rthe

rn

and

sout

hern

nei

ghbo

rs. I

gnor

ed a

re a

lso

the

seri

ous

geog

raph

ic a

nd

polit

ical

con

stra

ints

that

cou

ld im

pede

the

viab

ility

of a

Wes

tern

-ori

ente

d de

velo

pmen

t cor

rido

r and

the

limite

d ex

tent

of t

he E

urop

ean

mar

ket a

s an

out

let f

or C

aspi

an h

ydro

carb

on r

esou

rces

. Wor

se s

till,

it pr

obab

ly

unde

rest

imat

es th

e te

naci

ty o

f Cas

pian

cou

ntrie

s to

resi

st a

ny fo

rm o

f new

he

gem

onic

con

trol

and

inte

grat

ion.

Cha

lleng

es o

f the

Cas

pian

Reg

ion

• 7

Sim

plis

tic

Not

ions

of a

Com

plex

Rea

lity

Sim

plis

tic n

otio

ns o

f a c

ompl

ex a

nd in

terc

onne

cted

phe

nom

ena

such

as

the

Cas

pian

regi

on a

boun

d. V

iew

s of

bot

h ex

tern

al a

nd in

tern

al a

ctor

s su

f-fe

r fro

m th

is p

robl

em. O

ne re

ason

why

the

com

plex

ity is

ove

rloo

ked

is

that

com

mer

cial

inte

rest

s in

the

regi

on p

rece

ded

acad

emic

rese

arch

. Thi

s re

late

s to

the

rapi

d op

enin

g up

of t

he re

gion

, exp

ecta

tions

of i

ts re

sour

ce

rich

es, a

nd th

e w

ork

of c

onsu

ltant

s re

latin

g to

the

expl

orat

ion

of th

ese

reso

urce

s. G

ener

ally

, the

are

a is

vie

wed

as

a go

od p

iece

of r

eal e

stat

e—up

fo

r gr

abs

by th

e to

ughe

st a

nd h

ighe

st b

idde

r. V

ery

little

atte

ntio

n is

fo

cuse

d on

the

peop

le a

nd e

nvir

onm

ent o

f th

e pl

ace,

and

its

long

-ter

m

soci

o-ec

onom

ic a

nd p

oliti

cal s

tabi

lity.

Thi

s m

inds

et h

as le

d to

the

negl

ect

by th

e lit

tora

l sta

tes

to p

rope

rly

defi

ne th

eir n

atio

nal i

nter

ests

. Lea

ders

ha

ve b

een

conc

erne

d pr

imar

ily w

ith s

ecur

ing

the

best

dea

l in

rela

tion

to

the

selli

ng o

f hyd

roca

rbon

reso

urce

s.

As

an e

xam

ple,

ther

e is

an

alm

ost r

eckl

ess

inat

tent

ion

to th

e le

gal

regi

me

of th

e C

aspi

an S

ea, w

hile

at t

he s

ame

time,

inte

rnat

iona

l con

trac

t af

ter c

ontr

act i

s se

cure

d fo

r the

exp

lora

tion

and

extr

actio

n of

its

oil a

nd

gas.

The

issu

e of

del

imita

tion

of th

e C

aspi

an S

ea p

ersi

sts.

It i

mpe

des

impl

emen

tatio

n of

dev

elop

men

t pro

ject

s. T

he d

ebat

e on

the

Cas

pian

Sea

le

gal r

egim

e is

larg

ely

rest

rict

ed to

lega

l iss

ues,

inst

ead

of in

clud

ing

impo

rtan

t env

iron

men

tal a

nd d

evel

opm

ent i

mpe

rativ

es. L

egal

per

spec

-tiv

es c

an s

erve

as

a re

sour

ce fo

r det

erm

inin

g an

app

ropr

iate

lega

l reg

ime,

bu

t the

y ca

nnot

ser

ve a

s th

e po

int o

f dep

artu

re fo

r reg

iona

l dev

elop

men

t. T

he p

oliti

cal a

nd e

nvir

onm

enta

l con

text

has

cha

nged

sig

nifi

cant

ly s

ince

th

e st

andi

ng le

gal r

egim

e w

as in

trod

uced

. Not

onl

y ha

s th

e nu

mbe

r of

lit

tora

l sta

tes

incr

ease

d, b

ut s

o ha

s th

e ex

tent

of p

ress

ure

on th

e C

aspi

an

Sea

as a

nat

ural

reso

urce

, bot

h as

a c

onta

iner

of p

ollu

tant

s an

d a

sour

ce o

f de

velo

pmen

t and

live

lihoo

d.

Sim

plis

tic n

otio

ns o

f inh

eren

tly c

ompl

ex p

heno

men

a al

so p

reva

il in

re

latio

n to

per

cept

ions

of t

he in

tern

al d

ynam

ics

of c

ount

ries

. For

exa

m-

ple,

stu

dies

of p

ost-

revo

lutio

nary

Iran

hav

e fo

cuse

d on

the

Isla

mic

gov

-er

nmen

t, la

rgel

y ig

nori

ng th

e no

n-st

ate

sect

or. A

s a

cons

eque

nce,

the

unde

rsta

ndin

g of

Iran

has

bee

n la

rgel

y re

duce

d to

one

of t

he re

gim

e in

po

wer

.4 W

hat i

s ig

nore

d is

, for

exa

mpl

e, th

at w

ith th

e re

publ

ican

revo

lu-

tion,

Iran

ians

ent

ered

the

polit

ical

sce

ne e

n m

asse

as

part

icip

ants

. It w

as

they

who

ove

rthr

ew th

e Sh

ah; i

t was

they

who

foug

ht S

adda

m H

usse

in

whi

le h

is w

ar m

achi

ne w

as b

acke

d by

the

Wes

t and

the

wea

lthy

Pers

ian

Gul

f mon

arch

ies;

and

it w

as th

ey w

ho fo

rced

the

Isla

mic

sys

tem

to re

treat

fr

om m

any

rest

rictiv

e cu

ltura

l and

soc

ial p

olic

ies.

If th

ere

is a

nyth

ing

that

th

e Ir

ania

n cl

ergy

are

con

cern

ed w

ith, i

t is

not t

he U

nite

d St

ates

or I

srae

l, bu

t the

late

nt p

ower

of t

heir

ow

n pe

ople

.

8 •

Hoo

shan

g A

mir

ahm

adi

Exp

edie

ncy

vers

us H

isto

rica

l Per

spec

tive

Polic

y an

d ac

tion

in th

e re

gion

sho

w a

dea

rth

of h

isto

rica

lly b

ased

refl

ec-

tion.

Life

and

gov

erna

nce

in th

e C

aspi

an re

gion

has

bee

n in

tert

win

ed w

ith

the

expl

oita

tion

of o

il fo

r ce

ntur

ies.

A r

ichl

y te

xtur

ed h

isto

ry e

xist

s fo

r in

divi

dual

pla

ces

and

for t

he re

gion

as

a w

hole

. Thi

s re

pres

ents

an

impo

r-ta

nt s

ourc

e of

exp

erie

nce

and

know

ledg

e, o

ften

forg

otte

n in

the

rapi

dly

chan

ging

dev

elop

men

t con

text

of t

oday

, whe

re d

ecis

ions

hav

e to

be

mad

e fa

st, a

nd ti

me

spen

t on

refl

ectio

n is

not

vie

wed

as

an a

sset

. For

new

ly

inde

pend

ent s

tate

s, h

isto

ry is

oft

en a

ssoc

iate

d w

ith ti

mes

bes

t for

gotte

n,

as o

ppos

ed to

bei

ng v

iew

ed a

s a

sour

ce o

f gu

idan

ce a

nd in

sigh

t for

the

futu

re. T

here

is a

n ill

-inf

orm

ed b

elie

f tha

t the

eve

nts

of th

e pa

st w

ill n

ot

be re

peat

ed.

Perh

aps,

now

mor

e th

an e

ver,

ther

e is

a n

eed

for r

efle

ctio

n, a

nd a

vie

w

of h

isto

ry a

s a

mea

ns to

mak

e se

nse

of to

day'

s in

crea

sing

ly c

ompl

ex w

orld

. Th

e sc

ale

and

natu

re o

f the

Cas

pian

pro

blem

atic

is v

astly

diff

eren

t to

wha

t it

once

was

. The

re a

re m

any

mor

e ac

tors

invo

lved

, mor

e pe

ople

with

pr

essi

ng n

eeds

to b

e m

et, a

nd g

over

nmen

ts w

ith le

ss p

ower

to a

ct u

nila

t-er

ally

and

no

long

er a

ble

to re

ly o

n fo

rce

to a

chie

ve th

eir a

ims.

The

y ar

e al

so m

ore

depe

nden

t on

exte

rnal

sou

rces

of f

inan

ce. A

lthou

gh th

e pr

esen

t si

tuat

ion

is s

ubst

antia

lly m

ore

com

plex

than

bef

ore,

we

have

the

bene

fit

of h

isto

ry to

teac

h us

pre

cede

nt, t

o se

rve

as b

oth

a gu

idin

g lig

ht a

nd a

w

arni

ng.

Des

pite

the

curt

ailm

ent o

f sta

te p

ower

s to

day,

man

y fa

cets

of t

he ro

le

play

ed b

y th

e st

ate

in e

arlie

r tim

es a

re im

port

ant.

Firs

t, th

e st

ate'

s vi

ew

of a

val

uabl

e na

tura

l res

ourc

e as

a m

eans

to in

crea

se g

over

nmen

t rev

enue

ra

ther

than

one

that

for

ms

the

basi

s fo

r m

ore

sust

aina

ble

deve

lopm

ent

war

rant

s ca

refu

l con

side

ratio

n. S

econ

d, th

e st

ate'

s in

tens

e in

tern

al d

elay

s in

dec

isio

n m

akin

g im

pede

d th

e po

tent

ial c

onst

ruct

ive

deve

lopm

ent o

f th

e oi

l ind

ustr

y. R

ecen

t dev

elop

men

ts to

con

solid

ate

the

vari

ous

min

-is

trie

s en

gage

d in

ene

rgy

mat

ters

in th

e ne

wly

inde

pend

ent s

tate

s sh

ould

be

wel

com

ed in

this

reg

ard.

Als

o im

port

ant i

s th

e ki

nd o

f su

ppor

t the

st

ate

prov

ides

in r

esou

rces

ove

r w

hich

it h

as s

ubst

antia

l con

trol

, fro

m

infr

astr

uctu

re to

edu

catio

n, to

allo

w fo

r a m

ore

bene

fici

al e

xplo

itatio

n of

th

e re

sour

ce.

Fina

lly, t

he s

tate

has

a ro

le to

pla

y in

pro

tect

ing

the

inte

rest

s of

sm

alle

r in

dust

ries

so

that

opp

ortu

nitie

s as

soci

ated

with

hyd

roca

rbon

res

ourc

es

can

be s

prea

d m

ore

wid

ely.

The

sta

te s

houl

d no

t fav

or fo

reig

n ca

pita

l to

the

detr

imen

t of

loca

l dev

elop

men

t. In

stea

d, it

has

a r

espo

nsib

ility

to

esta

blis

h ru

les

or c

ondi

tions

for f

orei

gn in

vest

men

t, w

hich

furt

her s

up-

port

rath

er th

an in

hibi

t loc

al o

ppor

tuni

ties.

Les

s de

pend

ence

on

fore

ign

capi

tal a

nd a

few

mul

tinat

iona

ls w

ould

redu

ce d

epen

denc

y on

the

whi

ms

and

woe

s of

the

inte

rnat

iona

l mar

ket.

We

are

rem

inde

d of

the

harm

ful

cons

eque

nces

of o

ver-

depe

nden

ce b

y th

e in

cide

nts

of th

e B

aku

oil c

risis

in

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

9

the

earl

y tw

entie

th c

entu

ry, a

nd th

e co

ntro

l of

tran

spor

tatio

n ro

utes

by

firc

t the

Nob

le a

nd la

te'

the R

oths

child

com

pani

es.

His

tory

off

ers

impo

rtant

less

ons

for f

orei

gn c

ompa

nies

. Eve

n to

day,

the

tides

can

turn

une

xpec

tedl

y. C

ompa

nies

sho

uld

not c

ontr

ibut

e to

the

vul-

nera

bilit

y of

gov

ernm

ents

thro

ugh

expl

oita

tive

prac

tices

. Whe

n th

e tid

e tu

rns,

as

it di

d in

the

Bak

u cr

isis

, the

y ca

nnot

nec

essa

rily

rely

on

the

sup-

port

of

the

stat

e, a

nd m

ay lo

se e

very

thin

g. T

he in

stitu

tiona

l im

pass

e,

whi

ch w

as p

revi

ousl

y a

resu

lt of

a la

ck o

f coo

rdin

atio

n am

ong

gove

rnm

ent

depa

rtm

ents

, cou

ld n

ow c

once

ivab

ly o

ccur

bet

wee

n na

tion-

stat

es. T

he

impa

sse

lead

s to

pro

blem

s th

at c

urre

ntly

rela

te to

fund

amen

tal d

evel

op-

men

tal a

nd e

nvir

onm

enta

l iss

ues.

H

isto

ry a

lso

sugg

ests

the

wis

dom

of s

tron

ger s

tate

s be

arin

g re

spon

si-

bilit

y, w

hen

poss

ible

, to

secu

re a

gain

st th

e pe

rils

face

d by

wea

ker s

tate

s in

th

e re

gion

. Sta

tes

coul

d ga

in fr

om re

spec

ting

and

assi

stin

g ea

ch o

ther

in

deve

lopi

ng th

eir c

ompa

rativ

e ad

vant

ages

. In

a re

gion

whe

re th

e ad

van-

tage

s of

inte

rdep

ende

nce

are

prom

inen

t, fo

cusi

ng p

rim

arily

on

com

peti-

tive

adva

ntag

e is

inap

prop

riat

e. T

he a

ppro

ach

shou

ld b

e to

gau

ge th

e co

mpe

titi

ve a

dvan

tage

of

the

regi

on a

s a

who

le, a

nd w

ithi

n th

at, t

o ad

dres

s th

e co

mpa

rativ

e ad

vant

age

of it

s pa

rts.

The

inte

rdep

ende

nt d

es-

tinie

s of

the

Cas

pian

regi

on a

nd th

e oi

l ind

ustr

y m

eans

that

bot

h w

ill s

uf-

fer

if p

robl

ems

are

addr

esse

d un

ilat

eral

ly. R

egio

nal c

oope

rati

on is

ne

cess

ary

not o

nly

for e

nviro

nmen

tal m

anag

emen

t, bu

t als

o fo

r the

inst

al-

latio

n of

pip

elin

es, a

mon

g ot

her d

evel

opm

ent p

roje

cts.

T

here

are

, how

ever

, con

trad

ictio

ns in

the

exte

nt to

whi

ch h

isto

ry

dete

rmin

es p

rese

nt-d

ay a

ctio

n. T

he p

ast m

ay b

e fo

rgot

ten

in a

dher

ence

to

an e

xpor

t-dr

iven

dev

elop

men

t vie

w, b

ut it

has

bee

n re

vive

d in

sha

ping

th

e fo

reig

n po

licy

and

the

wor

ldvi

ews

of k

ey a

ctor

s in

the

regi

on. U

.S.

sanc

tions

aga

inst

Ira

n is

a c

ase

in p

oint

, bas

ed o

n hi

stor

ic e

vent

s an

d pr

emis

es th

at m

ay n

o lo

nger

be

rele

vant

. Cur

rent

pip

elin

e pr

efer

ence

s ha

ve te

nded

to ta

ke c

urre

nt U

.S.-I

ran

rela

tions

as

a gi

ven,

not

reco

gniz

-in

g th

at m

uch

can

chan

ge w

ithin

the

peri

od o

f co

nstr

uctio

n of

thes

e pi

pelin

es. P

erha

ps m

ore

time

shou

ld b

e sp

ent d

efin

ing

the

prec

ondi

tions

fo

r via

ble

pipe

line

rout

es ra

ther

than

spe

cula

ting

abou

t rou

tes

with

in a

n un

cert

ain

cont

ext.

The

futu

re d

evel

opm

ent o

f the

Cas

pian

regi

on is

too

gran

d a

topi

c to

be

view

ed th

roug

h th

e le

ns o

f the

cur

rent

U.S

. adm

inis

-tr

atio

n, th

e le

ader

s of

the

Isla

mic

Rep

ublic

, or o

f pre

sent

U.S

.-Ira

n re

la-

tions

. Lon

g af

ter t

he c

urre

nt p

oliti

cal p

laye

rs h

ave

left

the

scen

e, th

ere

still

will

be

two

grea

t reg

ions

that

mus

t one

day

men

d th

eir

fenc

es a

nd

mak

e th

e w

orld

a b

ette

r pla

ce fo

r pos

teri

ty.

The

Nee

d fo

r C

ompr

ehen

sive

Dev

elop

men

t

Dev

elop

men

t per

spec

tives

for t

he a

rea

are

part

ial r

athe

r tha

n co

mpr

ehen

- si

ve. T

he g

over

nmen

ts o

f the

new

ly in

depe

nden

t sta

tes

gene

rally

def

ine

10 •

Hoo

shan

g A

m i

rah

mad

i C

hall

enge

s of

the

Cas

pian

Reg

ion

• 11

natio

nal d

evel

opm

ent i

n te

rms

of th

e en

ergy

sec

tor,

and

part

icul

arly

one

as

pect

of

this

sec

tor:

the

expo

rt o

f hy

droc

arbo

n re

sour

ces.

Peo

ple,

the

envi

ronm

ent,

and

exac

tly h

ow h

ydro

carb

on w

ealth

will

rela

te to

dev

elop

-m

ent,

appe

ar to

fea

ture

rel

ativ

ely

low

on

thei

r ag

enda

s. T

he p

erso

nal

invo

lvem

ent b

y le

ader

s of

litto

ral s

tate

s in

ene

rgy

mat

ters

cle

arly

illu

s-tr

ates

this

poi

nt. I

n A

zerb

aija

n, T

urkm

enis

tan,

and

Kaz

akhs

tan,

lead

ers

pers

onal

ly n

egot

iate

, rat

ify

and

sign

con

tact

s w

ith fo

reig

n oi

l con

sort

ia.

Now

here

is th

e pa

rtia

l app

roac

h to

dev

elop

men

t in

the

Cas

pian

regi

on

bette

r ill

ustr

ated

than

in th

e re

spon

se to

the

envi

ronm

ent.

The

pot

entia

l fo

r en

viro

nmen

tal d

isas

ter

is o

ften

for

gotte

n, a

s co

nsul

tant

s, a

naly

sts,

le

ader

s, a

nd m

ulti

nati

onal

s fo

cus

on th

e hy

droc

arbo

n re

sour

ces

and

rela

ted

com

mer

cial

opp

ortu

nity

. Thi

s oc

curs

des

pite

the

envi

ronm

enta

l de

vast

atio

n of

the

near

by A

ral S

ea, r

epre

sent

ing

a st

ark

rem

inde

r of t

he

cons

eque

nces

of

such

inat

tent

ion.

Wor

se y

et, e

nvir

onm

enta

l iss

ues

are

allo

wed

to b

ecom

e a

part

of p

oliti

cal d

ispu

tes

or p

ersp

ectiv

es. A

con

fer-

ence

on

the

Cas

pian

env

iron

men

t in

Mar

ch 1

999

in V

ienn

a, s

pons

ored

by

NA

TO

, did

not

per

mit

Iran

's pa

rtic

ipat

ion.

T

he C

aspi

an S

ea is

an

apt m

etap

hor f

or th

e de

velo

pmen

t dyn

amic

s of

th

e re

gion

. The

phy

siog

raph

ic a

nd e

colo

gica

l cha

ract

eris

tics

of

the

Cas

pian

as

a na

tura

l sys

tem

are

cle

arly

at o

dds

with

pre

sent

pol

itica

l bo

unda

ries

and

inst

itutio

ns. I

ts p

rope

r wor

king

s an

d pr

otec

tion

dem

and

a m

anag

emen

t res

pons

e di

ffer

ent f

rom

the

indi

vidu

al re

spon

sibi

litie

s of

lit

tora

l sta

tes.

Yet

, no

lega

l and

inst

itutio

nal s

truc

ture

s th

at r

efle

ct th

e es

senc

e of

the

natu

ral s

yste

m e

xist

. Atte

mpt

s to

cre

ate

such

str

uctu

res

have

not

bee

n su

cces

sful

, lac

king

fun

ding

, coo

pera

tion,

and

rel

iabl

e in

form

atio

n. A

t the

sam

e tim

e, s

igni

fica

nt fu

ndin

g is

pou

red

into

hyd

ro-

carb

on e

xplo

ratio

n.

Inte

rnat

iona

l ins

titu

tion

s ar

e al

so il

l equ

ippe

d to

dea

l wit

h th

e C

aspi

an's

envi

ronm

enta

l pro

blem

s. T

his

is p

artly

due

to th

eir g

loba

l foc

us

and

proc

edur

al c

hara

cter

istic

s. T

hey

are

also

han

dica

pped

in h

elpi

ng th

e re

gion

fin

anci

ally

. Mor

eove

r, n

one

has

as y

et d

evel

oped

a r

egio

n-w

ide

coop

erat

ive

sche

me

for

envi

ronm

enta

l pro

tect

ion.

Fun

ding

and

pro

ce-

dura

l dif

ficu

ltie

s ha

ve a

lrea

dy n

eutr

aliz

ed o

ne m

ajor

init

iati

ve: t

he

Cas

pian

Sea

Env

iron

men

tal I

nitia

tive,

est

ablis

hed

in 1

993

by th

e U

nite

d N

atio

ns D

evel

opm

ent P

rogr

am, t

he U

nite

d N

atio

ns E

nvir

onm

enta

l Pro

-gr

am, a

nd th

e W

orld

Ban

k. T

he In

itiat

ive

was

to a

rres

t the

det

erio

ratin

g st

ate

of th

e C

aspi

an S

ea e

nvir

onm

ent,

but e

xper

ienc

ed fu

ndin

g pr

oble

ms

beca

use

not a

ll lit

tora

l sta

tes

wer

e m

embe

rs o

f the

Glo

bal E

nvir

onm

enta

l F

acil

ity,

the

fund

ing

agen

cy o

f th

e U

nite

d N

atio

ns E

nvir

onm

enta

l Pr

ogra

ms.

R

ampa

nt p

over

ty in

the

regi

on, a

ugm

ente

d by

a la

ck o

f ap

prop

riat

e la

ws

and

capa

city

for e

nfor

cem

ent,

mak

e th

e un

sust

aina

ble

expl

oita

tion

of

the

Cas

pian

's na

tura

l res

ourc

es a

ver

y re

al th

reat

to a

uni

que

ecol

ogy.

The

ri

se o

f the

Cas

pian

Sea

wat

er le

vel c

ontr

ibut

es n

ot o

nly

to e

cono

mic

loss

by d

amag

ing

agri

cultu

ral l

and,

infr

astr

uctu

re, a

nd b

uild

ings

, but

als

o in

crea

ses

pollu

tion

as s

ome

of th

e m

ost p

ollu

ted

land

s of

the

form

er S

ovie

t U

nion

are

in th

e im

med

iate

vic

inity

. Thu

s fa

r the

cau

ses

of th

e hi

gh p

ol-

lutio

n le

vels

of

the

Cas

pian

wat

ers

have

bee

n in

dust

rial

was

tes

and

untr

eate

d se

wer

age

pour

ed in

to th

e se

a. T

he e

xten

sive

dev

elop

men

t of

hydr

ocar

bon

reso

urce

s pr

omis

es g

reat

er p

robl

ems,

par

ticul

arly

as

prod

uc-

tion

mov

es in

crea

sing

ly o

ffsh

ore.

T

he e

cono

mic

impa

ct o

f en

viro

nmen

tal d

egra

datio

n sh

ould

not

be

unde

rest

imat

ed, p

artic

ular

ly b

ecau

se th

e C

aspi

an s

hore

s of

fer s

igni

fica

nt

non-

oil e

cono

mic

pot

entia

l. Fo

r exa

mpl

e, a

lthou

gh o

il ex

port

s co

nstit

ute

Iran

's m

ajor

sou

rce

of fo

reig

n ex

chan

ge, a

gric

ultu

re le

ads

all s

ecto

rs w

ith

a 25

per

cent

con

trib

utio

n to

GD

P, f

ollo

wed

by

oil w

ith 1

5.5

•per

cent

. Ir

an's

Cas

pian

regi

on, o

ccup

ying

onl

y 4

perc

ent o

f the

cou

ntry

's la

nd a

rea,

is

resp

onsi

ble

for 4

0 pe

rcen

t of t

he c

ount

ry's

agri

cultu

ral a

ctiv

ity. A

s th

e go

vern

men

t is

emph

asiz

ing

self-

suff

icie

ncy

in th

e fo

od s

ecto

r, th

e re

gion

's ro

le in

agr

icul

ture

cou

ld in

crea

se. T

hrou

ghou

t the

regi

on, i

n th

e Ir

ania

n an

d R

ussi

an s

ides

, in

part

icul

ar, m

ore

peop

le m

ake

thei

r liv

ing

by fi

shin

g an

d ca

viar

pro

duct

ion

than

by

any

othe

r mea

ns. M

oreo

ver,

the

Cas

pian

sh

ores

are

a m

ajor

attr

actio

n fo

r to

uris

ts f

rom

all

over

the

regi

on, a

n in

dust

ry th

at h

as g

row

n si

gnif

ican

tly s

ince

the

colla

pse

of th

e So

viet

U

nion

. G

iven

the

larg

e an

d ra

pidl

y gr

owin

g po

pula

tion

of th

e C

aspi

an re

gion

, it

can

ill a

ffor

d to

neg

lect

any

one

of i

ts re

sour

ces

offe

ring

pot

entia

l for

gr

owth

and

dev

elop

men

t. T

hus,

it is

not

cle

ar w

heth

er th

e hy

droc

arbo

n ri

ches

of

the

Cas

pian

, and

par

ticul

arly

an

emph

asis

on

its e

xpor

t, is

a

bles

sing

or a

cur

se to

the

regi

on's

new

ly in

depe

nden

t sta

tes.

It c

an a

lso

be

argu

ed th

at w

ithin

the

ener

gy s

ecto

r, th

ere

is a

n ov

erri

ding

em

phas

is o

n oi

l. T

his

pers

pect

ive

unde

rpla

ys th

e si

gnif

ican

ce o

f gas

as

an im

port

ant

fuel

in th

e tw

enty

-fir

st c

entu

ry a

nd is

obl

ivio

us to

the

fact

that

oil

fiel

ds

requ

ire

mas

sive

inve

stm

ents

to k

eep

them

goi

ng. F

or e

xam

ple,

Ira

n,

whi

ch h

olds

the

seco

nd la

rges

t gas

rese

rves

in th

e w

orld

, is

an im

porte

r of

gas.

To d

ate,

des

pite

the

avai

labi

lity

of th

e re

quire

d te

chno

logy

, it h

as n

ot

sign

ific

antly

exp

lore

d th

e co

nver

sion

of g

as to

liqu

id fu

el, a

str

ateg

y th

at

over

com

es th

e pr

oble

ms

ende

mic

to th

e ga

s in

dust

ry s

uch

as th

e ne

ed fo

r fi

xed

outle

ts a

nd lo

ng-t

erm

con

trac

ts.

Glo

bal I

nter

ests

and

Loc

al N

eeds

G

loba

l int

eres

ts in

rel

atio

n to

geo

-pol

itica

l str

ateg

y an

d th

e se

curi

ty o

f hy

droc

arbo

n re

sour

ces,

rath

er th

an lo

cal d

evel

opm

enta

l nee

ds, a

ppea

r to

driv

e en

gage

men

t in

the

Cas

pian

reg

ion.

The

con

flic

ts b

etw

een

thes

e fo

rces

repr

esen

t a m

ajor

impe

dim

ent t

o fu

ture

regi

onal

pro

sper

ity. A

t thi

s st

age,

Am

eric

an c

orpo

ratio

ns a

re b

y fa

r the

lead

pla

yers

in th

e bu

sine

ss

deve

lopm

ent d

ebat

e of

the

Cas

pian

reg

ion.

How

to g

et o

il ou

t of

the

12 •

Hoo

shan

g A

mir

ahm

adi

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

13

regi

on, i

n th

e qu

icke

st w

ay p

ossi

ble,

is th

eir

key

inte

rest

. Gov

ernm

ents

w

ill h

ave

to d

evis

e fr

amew

orks

to e

ngag

e th

ese

acto

rs w

hile

als

o pr

ovid

-in

g fo

r the

fulf

illm

ent o

f loc

al n

eeds

. T

he c

urre

nt e

mph

asis

on

the

extr

actio

n an

d ex

port

of C

aspi

an o

il an

d ga

s m

ay n

ot b

e in

the

long

-ter

m e

cono

mic

and

soc

ial i

nter

est o

f th

e lit

-to

ral s

tate

s. In

term

s of

pro

ven

rese

rves

of h

ydro

carb

on re

sour

ces,

the

Cau

-ca

sus

and

Cen

tral

Asi

a ar

e no

t as

sign

ific

ant a

s th

e Pe

rsia

n G

ulf o

r eve

n Ir

an a

lone

. Fur

ther

, the

Gul

f be

nefi

ts f

rom

the

low

est m

argi

nal c

ost o

f pr

oduc

tion

in th

e w

orld

for

pum

ping

cru

de, a

s w

ell a

s lo

w tr

ansi

t cos

ts

sinc

e th

e re

quir

ed p

ipel

ines

to e

xpor

t ter

min

als

are

shor

t. G

eogr

aphi

c an

d po

litic

al f

acto

rs im

pede

the

com

petit

iven

ess

of th

e C

aspi

an o

il an

d ga

s in

dust

ry.

The

requ

ired

leng

th o

f pip

elin

es a

nd d

eman

ding

phy

sica

l ter

rain

will

re

sult

in h

igh

capi

tal a

nd m

aint

enan

ce c

osts

. Fur

ther

, tra

nsit

fees

hav

e to

be

pai

d to

cou

ntri

es tr

aver

sed

by p

ipel

ines

as

wel

l as

man

agem

ent f

ees

at

mar

itim

e te

rmin

als.

-Add

ed to

thes

e co

sts

are

the

roya

lties

and

man

age-

men

t cos

ts to

be

paid

to fo

reig

n co

mpa

nies

resp

onsi

ble

for f

inan

cing

and

de

velo

ping

the

oilf

ield

s an

d pi

pelin

es. A

ll of

thes

e fa

ctor

s w

ill re

duce

the

shar

e of

the

Cas

pian

Sea

cou

ntri

es to

one

thir

d of

the

actu

al s

ale

pric

e of

th

eir c

rude

oil.

Und

er th

ese

circ

umst

ance

s, a

low

er c

rude

pri

ce c

an h

ave

detr

imen

tal e

ffec

ts o

n th

e pr

ospe

cts

of o

il an

d ga

s de

velo

pmen

t in

the

regi

on.

Sinc

e hy

droc

arbo

n re

sour

ces

are

not r

enew

able

, the

ir e

xpor

t cou

ld

com

pel g

over

nmen

ts to

div

ersi

fy r

apid

ly a

nd e

ngag

e in

not

-so-

viab

le

indu

stri

aliz

atio

n pr

ogra

ms.

An

infl

ux o

f fo

reig

n ex

chan

ge f

rom

oil

ex

port

s ca

n le

ad to

ove

r-va

lued

loca

l cur

renc

ies,

and

a p

refe

renc

e fo

r the

im

port

atio

n of

goo

ds a

nd la

bor,

ther

eby

inhi

bitin

g th

e de

velo

pmen

t of

loca

l ind

ustr

ies

and

empl

oym

ent—

a pr

oble

m a

lrea

dy fa

ced

by th

e Pe

rsia

n G

ulf

oil-

expo

rtin

g st

ates

. Thu

s, a

ltern

ativ

es s

houl

d be

sou

ght t

o de

vel-

opm

ent b

ased

osv

he e

xpor

t of

oil a

nd g

as. H

owev

er, g

iven

that

the

lit-

tora

l sta

tes

with

:dep

end

on th

eir o

il an

d ga

s re

serv

es fo

r som

e tim

e, a

ny

alte

rnat

ive

mus

t util

ize

and

bene

fit f

rom

thes

e na

tura

l res

ourc

es.

One

suc

h al

tern

ativ

e is

dev

elop

men

t of

ener

gy-i

nten

sive

indu

stri

es

such

as

the

prod

uctio

n of

pet

roch

emic

als,

alu

min

um, a

nd d

irec

t red

uc-

tion

stee

l, w

hich

cou

ld b

e ea

sily

tran

spor

ted

via

a va

riet

y of

rou

tes

to

Eur

ope

and

the

Far E

ast.

Alth

ough

thes

e in

dust

ries

als

o de

man

d co

nsid

-er

able

inve

stm

ent,

it ca

n be

arg

ued

that

retu

rns

on s

uch

inve

stm

ent c

ould

be

thre

e to

four

tim

es h

ighe

r tha

n re

venu

es fr

om th

e ex

port

of o

il an

d ga

s.

Such

a d

evel

opm

ent f

ocus

has

the

adde

d ad

vant

age

of in

crea

sing

the

rang

e of

sou

rces

for f

orei

gn fu

ndin

g, th

ereb

y cr

eatin

g a

mor

e fa

vora

ble

and

com

-pe

titiv

e in

vest

men

t env

iron

men

t. Su

bsta

ntia

l val

ue c

ould

be

adde

d to

a

non-

rene

wab

le re

sour

ce, m

ore

jobs

cou

ld b

e cr

eate

d, a

nd e

cono

mic

inde

-pe

nden

ce c

an in

crea

se a

s co

untr

ies

beco

me

less

relia

nt o

n th

e go

odw

ill o

f ad

join

ing

stat

es fo

r the

tran

sit o

f res

ourc

es. I

n th

e lo

ng te

rm, m

ore

dive

rse

econ

omie

s w

ould

faci

litat

e so

cial

and

pol

itica

l sta

bilit

y as

wel

l as

the

con-

tain

men

t of e

nvir

onm

enta

l deg

rada

tion.

Zero

-Su

m a

nd W

in-W

in S

trate

gies

Z

ero-

sum

, as

oppo

sed

to w

in-w

in, s

trat

egie

s ch

arac

teri

ze e

ngag

emen

t by

diff

eren

t act

ors

in th

e re

gion

. The

"gr

eat g

ame"

met

apho

r m

ay b

e to

o si

mpl

istic

a n

otio

n to

des

crib

e th

e dy

nam

ics

of th

e C

aspi

an re

gion

. Yet

el

emen

ts o

f it r

emai

n in

the

polic

ies

of th

e U

nite

d St

ates

and

Rus

sia,

pop

-ul

arly

vie

wed

as

the

mai

n pl

ayer

s in

the

regi

on. T

o a

less

er e

xten

t per

haps

, th

e in

volv

emen

t of

mul

ti-n

atio

nal o

il, a

nd n

on-o

il, c

ompa

nies

als

o ex

hibi

t ele

men

ts o

f a g

ame.

The

diff

eren

ce is

, whi

le th

e fo

rmer

act

ors

are

larg

ely

inte

rest

ed in

str

ateg

ic p

ositi

onin

g of

thei

r int

eres

ts, t

he la

tter a

re

focu

sed

on e

cono

mic

mat

ters

. T

he U

nite

d St

ates

, in

wan

ting

to in

tegr

ate

Rus

sia

into

Wes

tern

ori

-en

ted

mar

ket a

nd s

ecur

ity a

rran

gem

ents

, cle

arly

illu

stra

tes

a he

gem

onic

te

nden

cy. A

sim

ilar

tend

ency

mot

ivat

es th

e U

.S. p

olic

y to

con

tain

and

ex

clud

e Ir

ania

n in

tere

sts

in th

e C

aspi

an re

gion

. Sim

ilarl

y, R

ussi

a's

"nea

r ab

road

" po

licy

tow

ard

the

Cau

casu

s an

d C

entra

l Asi

a is

an

asse

rtion

of i

ts

past

heg

emon

ic c

ontr

ol. I

n co

ntra

st, I

ran

has

follo

wed

a fa

r mor

e pr

ag-

mat

ic s

trat

egy

tow

ard

its n

ew n

eigh

bors

to th

e no

rth,

foc

usin

g on

eco

-no

mic

issu

es a

nd u

nder

play

ing

ideo

logi

cal d

iffe

renc

es. T

he n

ext m

ajor

pl

ayer

, Tur

key,

has

yet

to s

trike

a b

alan

ce b

etw

een

its p

ragm

atic

inte

rest

s in

the

regi

on a

nd T

urki

sh n

atio

nalis

m.

With

in th

e lit

tora

l sta

tes

them

selv

es, i

t is

impo

rtan

t to

rem

embe

r tha

t th

e co

mpo

sitio

n of

the

popu

latio

n is

ext

rem

ely

varie

d. In

onl

y a

few

cou

n-tr

ies

are

mem

bers

of t

he "

titul

ar"

natio

nalit

y—th

e gr

oup

for w

hich

a p

ar-

ticul

ar te

rrito

ry w

as "

desi

gned

"—a

sign

ifica

nt m

ajor

ity. T

here

fore

, a m

ajor

ch

alle

nge

of th

e re

gion

is to

dev

ise

syst

ems

of in

clus

iona

ry g

over

nanc

e,

whi

ch p

rovi

de fo

r mea

ning

ful p

artic

ipat

ion

of m

inor

ities

. It i

s es

peci

ally

at

this

nat

iona

l lev

el th

at th

e co

untr

ies

in th

e re

gion

nee

d to

dev

ise

win

-w

in s

trat

egie

s an

d th

en c

oord

inat

e th

em w

ith s

imila

r app

roac

hes

to in

ter-

natio

nal r

elat

ions

.

Rhet

oric

ver

sus

Real

ity

Rhe

tori

c ab

ound

s in

rel

atio

ns b

etw

een

acto

rs e

ngag

ed in

the

Cas

pian

re

gion

. U.S

.-Ira

n re

latio

ns s

ince

the

1979

revo

lutio

n ill

ustr

ate

this

poi

nt.

The

Isla

mic

regi

me

has

view

ed th

e U

nite

d St

ates

as

"the

Gre

at S

atan

," th

e or

igin

of a

ll ev

il in

tent

ions

. The

Uni

ted

Stat

es h

as b

een

equa

lly g

uilty

of

infl

amm

ator

y rh

etor

ic th

at d

escr

ibes

Iran

as

a "r

ogue

" or

"ou

tlaw

" s

tate

, an

d "t

he w

orld

's le

adin

g sp

onso

r of

terr

oris

m."

Rhe

tori

c is

to a

larg

e ex

tent

a re

lic o

f the

regi

on's

past

, its

geo

-pol

itica

l dyn

amic

s an

d po

wer

re

latio

ns. I

t is

also

a p

rodu

ct o

f th

e de

term

inan

ts o

f po

litic

al a

nd e

co-

14 •

Hoo

shan

g A

mir

ahm

adi

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

15

nom

ic in

flue

nces

and

con

trol

pre

datin

g th

e co

llaps

e of

the

Sovi

et U

nion

. B

ut th

e po

st-S

ovie

t era

has

wit

ness

ed a

new

for

ria

of ih

mor

ic, o

ne

desi

gned

to d

emon

ize

and

incr

imin

ate

the

adve

rse

part

y.

Tod

ay, r

heto

ric

is s

usta

ined

bec

ause

pla

yers

hav

e no

t int

erna

lized

the

limits

of

wha

t the

y ca

n pr

actic

ally

ach

ieve

indi

vidu

ally

in th

e cu

rren

t w

orld

ord

er, a

s w

ell a

s th

e ex

tent

to w

hich

dev

elop

men

t of t

he re

gion

is

depe

nden

t on

regi

onal

coo

pera

tion.

For

exa

mpl

e, re

gion

al re

aliti

es h

ave

mad

e it

diff

icul

t for

U.S

. pol

icy

and

rhet

oric

to e

ffec

tivel

y in

flue

nce

thei

r ta

rget

s. I

n ea

rly

1998

, the

mis

mat

ch b

etw

een

rhet

oric

and

pra

ctic

al

actio

n w

as il

lust

rate

d by

the

Uni

ted

Stat

es c

once

ding

to li

mite

d sw

ap

arra

ngem

ents

for o

il an

d ga

s be

twee

n Ir

an a

nd C

entr

al A

sia.

The

gap

was

ag

ain

dem

onst

rate

d w

hen

the

Uni

ted

Stat

es r

elax

ed I

LSA

(se

cond

ary,

ex

trat

erri

tori

al s

anct

ions

aga

inst

for

eign

fir

ms)

in r

elat

ion

to I

ran'

s oi

l in

vest

men

t dea

l with

Tot

al, G

aspr

om, a

nd P

etro

nas

com

pani

es. T

he fa

iled

"dua

l con

tain

men

t" p

olic

y w

as a

noth

er in

stan

ce o

f m

ism

atch

bet

wee

n rh

etor

ic a

nd re

ality

. C

apita

lizin

g on

the

pote

ntia

l of t

he C

aspi

an fo

r ene

rgy

utili

zatio

n an

d de

velo

pmen

t in

the

twen

ty-f

irst

cen

tury

will

larg

ely

depe

nd o

n re

gion

al

coop

erat

ion.

In

this

env

iron

men

t, ho

stile

rhe

tori

c co

nfus

es is

sues

and

de

stro

ys th

e at

mos

pher

e of

mut

ual r

espe

ct a

nd u

nder

stan

ding

req

uire

d fo

r ach

ievi

ng c

oope

ratio

n. A

t the

sam

e tim

e, it

can

repr

esen

t a p

ositi

ve

forc

e. T

he d

eep-

seat

ed o

rigi

ns o

f rhe

tori

cal i

ssue

s sh

ould

not

be

unde

res-

timat

ed. R

heto

ric

can

serv

e to

pre

vent

soc

ieta

l cha

nge

and

chan

ging

rela

-tio

ns f

rom

eru

ptin

g in

the

face

of

thos

e w

ho p

rom

ote

chan

ge. A

ll th

e pl

ayer

s in

the

Cas

pian

Reg

ion

have

to c

onte

nd w

ith c

onse

rvat

ive

and

ret-

rogr

essi

ve fo

rces

with

in th

eir m

idst

, for

ces

that

are

sen

sitiv

e to

runa

way

ch

ange

.

Sour

ces o

f Reg

iona

l Ins

tabi

lity

Dif

fere

nt a

ctor

s w

ith d

iffe

rent

pri

oriti

es a

re p

layi

ng d

iffe

rent

role

s in

the

regi

on. T

he e

mph

asis

on

the

expo

rt o

f hyd

roca

rbon

reso

urce

s co

uld

be

attr

ibut

ed in

par

t to

the

cent

ral r

ole

that

mul

tinat

iona

l oil

com

pani

es,

anal

ysts

, fin

anci

ers,

and

con

sulta

nts

play

in th

e re

gion

. New

ly in

depe

n-de

nt s

tate

s ha

ve s

pare

d no

eff

ort t

o cr

eate

favo

rabl

e in

vest

men

t env

iron

-m

ents

for t

hese

act

ors,

thou

gh w

hat c

onst

itute

s su

ch a

n en

viro

nmen

t ove

r th

e lo

ng te

rm is

not

alw

ays

fully

und

erst

ood.

Thi

s is

not

to s

ay th

at th

ese

acto

rs s

houl

d no

t pla

y a

prom

inen

t rol

e. R

athe

r, th

ere

shou

ld b

e a

clea

r un

ders

tand

ing

of th

eir s

peci

fic ro

le a

s op

pose

d to

thos

e of

oth

ers.

As

long

as

oil

com

pani

es' i

nter

ests

dom

inat

e in

the

regi

on, m

ore

sust

aina

ble

deve

lopm

ent s

cena

rios

will

not

be

activ

ely

purs

ued.

T

his

lops

ided

em

phas

is o

n a

sing

le s

ecto

r cou

ld b

e at

trib

uted

als

o to

th

e le

gacy

of c

entr

aliz

ed p

lann

ing

and

lack

of p

oliti

cal d

evel

opm

ent i

n th

ese

coun

trie

s. M

oreo

ver,

as th

e co

llaps

e of

the

Sovi

et U

nion

was

not

inev

itabl

e, C

entr

al A

sia

and

the

Cau

casu

s w

ere

caug

ht o

ff g

uard

; the

y w

ere

cl

earl

y ne

t pre

pare

d to

dea

l .ri

ch u

nexp

ecte

d in

depe

nden

ce a

nd th

e ch

alle

nges

of

natio

n-bu

ildin

g. T

hus,

the

real

ities

of

stru

ctur

al in

terd

e-pe

nden

ce b

etw

een

Rus

sia

and

its "

near

abr

oad"

cut

thro

ugh

the

econ

omic

an

d po

litic

al d

omai

ns, a

s w

ell a

s th

roug

h th

e ar

eas

of s

ecur

ity a

nd s

ocia

l-iz

atio

n. I

n sh

ort,

the

lega

cy o

f th

e So

viet

era

per

vasi

vely

sur

vive

s an

d sh

ould

not

be

unde

rest

imat

ed.

The

pol

icie

s of

maj

or p

laye

rs in

the

regi

on, n

otab

ly R

ussi

a an

d th

e U

nite

d St

ates

, do

not a

lway

s fa

cilit

ate

a m

ore

ratio

nal u

nder

stan

ding

and

de

velo

pmen

t of t

he ro

les

and

invo

lvem

ent o

f dif

fere

nt a

ctor

s. F

or e

xam

-pl

e, M

osco

w v

iew

s its

"ne

ar a

broa

d" in

Cen

tral

Asi

a an

d th

e C

auca

sus

as

a pr

imar

y ar

ea o

f his

tori

cal i

nflu

ence

and

inte

rest

, dem

andi

ng a

fore

ign

polic

y di

stin

ct f

rom

that

of

Rus

sia'

s in

ters

tate

rel

atio

ns w

ith th

e re

st o

f th

e w

orld

. It i

s an

are

a w

here

Rus

sian

s w

ant t

o be

the

sole

gua

rant

or o

f se

curi

ty a

nd a

key

arb

iter o

f maj

or g

eopo

litic

al s

hift

s. Im

port

antly

, thi

s vi

ew is

bro

adly

sha

red

amon

g va

riou

s po

litic

al g

roup

s in

Rus

sia,

and

the

Rus

sian

gov

ernm

ent h

as in

var

ious

occ

asio

ns il

lust

rate

d its

abi

lity

and

com

mitm

ent t

o pr

otec

ting

its in

tere

sts

in th

e re

gion

. T

he d

ecla

red

inte

rest

of

the

Uni

ted

Sta

tes

in th

e ar

ea s

imil

arly

im

pede

s a

broa

der

unde

rsta

ndin

g an

d re

spec

t for

the

role

s of

dif

fere

nt

acto

rs. I

ts E

ast-

Wes

t ori

enta

tion,

heg

emon

ic te

nden

cy, a

nd p

reoc

cupa

-tio

n w

ith th

e "I

slam

ic th

reat

" ex

clud

e ke

y pl

ayer

s in

the

regi

on. T

he s

hare

d in

tere

sts

of th

e R

ussi

ans

and

Am

eric

ans

in th

e ar

ea, b

uilt

arou

nd n

ucle

ar

non-

prol

ifera

tion

and

cont

ainm

ent o

f Isl

am, i

s lik

ely

to c

ome

unde

r inc

reas

-in

g pr

essu

re fr

om o

ther

maj

or re

gion

al o

r ext

ra-r

egio

nal p

laye

rs a

s co

m-

petit

ion

for r

esou

rces

gro

ws.

Cle

arly

, a re

turn

to th

e "c

old

war

" m

enta

lity

coul

d fu

rthe

r im

pede

the

enga

gem

ent o

f al

l act

ors

in th

e de

velo

pmen

t pr

oces

s of

the

regi

on.

The

Cas

pian

regi

on is

sig

nifi

ed b

y a

cata

log

of s

ourc

es o

f ten

sion

and

se

curi

ty is

sues

. Exi

stin

g co

nflic

ts in

clud

e th

e K

arab

agh

War

bet

wee

n A

rmen

ia a

nd A

zerb

aija

n, th

e C

hech

en c

onfl

ict i

nvol

ving

Che

chny

a an

d R

ussi

a, th

e T

urko

-Kur

dish

hos

tility

, and

the

war

in A

fgha

nist

an. P

oten

-tia

l sou

rces

of c

onfl

ict a

lso

exis

t bet

wee

n A

zerb

aija

n an

d Ir

an, a

s w

ell a

s in

Lez

gin

and

Dag

esta

n. C

urre

nt c

onfli

cts,

som

e lo

ngst

andi

ng a

nd la

rgel

y un

reso

lved

, hav

e in

hibi

ted

impl

emen

tatio

n of

dev

elop

men

t pro

posa

ls,

drai

ned

reso

urce

s, a

nd e

xace

rbat

ed p

oor

rela

tions

am

ong

the

regi

onal

st

ates

and

nat

iona

litie

s. T

he d

evas

tatin

g im

pact

of t

he K

arab

agh

conf

lict

on th

e ec

onom

ies

of A

rmen

ia a

nd A

zerb

aija

n is

illu

stra

tive

of th

e ki

nd o

f ne

gativ

e co

nseq

uenc

es th

at s

uch

conf

licts

hav

e on

regi

onal

dev

elop

men

t. M

oreo

ver,

low

-int

ensi

ty w

arfa

re b

y va

riou

s et

hnic

and

sec

tari

an m

ili-

tias

repr

esen

ts a

thre

at to

the

long

-ter

m s

tabi

lity

of th

e C

aspi

an re

gion

. A

lthou

gh th

ese

are

likel

y to

ori

gina

te m

ore

from

intr

a-st

ate

inst

abili

ty

than

inte

r-st

ate

riva

lrie

s, th

e po

tent

ial f

or c

onfl

icts

to s

pill

over

pol

itica

l bo

unda

ries

and

draw

in e

xter

nal a

ctor

s ca

nnot

be

rule

d ou

t. M

ost o

f the

se

16

• H

oosh

ang

Am

irah

mad

i C

halle

nges

of

the

Cas

pian

Reg

ion

• 17

conf

licts

will

not

sim

ply

disa

ppea

r as

deep

-roo

ted

grie

vanc

es a

nd le

giti-

mat

e de

man

ds o

r cl

aim

s fu

el th

em. I

t is

thus

cri

tical

that

they

are

reco

g-ni

zed

and

draw

n in

to n

atio

n-bu

ildi

ng a

nd r

egio

nal c

oope

rati

on a

nd

deve

lopm

ent s

chem

es.

The

Need

for R

egio

nal C

oope

ratio

n R

egio

nal c

oope

ratio

n on

a ra

nge

of is

sues

is c

ruci

al to

ove

rcom

e th

e ch

al-

leng

es a

nd u

nloc

k th

e de

velo

pmen

t pot

entia

l of

the

Cas

pian

. Yet

mos

t ac

tors

and

cou

ntri

es e

mph

asiz

e se

lf-i

nter

est o

ver

com

mun

al in

tere

sts,

se

riou

sly

impe

ding

regi

onal

coo

pera

tion

and

deve

lopm

ent p

rosp

ects

. The

st

ates

in th

e C

auca

sus

and

Cen

tral A

sia

are

land

lock

ed, r

equi

ring

coop

era-

tion

with

thei

r nei

ghbo

rs fo

r pip

elin

e ou

tlets

for t

heir

hydr

ocar

bon

expo

rts.

The

sign

ifica

nce

of p

ipel

ines

in C

aspi

an o

il pr

oduc

tion

need

s no

em

phas

is,

as it

is n

ow a

glo

bal i

ssue

. Cas

pian

oil

prod

uctio

n ca

n re

ach

five

mill

ion

barr

els

per d

ay (m

bls/

d) b

y th

e ye

ar 2

010.

Dom

estic

con

sum

ptio

n co

uld

surp

ass

one

mbl

s/d

by th

e sa

me

year

. How

ever

, exi

stin

g pi

pelin

e ca

paci

ty

is s

ome

400,

000

bls/

d, o

nly

suff

icie

nt to

car

ry th

e so

-cal

led

earl

y oi

l. Se

lf-i

nter

est a

nd th

e ba

ttle

for p

ower

and

pol

itica

l inf

luen

ce a

re m

ost

evid

ent i

n th

e ri

valr

y fo

r the

rout

es o

f the

se p

ipel

ines

requ

ired

for t

rans

-po

rtin

g "b

ig o

il" f

rom

the

regi

on. P

ipel

ines

pro

vide

inve

stm

ent,

jobs

, ro

yalti

es, l

ong-

term

acc

ess

to e

nerg

y so

urce

s an

d, c

ritic

ally

, con

side

rabl

e po

litic

al a

nd e

cono

mic

leve

rage

. Rus

sia

hope

s to

mai

ntai

n its

trad

ition

al

cont

rol a

nd in

flue

nce

by a

dvoc

atin

g oi

l and

gas

exp

ort t

hrou

gh it

s ow

n te

rrito

ry. O

n th

e ot

her h

and,

the

new

ly in

depe

nden

t sta

tes

are

eage

r to

shed

th

eir d

epen

denc

e on

Rus

sia

and

cons

ider

oth

er o

ptio

ns th

roug

h G

eorg

ia,

Tur

key,

and

Iran

. The

inte

rnat

iona

l oil

com

pani

es a

re a

lso

eage

r to

find

th

e m

ost e

cono

mic

al e

xpor

t out

lets

to e

nsur

e pr

ofita

bilit

y of

thei

r ven

ture

s.

Yet

, ow

ing

to U

.S. s

anct

ions

aga

inst

Ira

n, th

e m

ost a

ttrac

tive

rout

e op

tions

thro

ugh

that

cou

ntry

are

not

ful

ly e

xplo

red,

ther

eby

depr

ivin

g th

e re

gion

al s

tate

s of

max

imiz

ing

thei

r oil

reve

nues

. Ira

n's

optio

n is

par

-tic

ular

ly a

ttrac

tive

in a

n en

viro

nmen

t of d

eclin

ing

oil p

rice

s. T

he e

xclu

-si

on o

f Ir

an h

as m

ade

othe

r al

tern

ativ

es s

o un

tena

ble

that

the

Uni

ted

Stat

es h

as b

een

forc

ed to

pro

pose

and

def

end

pipe

line

rout

es a

cros

s th

e C

aspi

an S

ea, a

n al

tern

ativ

e th

at is

env

iron

men

tally

haz

ardo

us g

iven

that

th

e se

a is

ear

thqu

ake

pron

e.

The

larg

e si

ze o

f som

e C

aspi

an c

ount

ries

and

the

wid

e di

stri

butio

n of

hy

droc

arbo

n re

sour

ces,

refi

neri

es, a

nd p

opul

atio

n de

man

d re

gion

al c

oop-

erat

ion

as a

pre

requ

isite

for d

evel

opm

ent.

For e

xam

ple,

ow

ing

to th

e di

s-ta

nce

betw

een

Kaz

akhs

tan'

s T

engi

z oi

l fie

ld in

the

wes

t and

its

mai

n co

nsum

ptio

n ce

nter

s in

the

nort

h an

d so

uthe

aste

rn p

arts

of t

he c

ount

ry,

crud

e ha

s be

en e

xpor

ted

to a

nd v

ia R

ussi

a, w

hile

Rus

sian

cru

de is

im

port

ed to

refi

neri

es in

the

east

. In

addi

tion,

und

er S

ovie

t rul

e th

e fu

nc-

tion

of th

e C

auca

sus

and

Cen

tral

Asi

a w

as s

een

only

in re

latio

n to

that

of

Mos

cow

: eac

h co

untry

was

ass

igne

d a

role

in re

latio

n to

ser

ving

the

over

-al

l Rus

sian

eco

nom

y. A

s a

resu

lt, th

e ec

onom

ies,

infr

astru

ctur

e, s

ervi

ces,

an

d fa

cilit

ies

of th

e ne

w re

publ

ics

are

in a

sta

te o

f im

bala

nce.

Coo

pera

tion

betw

een

stat

es is

sim

ply

the

fast

est a

nd c

heap

est w

ay to

ove

rcom

e th

e co

nseq

uenc

es o

f thi

s im

bala

nce.

G

iven

the

enor

mou

s co

st o

f new

pip

elin

es, s

wap

arr

ange

men

ts w

ith

Iran

is a

via

ble

and

econ

omic

ally

pra

ctic

al a

ltern

ativ

e fo

r exp

ortin

g so

me

oil f

rom

the

Cau

casu

s an

d C

entr

al A

sia.

The

pip

elin

e ne

twor

k an

d po

rt

infr

astru

ctur

e on

the

Cas

pian

coa

st a

re la

rgel

y in

pla

ce o

r can

be

prov

ided

at

reas

onab

le c

ost a

nd ti

me,

to c

arry

bot

h "e

arly

oil"

and

som

e la

ter p

ro-

duct

ion.

Iran

's ex

istin

g re

fine

ries

at T

abri

z, T

eher

an, A

rak,

and

Isfa

han

coul

d re

ceiv

e oi

l fro

m th

e no

rth

rath

er th

an fr

om th

e Pe

rsia

n G

ulf.

Oth

er

adva

ntag

es o

f th

is a

rran

gem

ent w

ould

be

the

bypa

ssin

g of

pol

itica

lly

unst

able

are

as, a

void

ing

envi

ronm

enta

l and

nav

igat

iona

l con

cern

s re

late

d to

the

Cas

pian

Sea

and

the

Bos

phor

us, a

nd p

rom

otin

g be

tter e

xpos

ure

to

the

dyna

mic

and

gro

win

g E

aste

rn m

arke

ts.

The

new

ly in

depe

nden

t sta

tes

lack

mon

ey f

or in

vest

men

t in

infr

a-st

ruct

ure

requ

ired

for d

evel

opm

ent.

How

ever

, muc

h co

uld

be a

chie

ved

thro

ugh

regi

onal

coo

pera

tion.

One

exa

mpl

e of

wha

t cou

ld b

e do

ne is

Iran

-T

urkm

en c

oope

ratio

n on

gas

exp

orts

, whe

re I

ran

is f

inan

cing

pip

elin

e in

fras

truc

ture

whi

le T

urkm

enis

tan

pays

bac

k its

sha

re in

-kin

d w

ith g

as.

Furt

her e

xam

ples

of e

xpan

ded

regi

onal

coo

pera

tion

incl

ude

Iran

's am

bi-

tious

pro

ject

to c

onst

ruct

a c

anal

link

ing

the

Cas

pian

Sea

with

the

Pers

ian

Gul

f. O

bvio

usly

, con

stru

ctin

g th

e ca

nal w

ill re

quir

e in

tern

atio

nal c

oope

r-at

ion,

but

if c

onst

ruct

ed, i

t wou

ld s

igni

fica

ntly

redu

ce th

e tr

ansp

ort c

ost

of o

il an

d ot

her c

omm

oditi

es fr

om th

e C

aspi

an S

ea to

Sou

thea

st A

sia.

It

wou

ld a

lso

allo

w th

e po

ssib

ility

of I

ran

mak

ing

avai

labl

e on

e of

its

Per-

sian

Gul

f por

ts to

the

coun

trie

s of

the

Cau

casu

s an

d C

entr

al A

sia.

T

he n

eed

for r

egio

nal c

oope

ratio

n is

not

rest

rict

ed s

olel

y to

the

tran

s-po

rt of

hyd

roca

rbon

reso

urce

s. E

qual

ly s

igni

fican

t is

the

coop

erat

ion

over

th

e un

reso

lved

lega

l reg

ime

of th

e C

aspi

an S

ea, a

n is

sue

that

thre

aten

s re

gion

al d

evel

opm

ent a

nd e

nvir

onm

enta

l man

agem

ent.

In th

e ab

senc

e of

a

defi

nite

lega

l reg

ime,

info

rmat

ion

abou

t the

env

iron

men

tal s

tatu

s of

the

Cas

pian

, the

nat

ure

of th

reat

s to

the

envi

ronm

ent,

and

a jo

int m

anag

e-m

ent r

espo

nse

rem

ain

frag

men

ted.

Thi

s in

clud

es th

e th

reat

of r

isin

g se

a le

vels

, pol

lutio

n, a

nd e

xplo

itatio

n of

mar

ine

reso

urce

s—no

tabl

y st

urge

on

and

seal

. The

am

bigu

ity re

gard

ing

the

lega

l sta

tus

of th

e C

aspi

an h

as n

ot

dete

rred

inte

rnat

iona

l inv

estm

ent i

n ex

plor

atio

n an

d ex

ploi

tatio

n of

oil

and

gas

rese

rves

. How

ever

, one

mus

t war

n ag

ains

t ign

orin

g th

e di

ffer

-en

ces

in c

hara

cter

bet

wee

n co

ntra

cts

with

pre

dom

inan

tly p

oliti

cal r

athe

r th

an p

ract

ical

eco

nom

ic p

urpo

ses.

D

iffe

rent

pla

yers

are

est

ablis

hing

a p

rese

nce

in th

e re

gion

rath

er th

an

pum

ping

larg

e su

ms

of m

oney

into

the

area

. The

ext

ent o

f in

vest

men

t re

quir

ed is

hug

e, g

iven

the

agin

g st

ate

of e

xist

ing

faci

litie

s an

d in

fra-

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

19

18

•

Hoo

shan

g A

mira

hmad

i

stru

ctur

e. A

sta

ble

lega

l reg

ime

agre

ed to

by

all c

ount

ries

is n

eces

sary

for

such

inve

stm

ent t

o oc

cur.

Cla

ims

by T

urkm

enis

tan

on s

ome

Aze

ri o

il fi

elds

in th

e se

a ill

ustr

ate

the

unce

rtai

nty

and

risk

s as

soci

ated

with

the

Cas

pian

inve

stm

ent e

nvir

onm

ent.

The

Cas

pian

Sea

is a

lso

very

impo

rtan

t fo

r int

ra-r

egio

nal t

rans

port

. With

out r

egio

nal c

oope

ratio

n, a

com

preh

en-

sive

tran

spor

t str

ateg

y ca

nnot

be

deve

lope

d. T

his,

in tu

rn, d

eman

ds a

def

-in

ite le

gal r

egim

e fo

r th

e se

a. T

he m

edia

n-lin

e de

linea

tion

prop

osal

for

th

e C

aspi

an is

exc

lusi

vely

dri

ven

by c

omm

erci

al s

elf-

inte

rest

, one

that

w

ill c

erta

inly

inhi

bit r

egio

nal c

oope

ratio

n.

Reg

iona

l coo

pera

tion

is f

urth

er r

equi

red

to m

aint

ain

secu

rity

in th

e re

gion

. Cur

rent

con

flict

s, a

lthou

gh d

ispe

rsed

, hav

e ha

d a

dest

abili

zing

influ

-en

ce o

n th

e re

gion

. Eve

nts

in C

hech

nya,

Kar

abag

h, T

urke

y, a

nd A

fgha

ni-

stan

hav

e im

pede

d fi

naliz

atio

n of

pip

elin

e pr

opos

als

and

have

del

ayed

in

vest

men

t. T

hese

and

oth

er c

onfl

icts

can

als

o po

tent

ially

spi

ll ov

er b

or-

ders

, the

reby

dra

win

g in

ext

erna

l act

ors

and

lead

ing

to a

mor

e co

mpl

ex

deve

lopm

ent e

nvir

onm

ent.

Mor

e pl

ayer

s w

ill in

evita

bly

impe

de o

r com

-pl

icat

e re

gion

al c

oope

ratio

n. G

roup

ing

sele

cted

reg

iona

l cou

ntri

es in

to

defe

nse

or m

ilita

ry a

llian

ces

is c

ount

erpr

oduc

tive.

One

suc

h ex

ampl

e is

th

e pa

ct b

eing

for

med

bet

wee

n th

e U

nite

d St

ates

, Tur

key,

Aze

rbai

jan,

an

d Is

rael

.

Ent

renc

hed

Old

Lea

ders

hip

Prac

tices

Inde

pend

ence

has

not

nec

essa

rily

bro

ught

new

and

mor

e ap

prop

riat

e pr

actic

es o

f gov

erna

nce

and

com

mer

ce to

the

Cau

casu

s an

d C

entr

al A

sia.

H

eavy

-han

dedn

ess,

aut

ocra

cy, p

olic

e po

wer

, nep

otis

m, a

nd c

orru

ptio

n ha

ve in

crea

sed

wit

h re

new

ed in

tere

st in

the

area

, alb

eit t

o di

ffer

ent

degr

ees

in th

e di

ffer

ent s

tate

s. A

lmos

t all

of th

e ne

wly

inde

pend

ent s

tate

s ar

e go

vern

ed b

y fo

rmer

Sov

iet p

oliti

cian

s an

d "s

tron

g m

en"

soci

aliz

ed in

a

cont

ext o

f obt

aini

ng a

nd m

aint

aini

ng c

entr

aliz

ed p

ower

. The

se fo

rmer

ch

ief

cust

odia

ns o

f co

mm

unis

m b

ecam

e, o

vern

ight

, its

pri

mar

y op

po-

nent

s, a

dopt

ing

a ne

w s

chem

a of

bel

ief a

nd p

ract

ice.

In re

ality

, the

y w

ere

peop

le le

ft w

ithou

t bel

ief,

dese

rted

by

thei

r mos

t tre

asur

ed id

eals

. At t

he

sam

e tim

e, th

eir

ambi

tion

and

ego,

and

cen

tral

ist a

nd d

espo

tic c

ultu

re,

foun

d a

mat

ch in

the

driv

e of

for

eign

com

pani

es, g

over

nmen

ts, a

nd

oppo

rtun

ists

for t

he re

gion

's re

sour

ces

and

mar

kets

. The

resu

lt is

a d

an-

gero

us m

ix o

f rei

nfor

ced

egos

, nar

row

-min

dedn

ess,

sho

rt-t

erm

dea

l mak

-in

g, a

nd fa

vori

tism

. A

utoc

ratic

lead

ersh

ip is

als

o pr

eval

ent e

lsew

here

in th

e la

rger

Mid

dle

East

and

Per

sian

Gul

f. It

has

not n

eces

saril

y hi

nder

ed s

ocia

l and

eco

nom

ic

deve

lopm

ent.

The

re a

re, h

owev

er, m

ajor

dif

fere

nces

bet

wee

n th

e oi

l-ri

ch

dict

ator

ship

s of

the

Pers

ian

Gul

f and

thos

e of

the

Cau

casu

s an

d C

entr

al

Asi

a. A

s no

ted

abov

e, e

ven

the

mos

t opt

imis

tic e

stim

ates

of

the

new

ly

inde

pend

ent s

tate

s' hy

droc

arbo

n re

sour

ces

do n

ot re

mot

ely

com

pare

with

thos

e of

the

Pers

ian

Gul

f. Fu

rther

, pro

duct

ion

and

trans

it co

sts

asso

ciat

ed

with

Cas

pian

oil

and

gas

is m

uch

high

er th

an in

the

Pers

ian

Gul

f. C

on-

sequ

ently

, the

hyd

roca

rbon

wea

lth o

f the

Cas

pian

regi

on is

not

suf

fici

ent

to a

llow

for s

igni

fica

nt p

ilfer

ing

by th

e el

ite a

nd th

eir i

nter

med

iari

es a

s w

ell a

s to

pro

vide

bro

ad s

ocio

-eco

nom

ic b

enef

its to

the

larg

er p

opul

ace.

O

verc

omin

g th

e po

wer

of t

his

hand

ful o

f str

ong

indi

vidu

als

and

thei

r al

lies—

and

build

ing

robu

st a

nd b

road

-bas

ed p

oliti

cal,

econ

omic

, and

so

cial

inst

itutio

ns—

repr

esen

ts a

maj

or c

halle

nge

and

a pr

ereq

uisi

te fo

r su

stai

nabl

e lo

ng-t

erm

dev

elop

men

t of t

he re

gion

as

a w

hole

and

of i

ndi-

vidu

al s

tate

s. T

he C

aspi

an re

gion

requ

ires

dev

elop

men

t of a

str

ong

civi

l so

ciet

y to

rest

rict a

buse

s by

the

stat

e. B

ut a

hea

lthy

civi

l soc

iety

nee

ds a

n op

en s

ocie

ty o

f pol

itics

and

mar

kets

. Unf

ette

red

priv

ate

and

publ

ic p

ar-

ticip

atio

n an

d co

mpe

titio

n is

a p

rere

quis

ite fo

r suc

h a

deve

lopm

ent.

Imag

inin

g th

e Fu

ture

Giv

en th

e is

sues

iden

tifie

d ab

ove,

wha

t doe

s th

e fu

ture

hol

d? C

an th

e C

aspi

an re

gion

ove

rcom

e its

cha

lleng

es a

nd b

ecom

e a

stra

tegi

c fr

ontie

r for

en

ergy

and

dev

elop

men

t in

the

twen

ty-f

irst

cen

tury

? Fo

cusi

ng o

n ce

rtai

n th

emes

that

I b

elie

ve f

orm

the

basi

s fo

r a

bette

r un

ders

tand

ing

of th

e C

aspi

an re

gion

, thi

s se

ctio

n ex

plor

es fu

ture

pro

spec

ts.

The

inha

bita

nts

and

envi

ronm

ent o

f th

e C

aspi

an r

egio

n ha

ve n

ot

alw

ays

feat

ured

pro

min

ently

in th

e re

new

ed in

tere

st in

the

area

. It i

s un

likel

y th

at th

is s

tate

of a

ffai

rs w

ill p

ersi

st. T

he n

eeds

of p

eopl

e, in

clud

-in

g th

eir e

ngag

emen

t in

polit

ical

dec

isio

n m

akin

g, a

s w

ell a

s th

e co

ndi-

tion

of th

e en

viro

nmen

t, w

ill re

ceiv

e in

crea

sing

atte

ntio

n in

the

futu

re.

In re

cent

dec

ades

, nat

iona

list a

gend

as h

ave

play

ed a

pro

min

ent r

ole

in

the

polit

ics

of th

e C

aspi

an r

egio

n, il

lust

rate

d by

the

Iran

ian

revo

lutio

n an

d nu

mer

ous

conf

licts

, inc

ludi

ng th

ose

in C

hech

nya

and

the

Kar

abag

h.

In m

ost s

tate

s of

the

regi

on, e

thni

c di

vers

ity is

the

rule

, and

the

popu

-la

tions

for

whi

ch p

artic

ular

sta

tes

wer

e "d

esig

ned"

do

not n

eces

sari

ly

cons

titut

e su

bsta

ntia

l maj

oriti

es. A

car

eful

bal

ance

of t

he in

tere

sts

of p

re-

dom

inan

t gro

ups

with

thos

e of

the

vari

ous

min

oriti

es re

pres

ents

a m

ajor

ch

alle

nge

to fo

rgin

g na

tiona

l int

egra

tion

of s

tate

s, a

nd, u

ltim

atel

y, d

evel

-op

men

t and

gro

wth

. At t

he s

ame

time,

inad

equa

te p

rogr

ess

in b

road

-ba

sed

deve

lopm

ent w

ould

inev

itabl

y le

ad to

a re

surg

ence

of a

s ye

t lat

ent

natio

nalis

t ide

ntiti

es th

roug

hout

the

regi

on.

Peop

le h

old

real

pow

er fo

r pot

entia

l cha

nge

in th

e re

gion

. Soc

ial t

rans

-fo

rmat

ion

is c

ritic

al fo

r dev

elop

men

t in

the

regi

on. P

over

ty in

crea

ses

the

vuln

erab

ility

of

stat

es a

nd p

rovi

des

impe

tus

to f

unda

men

talis

t mov

e-m

ents

. Oft

en fo

rgot

ten

is th

e fa

ct th

at th

e Ir

ania

n re

volu

tion

had

as m

uch

to d

o w

ith th

e so

cio-

econ

omic

exp

ecta

tions

of p

eopl

e an

d th

eir s

trug

gle

for a

cces

s to

reso

urce

s as

it h

ad w

ith id

eolo

gica

l con

side

ratio

ns. T

he s

ame

appl

ies

to th

e va

riou

s co

nflic

ts c

urre

ntly

pla

guin

g th

e re

gion

.

20 •

Hoo

shan

g A

mir

ahm

adi

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

21

The

em

phas

is o

f new

ly in

depe

nden

t sta

tes

on o

il an

d ga

s ex

port

s is

a

risk

y st

rate

gy f

or o

verc

omin

g st

ruct

ural

und

erde

velo

pmen

t. It

cou

ld

inhi

bit t

he d

evel

opm

ent o

f lo

cal i

ndus

try

and

job

crea

tion.

Cou

ntri

es

shou

ld s

triv

e fo

r m

ore

dive

rse

and

robu

st e

cono

mie

s, r

ecog

nizi

ng th

e im

pedi

men

ts to

oil

and

gas

expo

rt in

the

Cas

pian

Reg

ion.

The

y ne

ed to

de

vise

opt

ions

for m

ore

sust

aina

ble

long

-ter

m g

row

th a

nd d

evel

opm

ent,

incl

udin

g in

vest

men

t of o

il re

venu

es in

pro

duct

ive

capa

citie

s, m

anuf

ac-

turi

ng in

par

ticul

ar.

The

re a

re p

rosp

ects

for

pol

itica

l tra

nsfo

rmat

ion.

It i

s un

likel

y, h

ow-

ever

, tha

t new

ly in

depe

nden

t sta

tes

will

eas

ily g

ive

up th

eir

new

foun

d fr

eedo

ms.

The

y ha

ve tr

ied,

with

var

ying

deg

rees

of

succ

ess,

to li

bera

te

them

selv

es fr

om s

truc

tura

l dep

ende

nce

on R

ussi

a. T

his

effo

rt is

refl

ecte

d in

thei

r sea

rch

for a

ltern

ativ

e pi

pelin

e ro

utes

, Wes

tern

inve

stm

ent p

art-

ners

, est

ablis

hmen

t of n

atio

nal a

rmed

forc

es, a

nd fo

llow

ing

inde

pend

ent

fore

ign

polic

ies.

The

re is

als

o a

gene

ral r

eluc

tanc

e to

eng

age

in n

ew p

art-

ners

hips

that

will

resu

lt in

new

heg

emon

ic re

latio

nshi

ps.

Incr

easi

ngly

, the

sta

bilit

y of

gov

ernm

ents

will

dep

end

on th

e ex

tent

to

whi

ch th

ey c

an a

ccom

mod

ate

the

diff

eren

t int

eres

ts w

ithin

thei

r dom

ains

. A

s in

dica

ted

by th

e 19

97 e

lect

ions

in Ir

an, t

he y

outh

and

wom

en h

ave

an

incr

easi

ngly

dec

isiv

e im

pact

on

polit

ics.

An

impo

rtan

t fac

tor i

n po

litic

al

and

soci

al d

evel

opm

ent i

s th

e ex

tent

to w

hich

the

new

sta

tes

can

inte

grat

e et

hnic

dif

fere

nces

in th

eir

emer

ging

nat

ions

. Pro

long

ed c

onfl

icts

hav

e dr

aine

d re

sour

ces

and

seri

ousl

y im

pede

d de

velo

pmen

t. Ir

an p

lays

an

impo

rtan

t rol

e in

the

polit

ical

tran

sfor

mat

ion

of th

e re

gion

. It i

s m

ovin

g to

war

d in

crea

sing

pol

itica

l mat

urity

, and

as

the

coun

-tr

y's

com

mer

cial

link

ages

with

its

nort

hern

nei

ghbo

rs s

tren

gthe

n, it

will

ha

ve a

pos

itive

impa

ct o

n po

litic

al f

reed

oms

in th

e ne

ighb

orin

g st

ates

. R

athe

r th

an e

xpor

ting

rogu

e "f

unda

men

talis

m,"

Ira

n ca

n as

sist

in th

e ex

port

of c

onst

ruct

ive

valu

es a

nd p

ract

ices

to n

eigh

borin

g co

untri

es. I

t cer

-ta

inly

app

ears

to b

e in

a b

ette

r pos

ition

to d

o so

than

Tur

key,

whe

re th

e m

ilita

ry c

ontin

ues

to re

mai

n th

e re

al p

ower

beh

ind

the

frag

ile d

emoc

racy

. T

he C

aspi

an S

ea e

nvir

onm

ent m

ust b

e pr

otec

ted.

The

sea

repr

esen

ts a

hi

ghly

sig

nific

ant r

esou

rce

base

for t

he re

gion

, off

erin

g hy

droc

arbo

n, s

tur-

geon

, and

oth

er v

alua

ble

reso

urce

s. I

t als

o su

ppor

ts a

n im

port

ant a

nd

grow

ing

tour

ism

indu

stry

. Yet

, as

a cl

osed

lake

, it i

s pa

rtic

ular

ly v

ulne

r-ab

le. S

ince

the

colla

pse

of th

e So

viet

Uni

on, e

cono

mic

har

dshi

p an

d co

n-co

mita

nt o

ver-

expl

oita

tion

has

caus

ed a

ser

ious

thre

at to

the

Cas

pian

's st

urge

on r

esou

rce.

Rap

id p

opul

atio

n in

crea

se in

the

regi

on, a

s w

ell a

s in

crea

sed

deve

lopm

ent,

will

incr

ease

pre

ssur

e on

the

envi

ronm

ent.

Soun

d m

anag

emen

t arr

ange

men

ts a

re re

quir

ed, b

ecau

se re

sour

ce d

eple

tion

will

re

sult

not o

nly

in lo

ss o

f an

impo

rtan

t bio

me,

but

als

o in

incr

ease

d co

m-

petit

ion

for r

esou

rces

; thi

s co

uld

lead

to in

ter-

stat

e te

nsio

n an

d po

litic

al

inst

abili

ty. W

ithou

t eco

logi

cal s

usta

inab

ility

ther

e ca

n be

no

econ

omic

su

stai

nabi

lity

in th

e re

gion

.

A n

umbe

r of p

ositi

ve in

itiat

ives

to a

ddre

ss th

e C

aspi

an's

envi

ronm

en-

tal p

ress

ures

and

man

age

ii as

a re

sour

ce h

ave

com

men

ced

in re

cent

yea

rs.

This

incl

udes

the

form

atio

n of

the

Org

aniz

atio

n fo

r Reg

iona

l Coo

pera

tion

of C

aspi

an S

tate

s (O

RC

CS)

, the

cen

ter f

or C

aspi

an S

tudi

es, a

nd th

e Ir

an-

ian

fishe

ries

com

pany

's st

urge

on m

anag

emen

t pla

n. A

key

cha

lleng

e is

to

stre

ngth

en th

ese

initi

ativ

es. I

nter

natio

nal a

genc

ies

shou

ld s

uppo

rt th

ese

loca

l ini

tiativ

es ra

ther

than

form

ing

new

org

aniz

atio

ns. T

he li

ttora

l sta

tes

have

mad

e a

grea

t dea

l of e

ffor

t to

cons

olid

ate

diff

eren

t min

istri

es re

late

d to

the

ener

gy in

dust

ry. T

he s

ame

initi

ativ

e m

ust a

lso

be m

ade

in re

latio

n to

coo

rdin

atin

g th

e w

ork

of m

inis

trie

s im

pact

ing

on th

e en

viro

nmen

t. T

he C

aspi

an r

egio

n ha

s th

e po

tent

ial t

o de

velo

p a

stro

ng r

egio

nal

econ

omy.

Geo

grap

hica

lly, i

t enj

oys

an e

nvio

us p

ositi

on in

rel

atio

n to

es

tabl

ishe

d an

d em

ergi

ng w

orld

mar

kets

. It e

njoy

s m

ariti

me

acce

ss to

m

ajor

shi

ppin

g ro

utes

and

is b

less

ed w

ith

sign

ific

ant h

ydro

carb

on

reso

urce

s. I

t als

o ha

s th

e be

nefi

t of

othe

r re

sour

ces,

ran

ging

fro

m th

e C

aspi

an S

ea's

mar

itim

e ri

ches

to a

gric

ultu

ral a

nd m

iner

al re

sour

ces.

Fur

-th

er, i

t has

a la

rge,

you

ng p

opul

atio

n th

at c

an fo

rm th

e ba

sis

of a

str

ong

inte

rnal

mar

ket.

Iran

, in

part

icul

ar, p

osse

sses

tech

nica

l kno

w h

ow in

a

rang

e of

fiel

ds th

at c

an b

enef

it th

e re

gion

as

a w

hole

. R

egio

nal a

llian

ces

are

the

key

to m

eetin

g th

e ch

alle

nges

and

cap

italiz

-in

g on

the

oppo

rtun

ities

of

the

regi

on. I

n te

rms

of g

eogr

aphy

, cap

ital,

exis

ting

infr

astr

uctu

re, a

nd te

chni

cal r

esou

rces

, mos

t cou

ntri

es a

re

impe

ded

in m

eetin

g th

eir c

halle

nges

, alb

eit t

o va

ryin

g de

gree

s. M

ost o

f th

e co

untr

ies

also

suf

fer f

rom

a le

gacy

of u

nder

deve

lopm

ent a

nd s

truc

-tu

ral d

epen

denc

e on

Rus

sia.

The

pot

entia

l of t

he re

gion

is g

reat

, but

so

are

its c

halle

nges

, and

ove

rcom

ing

them

wou

ld in

volv

e in

vest

men

t be

yond

the

mea

ns o

f any

one

cou

ntry

. Reg

iona

l coo

pera

tion,

pla

nnin

g,

man

agem

ent,

and

fore

ign

inve

stm

ent a

re e

ssen

tial t

o m

axim

ize

hum

an,

finan

cial

, and

phy

sica

l res

ourc

es.

Exa

mpl

es o

f reg

iona

l coo

pera

tion

abou

nd, i

nclu

ding

the

inte

grat

ion

and

expa

nsio

n of

rail

netw

orks

and

Cas

pian

shi

ppin

g, th

e ex

tens

ion

of o

il an

d ga

s pi

pelin

es, s

wap

arr

ange

men

ts fo

r oil

and

gas,

and

pea

ce k

eepi

ng

in th

e co

ntes

ted

Kar

abag

h te

rrito

ry. A

cle

arer

def

initi

on o

f the

Cas

pian

ec

onom

ic re

gion

will

bol

ster

regi

onal

coo

pera

tion

and

the

regi

on's

abili

ty

to m

anag

e he

gem

onic

and

mon

opol

istic

inte

rest

s. It

cou

ld a

lso

assi

st in

re

focu

sing

the

new

ly in

depe

nden

t sta

tes

tow

ard

inte

rnal

dev

elop

men

t, ra

ther

than

on

emph

asiz

ing

the

expo

rt o

f hyd

roca

rbon

reso

urce

s. Ir

oni-

cally

, som

e of

the

dela

ys in

dec

isio

ns o

n pi

pelin

es a

nd th

e le

gal r

egim

e of

th

e C

aspi

an S

ea h

ave

prob

ably

had

the

effe

ct o

f enh

anci

ng th

e pr

ospe

cts

for r

egio

nal c

oope

ratio

n. C

urre

nt in

tra-

regi

onal

initi

ativ

es a

t inf

rast

ruc-

ture

impr

ovem

ents

and

trad

e m

ay e

vent

ually

lead

tow

ard

a re

gion

al

ener

gy p

lan.

T

he U

nite

d St

ates

has

had

no

qual

ms

abou

t its

str

ateg

ic in

tere

st in

the

Cas

pian

regi

on. Y

et a

s Ia

n B

rem

mer

has

not

ed, i

ts p

olic

ies

tow

ard

the

22 •

Hoo

shan

g A

mir

ahm

adi

Cha

lleng

es o

f the

Cas

pian

Reg

ion

• 23

Cas

pian

do

not r

efle

ct th

e re

aliti

es o

f th

e C

auca

sus

and

Cen

tral

Asi

a.

Rat

her

they

are

rea

ctio

ns to

wha

t Ira

n, T

urke

y, a

nd R

ussi

a m

ight

or

mig

ht n

ot d

o.5 T

he U

nite

d St

ates

' atte

mpt

at c

onta

inin

g Ir

an a

nd in

te-

grat

ing

Rus

sia

into

the

Wes

t hav

e fa

llen

shor

t of e

xpec

tatio

ns. I

t has

als

o ov

eres

timat

ed T

urke

y's

abili

ty to

exp

and

Wes

tern

inte

rest

in th

e re

gion

. U

.S. C

aspi

an p

olic

ies

are

in n

eed

of s

erio

us o

verh

aulin

g.

For

exam

ple,

Uni

ted

Stat

es f

orei

gn p

olic

y to

war

d Ir

an is

bas

ed o

n a

perc

eptio

n th

at th

e Pe

rsia

n G

ulf

is b

ette

r se

cure

d th

roug

h its

exi

stin

g al

lianc

es, a

nd th

at A

mer

ican

inte

rest

s ar

e pr

otec

ted

as lo

ng a

s ex

tern

al

thre

ats

to it

s al

lies

can

be c

onta

ined

. At o

ne s

tage

, it w

as th

e Sh

ah o

f Ira

n,

late

r Sad

dam

Hus

sein

, who

ser

ved

the

Uni

ted

Stat

es' a

gend

a; to

day,

it is

Sa

udi A

rabi

a. W

hat t

hrea

tens

thes

e st

ates

now

is th

eir o

wn

inte

rnal

ten-

sion

; mor

e sp

ecif

ical

ly, t

heir

peo

ple'

s at

tem

pts

to c

hang

e th

e ex

istin

g so

cio-

econ

omic

ord

er a

nd p

ower

str

uctu

res.

How

thes

e go

vern

men

ts w

ill

face

this

cha

lleng

e w

ill d

eter

min

e th

e se

curi

ty o

f th

e re

gion

and

thei

r ab

ility

to fu

nd in

crea

ses

in o

il pr

oduc

tion.

T

he U

nite

d St

ates

' int

eres

t will

be

bette

r ser

ved

by le

ss o

f a "

sing

le p

il-la

r" a

ppro

ach.

It n

eeds

to fo

cus

mor

e on

the

regi

on a

s a

who

le a

nd w

ork

with

all

rele

vant

act

ors.

Thi

s ap

proa

ch im

plie

s an

und

erst

andi

ng th

at th

e re

sour

ces

of th

e re

gion

sho

uld

not b

e ex

ploi

ted

by c

once

ntra

ting

on a

few

co

untri

es a

lone

. A "

sing

le p

illar

" ap

proa

ch w

ill p

rom

ote

coun

ter-

allia

nces

: fo

r exa

mpl

e, a

Rus

sia-

Iran

alli

ance

. It w

ill a

lso

prov

ide

a st

rong

er fo

otho

ld

for A

sian

inte

rest

s, a

rath

er im

port

ant m

arke

t for

the

Cas

pian

Reg

ion.

To

date

, thi

s ap

proa

ch in

itse

lf h

as p

laye

d a

part

in in

hibi

ting

reso

urce

dev

el-

opm

ent.

For e

xam

ple,

Uni

ted

Stat

es' s

uppo

rt fo

r the

Aze

ri p

ositi

on o

n th

e C

aspi

an le

gal r

egim

e ha

s pr

even

ted

reso

lutio

n of

this

ver

y im

port

ant

issu

e, m

akin

g m

any

pros

pect

ive

inve

stor

s ho

ld b

ack

fina

l dec

isio

ns. A

m

ore

incl

usiv

e ap

proa

ch to

regi

onal

dev

elop

men

t is

a be

tter a

ltern

ativ

e.

Sim

ilarl

y, R

ussi

a's

"nea

r abr

oad"

pol

icy

will

not

be

a vi

able

bas

is fo

r fu

ture

eng

agem

ent w

ith th

e ar

ea. T

he n

ewly

inde

pend

ent s

tate

s do

not

fa

vor p

rolo

nged

heg

emon

ic in

tere

st in

the

regi

on, w

heth

er b

y R

ussi

a, th

e U

nite

d St

ates

, Ira

n, o

r Tur

key.

Rus

sia'

s cu

rren

t app

roac

h m

ay s

tren

gthe

n th

e po

sitio

n of

eith

er th

e U

nite

d St

ates

or I

ran.

Rus

sia,

how

ever

, fac

es a

di

ffic

ult t

ask

in o

verc

omin

g au

thor

itari

an tr

aditi

ons

and

a co

llect

ivis

t cul

-tu

re. G

iven

the

coun

try'

s in

stitu

tiona

l bre

akdo

wn,

wid

espr

ead

corr

up-

tion

, as

wel

l as

anti

quat

ed in

fras

truc

ture

and

inve

stm

ent b

ases

, the

po

tent

ial f

or im

peri

alis

t elit

e to

atte

mpt

reg

aini

ng lo

st "

wor

ld p

ower

" st

atus

and

regi

onal

infl

uenc

e th

roug

h m

ilita

ry m

eans

rem

ains

sig

nifi

cant

. Ir

an h

as im

men

se s

trat

egic

sig

nifi

canc

e in

the

Cas

pian

regi

on. F

irst

ly,

conn

ectin

g th

e Pe

rsia

n G

ulf

to th

e C

aspi

an S

ea, I

ran

is th

e ge

ogra

phic

an

d cu

ltura

l ner

ve c

ente

r of

the

two

mos

t ene

rgy-

rich

reg

ions

in th

e w

orld

. Ira

n its

elf p

osse

sses

the

wor

ld's

four

th la

rges

t res

ervo

ir o

f oil

and

the

seco

nd la

rges

t of n

atur

al g

as. I

n th

e w

ake

of th

e So

viet

col

laps

e, Ir

an

now

con

nect

s th

e M

iddl

e E

ast,

the

Cau

casu

s, a

nd C

entr

al A

sia.

It p

os-

sess

es o

ver 4

00 m

iles

of th

e C

aspi

an s

hore

, 750

mile

s of

the

Pers

ian

Gul

f's

pass

C

s ev

ery

day.

For

thes

e re

ason

s al

one,

Iran

is a

crit

ical

r-r

ait -

of H

nrm

il7

, th

rou

gh w

hic

h o

ver

11 m

il-

lion

hor e

b, an

d ov

erlo

oks k

play

er in

dev

elop

men

t of t

he re

gion

. T

he s

econ

d el

emen

t in

Iran

's st

rate

gic

sign

ific

ance

is p

oliti

cal I

slam

, w

hich

will

rem

ain

a fo

rini

dabl

e fo

rce

in T

urke

y, E

gypt

, Alg

eria

, and

the

occu

pied

terr

itori

es. P

oliti

cal I

slam

can

not b

e ov

ertu

rned

; it c

an o

nly

be

acco

mm

odat

ed. I

ran'

s in

tegr

atio

n in

to th

e ec

onom

ic a

nd s

trat

egic

form

a-tio

ns o

f the

regi

on p

rovi

des

it w

ith th

e op

port

unity

to u

se it

s ex

peri

ence

to

con

tain

and

mod

erat

e th

e po

tent

ially

dis

rupt

ive

effe

cts

of m

ilita

ncy.

R

ussi

a's

unce

rtai

n fu

ture

is a

noth

er re

ason

for I

ran'

s in

crea

sed

stra

tegi

c si

gnif

ican

ce. I

ran

is w

ell e

quip

ped

to a

ssis

t the

new

ly in

depe

nden

t sta

tes

seek

ing

stru

ctur

al in

depe

nden

ce fr

om R

ussi

a.

Prev

ious

des

crip

tions

of

Iran

as

a "r

ogue

" or

"ou

tlaw

" st

ate

are

no

long

er v

alid

, alth

ough

per

iodi

c Ir

ania

n rh

etor

ic m

ay s

uppo

rt th

is v

iew

. Ir

an is

a s

tate

incr

easi

ngly

in p

ursu

it of

its

own

natio

nal i

nter

est,

as il

lus-

trat

ed b

y its

pol

icie

s in

rela

tion

to C

hech

nya

and

othe

r reg

iona

l con

flic

ts.

Wha

t is

impo

rtan

t in

Iran

's st

ance

is th

at it

sho

ws

the

way

for

eng

age-

men

t in

the

futu

re, p

artic

ular

ly in

dra

win

g th

e di

stin

ctio

n be

twee

n co

m-

mon

and

pri

vate

issu

es, i

n m

edia

ting

bet

wee

n in

depe

nden

ce a

nd

inte

rdep

ende

nce,

and

stim

ulat

ing

the

latte

r with

out g

ivin

g up

the

form

er.

Chi

na is

like

ly to

bec

ome

a si

gnif

ican

t act

or in

futu

re d

evel

opm

ent o

f th

e C

aspi

an R

egio

n. T

he e

cono

mic

, as

oppo

sed

to p

oliti

cal,

orie

ntat

ion

of

the

Cas

pian

sta

tes

invi

tes

grea

ter i

nvol

vem

ent b

y C

hina

. Chi

na w

ould

not

be

cha

lleng

ed b

y C

aspi

an s

tate

s on

issu

es o

f de

moc

ratiz

atio

n, h

uman

rig

hts,

and

inte

rnat

iona

l arm

s co

ntro

l, si

nce

the

regi

on it

self

enco

mpa

sses

st

ates

of g

reat

pol

itica

l div

ersi

ty a

nd m

inim

al re

gard

for t

he id

eolo

gica

l or

mor

al a

gend

a of

the

Wes

t. C

lose

r tie

s m

ake

econ

omic

sen

se to

Chi

na.

Xin

jang

, the

reso

urce

-ric

h no

rthw

este

rn p

rovi

nce,

is to

o fa

r fro

m th

e C

hi-

nese

por

ts f

or o

ptim

um d

evel

opm

ent a

nd c

ould

be

inte

grat

ed in

stea

d w

ith th

e C

aspi

an ra

il sy

stem

and

exp

ort o

utle

ts. C

hina

is a

lread

y sh

owin

g si

gnif

ican

t int

eres

t in

the

oil a

nd g

as re

sour

ces

of C

entr

al A

sia

and

the

Cau

casu

s. T

he C

hine

se N

atio

nal O

il C

ompa

ny h

as a

rriv

ed a

t an

agre

e-m

ent w

ith K

azak

hsta

n to

bui

ld a

pip

elin

e an

d en

gage

in o

il ex

plor

atio

n.

Tur

key

is a

noth

er im

port

ant p

laye

r in

the

Cas

pian

thea

ter,

eve

n th

ough

it is

not

a C

aspi

an s

tate

. Rus

sia'

s re

duce

d co

ntro

l ove

r the

new

ly

inde

pend

ent s

tate

s an

d th

e ex

pans

ion

of U

nite

d St

ates

com

mer

cial

inte

r-es

t in

the

Cas

pian

has

pro

vide

d T

urke

y w

ith a

n op

port

unity

to p

roje

ct it

s in

flue

nce

in th

e re

gion

. Pip

elin

e pr

opos

als

to C

eyha

n an

d Su

psa

is th

e m

anif

esta

tion

of th

is in

tere

st. O

ver t

he lo

ng te

rm, t

hese

pro

posa

ls s

houl

d sh

ow th

eir p

oliti

cal b

ases

, rat

her t

han

econ

omic

and

pra

ctic

al v

iabi

lity.

T

his

wes

tern

-ori

ente

d ap

proa

ch to

pip

elin

e bu

ildin

g un

dere

stim

ates

bot

h th

e si

gnifi

canc

e of

the

East

as

a m

arke

t for

Cas

pian

oil

and

gas,

as

wel

l as

the

geog

raph

ic a

nd p

oliti

cal i

mpe

dim

ents

to th

e T

urki

sh-b

ased

pip

elin

e

24 •

Hoo

shan

g A

mir

ahm

adi

Cha

llen

ges

of th

e C

aspi

an R

egio

n •

25

prop

osal

s. T

urke

y ca

nnot

bas

e its

eng

agem

ent i

n th

e ar

ea o

n its

Wes

tern

al

lianc

es, a

s th

ese

may

cha

nge

In p

nrtic

ular

, a c

hang

e in

Uni

ted

Stat

es-

Iran

ian

rela

tions

wou

ld d

imin

ish

Tur

key'

s in

flue

nce

in th

e re

gion

. T

he s

tabi

lity

and

deve

lopm

ent p

rosp

ects

of t

he C

auca

sian

and

Cen

tral

A

sian

sta

tes

will

be

larg

ely

dete

rmin

ed b

y ho

w th

ey m

anag

e re

latio

ns

betw

een

exte

rnal

inve

stor

s an

d th

e gr

owin

g ex

pect

atio

ns o

f th

eir

resi

-de

nts.

For

eign

inve

stm

ent i

s a

prer

equi

site

for d

evel

opm

ent,

but t

he b

en-

efits

of d

evel

opm

ent w

ill h

ave

to b

e di

stri

bute

d w

idel

y. A

lso

impo

rtan

t is

acco

mm

odat

ion

of th

e le

gitim

ate

fear

s an

d ex

pect

atio

ns o

f eth

nic

grou

ps

for p

oliti

cal a

nd s

ocio

-eco

nom

ic p

artic

ipat

ion.

The

sta

tes

need

to d

iver

-si

fy th

eir i

nter

est a

nd fo

cus

from

hyd

roca

rbon

, and

wor

k ha

rd fo

r reg

iona

l co

oper

atio

n.

Conc

lusi

on

Pres

sure

for

dev

elop

men

t in

the

Cas

pian

reg

ion

will

inev

itabl

y m

ount

. Sh

ould

the

gove

rnm

ents

of t

he n

ewly

inde

pend

ent s

tate

s w

ish

to re

mai

n in

pow

er, t

hey

will

be

com

pelle

d to

dem

ocra

tize

thei

r soc

ietie

s an

d co

op-

erat

e w

ith e

ach

othe

r. Th

ese

coun

tries

als

o re

aliz

e th

at n

atio

ns d

o no

t hav

e pe

rman

ent a

llies

, the

y ha

ve p

erm

anen

t int

eres

ts. T

he n

ewly

inde

pend

ent

stat

es w

ill e

xplo

it th

e op

port

unity

for

Uni

ted

Stat

es' i

nves

tmen

t, an

d su

ppor

t it t

o th

e fu

ll. A

t the

sam

e tim

e, h

owev

er, t

hey

will

not

be

blin

d to

the

infl

uenc

e an

d op

port

uniti

es fo

r dev

elop

men

t tha

t can

be

gain

ed b

y es

tabl

ishi

ng g

ood

rela

tions

with

Iran

and

Rus

sia.

It is

ther

efor

e lik

ely

that

th

e U

nite

d St

ates

will

in th

e fu

ture

hav

e to

eng

age

in th

e re

gion

mor

e in

re

latio

n to

loca

l con

ditio

ns ra

ther

than

in te

rms

of it

s ow

n ag

enda

. A

maj

or c

halle

nge

for f

utur

e re

gion

al a

llian

ces

is to

dis

asso

ciat

e di

ffer

-en

t nat

iona

list s

entim

ents

and

tens

ions

from

eco

nom

ic in

tere

sts.

Exp

loit-

ing

ethn

ic a

nd re

ligio

us d

iffe

renc

es fo

r sel

f-in

tere

st o

r allo

win

g in

tern

al

ethn

ic s

trif

e to

spi

ll ov

er in

tern

atio

nal b

ound

arie

s ca

n se

riou

sly

inhi

bit

frag

ile e

cono

mic

alli

ance

s. E

qual

ly u

npro

duct

ive

is c

ompe

ting

on id

eo-

logi

cal o

r nat

iona

listic

gro

und.

A c

ase

in p

oint

is th

e po

st-S

ovie

t rel

atio

ns

betw

een

Iran

and

Tur

key.

Par

tly b

y th

eir o

wn

desi

gn a

nd p

artly

bec

ause

of

the

way

out

side

for

ces

proj

ecte

d th

eir

inte

rest

s in

the

regi

on, t

hese

st

ates

wer

e m

ade

to re

pres

ent a

"re

fere

nce

soci

ety"

for o

ther

sta

tes.

Thi

s de

velo

pmen

t has

har

dly

been

con

duci

ve to

reg

iona

l coo

pera

tion

and

deve

lopm

ent,

as e

xem

plif

ied

by th

e pr

oble

ms

faci

ng th

e E

cono

mic

Coo

p-er

atio

n O

rgan

izat

ion.

It

is u

nlik

ely

that

the

curr

ent i

mpa

sse

on th

e C

aspi

an S

ea le

gal r

egim

e w

ill p

ersi

st, s

impl

y be

caus

e th

e su

bjec

t is

criti

cal t

o re

gion

al d

evel

op-

men

t. In

the

case

of I

ran,

som

e fo

rm o

f lin

e to

indi

cate

an

area

of e

xclu

-si

ve s

over

eign

ty w

ould

hav

e ha

d to

be

inve

nted

, had

it n

ot e

xist

ed a

lrea

dy

as a

lega

l nec

essi

ty, e

nabl

ing

it to

dea

l with

issu

es s

uch

as n

avig

atio

n,

reso

urce

exp

loita

tion,

and

imm

igra

tion.

Thi

s ap

plie

s in

pri

ncip

le to

all

coun

trie

s. A

t the

sam

e tim

e, w

hat i

s im

port

ant a

bout

the

"don

ut"

prin

- ci

ple

is th

at it

impl

ies

regi

onal

coo

pera

tion

in re

sour

cc c

xtra

ctio

n. A

com

- m

itm

ent t

o jo

int r

esou

rce

deve

lopm

ent s

houl

d fa

cili

tate

hol

isti

c m

anag

emen

t of t

he C

aspi

an S

ea a

s a

natu

ral r

esou

rce.

The

pri

mar

y m

oti-

vatin

g fa

ctor

for m

edia

n-lin

e de

linea

tion,

on

the

othe

r han

d, is

a "

sepa

-ra

tist"

app

roac

h re

sour

ce d

evel

opm

ent.

Thi

s de

linea

tion

appr

oach

has

fa

r-re

achi

ng im

plic

atio

ns fo

r the

env

iron

men

t. T

he C

aspi

an re

gion

cou

ld o

nce

agai

n be

com

e a

stra

tegi

c cr

ossr

oads

of

the

wor

ld. I

ts re

open

ing

as a

fron

tier f

or e

nerg

y an

d de

velo

pmen

t is,

how

-ev

er, a

ssoc

iate

d w

ith s

erio

us c

halle

nges

, im

pose

d by

the

varie

d in

tere

sts

of

diff

eren

t pla

yers

and

thei

r ow

n in

tern

al tr

ansf

orm

atio

ns in

a n

ew w

orld

or

der.

The

pot

entia

l for

gro

wth

and

dev

elop

men

t is

rich

, but

so

is th

e pr

ospe

ct fo

r ser

ious

impe

dim

ents

of a

pol

itica

l-ec

onom

ic a

nd s

trat

egic

na

ture

. Pas

t met

apho

rs a

nd u

nder

stan

ding

s fo

r en

gagi

ng th

e ar

ea in

w

orld

aff

airs

will

not

real

ize

its s

ubst

antia

l pot

entia

l. A

fund

amen

tal p

re-

requ

isite

for d

evel

opm

ent a

nd s

tabi

lity

is m

utua

l res

pect

by

the

diff

eren

t pl

ayer

s fo

r eac

h ot

her's

inte

r-de

pend

ent i

nter

ests

and

nee

ds.

A n

ew a

ppro

ach

to C

aspi

an s

tudi

es is

fun

dam

enta

l to

esta

blis

hing

su

ch r

espe

ct a

nd o

verc

omin

g ot

her

deve

lopm

enta

l cha

lleng

es in

the

regi

on. T

his

incl

udes

form

ulat

ing

a cl

ear d

efin

ition

of t

he re

gion

, a c

lear

un

ders

tand

ing

of w

hat c

onst

itute

s ap

prop

riat

e de

velo

pmen

t in

the

area

, an

d of

the

role

s th

at d

iffe

rent

act

ors

coul

d an

d sh

ould

pla

y in

the

deve

l-op

men

t pro

cess

. Suc

h an

edu

catio

n sh

ould

als

o ov

erco

me

fict

iona

l and

si

mpl

istic

not

ions

of t

he re

gion

's de

velo

pmen

t pot

entia

l and

cha

lleng

es. I

t m

ust a

ddre

ss th

e de

stru

ctiv

e pu

rsui

t of s

elf-

inte

rest

so

evid

ent i

n th

e re

gion

to

day.

The

new

app

roac

h to

Cas

pian

stu

dy n

eeds

to u

nder

scor

e th

e he

avy-

hand

ed le

ader

ship

, cor

rupt

ion,

and

nep

otis

m th

at p

reva

ils in

the

polit

ical

sp

here

. It h

as to

revi

sit t

he p

reva

lenc

e of

hol

low

rhet

oric

, the

focu

s on

gl

obal

as

oppo

sed

to lo

cal n

eeds

, and

the

zero

-sum

atti

tude

s to

war

d en

gage

men

t. Fi

nally

, the

new

app

roac

h to

the

Cas

pian

cha

lleng

es s

houl

d fo

ster

his

-to

ric

refl

ectio

n, r

ealiz

ing

that

the

Cas

pian

reg

ion

has

been

at h

isto

ric

cros

sroa

ds b

efor

e, a

nd th

at d

ecis

ions

mad

e at

diff

eren

t sta

ges

have

aff

ecte

d its

dev

elop

men

t pro

spec

ts fo

r man

y ye

ars

ther

eaft

er. A

n en

viro

nmen

t of

mut

ual r

espe

ct a

nd u

nder

stan

ding

wou

ld fa

cilit

ate

the

stre

ngth

enin

g of

re

gion

al in

stitu

tions

and

is c

ritic

al in

stim

ulat

ing

regi

onal

coo

pera

tion

and

deve

lopm

ent.

This

bro

ader

regi

onal

fram

ewor

k w

ould

ass

ist i

ndiv

idua

l co

untr

ies

to fo

llow

thei

r ow

n po

licie

s in

rela

tion

to s

ocia

l and

pol

itica

l de

velo

pmen

t, de

pend

ing

on th

eir o

wn

hist

ory

and

deve

lopm

enta

l con

text

s.

26 •

Hoo

shan

g A

mira

hmad

i

Not

es

1.R

icha

rd B

ullie

t, in

an

unpu

blis

hed

artic

le e

ntitl

ed "

NIR

A: A

Wor

ld

Reg

ion

Emer

ges,

" ex

clud

es R

ussi

a as

wel

l. 2.

Ibid

. 3.

See

Ali

A. M

azru

i, "I

slam

ic a

nd W

este

rn V

alue

s,"

Fore

ign

Affa

irs,

Sep-

tem

ber/O

ctob

er 1

997,

pp.

118

-132

. 4.

See

Hoo

shan

g A

mira

hmad

i, "A

dopt

a L

onge

r-Te

rm P

ersp

ectiv

e on

Iran

,"

pape

r pre

sent

ed a

t Ira

n in

Tra

nsiti

on: A

n Ec

onom

ic, P

oliti

cal a

nd E

nerg

y Con

-fer

ence

, In

stitu

te fo

r the

Stu

dy o

f Ear

th a

nd M

an a

t Sou

ther

n M

etho

dist

U

nive

rsity

(Dal

las)

, May

199

6.

5.Se

e Ia

n B

rem

mer

, "O

il Po

litic

s: A

mer

ica

and

the

Ric

hes

of th

e C

aspi

an

Bas

in,"

Wor

ld P

olicy

Jour

nal,

Spri

ng 1

998,

pp.

27-

35.

Part

I

Peop

les

and

Reso

urce

s

the caspian region at a crossroad challenges of a new...

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