South Caucasus Countries Research Articles

REGIONAL COOPERATION BETWEEN THE SOUTH CAUCASIAN COUNTRIES AND THEIR ECONOMIC DEVELOPMENT

The article reviews the issues of the geopolitical priorities in the development of the South Caucasus countries. The article provides a general assessment of the situation in the countries of the region, economic aspects of interaction in the context of extraction, processing and transportation of the energy resources along the energy corridors. Several other aspects of the economic and political relations between Azerbaijan and Georgia, as well as with Armenia, are reviewed as well. The article provides an assessment of the subsequent development of relations in terms of international programs implemented by Germany, the countries of the European Union, as well as by an international bank, and defines their common prospects.

FEATURES OF ECONOMIC DEVELOPMENT IN THE SOUTH CAUCASIAN COUNTRIES, CURRENT STATE AND PROSPECTS OF REGIONAL ECONOMIC RELATIONS

The current level of territorial - economic relations and production apacities of the South Caucasus countries has become one of the important factors for strengthening and deepening the integration process. The dynamics of globalization necessitates efficient use of the favorable geographical position of the Caucasus Region, as well as, its socio-economic and transit potential. The article analyzes the economic development features and regional economic relations of the South Caucasian countries with the help of key macroeconomic indicators. The research shows that Azerbaijan has formed a strong economy in the region, and the region's transit potential and regional relations are poorly used. The article gives substantiated proposals for increasing the transit potential of the Caucasus region and raising the level of regionalization.

The peace-making process in the Nagorno-Karabakh conflict: why did Iran fail in its mediation effort?

The Nagorno-Karabakh conflict has been one of the persistent disputes in the Post-Soviet spaces since its outbreak. There have been various peace proposals by the regional and international mediation for halting the fighting and ensuring the peaceful resolution of the conflict between two South Caucasian countries. These include the peace initiative of Kazakhstan and Russia, the mediation efforts of Iran and Turkey, the resolutions of the United Nation Security Council, and the peace proposals of the OSCE Minsk Group. However, despite all these efforts, there has not been any substantive progress on bringing parties to the conflict closer to an agreement due to the various internal and external factors. In this regard, the aim of this research paper is to investigate the peace initiative of Iran from the outset of the conflict until the signing of the Tehran Declaration in May 1992 and then to analyse the failure of Iran’s mediation efforts.

Transformation of South Caucasus Countries During 25 Years of Independence

More than 25 years have passed since countries of the South Caucasus gained independence. During this time, they underwent a serious transformation, their geopolitical and economic significance, as well as the relationship with the outside world has changed. The countries of the South Caucasus are small and their role in the world economy is negligible. However, because of the important geopolitical location, they attract the attention of many major powers and thus external factors play an important role in their development.The purpose of this work is to study the peculiarities of the transition of countries of the South Caucasus from the socialist system to the capitalist, to identify the problems of this transformation and to show the ways of their solution, and to determine the influence of regional and non-regional countries on the economic development of these countries.The paper analyzes the trends in the economic development of the countries of the South Caucasus, the features of their transformation, the degree of economic interdependence and the possibilities for deepening cooperation, shows the structural features and international competitiveness of national economies, the prospects for economic development of these countries, taking into account external factors, the possibilities of globalization and modern geo-economic conditions.

Turkish-Georgian relations in the context of Turkey’s regional policy at the current stage

The South Caucasus has always been a vital link and an artery between the West and the East. For centuries the rich lands and strategic location of this region attracted the attention of strong neighbors who tried to include the region in their borders. After the First World War and the independence of the South Caucasus states, the region turned into one of those points of the world where began a big game for influence. This game ended with the sovietization of the South Caucasus. After the collapse of the Soviet Union, the South Caucasus has become a focus of global transformations and political upheavals. At the current age, here are appearing the profits of regional as well as global actors of international relations. The disintegration of USSR created vast opportunities for Turkey to spread its influence not only in the South Caucasus region, but also in Central Asia. In conditions of Karabakh conflict, Armenian-Turkish, Armenian-Azerbaijani complicated relations, Georgia assumed significant role in the context of Turkey’s regional policy, realizing an important function of a corridor between Turkey and Turkic speaking countries of Central Asia and South Caucasus. Based on these facts and giving special importance to the transportation of Caspian energy resources Turkey has been developing close relations with Georgia since the mid-1990s and has successfully reached a high level of cooperation in almost all spheres. In the article has been analyzed the role of South Caucasus in the foreign policy of Turkey. Has been reviewed the main aspects of Turkish-Georgian relations at the current stage. Special attention was paid to the place of Georgia in foreign policy of Turkey. General conclusions were made in regard to Turkey’s foreign policy towards Georgia for the effectiveness of vector and further progress. The author contends that despite the fact that Georgia is trying to diversify its foreign policy Turkish-Georgian bilateral relations will continue to develop at a fast pace.

The ethnic map of Stavropol krai: Space–time dynamics for the last half-century

The paper analyzes changes in the ethnic composition of the population of Stavropol krai and the transformation of its ethnic map from 1959 to 2010. It has been determined that the geographical position and the demographic and migration situation are the main reasons for the dynamics of these processes. Stavropol krai is a kind of contact zone between Orthodoxy and Islam and between the areas of the settlement patterns of ethnic groups of the Indo-European, North Caucasian, and Altaic language families. The proximity of Stavropol krai to Dagestan, Chechnya, North Ossetia, Kabardino-Balkaria, and Karachay-Cherkessia largely explains the multiethnicity of its population. In moments of extreme migration activity, the krai’s territory was turned into a kind of corridor for migration, a buffer zone, and a transit area. Foreign migrants, mainly from South Caucasian countries, have made a great contribution to the modern ethnic composition of the krai’s population. Five stages can be distinguished in the structural dynamics of Stavropol krai’s ethnic population in since 1959: very stable, stable, turning, dynamic, and relatively dynamic. At the present stage, Stavropol krai has centers of multiethnicity, an ethnic semiperiphery, and an ethnic periphery.

THE CAUCASIAN DIMENSION OF THE EASTERN PARTNERSHIP IN 2009-2016

The paper gives an in-depth analysis of the evolution of the EU policy towards the South Caucasus within the framework of the Eastern Partnership. It is amply demonstrated that in 2009-2016 the goal was a Europeanization as a creation of a favorable external environment for the European Union through a sweeping judiciary, economic and political transformation in the region carried out according to the European standards. Among the key objectives of the European Union policy is the maintenance of energy security by means of creating an alternative transport corridor for fossil fuels. The study underscores that the implementation of the Eastern Partnership in 2009-2013 revealed significant discrepancies in the speed and degree of Europeanization in the South Caucasus countries due to their socio-economic peculiarities. Such uneven transformation reflects the long-standing search for an optimum way of cooperation with the European Union. This complex multi-aspect and long-term process constitutes an integral part of the effort to grasp new national and regional identities made by post-Soviet states. The paper thoroughly analyses the distinctive features of the new EU foreign policy strategy characterized by a differentiated approach to each country. Instead of the former irreciprocal statement of prerequisites for cooperation, such an approach paves the way for meaningful bilateral dialogue between the partners and furthers integration just to the extent they are ready for. Yet, it is shown that this strategy preserved the faults of the former EU regional policy towards the post-Soviet space. They include inconsistency, vague objectives, and emphasis on the geopolitical confrontation with Russia. However, in order to promote the stable development of the region, the EU needs to rethink its foreign policy strategy and come up with a modernized framework of cooperation that would take into account the interests of all concerned parties, including the Russian Federation.

A Global Trend EU‐style: Democracy Promotion in ‘Fragile’ and Conflict‐Affected South Caucasus

AbstractThis article examines the EU's democracy promotion in ‘fragile’ and conflict‐affected states. The article discusses the EU's perception of state fragility, contrasts it to the evolving understanding of the concept in the literature, and discusses its actions in the conflict‐affected states of the South Caucasus: Armenia, Azerbaijan and Georgia. The analysis demonstrates that while the EU has adjusted its democracy promotion policies following critical international junctures, it has not specifically addressed the perceived fragility or conflicts of states where it promotes democracy. While the EU's democracy promotion profile in the South Caucasus countries has become more visible, its involvement in the resolution of regional conflicts has remained marginal. Yet, by not following the trend of accentuating fragility, the EU may have proven itself as a more nuanced democracy promoter, attempting to take into consideration local perceptions and realities.

Multiple external influences and domestic change in the contested neighborhood: the case of food safety

Sanitary and Phytosanitary Standards (SPS) are a cornerstone of the Deep and Comprehensive Free-Trade Areas (DCFTAs) negotiated between the European Union (EU) and Eastern European Neighborhood Countries (NCs) under the Eastern Partnership. These are expected to eliminate quotas as well as both tariff and non-tariff barriers to trade, thus improving the existing export opportunities for food and feed products from Ukraine, Moldova, and South Caucasus countries. However, NCs face multifaceted challenges in meeting the stringent EU regulatory and administrative requirements in the SPS area. Domestically, in light of Soviet legacies (including a food safety system which deeply differed from WTO-compliant standards), approximation with EU SPS standards requires massive reforms and involve high costs for partner countries – to be borne not only by state authorities but also private businesses. Yet reforms to comply with EU demands are also closely intertwined with regional interdependencies and Russia’s bilateral and multilateral policies. The article scrutinizes the interplay between domestic preferences, EU demands for reform and Russia’s policies. It points to a complex and multifaceted relationship between engagement into a macro-level regional framework and shifting sectoral compliance patterns. The paper highlights disjunctures between sector-specific compliance processes with EU demands, on the one hand, and macro-level relations between these countries and the EU and Russia on the other. As the article argues, this is because external actors’ policies are filtered by domestic interests, preferences, and practices. Ultimately, these shape the adoption and application of external templates.

Gender Dimensions of Inequality in the Countries of Central Asia, South Caucasus, and Western CIS

The collapse of the Soviet Union initiated an unprecedented social and economic transformation of the successor countries and altered the gender balance in a region that counted gender equality as one of the key legacies of its socialist past. The transition experience of the region has amply demonstrated that the changes in the gender balance triggered by economic shifts are far from obvious, and that economic expansion and women's economic empowerment do not always go hand in hand. Therefore, active measures to enhance women’s economic empowerment should be of central concern to the policy dialogue aimed at poverty and inequality reduction and inclusive growth. In this paper, we establish the current state of various dimensions of gender inequalities and their past dynamics in the countries of Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan), South Caucasus (Armenia, Azerbaijan, and Georgia), and Western CIS (Belarus, Moldova, and Ukraine), and propose steps aimed at reducing those inequalities in the context of inclusive growth, decent job creation, and economic empowerment.

The relationship among real GDP, CO2 emissions, and energy use in South Caucasus and Turkey

The paper analyses the relationship among real gross domestic product (GDP), CO2 emissions and energy use in South Caucasus countries and Turkey over the 1992-2013 years. Results of unit root tests show that all variables are integrated of order one. In general, cointegration tests with breaks suggest the presence of a long-run relationship between these variables. Causality results suggest that “conservation hypothesis” holds for Armenia; while, for Azerbaijan and Georgia, we reached mixed results, since both “feedback hypothesis” and “growth hypothesis” received support by empirical findings. Finally, no evidence of causality emerges for Turkey, in favour of “neutrality hypothesis.” Therefore, the relevant policy implication of the study is that a common energy policy strategy would not be pursued by these countries, given the different causality links emerged in the area.

Informality, Tax Evasion and the Quality of Business Environment: Evidence from South Caucasian Countries

In many transition countries, a considerable part of economic activity takes place in the informal sector. On the other hand, tax evasion constitutes a major problem and causes improvements to all levels of the informal sector in which the volume of the informal sector in transition countries is much higher than in developed countries. Previous works have examined separately both the determinants of the size of the informal sector and the determinants of tax evasion for transition countries. But, this paper complements these significant works by examining cross sectional analysis based on firm-level data for South Caucasian countries. In addition, our paper has a new contribution to previous works by providing some empirical evidence for informality and tax evasion with the quality of business environment. Building on a simple analytical framework, we test the channels affecting the degree of informality in South Caucasian countries and vice versa, the channels affecting the degree of tax evasion. We use instrumental variable OLS and find that the extent of informality is determined by tax evasion, as well as the extent of tax evasion is determined by the informality for these countries. In addition, we find that the business environment has implications for both informal economy and tax evasion. These results suggest generally ameliorating the business environment in South Caucasian countries, while strengthening an access to land and financial sources, adequate provision of public capital such as telecommunication, transport and electricity infrastructure will reduce informality, reigning the corruption, tax administration and labor regulation will reduce tax evasion and ultimately lead to increasing government revenue collections.

The EU in the South Caucasus and the Impact of the Russia-Ukraine War

Despite hopes that it would act as a transformative tool in the South Caucasus to strengthen democracy, stability, security and regional cooperation, the Eastern Partnership (EaP) has produced limited results, with the region more fragmented today than it was five years ago. Russia’s war against Ukraine has further exacerbated the situation, raising concerns over the extent to which South Caucasus countries can genuinely rely on the West. Today, Georgia, Armenia and Azerbaijan have different geostrategic trajectories. While Georgia has stuck to the Euro-Atlantic track, Armenia joined the Russian-led Eurasian Union in January 2015. Meanwhile Azerbaijan has the luxury of choosing not to choose. Developments in the region have demonstrated that a ‘one size fits all’ approach does not work and a more differentiated policy is required.

Informality, Tax Evasion and the Quality of Business Environment: Evidence from South Caucasian Countries

In many transition countries, a considerable part of economic activity takes place in the informal sector. On the other hand, tax evasion constitutes a major problem and causes improvements to all levels of the informal sector in which the volume of the informal sector in transition countries is much higher than in developed countries. Previous works have examined separately both the determinants of the size of the informal sector and the determinants of tax evasion for transition countries. But, this paper complements these significant works by examining cross sectional analysis based on firm-level data for South Caucasian countries. In addition, our paper has a new contribution to previous works by providing some empirical evidence for informality and tax evasion with the quality of business environment. Building on a simple analytical framework, we test the channels affecting the degree of informality in South Caucasian countries and vice versa, the channels affecting the degree of tax evasion. We use instrumental variable OLS and find that the extent of informality is determined by tax evasion, as well as the extent of tax evasion is determined by the informality for these countries. In addition, we find that the business environment has implications for both informal economy and tax evasion. These results suggest generally ameliorating the business environment in South Caucasian countries, while strengthening an access to land and financial sources,adequate provision of public capital such as telecommunication, transport and electricity infrastructure will reduce informality, reigning the corruption, tax administration and labor regulation will reduce tax evasion and ultimately lead to increasing government revenue collections.

Professional military education. Appreciating challenges of the learning environment

1. NATO’s Role in Improving Professional Military Education with a Focus on the South Caucasus Countries Khayal Iskandarov, Piotr Gawliczek Connections: The Quarterly Journal CrossRef

Post-Soviet Transformations of Health Systems in the South Caucasus

This article analyzes post-Soviet changes to the health systems in the three South Caucasus countries of Armenia, Azerbaijan, and Georgia. After a severe economic and social crisis and deindustrialization in the 1990s, divergent trends emerged in the 2000s. Azerbaijan saw a spectacular recovery in growth, fuelled by an oil boom, while the impact of the 2009 global crisis restrained Georgia and Armenia’s capacity to allocate budgets to health care. Many similarities can be identified between the three countries, particularly in the 1990s, attributed to a common Soviet past and to the same trends in international aid. Differences and country-specific features increasingly manifested themselves in the 2000s, and resulting from diverging policy choices.

Trust towards NGOs and volunteering in South Caucasus: civil society moving away from post-communism?

The purpose of this paper is to compare the civil societies of the three South Caucasus countries, focusing on trust towards non-governmental organizations (NGOs) and self-reported volunteering. It is hypothesized that due to differences in democratic developments, civil society should be strongest in Georgia and weakest in Azerbaijan. It is also hypothesized that the post-communist legacy of mistrust and disengagement can be observed in older age cohorts but not among the young generation that grew up after the collapse of the Soviet Union. Analysis of recent survey data shows that the differences exist but are not in the direction hypothesized: Armenia has the lowest levels of trust and the highest levels of volunteering, whereas Azerbaijan and Georgia are fairly similar. The post-communist generation of the three countries is more likely to trust NGOs but is not more likely to engage in voluntary activities.

Energy exports, globalization and economic growth: The case of South Caucasus

We examine the effect of energy exports and globalization on economic growth using the bias-corrected least square dummy variable model in a panel of five South Caucasus countries (Azerbaijan, Armenia, Georgia, Russia and Turkey) over the period of 1990–2009. We provide evidence that higher energy exports and globalization expand economic growth. Also, we find that higher economic, political and social integrations are associated with higher growth rates. Furthermore, we find that greater energy exports contribute to higher growth rates in the course of globalization. In particular, higher energy exports lead to higher growth rates in the period of increasing economic and political integration. We therefore emphasize that energy exports, global integration, and their interaction effects are important determinants of economic growth in the South Caucasus region.

Position of European Parliament in Relation to the Association Process of the South Caucasus Countries with the EU

This article analyses the position of European Parliament (EP) in the question of the lasting from 2010 association process of the South Caucasus countries with the EU. The process is aimed at the establishment of close, extensive political and economic cooperation of the countries with the EU. The author stresses the importance attached by EP to the association negotiations, which according to the Parliament should have a crucial impact on the democratization process in Azerbaijan, Armenia and Georgia. It should be underlined that the development of democracy in those EU’s partner countries is of special interest to EP, which in recognition of their geopolitical importance with its numerous resolutions requires making closer relations with them and even providing the countries with a potential European perspective (Georgia). However the more extensive cooperation of the EU with the countries is made dependent by EP on the incorporation by Azerbaijan, Georgia and Armenia of the values defined as European (democracy, rule of law, protection of human rights etc.). That is why so important for EP are the questions of human rights observance, observance of the rules of democracy and law, including transparency and fairness of the processes in the countries. In case of violating rules constituting foundations for democratic and lawful country’s functioning, EP responds in a determined way and usually takes un unambiguous stand quite often contrasting with more “weighted” opinions of other Union institutions.

The rights and freedoms gradient of health: evidence from a cross-national study

This study examined the combined influences of national levels of socioeconomic status (SES), social capital, and rights and freedoms on population level physical and mental health outcomes. Indicators of mental health were suicide rates, alcohol consumption, and tobacco use. Indicators of physical health included life expectancy, infant mortality rates, and prevalence of HIV. Using pathway analysis on international data from a selected sample of European, North American, South American, and South Caucasus countries, similar models for mental health and physical health were developed. In the first model, the positive effects of SES and social capital on physical health were completely mediated via rights and freedoms. In the second model, the positive effect of SES on mental health was completely mediated, while the impact of social capital was partially mediated through rights and freedoms. We named the models, the “rights and freedoms gradient of health” in recognition of this latter construct’s crucial role in determining both physical and mental health.