Caspian States Research Articles

Iran’s policy in the Caspian region at the present stage: results and prospects

One of the most important players in the geopolitical process in the Caspian region is Iran. In this article, we consider Iran’s policy on a wide range of problems in the Caspian Sea region that the country has been following since the collapse of the Soviet Union. For more than two decades, one of the important tasks of the Iranian Foreign Ministry was to define the international legal regime of the Caspian Sea, which was complicated by the geopolitical changes in the region associated with the collapse of the Soviet Union and the emergence of new Caspian states - Turkmenistan, Azerbaijan and Kazakhstan. Initially, Iran tried to justify the division of the sea, based on the former Soviet-Iranian agreements. However, the new Caspian states believed that the geopolitical status underwent fundamental changes and the previous contracts couldn’t justify modern challenges. In this connection, the tasks of preserving the national interest to the maximum extent and at the same time maintaining constructive relations with other Caspian states, especially with the Russian Federation, became urgent for Iran’s policy. Environmental pollution and lack of financial and technological resources for energy extraction are a serious problem for Iran in the Caspian Sea. The Islamic Republic of Iran is still at the stage of research into the extraction of energy resources in the region and has not entered the mass production stage due to international sanctions. However, after the agreement with the “5+1” and the lifting of sanctions, Iran has the opportunity to extract oil and gas from the Caspian. The activities of Western companies and their close cooperation with the new Caspian states are also a problem for Iran. The military presence of the West, especially the United States, in the Caspian region is considered a direct security threat from the Iranian point of view, and Iran has serious objections and fears in this regard.

LEGAL REGIME FOR CROSS-BORDER INVESTMENTS IN THE STATES OF THE CASPIAN REGION

The Caspian region has a great economic potential and there are a lot of prospects for its future development. Caspian states have not formalized any special regional economic integration projects; however, they actively cooperate in implementing different large-scale projects. The article provides the detailed analysis of the main forms of foreign investments in the Caspian region and the peculiarities of their legal regime. The legal basis for the development of investments in the region was established by the system of bilateral treaties concluded between the respective states on avoidance of double taxation and on mutual protection of investments. The legal basis provides for different legal forms for cross-border investments in the Caspian region: 1) preparatory activity without creation of permanent establishment; 2) activity through permanent establishment; 3) activity through subsidiary company; 4) special forms of activities in special economic zones. Additionally, specialized tax rules for investments may be provided for the certain types of business activities: cross-border transportation, the use of complex infrastructure objects (pipelines, electricity lines, etc.).

Security Problems in the Caspian Region in the Context of the New Geopolitical Situation

The article investigates the problem of security in the Caspian region in the conditions of current geopolitical reality. Author highlights the factors that change the situation in the world and activating the geopolitical interests of a number of states in the Caspian region: “color revolutions” in the Arab countries, the Syrian conflict, the aggravation of relations between the US and Iran, the aggravation of relations between Turkey and Russia etc. In the article author defines the risks of destabilization of the situation in the Caspian region as a function of each of these factors, and formulate proposals on the collective security of the Caspian states.

Outcomes and strategies in the ‘New Great Game’: China and the Caspian states emerge as winners

The decades-long struggle for control over oil and natural gas resources, infrastructure and influence in the Caspian region has been referred to as the ‘New Great Game’, with Europe, China, the US and Russia typically cited as the main combatants. We explore recent developments and aver that, if present trends continue, Europe will have access to Azerbaijan's resources, China to those of the East Caspian states, the US will stay commercially and strategically engaged, and Russia's influence will (continue to) diminish. How did this unexpected turn of events arise? We examine China's dominance and argue that the foreign policies of the US and Russia – within the region and even further abroad – have inadvertently driven the East Caspian states and China towards each other. Wary of potential maritime chokepoints in the Pacific, China feels strongly compelled to shore up resources and influence in the Caspian region. In part because of Russia's intransigence regarding the Caspian Sea's status, the East Caspian states – faced with constrained access to the West – have turned to China as an alternative market and counterbalance to Russia.

Mixing geopolitics and business: How ruling elites in the Caspian states justify their choice of export pipelines

As political elites in the Caspian countries see themselves as actors who determine the fate of their countries and not as mere objects of international power struggles or as managers of pipeline projects, this contribution examines how domestic elites assess different pipeline projects. Based on close to 1,500 TV reports from national TV stations, which are seen as the mouthpiece of the ruling elites, we analyze the arguments surrounding oil and gas pipeline debate and construction in Azerbaijan, Kazakhstan and Turkmenistan.

О БИОЛОГИЧЕСКИХ РЕСУРСАХ КАСПИЯ

Aim . We present the data on the biological resources of the Caspian Sea, based on the analysis of numerous scientific sources published between years of 1965 and 2011. Due to changes in various biotic and abiotic factors we find it important to discuss the state of the major groups of aquatic biocenosis including algae, crayfish, shrimp, pontogammarus, fish and Caspian seal. Methods. Long-term data has been analyzed on the biology and ecology of the main commercial fish stocks and their projected catches for qualitative and quantitative composition, abundance and biomass of aquatic organisms that make up the food base for fish. Results and discussion. It has been found that the widespread commercial invertebrates in the Caspian Sea are still poorly studied; their stocks are not identified and not used commercially. There is a great concern about the current state of the main commercial fish stocks of the Caspian Sea. A critical challenge is to preserve the pool of biological resources and the restoration of commercial stocks of Caspian fish. For more information about the state of the marine ecosystem in modern conditions, expedition on Caspian Sea should be carried out to study the hydrochemical regime and fish stocks, assessment of sturgeon stocks, as well as the need to conduct sonar survey for sprat stocks. Conclusions . The main condition for preserving the ecosystem of the Caspian Sea and its unique biological resources is to develop and apply environmentally-friendly methods of oil, issuing concerted common fisheries rules in various regions of theCaspian Sea, strengthening of control for sturgeon by all Caspian littoral states. The basic principle of the protection of biological resources is their rational use, based on the preservation of optimal conditions of their natural or artificial reproduction.

Climate Change Impacts on Azerbaijan Biodiversity in the Caspian Sea

Hydrological regime of large bodies of water, especially in land, is an integral feature of the climatic variability of most territories of their pool and adjacent regions. These waters include the Caspian Sea. 130 rivers flow to the Caspian Sea, which and none emerges, with catchments basin exceeds approximately 10 times the area of the sea itself and equal 3.5 million quadrat.km, can play the role of climate and environmental indicator not only regional but also global change. Currently, the Caspian region is undergoing major changes in the environment that affect the living conditions of the population of the Caspian States. Ecological problems of the Caspian Sea and coastal zones are the result of extensive economic development in the countries of the region.The coastline of the Azerbaijan sector of the Caspian Sea is 825km. The coastal zone is densely populated and intensively developed. About 40% of the population and the country's industrial facilities are concentrated in the coastal zone. The coast and the bottom are rich with oil and gas. In the region has developed agricultural activities. The coastal area has its own resort and recreational resources. The largess trade port and ferry terminal are in the Caspian Sea in Baku. Socio-economic and ecological problems of the coastal zone of the Caspian Sea have arisen as a result of the exploitation of natural resources of the sea and coastal areas. These problems are further exacerbated by abrupt changes in sea level, play an important role in global climate change.Therefore, it is imperative to examine the causes of sea level change, predicting its long-term fluctuations. Vulnerability assessment of the socio-economic conditions, natural resources of the coastal zone of the Caspian Sea for the forthcoming climate change is an urgent task for the Republic of Azerbaijan.

COMPARATIVE ASSESSMENT OF TERMS FATTENING OF STURGEONS FISH IN THE WATERS OF THE CASPIAN STATES

The article presents materials on the terms of the feeding area of sturgeon in the waters of all the Caspian States.

The Eastern Partnership and the EU-Turkey Energy Relations

Abstract This article discusses the prospects and challenges of energy cooperation between the European Union (EU) and Turkey within the context of the Eastern Partnership (EaP). Part of the EaP agenda is to advance energy cooperation between the EU and the partner states, particularly regarding the diversification of import routes. As an energy corridor between the EU and the hydrocarbon-rich Caspian states, Turkey is a strategic asset for European energy security. Turkey also has economic ties and political capital in the Caspian region that can help the EU reach out to its eastern partners. Despite robust incentives for cooperation, however, the EU-Turkey energy partnership has so far failed to meet mutual expectations. This article argues that this is primarily due to the inability of the two actors to credibly commit to regional energy cooperation. Commitment problem stems from two factors. First, the predominance of national energy interests over communal ones undermines credible commitment. The variation in energy needs of Member States prevents the EU from acting in unison in external energy policy. Similarly, Turkey also prioritizes its own energy security, particularly in its relations with suppliers, which undermines cooperation with the EU. Second, the EU and Turkey hold divergent perspectives on the potential political payoffs of energy cooperation. Turkish decision makers are convinced that energy cooperation warrants palpable progress in Turkey’s accession while most EU actors appear hesitant to establish a direct connection between energy and accession.

Emerging Frontiers: Focus on the Caspian

President's column For my fourth column on emerging oil and gas frontier regions, I want to focus on the area surrounding the Caspian Sea, the world’s largest inland water body and one of the oldest oil-producing regions. So how does this area qualify as “emerging”? First, only in recent years have significant volumes of Caspian oil begun to reach world export markets. Second, the Caspian region is rapidly emerging as an important new source of natural gas. Third, the region’s—if not the globe’s—most publicized, most prolific oil and gas project, Kashagan, entered Phase 1 of production just a few months ago, after being discovered in 2000. Production History Five countries border the Caspian Sea—Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan. Much of Uzbekistan also lies within the geological basins that make up the broader Caspian oil and gas region. However, apart from early oil production in Azerbaijan, Caspian hydrocarbons remained largely untapped until the 1990s. According to historical records, primitive methods of oil extraction date back several hundred years near Baku on the Absheron peninsula, which juts into the Caspian Sea. Modern oil exploration and development began there in the early 1870s. By the early 20th century, Baku, which had more than 3,000 oil wells, was known as one of the “black gold” capitals of the world. In the 1920s, Azerbaijan’s entire oil industry came under the control of the Soviet Union, and remained so until the USSR’s collapse in the early 1990s. At that time, several newly independent Caspian states opened the region to international investment and development. The region has significant oil and gas reserves in both onshore and offshore fields. In 2012, the US Energy Information Administration (EIA) estimated proved and probable reserves of 48 billion bbl of oil and 292 Tcf of natural gas within the basins that make up the Caspian region. The US Geological Survey estimates another 20 billion bbl of oil and 243 Tcf of gas in as-yet-undiscovered, technically recoverable resources. In 2012, the Caspian region produced an average of 2.6 million B/D of oil and condensate, roughly 3.4% of total world supply. While the majority of Caspian oil production to date has come from onshore fields, much of the future growth lies in offshore fields, which have been relatively undeveloped until recently. For example, Azerbaijan’s Shah Deniz field—the largest gas field in the Caspian Sea—came online in 2006. And Kazakhstan’s Kashagan field in the northern Caspian Sea—perhaps the world’s largest oil field outside the Middle East—just began producing oil in 2013. According to the EIA, offshore fields account for 41% of total Caspian oil reserves and 36% of natural gas. Caspian fields are still relatively distant from export markets such as Europe, China, and south Asia, where demand continues to rise. Historically, Caspian oil and gas went through Soviet infrastructure to Russia. In recent years, however, a number of major new pipelines have come online and others are in development, significantly boosting the region’s export capacity. Nevertheless, large investments in additional infrastructure will be required in the years to come.

US Policy and Interest in the Post-Soviet Caspian Region

The instability of the Caspian region, matters profoundly to the west and to the U.S. for several reasons. First, its instability permits the operation and growth of terrorist movements that often have a global and specifically anti-American scope. Second, the Caspian is a emerging oil producing region vital to unimpeded energy access. Finally, regional conflicts in this volatile area have the potential of developing into major power confrontations that cannot but affect the security of the U.S. and its allies. US since 1992 have claimed that engaging the Caspian states is a strategic priority for the United States foreign policy. The region is home to vast unexploited oil and gas reserves and is an important staging area for the US.

Globalization, regionalization and society in the Caspian Sea Basin: overcoming geography restrictions and calamities of oil dependent economies

All states of the Caspian look at different security and political alliances to address their concerns and interests. Emerging disputes over the oil fields made the states to search for consensus at the level of sub-regional multilateralism on the legal status of the Caspian, which reflected complexities and divergence of their interests. Coercive policies of the regional powers, such as Russia’s war in Georgia, geographically limited security options (Kazakhstan), richness with resources and developing political identities affected directions of cooperation and integration. Strengthened by the powerful vested interests, energy cooperation was so far the most effective one in the Caspian. It was promoted by the energy security interests of the ruling elites of the Caspian states, regional and international organizations, global powers and transnational corporations. Broader political cooperation, which is limited by geographic conditions and selectivity of ruling elites, is increasingly overcome by the non-state actors, who have been struggling with the autocrats empowered by the oil revenues and lack of incentive, support and investment from the leading democratic states, prioritizing energy interests in the Caspian. The utilization of the modern communication technologies such as internet and social networks by the civil and non-state actors, in particular after the events of the Arab spring, alters the focus from sub-regional to regional and global cooperation and empowers the civil actors, making them even in the conditions of the oil-based economies, emerge as the alternative leading forces in democratization and integration in the global processes.

Caspian vector of integration of the Shanghai cooperation organization: exogenous and endogenous factors of development of the North Caucasus

North Caucasian federal district is considered in the context of its geostrategic importance and geoeconomic understanding. Possibilities of integration of its subjects with the coastal Caspian states and extra-regional states are analyzed; as well as strategic partners of North Caucasus are highlighted. The following groups of subjects in Caspian Sea region are emphasized: coastal near-Caspian countries, countries of the transit zone, traditional regional players and large world players. The author also calculates factors of growth and supposes econometric models of growth of North Caucasian federal district on the basis of methodology of ranging of endogenous and exogenous factors of growth. The conclusion is made on the basis of the research. The main drivers of international economic integration of the majority of subjects of North Caucasian federal district are exogenous factors, and it reflects a nature of extending processes of globalization within the Shanghai cooperation organization.

«Турецкая модель развития» и причины ее несостоятельности для постсоветских стран Прикаспийского региона (1992–1993 годы)

The article is devoted to the study of the reasons of the post-Soviet Caspian states’ refusal to use the «Turkish model» for their own economic and political development. It also analyzes the American attitude towards the countries of the region after the rejection of the concept of the «Turkish model of development» and the Caspian region states’ foreign policies in 1992–1993.

Legal complications in the Caspian Sea

After the breakup of the Union of Soviet Socialist Republics (USSR), the Caspian states have been negotiating to achieve a common resolution of the territorial delimitation dispute regarding the Caspian Sea. The only progress in the resolution of this dispute belongs to the series of bilateral agreements between the littoral states and the Framework Convention on Protection of the Marine Environment of the Caspian Sea, 2003 signed by all Caspian littoral states. Both Iran and the Russian Federation still recognise the valid status of the Treaty of Friendship between the Socialist Federate Republic of Russia and Persia on 26 February 1921 and the Treaty of Commerce and Navigation between the Union of Soviet Socialist Republics and Iran on 25 March 1940 with supplements. According to these treaties, the Caspian Sea is under the regime of condominium among the littoral states. The question at issue is the size of the zones or sectors which could be obtained by the littoral states and their sovereign rights over the territory. Although no common agreement declaring the sovereign rights of the littoral states over the territory of the Caspian Sea and resources in it was concluded, development of Caspian hydrocarbon resources has already started.

EU Policies and Sub-Regional Multilateralism in the Caspian Region

The EU's agenda in promoting multilateralism faces a few challenges in the eastward direction. The Caspian Sea basin, which has been acquiring increasing importance for the EU in the context of energy, above all gas, supplies from the Caucasus and Central Asia, represents a complex mix of states with different histories, identities, regimes, centres of gravity and regional ambitions. Unlike the Black Sea basin, where the EU has developed the Black Sea Synergy policy, none of the Caspian littoral states is an EU member and this has led to a lack of EU interest in and commitment to the promotion of multilateralism in the area. Thus, in spite of significant energy security interests, the EU lacks the will, the capacity or the consistency to address regional security issues or promote reform. Indeed, economic interests are inevitably likely to clash with the reform promotion objective.

Modeling the Caspian Sea Negotiations

The objective of this study is to identify techniques for predicting the outcome of a negotiation and then apply them to the current negotiations over the legal status of the Caspian Sea, which has been in dispute since the collapse of the Soviet Union. The five coastal states—Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan—entered negotiations in 1993, but have not yet agreed on who owns the waters or the oil and natural gas beneath them. We identify the five well-defined options for resolving the dispute and then discuss the states’ preferences regarding these options. We apply some well-known social choice rules to find the “socially optimal” resolution. Then we review several versions of Fallback Bargaining, which aims to minimize the maximum dissatisfaction of the bargainers, and apply them to the dispute. Finally, we represent the dispute in financial terms and apply several well-known bankruptcy procedures, which are fair division methods for settling monetary claims. We end with some suggestions on how the value of the Caspian seabed resources could be allocated among the five Caspian states.

Russia pre‐empts Iranian and Caspian pipeline plans

Gazprom and ENI have signed a memorandum of understanding to study the feasibility of a gas pipeline from southern Russia to Western Europe. The line could deliver gas from both Russia and the Caspian states to markets across Europe and appears as a direct challenge to an EU‐sponsored plan to pipe gas from the Caspian, Iran and elsewhere to Western Europe via another proposed pipeline, known as Nabucco.

The Limits of culture: Islam and foreign policy

In recent years, analysts of world affairs have suggested that cultural interests -- ethnicity, religion, and ideology -- play a primary role in patterns of conflict and alliances, and that in the future the clash of civilizations will dominate international relations. The Limits of Culture explores the effect of culture on foreign policy, focusing on countries in the geopolitically important Caspian region and paying particular attention to those states that have identified themselves as Islamic republics -- Iran, Taliban Afghanistan, and Pakistan.The contributors to The Limits of Culture find that, contrary to the currently popular view, culture is rarely more important than other factors in shaping the foreign policies of countries in the Caspian region. They find that ruling regimes do not necessarily act according to their own rhetoric. Iran, for example, can conduct policies that contradict the official state ideology without suffering domestic retribution. Also, countries frequently align with one another when they do not share religious beliefs or cultural heritage. For example, Christian Armenia cooperates on trade and security with non-Christian Iran. Cultural identities, the contributors find, are flexible enough to enable states to pursue a wide range of policies that are consistent with their material interests. As the essays in The Limits of Culture make clear, the emerging foreign policies of the Caspian states present a significant challenge to the culturalist argument.

Management of Coastal Areas in the Caspian Sea Region: Environmental Issues and Political Challenges

Enclosed coastal waters are subject to deterioration and eutrophication. Caspian Sea (CS), the world's largest lake, located in western Asia, constitutes the focus of this article. The CS is possibly the world's third largest reservoir of oil and natural gas after the Persian Gulf and Russia. Hence, management of its coastal waters requires extraordinary efforts by all littoral states. Economical rivalries in the CS states have created an atmosphere of uncertainty in the future and commotion. In this article the geography, history, politics, and the environmental issues of the CS are discussed. It is concluded that future success of a sustainable coastal management scheme in this region can only be implemented with full cooperation and understanding between the countries neighboring the CS. Despite all existing differences, it is herewith submitted that sustainable growth and sound environmental plans in the coastal regions of the CS are attainable and will create unique growth opportunities for all countries bordering the CS (Russia, Azerbaijan, Iran, Turkmenistan, and Kazakhstan) and countries that are located in the CS region (Turkey, Georgia, Armenia, Uzbekistan, and Kyrgyzstan). A sign of such cooperation has already emerged within the Caspian Environmental Programme (CEP), which initiated its activities in 1998 for the protection of the Caspian Sea marine environment and inland zone of 100 km. With the secure future of CEP, it can be a base for future agreements between the Caspian states regarding all aspects of the Caspian region.