Caspian Sea countries searching for balance of interests

Russia is desperately trying to create different unions to shore up its position as the leading country in the post-Soviet sphere and attract more countries in its orbit. Already last Autumn Moscow initiated the creation of the Caspian basin countries economic union. It has already offered to establish the headquarters of this ‘Caspian Five’ (Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan) in the Russian city of Astrakhan.

The idea of setting up this group was raised in the Russian city of Makhatchkala at an economic council session. Russia’s trade turnover with the Caspian Five countries in 2008 was USD 26.7 billion, 21% higher than it was in 2007. Russian political think tanks consider this type of alliance very important for Russia as it could use it to exercise greater influence over countries which are potentially suppliers of oil and gas to Europe and the world. This region could readily create transport corridors bypassing Russia and Moscow wants to use all the levers it can to ensure it does not stray offside in economic games.

Russia’s activities are designed to further its own interests under the disguise of supporting other countries. However there are certain difficulties it faces as the Caspian countries have not yet reached a consensus on dividing the Caspian Sea waters. Two major approaches are being discussed: dividing it into five equal parts or reactivating a Soviet period scheme in which Iran would possess only a small segment of the Caspian waters, the rest being divided into 4 equal parts.

The relations between the post-Soviet countries are also not clear. There are serious disputes between Azerbaijan and Turkmenistan concerning different Caspian gas fields. Turkmenistan will most probably file a claim against Azerbaijan in the international arbitration court. Moscow however does not want other international bodies to get involved in discussing ‘domestic’ problems, The Kremlin wanting to be the sole mediator in this region.

Meanwhile all the Caspian countries are implementing their own projects. By the end of this year the Turkmenistan-Uzbekistan-Kazakhstan-China natural gas pipeline will be functioning, as will the Turkmenistan-Iran pipeline. There are some other problems in the region as well, e.g. the export of Turkmen gas to Russia has been temporarily suspended for technical reasons. There are also certain signs of unrest in the North Caucasus among the Russian Federation’s autonomous entities.

Azeri political analyst Rasim Musabekov thinks that this might negatively influence Russia-Azeri economic relations. Baku is also concerned at the possibility of Islamic radicalism spreading in Azerbaijan. So a lot more problems are emerging around the Caspian Sea.