Showing posts with label Baku-Tblisi-Ceyhan Pipeline. Show all posts
Showing posts with label Baku-Tblisi-Ceyhan Pipeline. Show all posts

24.5.08

Turkey In Between: Syria-Israel & Georgia-Russia

Adding to its much coveted resume as "Europe's bridge to the Middle East", Turkey has now been officially recognized as the facilitator of talks between Israel and Syria. Whether or not the Israeli media agrees with Prime Minister Ehud Olmert's motivations for publicizing the existence of talks, Turkey can at least shine in the warm spotlight of international recognition for a few weeks.

While most Turkish diplomatic activity in the Arab Middle East other than with Iraq follows a mechanical approach, Turkey's role as a mediator between Israel and Syria is uncharacteristically complex. There exists a very clear logic behind Turkey’s effort to mingle in the affairs of these two countries.

Compared to its relationship with neighbor Iran, Turkey's rapport with Syria is relatively underdeveloped. Perhaps the most significant reason for this is the incredible backwardness of Syria’s Baathist state-controlled economy, which is also responsible for the incredible backwardness of Syria’s regional foreign policy. Syria's problematic approach last affected Turkey in a dramatic way in 1998. Syria gave refuge to PKK leader Abdullah Ocalan, much to the disgrace of Turkish public opinion that had designated Ocalan as a terrorist. Syria would ultimately harbor the Kurdish leader in Damascus until the threat of a Turkish invasion successfully forced his eviction.

In comparison, Turkey’s rapport with Israel has proved quite dynamic. Successive Turkish governments and the Turkish military have pursued a symbiotic relationship with Israel despite the risk of alienating Turkey even further in the eyes of the Arab World. Both countries, similarly focused on linking themselves with the West, have cooperated through military exchanges and natural resource transfers. In addition, Turkey hopes to court the sympathy of the Israeli lobby in Washington as a means of counter-balancing the influence of the Armenian lobby on American foreign policy.

While no observer could claim that Turkey’s efforts will actually make a significant difference in solving the issues that separate Israel and Syria, Turkey’s actions will help it acquire some additional credibility with pundits who influence EU opinion. This alone could be reason for Turkey to exert its diplomatic energy.

The highly involved nature of Turkey’s interest in affairs south of its border stands in tremendous contrast with its attitudes concerning the tumultuous political situation to its north-east. Turkey has chosen a relatively silent course as Georgia struggles to deal with breakaway Abkhazia and omnipresent Russia.

(On Monday, the UN announced that a Russian jet did indeed shoot down a Georgian unmanned surveillance drone patrolling over Abkhazia.)

Other than its relations with Armenia, which are “very well” defined, Turkey's diplomatic intentions in the greater Caucasus region and Central Asia have been unclear ever since the failure of its Pan-Turkism initiative in the 1990s. While Turkish construction companies and textile producers have been keen to acquire contracts and conduct foreign direct investment projects, Turkey's main interest in the region has been its role as a conduit for Central Asian energy exports to Europe and beyond. Turkey's energy interests in Central Asia have understandably run counter to those of Russia, which are monopolistic by nature.

Turkey's concern for its trade relations with Russia must also not be overlooked. Roughly 70% of the country's natural gas supplies come from Russia, worth approximately $2bn. In addition, Turkish companies currently boast $4.5bn in foreign direct investments in Russia, while Russia companies have $3bn in Turkey. Therefore, the rather undefined character of Turkey's relations with the Caucasus and Central Asia is most likely due to its disinterest in provoking Russia's wrath.

In contrast, provoking Russia's wrath has been one of the main occupations of Georgia's second post-Soviet Union president, Mikhael Saakashvili. Saakashvili’s attempts to overhaul his country’s economy and mentality, often in brazen defiance of Russia, have won him a large following in the West. The US is widely believed to have provided the George Washington University Law School trained lawyer with the necessary moral support and financial backing to overcome considerable odds.

While Turkey has shown such great interest in helping Israel resolve its issues with Syria, it has comparatively neglected neighboring Georgia’s plight. Although comparing Georgia to Israel on a geopolitical scale is like weighing a bowling ball against a golf ball, it is nevertheless unfortunate that Turkey chooses not to more publicly support the Caucasus’ own geopolitical David against the Russian Goliath.

Turkey does in fact give military support to Georgia in the form of training and funding. While the monetary figure of this military support is dwarfed in comparison to that provided by the US, Turkey is probably Georgia’s second largest military donor state. The two countries have also successfully cooperated together on the Baku-Tbilisi-Ceyhan pipeline project – the cornerstone of Turkey’s design to become an energy transfer hub. A new train connection between Azerbaijan, Georgian and Russia will also encourage closer trade relations.

Saakashvili is reputedly trying to transform his country into a fully-functional democracy and regional economic force, both of which would be beneficial to Turkish interests. While Georgia is still far from realizing this dream, Saakashvili’s goals are noble and most likely much more of a near-term reality than expecting Baathist Syria to dramatically evolve.

If Turkey wishes to demonstrate its constructive potential to influence the affairs of the surrounding regions, it would be well-served by addressing an issue that is clearly within its means and in its natural sphere of influence. Sadly for Georgia, Ankara is either too scared to compromise economic relations with Russia or too consumed by the international notoriety it receives from pursuing “peace in the Middle East” as opposed to in the Caucasus.

16.3.08

Armenia's Presidential Election and its Ramifications for Relations with Turkey

Armenia's presidential election has finally passed after simmering for much of the month of March. For a synopsis of the events before and after the election, please refer to this article in the Diplomatic Courier, or read the following open to an article from the February 21st Economist.
ELECTIONS in former Soviet republics rarely yield surprises. The incumbent wins; the opposition cries foul; it takes to the streets. The presidential vote in Armenia on February 19th ran true to form. Serzh Sarkisian, the prime minister, won 53% of the vote, enough to avert a runoff with his main rival, Levon Ter-Petrossian, with 21%. Mr Ter-Petrossian, a former president, said Mr Sarkisian had stolen the vote even before ballots were counted. Independent observers talked of ballot stuffing and intimidation.
It will probably be some time before elections in the Caucasus shed their flair for the dramatic. Even neighboring Turkey, a "pillar of political stability" for over half a decade, is giving the region a run for its money. The possibility of dismantling a ruling party due to alleged anti-secular transgressions would make any intrigue from the Caucasus look like a cheap B-movie.

Whether fraudulent elections or economic concerns, Armenian political debate rarely ventures far from a number of issues related to the country's intimidating western neighbor. Optimists could argue that the newest selection of political personalities in Armenia may indeed prove to be the necessary ingredients for improving relations between Armenia and Turkey. Other than the long-standing quarrel surrounding the Armenian Genocide, one of the most important issues defining poor relations between the two countries is the contemporary dispute concerning Nagorno-Karabakh.

The current conflict that defines this small region dangling between Armenia and Azerbaijan has its origins in the early days of the Soviet Union, and includes an intriguing historical connection to Turkey. Before the Bolsheviks swept through the Caucasus in the early 1920s, the Nagorno-Karabakh region had been traditionally inhabited by both ethnic Armenian and Azerbaijani peoples.
It had therefore been a point of contention during the short life-span of the newly minted states of Armenia and Azerbaijan. With the arrival of the communist era in the Caucasus, this conflict would be subsumed under the greater strategic affairs of the Soviet Union.

In 1923 Stalin, who was the Soviet commissar of nationalities at the time, decided to cede Nagorno-Karabakh to Azerbaijan as an "autonomous oblast". According to a biography of Georgia's most famous son by Robert Service, Stalin made this decision in order to curry favor with Ataturk's Turkish Republic, which apparently maintained a keen interest in "Turkic affairs" even at that early time.

Following the collapse of the Soviet Union, Nagorno-Karabakh experienced a string of bloody conflicts between Azerbaijani and Aremenian military and paramilitary forces. While Armenia received the bulk of its military support from Russia, the comparatively ill-equipped Azerbaijani forces are believed to have been supported by non-Azerbaijani Muslim mercenaries. With Armenia emerging as the nominal victor of the conflict, Turkey has chosen to isolate Armenia politically and economically, possibly with the ulterior motive of deflecting attention away from the Armenian Genocide or inflicting punishment as a result of public-relations discomfort it has caused the Turkish state.

While the fall of the Soviet Union involved a very unpleasant reality check for all those involved in the communist market experiment, the last decade has seen many of these countries make economic progress quite often due to their energy reserves. Over 15 years after the fall of the Soviet Union, the circumstance of the Armenian economy remain dire when compared to any of its neighbors. The financial and travel blockade imposed by Turkey and Azerbaijan is largely responsible for its lack of economic progress. Like the economies of its neighbors, the Armenian market and political landscape is riddled with corruption. When considering the question of Armenian-Turkish relations in the near future, it appears that this issue of corruption, particularly as it relates Nagorno-Karabakh, is of great relevance.

The following Voice of America (VOA) article demonstrates the degree to which politicians hailing from Nagorno-Karabakh maintain a stranglehold on the Armenian political process.

Here is a selection of the article's most poignant ideas:

Aram Abramian, editor in chief of the Yerevan-based daily newspaper "Aravot" and who has roots in Nagorno-Karabakh, says Kocharian and Sarkisian brought in associates from the territory who took over state posts and dominated the business elite.

"There are 20, 30 families -- oligarchs -- people who, thanks to the opportunities that are provided to them by the authorities, became rich, and have wide possibilities of avoiding taxes and custom fees," Abramian says, adding that well-connected moguls were able to gain "monopolies" over fuel, sugar, and other commodities.

Among those identified by analysts as part of the Karabakh clan are Kocharian's son, Sedrak, who reportedly controls mobile-phone imports; Barsegh Beglarian, who dominates the gas-station market; Mika Bagdasarov, who controls oil imports and heads the national airline; and Karen Karapetian, head of the Armrusgazard gas company, a joint venture with Russia's Gazprom.

If the ideas advanced by the VOA article are indeed true, it is hard not to be pessimistic about the future of Nagorno-Karabakh issue and, as an extension, the future of Armenian-Turkish relations. The conflict in Nagorno-Karabakh legitimates the political class currently running Armenia. In particular, it distracts the electorate away from the single biggest issue affecting their lives on a daily basis - a sickly economy. As the VOA article suggests, what motivation does Armenia's ruling Nagorno-Karabakh cabal have to resolve the conflict and further improve relations with Turkey in order to resuscitate the economy? A more free-market economic system, involving trade and investment with Turkey, would only undermine their current political and economic existence as it would empower potential opponents.

Turkey, for its part, should also be expected to engage the Nagorno-Karabakh with a more constructive attitude. This is especially the case in light of its role as the region's most important power broker after Russia and its aspirations to join the European Union as a valuable diplomatic partner. Prior to its construction, Turkey offered to route the Baku-Tbilisi-Ceyhan pipeline through Armenia, allowing its neighbor to collect the lucrative transit fees, in exchange for recognition of Nagorno-Karabakh as a part of Azerbaijan.

Such a swap would have merely fattened the wallets of the corrupt. More importantly, it would have done little to address the underlying issues stoking the Nagorno-Karabakh conflict - disputes between two distinct ethno-religious groups wanting to living on the same plot of land. While a more constructive approach must be demonstrated on Turkey's part, such an expectation may prove foolish. The rising levels of ethno-nationalistic sentiment that could very well mark the post-AKP era of Turkish politics render the possibility of reconciliation with Armenia increasingly unlikely.

Regardless of Turkey's role, there is a much greater motivation for Armenia to resolve Nagorno-Karabakh compared to Turkey considering Armenia's desperate need to reintegrate itself into the regional economy of Eurasia. Armenia cannot afford to be locked in its current economic ice age and slip further behind its neighbors in terms of economic development. Unfortunately, there does not appear to be a clear sign of when the country's democratic process will be capable of overcoming Armenia's suffocating political-economic corruption.

11.11.07

Pipeline Politics: Israel

Details were released last week concerning an advanced proposal for a pipeline from Turkey to Israel, which would provide Israel with a new source of natural gas, oil, electricity and water. The project is a notable development in Turkish-Israeli relations during a month that has been highlighted by Shimon Perez's diplomatically significant visit to Ankara today.

(Please review either this article from Zaman for the Turkish perspective or this piece from the Jerusalem Post for an Israeli view of the proposed pipeline.)

If the proposed connection is indeed constructed, this project will represent an intriguing addition to Turkey's growing web of energy pipelines. As an estranged member of the Muslim Middle East, it has been relatively easy for secular Turkey to cultivate a relationship with financially capable and technologically advanced Israel. Perez's invitation to Ankara, which was officially offered by President Gül, reflects the degree to which Turkey's supposed "neo-Islamists" are distinct from other political movements in the Middle East. Perhaps to a lesser extent, the move underscores the historic mistrust that undermines Turkic-Arab solidarity whether in Anatolia, the Caucasus or in Muslim Central Asia.

While the deal appears to be mutually beneficial in terms of Turkey adding a new market to its energy transfer network and Israel diversifying its energy needs, this observer is skeptical of the greater oil export applications for the pipeline suggested in the Jerusalem Post article. In particular, it is unclear what basis there is for the assertion that it is "more practical" to deliver oil to Asian markets via Israel compared to overland routes.

First of all, this observer wonders what real advantages oil transited through Israel has over shipping it from the Turkish terminal at Ceyhan and onto Asia through the proven Suez Canal route. Since the oil will originate in either Iraq or the Caspian Sea, it furthermore seems rather odd to first move the oil west to Ceyhan and then south to Israel and finally onto a destination in Asia. It would make far more sense to ship the oil from Basra or from a port in Pakistan through the growing network of pipelines crossing that country.


It is ultimately of little concern to Turkey whether or not such dreams of exporting oil to the "Far East" via Israel are in fact realized. Of far greater importance is the considerable geopolitical leverage Turkey will acquire through this increased cooperation with Israel. If the proposed pipeline proves successful, Israel will ultimately come to depend on it for a relatively significant portion of its subsistence. Therefore, Turkey will possess a greater means to "lean on" Israel for certain types of military or diplomatic support that the US or Europe will otherwise be reluctant to provide.

7.10.07

Pipeline Politics: Turkey's South Pars Project

Turkey and its state-owned oil company, TPAO, have made an uncharacteristically bold move in the theater of geopolitics. Despite intense political and financial pressure from the Bush administration, Turkey has taken a brave step forward, choosing to independently finance the $3.5bn necessary to initiate the South Pars natural gas development project in Iran. Turkey was unable to secure the outside financing, which is typical of a project of this scale, due to the recent American-led financial embargo on Iran.

Ankara apparently considers the strategic opportunity presented by the development of the South Pars fields as having sufficient long term value to outweigh the short term diplomatic turmoil, which will most likely ensue from this decision. From the prospective of this observer, the choice to independently pursue this opportunity should be strongly lauded for being very shrewd in both political and economic regards.

By disregarding Washington's warnings concerning any type of engagement with Iran, Ankara has tacitly communicated the obvious: President Bush is a lame duck. This blatant, yet well-calculated, act of defiance is a healthy gesture for Turkey as it tries to forge its own future as opposed to relying on heavy-weights like the US or hypothetically even the EU. If one considers this act along with Turkey's decision not to allow the US military to use Turkey as a northern invasion route for the second invasion of Iraq, it would seem that Turkey is no longer simply an acquiescent member of the Western/NATO camp. The Cold War is over and Turkey is very right to adjust its geopolitical posture accordingly.


In terms of its economic significance, the South Pars decision confirms the general consensus that Turkey's development of these natural gas fields will play a very important role in its future rapport with Europe. In particular, the supply of gas guaranteed by the project will further promote Turkey's goal to position itself as a critical energy transit corridor for Europe. Europe, like Turkey, currently depends on Russia for the majority of its natural gas needs. Once the flow of resources from South Pars join those energy resources already flowing from Central Asia, Turkey's pipeline network will emerge as a preferable alternative to Russia's divisive behavior regarding energy supply. (For further reading about Turkey's emerging role as an energy transport corridor, please read this Bosphorus Watch article from July.)

It is of course another matter whether the South Pars fields actually get developed by Turkey in the near future. Although this observer is not particularly convinced that there will be an invasion of Iran, a military conflict nonetheless represents one of a myriad of other factors, which could ultimately stall or even terminate the project. Chief among these factors would be the character of the current Iranian regime, which has shown its penchant for the unpredictable.

Another factor suggested by a a friend of mine, who is a Turkish businessmen, concerns the true intentions of Ankara. By demonstrating its ability to self-finance and independently cooperate with Iran, Ankara has gained a very valuable geopolitical bargaining chip with both the US and possibly even the likes of France. As my friend astutely pointed out, it is possible that Ankara has in fact no intention of actually realizing the Iranian project, but will instead use it to diplomatically extract certain equally valuable concessions from the West. Either way, South Pars is a win-win situation for the Turks.

26.8.07

Pipeline Politics: Further Reading II

In its August 23rd print edition, The Economist magazine published an article, which echoes many of the same observations that were made in the July Bosphorus Watch piece entitled, "Turkey's Pipeline Politics: Russia, Iran, Greece, Italy".

To view The Economist article, please click here.

The Economist posits that Prime Minister Erdogan's effort to cultivate greater energy ties with Iran will help his country's chances to join the European Union in the future. It believes that Turkey's heightened role as an energy transportation corridor will only increase its strategic value to the EU.

While these energy developments will certainly not hurt Turkey's bid to join the EU, it seems unlikely that they will represent a deciding factor in the EU's admission process as The Economist might be suggesting.

Simple economic and geographic realities dictate that Europe is by far the most important and logical market for any energy supplies flowing through Turkey. This will be the case whether or not Turkey is eventually offered the opportunity to join the EU.

It is therefore the opinion of this observer that that the EU would not gain any meaningful, strategic energy advantage by drafting Turkey into its ranks. The lack of formalized political ties between the Republic of Turkey and the EU will not influence the realities that govern Turkey's future energy transportation business with Europe.

19.8.07

Turkey's Future in Central Asia

Discussions with Turkish citizens concerning topics related to the ethnic diversity of their country, such as the infamous "Kurdish problem", tend to return to the same idea: Turks and Kurds came from lands in Central Asia and settled in Anatolia along side ethnic Armenians, Greeks and Arabs. Due to manner in which it is depicted in their school books, ethnic Turks in Turkey have a rather romantic impression of their Central Asian Oğuz ancestry.

While ancestry plays an important role in anchoring Turkish interest in Central Asia, more contemporary interests related to economic and political influence have developed this relationship further. Until the fall of the Soviet Union, Turkey's connection to its Turkic cousins in Central Asia was considerably limited due to the Soviet Union's suzerainty in these areas. When the fall of the Soviet Union opened the Turkic countries of Central Asia to outside influences, Turkey considered itself in a prime position to augment its influence in Eurasia.



Turkey's contemporary attempts to make inroads in Central Asian affairs peaked in the middle of the 1990s. Hoping to renew older attempts to forge Pan-
Turkism under the direction of the secular and western-oriented direction of Ankara, Turkey set out to promote new modes of cooperation in the Turkic world. Although Turkey was successful in realizing the adoption of Latin script in Azerbaijan, Turkmenistan and Uzbekistan, their efforts to create greater cultural, political and economic cooperation were stymied. Progress was made in Azerbaijan due to a shared antipathy for Armenia, but Turkey was unable to overcome the lingering obstacles related to the Soviet era in Turkmenistan and Uzbekistan. Since meaningful progress was not made during this first post-Soviet attempt, the cause of Pan-Turkism seems to have been abandoned for the time being.

American military activities and the new Great Game to control the flow of Central Asia's energy resources have dominated the region's geopolitical headlines during the past decade. Compared to its political initiatives in Europe and along its southern borders, Turkey has not been particularly active in the east. Making deals to transport Central Asian energy through Turkey's system of pipelines represent the recent highlights of Ankara's dealings in Central Asia.

Joshua
Foust of Registan.net recently wrote a piece about the future of Central Asian geopolitics entitled, "Iran and China Rise; Shall Russia and the U.S. Fade Away?" While his insights are all quite sound, it is remarkable how Foust does not feel it necessary to mention the possibility of Turkey playing a bigger role in Central Asia's geopolitics. When asked about this omission by this observer, Foust answered:
I certainly see Turkey trying (they’ve made a few weak stabs at it), but I don’t see how they can overcome the heft of Iran, Russia, China, the U.S., or the EU. The Turkic connection exists, but it’s also fairly weak, as you rightly said. There remains more cultural affinity for, depending on the country, China, Russia, or Iran—no one seems to want to announce Turkey as their best friend. Which, I think, is too bad. I would prefer Turkey to Russia or Iran or China any day.
It would seem that Turkey can not afford to continue this course of treading lightly in Central Asia. Central Asia simply has too much economic significance for Turkey's future. Although the United States currently protects Turkey's interests as a conduit for Central Asian energy, Turkey should not depend on this arrangement alone. While Ankara does not possess the same financial resources as Beijing or Moscow to back its policy in Central Asia, it will become more capable as the Turkish economy receives more foreign investment.

If Turkey does not pursue its interests in Central Asia more aggressively, it ultimately risks losing Central Asian energy to ports on the Persian Gulf and to pipelines built by Russia and China. Such a fate would significantly diminish Turkey's standing in the region.

17.8.07

Pipeline Politics: Further Reading

For further information concerning the transportation of natural resources in Eurasia, please refer to the article "Putin’s battle over Caspian energy resources and transport routes" in Turkey Financial. Click here.

This piece outlines Russia's energy strategy and competitive interests related to future pipeline development in the region. Its consideration of Chinese interests in Central Asia is also noteworthy.

In July 2007, The Bosphorus Watch featured its first article about Turkey's recent maneuverings concerning
pipeline politics in Eurasia.

28.7.07

Turkey's Pipeline Politics: Russia, Iran, Greece, Italy

Turkey's role in the global energy arena gained new layers of complexity during the month of July. Officials in Ankara and Tehran signed a Memorandum of Understanding to pump Iranian and Turkmen natural gas through the Turkish pipeline network for destinations in the lucrative Western European market. The two neighbors also agreed to a Turkish investment of $3.5 billion to develop three phases of Iran's South Pars gas field, starting in 2008. During the following week, Turkey, Greece and Italy agreed to terms in Rome for the transportation of Central Asian natural gas through an existing pipeline from Turkey to Greece, and then through a new underwater pipeline that will be constructed between Greece and Italy starting next year.

These July initiatives are important building blocks for Turkey's nascent efforts to acquire valuable political and economic leverage as a key purveyor of Central Asian and Middle Eastern energy resources. The successful opening of the U.S. backed Baku-Tblisi-Ceyhan (BTC) pipeline in May of 2006 constituted a proof of concept that Turkey is a viable alternative to Russia for transporting Central Asian oil and gas resources. While the U.S. was the initial supporter for Turkey's role as an energy transporter, Turkey has astutely developed its own relationship with Iran to increase its involvement beyond U.S. geopolitical interests. As early as 2001, Turkey began to purchase Iranian gas exported from Tabriz to Ankara to fulfill domestic demand. Just as was the case in 2001, U.S. officials have voiced their displeasure with Turkey developing energy ties with this international pariah.


U.S. criticism over Turkey's economic ties to Iran are quite irrelevant when compared to the political capital Ankara gains by fostering regional energy cooperation and development. Turkey's ascendancy as a regional energy transportation corridor exists in direct competition to Russian political and economic interests. Russia not only controls a significant number of existing gas pipelines linking Central Asia and Europe, but it also has the financial and political capability to stymie further Turkish energy initiatives. Russia's recent announcement in March to build an oil pipeline through Bulgaria and Greece in order to bring its own resources to the Mediterranean is a perfect example of this competitive challenge.

There is therefore considerable logic in Turkey's decision to grow its regional energy cooperation with Iran. Turkey needs Iran not only as a supplier of energy for its network of pipelines, but it also needs Iran's regional influence in order to parry Russian efforts to dominate Central Asian energy resources in the future.