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US, Turkey, and the Future of the Caspian

The US, Turkey, and the Future of the Caspian
by Ian Bremmer

Ian Bremmer is President of the Eurasia Group based in New York, New York.

Summary
Turkey is likely to play a pivotal role in the development of the Caspian region, since its long term economic and security interests are much more directly affected by the region than those of the United States. Thus far much of the public face of Turkish policy has been driven by the rhetoric of cultural affinity with the Turkic peoples of the region - something which appears confrontational to Armenia. In reality, in the long run the practical concerns of Turkish business corporations - which are already highly active in the region - will outweigh the pan-Turkic rhetoric.

* * *In the early 1990s, the Caspian basin eclipsed the broader category of the Newly Independent States (including all 15 former Soviet republics) as America''s key strategic interest in Eurasia. Turkey, Washington''s staunch neighborhood ally, naturally became the key component of American policy - a policy to create a "New Silk Road" connecting East to West, developing transport, energy, and communications infrastructure from the Basin through Turkey and on to Europe. As a result, the common presumption was that Turkey is a proxy for the United States in the Caspian, America''s point man and junior partner. Occasional discord in approach and interest mattered little as long as Washington made the Caspian a priority. But as of late American interest in the region has diminished - a trend likely to continue.

Much of the change in America''s mood is economic - the discovery of fewer energy resources than originally expected, recent dramatic fluctuations in energy prices, and the negative experiences of many US-based multinationals with their emerging market investments following the August 1998 financial crash have all helped to take the luster off the Caspian basin.

Some of the change is strategic. As Russia is perceived as less of a threat, both to the Caspian and to the West more broadly, the need for the United States to defend its interests in the region necessarily diminish. Similarly, the thus far muted specter of China has given the West less cause for concern than would have been predicted after Soviet collapse.

But the mood-change has political causes too. The continued and mounting instability in the region (most obviously in and around Chechnya, but almost as troubling over succession issues in Azerbaijan) make America''s aid and coordination in the Caspian appear modest and insufficient for the task at hand. Also burdensome has been the "Who Lost Russia?" debate, challenging President Clinton''s policy of engagement with the region. As Kazakhstan''s President Nazarbaev is tarred with the same brush as Boris Yeltsin (including most recent allegations of $85 million passing from Republic of Kazakhstan sovereign bank accounts to the personal accounts of the Kazakhstani president), Vice President Gore will be hard-pressed to maintain his support for the Caspian.

By most indicators then, the Caspian is slipping on America''s "who cares?" test. A new US foreign policy - one less of isolationism than of unilateralism - will raise the bar for American engagement, with aggressive support forthcoming only when real and tangible benefits obviously ensue. Foreign aid will be harder to come by, bilateral commissions harder to justify.

And as America''s role in the Caspian wanes, Turkey will arguably become the Western vanguard for the region. Its role, and its priorities, will become much more significant. How will Turkish policy differ from that of the United States?

One primary difference will be the role of culture. Turkish policymakers speak often and strongly of their shared heritage with the Turkic peoples of the Caucasus and Central Asia. There are close ties between Turkey and these states, particularly with Azerbaijan, where a "special" relationship exists between Presidents Aliyev and Demirel. Alternatively, pan-Turkish rhetoric deepens longstanding antagonism towards Armenia, which undermines Turkey''s ability to create a leadership role for itself in the Caspian.

Armenia raises an important point, the danger that Turkey''s culture-based policy may create permanent "have-nots" in the Caspian, a development which would be at odds with the economic integration and development of the region. This possibility will be a principal concern for Americans monitoring Turkey''s mounting influence in the Caspian.

The effect of American policy in the Caspian was neutralized fairly early on. Although the early post-Soviet period witnessed a marked pro-Armenia slant, American policy toward the Caspian shifted once policy-makers recognized the economic potential of the region. US policy became much more balanced as a result of oil interests and the influence of several key Jewish organizations supporting closer relations with Azerbaijan.

In Turkey''s case, the role of culture is much less significant than its politicians'' rhetoric would lead us to believe. Although the Azeris both literally and metaphorically understand the Turkish language, the Kazakhs and Kyrgyz typically need translators. Turkey has much closer relations with the neighboring Georgians - with whom they share considerable trade and a friendly political relationship (but no religious, linguistic, nor ethnic ties) - than they do with the brethren Kazakhs. And cultural kinship fails to explain the political antagonisms between Turkey and Uzbekistan.

Indeed, Turkey''s most significant cultural advantage in the region has less to do with the Turkic languages, Islam, or a shared ethnic heritage, than it does with a Eurasian business ethic. Turkish investors understand the business climate in the Caspian much better than most US multinationals, and tend to form more meaningful and lasting relationships (hence the recent growth in efforts of US companies to find Turkish partners for their business in the region). Enka Holding''s contacts with the administration of Moscow City mayor Yurii Luzhkov extend beyond anything found among American corporations; Okan Holding''s connections with Nazarbaev and Alarko''s relations with Turkmenistan''s President Niyazov are much closer than those enjoyed by the major Western oil companies.

Moreover, the Turkish government has always placed a much higher priority on
economic development in the Caspian than the United States, and is willing to support its business interests aggressively. An understanding of how business is done and a government commitment to developing business make Turkish investment more effective and more likely to have a significant impact on the economic future of the Caspian region.

The difference between American and Turkish energy policies is a good example of how economic concerns are more likely to shape the future of the Caspian under Turkey leadership than otherwise. For example, Turkish enthusiasm for the Baku-Ceyhan pipeline is considerably less pronounced than America''s hypersupport, although Turkey is ostensibly the key beneficiary. Turkish officials consider Baku-Ceyhan useful primarily because it means having something perceived as important by the United States; not because of its economic significance. If US policy has been to encourage multiple pipelines in theory though not in fact - multiple pipelines but not through Iran, Iraq, Afghanistan, China, nor Russia if you can help it - Turkey''s need for increased gas supply and energy infrastructure foreshadow an economic, instead of political, agenda. The Turkish government has pushed ahead with Bluestream project, which plans to bring Russian natural gas to Turkey; as well as efforts to build closer economic relations with Iran and Iraq. In the long run, this bodes well for the Caspian economies, which benefit from greater economic investment from all sides and a more rational distribution of funds.

And one of the reasons economic considerations will guide Turkish policy is the simple fact that Turkey''s security interests in the Caspian are more immediate than those of the United States. Accordingly, much has been made of the competing alliances emerging in the region - Turkey/Azerbaijan/Israel versus Greece/Iran/Armenia (and, tacitly, Russia). But once again, Turkish policy is more nuanced than cultural and historic tradition would lead us to expect. Warming relations between Greece and Turkey following recent earthquakes in both countries and Turkey''s candidacy for membership into the European Union help to moderate these tendencies, making shared economic interests more of an imperative.

Chechnya is an instructive example of the competing cultural, political, and security concerns Turkish policymakers must take into account when drawing up Caspian policy. Thus far in the Chechen war, Turkey has supported Moscow. Turkey wishes to halt instability in the Caucasus at all costs, and successes by Islamic fundamentalists near to the Turkish border are anathema to Turkish ideas of self-preservation, secular statehood, and accession to the EU.

However, mounting instability in Chechnya directly threatens Turkish ally Azerbaijan, which in recent months has appealed for a NATO presence. Washington has turned a deaf ear to Azerbaijan''s pleas, but Turkey cannot ignore Azeri security concerns. Tightening security arrangements in the region (with the potential for backlash in Russia) is the most probable outcome.

Turkey''s Caspian policy differences with the US are most immediate somewhat farther afield, in regard with Iraq. It is here that greatest coordination of policy needs to be pursued. Turkey supports a unitary Iraqi state, and is untroubled by the prospect of Saddam Hussein''s continued rule or, for that matter, by Iraq''s development of weapons of mass destruction. For Turkey, a weak Iraqi government creates the possibility of a successful Kurdish separatist movement in northern Iraq, which would fuel the aspirations of Kurdish population in both Turkey and Iran - a nightmare of political stability for the entire region. The United States has little considered what it should do after Hussein, which is the most important strategic concern for the Turks.

Turkey''s future relations with Russia remain the biggest question mark. Although rhetoric is confrontational between the two countries, both sides would clearly welcome an increase in trade. Turkey once enjoyed $1 billion a year in "shuttle trade" with Moscow (commerce by individual, unregistered traders), but this has now mostly dried up. But policy outcomes on this front are largely out of the hands of both Turkey and the United States. Will Russia press an expansionist agenda in the Caspian? Will they become anti-market, anti-integration towards the West? Only Russia''s coming elections will decide.

As the Caspian states continue to develop, economically and politically, the role of Turkey will clearly increase. Turkey''s long-term commitment to the Caspian will likely spur development in the region, building a Eurasian economic identity. Indeed, in the long run, the reason the Caspian states will turn to Turkey is less because it is a secular state of an Islamic nation, but rather because Turkish economic interests are more likely to integrate with those of Central Asia and the Caucasus. Policies driven by economic concerns will seem more rational to the region and political dialogue between Turkey and the Caspian states will accordingly ring much truer.