Hassan's

After the PKK Attacks Are We Where Words Fail?

2011-10-21T22:13:00.000+03:00

After mine attacks by the PKK in the Güroymak district of Bitlison Tuesday, while we haven’t yet dressed the wounds, we heard another attack took place in the Çukurca and Yüksekova districts of Hakkari on Wednesday. According to the information provided by the Prime Minister, during simultaneous attacks on police and army units, 24 security officials were killed and 18 were injured.

Following these attacks, which seriously alarmed the upper echelons of the state, it was notified that the Chief of Staff went to the event scene. In addition, three important diplomatic tours were canceled. The first of them was the Prime Minister’s Kazakhstan visit that was expected to be realized today. Second was the Foreign Minister’s Serbia visit and the third was the Finance Minister’s U.S. visit. In other words, Turkey again entered a period in which the agenda is confined by acts of terrorism at a time when it should carry out an active policy both domestically and abroad and be required to move resolutely.

Many arguments can be stated while analyzing the timing of the attacks that were carried out one after another following President Abdullah Gül’s visit to the region. One argument is that by these attacks, the PKK is trying to overcome the pressure placed on it because it has recently been very isolated in the international arena and had to face increasing pressure in local sense. Apart from the major blow that the PKK took from the operations conducted recently ago at Mountain Kato, the positive results of Turkish diplomacy, whether in the West or in Iraq, are narrowingthe PKK’s field and putting psychological pressure on members of the terrorist organization. So, one way to overcome this situation for the PKK is to continue operations in order to enable the organization to recover.

The second argument is that the PKK, which tends to intensify its actions before winter, might be working to get certain benefits during the constitution-making process or benefits for Öcalan by creating political pressure. From this point of view, the PKK exploits the Kurdish problem, since there is a discrepancy between its practice and rhetoric. The terrorist attacks not only sabotaging the its the transformation process in Turkey, but also targets the people who are ethnically Kurds. Once issues like education in the mother tongue, reforms of local governments, etc. start to be discussed publicly during debates on the new constitution that were launched in good purpose, these kinds of attacks will obviously have the effect of stalling this process. While we should have been discussing the working principles of a constitutional commission in which all parties have equal powers of representation, the postponing of the agenda because of terrorist attacks makes us think over and over again.

On the other hand, how the PKK will contribute to the liberation of the Kurdish people is open to dispute, since it tries to acquire control over the people of the region by frightening them with attacks toward civilians, like in the 1980s. After the Syrian Baathist cadres’ transmitter conversation was revealed and covered in the media, this group became effective in the PKK. Recently, we see that attacks on civilians are carried out consciously and they target even children and women. Last month four girls lost their lives due to the PKK attack, while they were returning back to their homes from a dinner outside in Bitlis district. Moreover, the PKK terrorist killed a preganat woman with her four year old kid in Batman district on 27 September 2011.

Taking all these factors into consideration, reducing the Kurdish problem to where Abdullah Öcalan’s house arrest should be served, whether in Muğla or Marmaris, and the BDP’s expressing this issue more than the democratization of Turkey and benefits for Kurdish people, will lead to confusion. In a country where one square meter of Öcalan’s room was on the agenda, it is seen that the BDP is confounding the Kurdish problem and Öcalan’s problems.

What Should Be Done Afterwards?

At a time when the Kurdish problem and PKK have become separate from each other, we have to rethink some issues. In this respect, “how successful Kurdish politics being dominated by the PKK will be and whether there will be reformation there or not”, will be influential in the future. Today, if certain initiatives are still being sabotaged by terrorist attacks and politics cannot function proaparly, and if terror is still looming over Turkey’s agenda, the time has already come for Kurdish people to draw a separator line between themselves and the PKK. It is obvious that the process of dissociation will not be easy in this environment. The existence of a body like the KCK which tries to control the local politics by the use of force and, in the long run, indoctrinate Kurdish youth in a radical way, as well as the attacks of the PKK which do not segregate civilians and officials, necessitate the foundation of affective mechanisms in the region by the state to guarantee the safety of civilians those who are encouraged to rise against the PKK. In sense, Kurds should give a very clear message to those who see themselves as representatives of the Kurdish population, but using illegal methods to reshape the politics in Turkey.

It is difficult to think straight in an environment where 24 security personnel were martyred and the PKK is still trying to provoke the authority of the state instead of leaving its weapons. However during this process, the continuation of momentum is very significant. The emptying of villages near Kandil by Massood Barzani, maintaining of operations against the PKK in legal terms, sustaining of the democratization process, and finding solutions to the socio-economic problems in regional scale simultaneously are much too important. Otherwise, you must keep in mind that what the PKK tries to do is sensationalize the state so that it appeals to unlawful practices which will expand the area of the PKK in the region. This means the loss of what has been gained thus far.

Test of Sincerity in Turkey-Azerbaijan Relations

2011-10-20T10:27:00.000+03:00

Twenty years ago, the Soviet Union was divided into fifteen republics. The resulting picture necessitated Turkey returning to a geography in which it was alienated as a result of the controlling policies of the Soviets. In the reconstruction process of five Turkic states, four in Central Asia, and Azerbaijan in the Caucasus, Turkey did not hesitate to take the initiative. If we look back, we can say that Turkey could not realize its dreams beyond the Caspian Sea due to regional geopolitics and geographical reasons, but succeeded in establishing a complex ties with Azerbaijan.

Located west of the Caspian Sea, Azerbaijan has experienced various problems in integrating into the international system after seventy years of Soviet administration. The first of them was the outbreak of war in Karabakh in 1988, which emerged as the biggest obstacle to experiencing a normal transition period for the country. Until the ceasefire agreement was signed in 1994, the country had serious troubles in the areas of security and economics, but after Heydar Aliyev’s coming to power, it entered a rapid recovery process.

In that period, Turkey sided with Azerbaijan and closed its border with Armenia in 1993, in response to Armenia's occupation of the territory of Azerbaijan and human rights violations. This step opened the way for Turkey to share a common fatewith Azerbaijan, but in the long run paved the way for the narrowing of its maneuvering area.

Baku’s Flirting with Moscow
The entering into service of the Baku-Tbilisi-Ceyhan crude oil pipeline in 2006 and the delivering of gas via the Baku-Tbilisi-Erzurum line the next year were important turning points for Azerbaijan. Because from 2006 to the end of 2008, when the global financial crisis occurred, Azerbaijan has grown by over 20 % and thus had a chance to recover from its economic problems and modernize its military. The completion of these projects creates an important success story for Turkey, but Ankara, having difficulties reaching beyond the Caspian Sea, could not take its current relations beyond the level they were in the 1990s. Even at certain points, it was seen that the existence of Ankara was relatively weakened by the gradual growth of Russia in the region. It should be noted that the Georgia-Russia war which erupted in 2008 played an important role in that issue.

The Kremlin, taking an aggressive stance in its backyard starting in the 2000s, sent important messages to both countries of the region and to the West with this war. Looking at Turkey-Azerbaijan relations, two important factors gain clarity. The first factor was the need for Baku to redefine its relations with Russia, which until 2008 Baku had always tried to keep balanced. The first reflection of that was the Kremlin’s monopolization of the Karabakh problem’s solution process since it wants to be the primary actor in solving the problems in its backyard. The second reflection was the symbolic but politically significant natural gas treaties signed between Azerbaijan and Russia.

The second important factor was the normalization process of Turkey-Armenia relations. In Baku, a pro-Russian clique close to the administration used the normalization process as a propaganda tool and that played a catalytic role in the rapprochement between Azerbaijan and Russia. In that process, which turned into a test of sincerity, some conflicts between Turkey and Azerbaijan entered the political scene. The closure of Sehitlik Mosque which was built in Azerbaijan by Diyanet, hauling down of Turkish flags in the country, assumption of a rigid attitude on the mutual abolition of visas, and adoption of a strong language toward Turkey were reflections of the tensions that occurred in that process. Yet, examples of Baku’s attitude seen in Wikileaks documents were quite interesting. Aliyev did not refrain from using expressions that underestimate Turkey in the meetings with American authorities.

Azerbaijan’s search for exercising power over Turkey
While we see acceleration in Baku-Moscow flirtations after 2008, it became apparent that Azerbaijan did not choose to completely cut its relations with Turkey. Inthat period, Baku a fortiori preferred to exercise power over Ankara. A positive public perception of Turkey in Azerbaijan was effective in İlham Aliyev’s not extravagating in that partly successful policy. As a consequence, Baku, taking public response into account, continued to exercise power over Ankara while managing the perceptions of the public.

On the other hand, Turkey did not take a stance that will raise tension against such steps, on the contrary; it took concrete steps to normalize strained relations. Prime Minister Erdoğan did not abstain from sending clear messages in the Azerbaijani parliament after the signing of protocols. That initiative weakened the hand of Turkey in relations with Armenia but helped Erdoğan regain power in Baku. In other words, while not being able to take a step back from the decision taken in the 1990s to close the borders, an era in which relations with Azerbaijan are defined in terms of policies toward Armenia has started. As a result of this, Turkey is faced with a question that asks how to turn the equation in a zero-sum game in its favor. This equation has not yet been solved.

At this point, we cannot say bilateral relations are at a specific level they had been in 1990s, but it is a fact that Turkey’s current position maintains its critical importance in Azerbaijan’s westward expansion. In this respect, Turkey is still seen as an important ally that is not dispensable in Baku. For Turkey, the situation is not so different. After the June 12 elections, PM Erdoğan’s first visit abroad after Cyprus was to Baku, and that illustrates Azerbaijan’s importance in Turkish foreign policy.

Nevertheless, in order to bring current relations to a more robust structure for the next twenty years, more than diplomatic jests are needed. Strengthening its economic and strategic position in the Caucasus is very important for a Turkey that wants to be a regional power, and for the turning of perception in Azerbaijan in favor of Turkey. But, Ankara, having to amend the paradigm with Armenia toward 2015, has to find ways to avoid a crisis in its relations with Azerbaijan.

*This piece was translated by Nihal Cizmecioglu.
Note: This analysis is an expanded version of the article, which was published in Analist, September 2011

Energy Negotiations over Turkish-Russian Line

2011-10-12T12:10:00.004+03:00

The first treaty regarding the natural gas trade between Turkey and the USSR was signed in 1984, proposing that Turkey would buy natural gas from the Soviet Union for a 25-year term from the beginning of 1987. In return, the USSR would buy cotton, meat, corn, and vegetable oil, as well as steel and non-steel products and industrial materials. According to this treaty, natural gas sales would start at a volume of 1.5 billion m3 in 1987 and rise up to 6 billion m3 per year from 1993 until 2011.

The content of the treaty, which seems quite advantageous for the Turkish side, can also be counted as a breakthrough for Turkey. While the agreement provided the opportunity to become acquainted with the Russian market before the Berlin Wall came down, Turkey also got the chance to enter the Russian market. Moreover, this bilateral agreement opened the doors to develop good relations and making business deals with the states which gained their independence after demise of the Soviet Union. On the other hand, cities suffering from air pollution such as Ankara acquired the opportunity for an early meeting with natural gas, the so-called “blue gold.”

Although the treaty signed in 1984 seems profoundly advantageous, in the long term, Turkey’s increasing addiction to natural gas led it to become the second largest customer of Russia following Germany. The underlying reason for this argument, which has been consistently expressed throughout the 2000s, was Turkey’s nearly 65% dependence on Russian gas. Regarding this, Turkey’s attitude of flirting with Turkmenistan while making a deal with Russia for gas sales through the “Blue Stream” has been debated for a long time.

In the second half of the 1990s, Turkey signed treaties regarding the sale of natural gas with various countries such as Nigeria (with LNG) for more than 20 years; then, gas agreements with Iran for the volume of 10 billion m3per year as well as gas deals with Russia were signed in 1997 and 1998, which counted for a total of 24 billion m3. Moreover, a gas deal finally signed with Turkmenistan in 1998 in the wake of the new millennium, proposing an annual 16 billion m3 sale of gas for 30 years but it has become relatively invalid because of both political and economic reasons as well as the fact Turkey is no longer in need of this volume of natural gas.

At this point, natural gas consumption in Turkey is gradually increasing and the negative effects of the financial crisis which emerged in 2008 have remained limited in the consumption of the Turkish market. While Turkey consumed 35.6 billion m3 in 2008 and 35.1 billion m³ in 2009, in 2010, the natural gas consumption increased to 37.4 billion m3. [1] According to BOTAS, its natural gas imports have gradually started to decrease since 2008. While BOTAS imported 37.2 billion m³ of natural gas in 2008, this volume fell to 32 billion m3 in 2010. Additionally, gas imports from Russia remained limited to 14.5 billion m3 in 2010. [2]

Is Turkey Taking a Risk?

The major reason for Turkey’s intense gas consumption is that more than half of its electricity generation is provided by natural gas. Considering consumption, only 20-22% of the gas is consumed in houses, with the other 20% is being used in industry as well. Although it is not easy to expect certain changes in a short period of time, it is a reality that Turkey has guaranteed to buy much more natural gas than it consumes by way of new gas deals. However, Turkey as a country is paying billions of dollars to both Russia and Iran as a result of “buy or pay” clauses in the deals, the possibility of its demand for gas will reduce in the coming periods as some have predicted seems slim.

In 2010, Turkey got totally 24 billion m3 natural gas of which 8 billion m3 came through Western lines and the Blue Stream gas deal worth 16 billion m3. However, considering Russian imports, Ankara has the chance to receive more natural gas from Russia up until 2021 than the volume it consumed in 2010. On the other hand, taking into account that the 23 billion m3 of imports plateaued in 2008 and the inconsistent behaviors of Iran, it is difficult to assume the impacts of those circumstances in the long run. In that context, the Silivri storage facility with its 2.1 billion m3 capacity will quite possibly get a significant role in this respect.

Why Did Turkey Not Extend the Gas Sale Agreement?

One clause of the 1984 agreement is that the parties involved can extend the deals for 5 years unless otherwise stated. However, as Turkey wanted some amendments in the deals, it demanded an extension of the treaty notification date and this demand from the Turkish side was positively responded to by Gazprom.

According to debates in the press, Turkey as being the second largest customer of Gazprom demanded to receive a 15-20% discount in gas prices. Turkey also demanded that the “buy or pay” clause will prevail for the 50% of the guaranteed gas volumes. Officials say the deals were not completed because Gazprom labeled those demands of the Turkish side as unrealistic and rejected them.

According to the Russian press, Russia is already selling cheaper gas to Turkey at nearly 35% lower than European prices and any numbers lower than the current prices will be illogical.[3] It is quite difficult to predict how this argument will be accepted in Turkey because gas deals and pricing are generally carried out in great confidentiality. Moreover, various numbers regarding the gas prices being mentioned and debated in the market and those debated numbers on gas prices are not clear as in the case of oil prices.

On the other hand, Turkey seems to have gained clout through the recent arbitration suits filed against Russia. The Italian Edison Company’s victory in the suit against Promgaz -a jointly owned energy company by Gazprom and ENI- at at the court of arbitration in Stockholm, in which they demanded a price discount citing price reductions in its domestic market, led to other big companies as EoN to pursue such moves. As the lawsuits still continue, in Russia, Putin seems to be quietly constrained regarding the investigations and also, it is said that Putin is closely following the legal process with Alexie Miller, the chairman of Gazprom.

General Directorate of the National Energy Foundation Konstantin Simonov made geopolitical comments on why the parties could not reach a compromise. According to Simonov, Turkey is trying to constrain Russia regarding Samsun-Ceyhan and South Stream cases. Therefore, Ankara is trying to apply pressure to Russia as much as possible. As it is already remembered that this argument was frequently put into words last month, experts interpreted the underlying reason for the Russian decision on suspending the Samsun-Ceyhan oil pipeline project is the position of Turkey on the South Stream project.

What will happen then?

Actually, whether Turkey aims to diminish its long-term dependence on Russia at a state level with such a move or is taking a risk is uncertain. However, another reality is that new legal regulations have brought import limitations to BOTAS. Accordingly, BOTAS has limited options for new import deals until its market stake is down to 20%.[4] One of the significant points that are seen from European cases and are consistently being mentioned in Turkey is that liberalization policies are quite effective in improving bilateral relations with Gazprom. In this respect, this situation offers certain advantages for Turkey. At this point, composing further strategies in the next term seems critical in terms of responding to questions of how Turkey will manage the transition process in the following period while it is trying to eliminate obstacles to liberalization, whether the powerful companies from Turkey will be able to enter the market, or whether BOTAS will achieve becoming an active actor.

Now, following Turkey’s reluctance to sign the treaty, and considering the latest statements of Gazprom Vice President Alexander Medvedev: “according to our observations, natural gas provided by Western lines is generally demanded by commercial and industrial consumers in Turkey. Therefore, we are ready to supply gas to all consumers in the Turkish market including current and new customers as well as the private sector,” it seems quite possible to believe that the negotiations between Turkey and Russia may be conducted through new channels in the upcoming periods.

References

[1] ETKB, Mavi Kitap 2011, http://www.enerji.gov.tr/yayinlar_raporlar/Mavi_Kitap_2011.pdf.

[2] BOTAŞ, 2010 Yılı Sektör Raporu (BOTAŞ Sector Report 2010); http://www.enerji.gov.tr/yayinlar_raporlar/Sektor_Raporu_BOTAS_2010.pdf.

[3] “Turkey and Gazprom fail to agree on price”, The Voice of Russia; http://english.ruvr.ru/2011/10/03/58096783.html.

[4] 4646 Sayılı Doğalgaz Piyasası Kanunu (Natural Gas Market Law No: 4646).

Note: This peace was translated by Betul Buke Karacin.http://www.turkishweekly.net/columnist/3529/-energy-negotiations-over-turkish-russian-line.html

Energy Policies of the EU: The Dilemma of Sovereignty and Unity

2011-09-09T14:12:00.000+03:00

The European Union, rooted in coal and steel which are the main raw materials of industry, was founded in the wake of the Second World War. During this process, the EU developed a common market and a complex structure within enlarged union borders, as well as made efforts to increase its competitive capacity. In this period, environmental problems, the development of common and competitive market dynamics, and the resolution of the supply problem were the central concerns in the Union’s policies. According to a report prepared by the Robert Schuman Center in 2010, these three main factors were described as the “three mantras” of Kyoto, Lisbon, and Moscow.

These three mantras are prominent in terms of understanding the EU’s present energy policies. First, as far as the Kyoto Protocol is concerned, the signatory EU member countries promised to cut carbon emissions by 20% as compared to the 1990 standards. Then, the EU more ambitiously set the goal of cutting them by 30%, and by 2050, the EU is planning to cut its carbon emission rates by 80-90%. Therefore, as the largest economic bloc in the world, the EU has to pursue common central policies in agriculture, aviation, industry, as well as innovation technologies. In that respect, the competitive and active market which lies at the roots of the EU has considerable importance, and is also related to the second mantra referring to the Lisbon Process.

Parallel to the development of common market efforts, the EU has undergone a liberalization process which was carried out throughout the 1990s and expanded on in the 2000s. In this period, concrete measures with regards to the transit passing of electricity and natural gas plus the promotion of a competitive market were decisively adopted. Legal regulations which will strengthen competitiveness have started to take shape within this context. There were also two related articles in the Lisbon Treaty which came into force in 2010. The first of them was the assurance of market operation and the other was the interconnection of energy infrastructures.

In addition, the last mantra Moscow indicates high levels of EU dependence and its quest for new policies in this regard. The risks of nearly 80% of EU gas passing through Ukraine as well as Russia’s efforts to strengthen its monopolistic position can be counted as the main elements of that dilemma.

Hybrid Structure of EU Energy Policies

Within the latest enlargement waves, the EU has partially transformed into a hybrid structure. Until 2004, the 15 most developed countries and developing countries came together under the EU umbrella. As a result of this, differences in economy and foreign policy in particular have become more explicit. The economic and political cost of those differences was limited for France and Germany compared to Eastern and Central European countries, as the latter faced crucial problems.

There is a similar picture in energy policies, where economy and foreign policy dimensions more clearly come to the fore. While Eastern European countries were forced to prompt transformation in energy policies within environmental considerations; on the other hand, politics being pursued by Brussels remain notably weak in terms of foreign policy coordination.

One of the most fundamental problems in coordination is the relations with Russia. There are clear distinctions in the ways of searching for alternatives among countries such as Poland, which gets nearly 65% of its natural gas from Russia, and Germany which successively achieved its supply diversification. Considering the fact that Poland needs to increase its natural gas consumption as a result of new-term environmental policies, it has to diminish coal related energy production. Warsaw’s desire to turn to non-Russian suppliers brings a significant dilemma, because locomotive powers such as Germany and France show an indifferent stance toward Poland in alternative projects. Energy diplomacy among Russia and Germany is the best example of this situation. In this new period, Germany wants to be an important energy hub via the North Stream, which enables Russia to reach Europe through the Baltic Sea. As a consequence, while Russia achieves direct entrance into Europe, in the long term, Eastern and Central European countries will be the sides that are negatively affected by this close relationship. Russia, as a country that diversified its customers, will be in less need of Eastern and Central European countries, and will therefore have the power to impose the exact cost that it wants when signing new contracts with those countries.

Considering the advantageous bilateral relations between Russia and Germany, Berlin is generally giving more importance to its own interests rather than EU interests. By the way of new contracts, German-Russian relations have prospered. However, instead of negotiating with the EU as a monopsony power, Russia strengthens its monopolistic role within the help of expanding bilateral relations through energy contracts. Second, Russia, as an energy supplier of Germany which is the locomotive of the EU, can also find appropriate ground for lobbying to make Brussels indifferent to alternative projects such as Nabucco.

According to the 2010 European Commission report, the EU has the goal of cutting carbon emissions without any increase in costs by 40% in 2030 and 60% in 2050 compared to the levels of the 1990s. In order to attain those goals, apart from renewable energy technologies, natural gas stands as a vital conventional resource. Regarding natural gas, under present technological capabilities, today it seems quite difficult to find other alternatives to supplement Russia. However, it does not mean that there are no other ways that help to diminish Russian bargaining power. Especially when taken account into account the fact that Middle Eastern countries, Iran, and Iraq, have not integrated into the West, it is clear that there would be prominent developments in the following period. The problematic issue is that despite foreign policy mechanisms which were intended to govern the EU after Lisbon having formed institutionally, they are still quite far from active operation.

As a consequence, although the EU has ambitious goals in terms of energy policies, it shows a weak stance, especially in diplomatic channels. In other words, although the EU aims to attain harmony in its energy policies as in Beethoven’s Ninth Symphony, it only comes into a picture prevailing in cacophony. May be the European Energy Community can be a successful initiative in this sense, but it is up to the political will that shape the effectiveness of this mechanism.

Hasan Selim Özertem

Center for Energy Security Studies

This peace was translated by Betul Buke Karacin.

Note: This analysis is an expanded version of the article, which was published in Analist, August 2011.

Critical Infrastructure Security and Energy Policies

2011-07-18T14:57:00.000+03:00

%35 of oil, %75 of natural gas is transmitted by pipelines in the world.[1] In the worldwide total length of oil pipelines is 313.670 km; this number is 1.226.258 km in natural gas pipelines.[2] In other words, transportation, storage, refinery and distribution of energy resources require a complex infrastructure chain.

In energy sector, regular and sustainable operation of energy systems requires not only the supply security, but also the protection of pipelines, electricity and nuclear power plants as well as refinery and distribution systems against the possible risks and threats. In other words, any potential failure or trouble in such a complex energy infrastructure system poses crucial economic and political consequences. In this sense, security of energy facilities can be analyzed as a sub-title of energy security.

In principle, energy security is built upon four major pillars. Two of those are directly related with critical infrastructure security. These principles are availability, affordability in economic terms, accessibility and sustainability. In essence, accessibility and sustainability principles are directly related with infrastructure security.

Accessibility and sustainability concepts are fundamental regarding the stability of energy transfer and distribution of energy resources. It is true that construction of pipelines and the cost/profit balance is important for energy security. Moreover, sustainability of the existing resources in the long run is deterministic in terms of investment. However, in the psot construction period the importance of accessibility and sustainability principles preserve their importance. Any problem emerges in energy transfer negatively affects the security of supply and causes severe economic problems in the production sector. On the other hand, due to disrupted transmission supplier country will have to bear the consequences of the stopped production, which means decreasing revenues from the oil and gas sector. Considering the fact that oil revenues represent mainly an important share of the government revenues for energy sector dependent countries it is also important for the political and economic stability in these country. In this respect, beside construction of infrastructure, protection of those facilities also counted in the priorities of energy security.

Despite there is no international consensus in critical infrastructure definition, it is difficult to mark every infrastructure unit as critical. In this sense, critical infrastructures can be basically defined as vital systems and assets that would pose security risks and would have negative impacts on national interest of country/countries in the case of disruption of transmission.

A short list of some specific energy facilities can be made, which might be examined within the framework of critical infrastructure. Looking at international conceptualization of the issue it can be seen that apart from energy systems, banking and finance, communication, transportation, public health and water distribution systems are included into general definitions of critical infrastructures in the US, EU and as well as in Japan. [3]

Any attacks toward critical infrastructures would bring local and also regional consequences such as loss of money and prestige, environmental pollution, humanitarian and social security risks. Transit pipelines, major energy distribution and transportation lines, interior oil and natural gas transmission lines, dams and nuclear power plants have great significance in the line of critical energy infrastructure security.

Possible threats toward critical infrastructures can be listed as below;

- terrorist attacks

- sabotages and natural disasters,

- cyber attacks

- illegal tapping,

- accidents during construction,

- problems related to ageing, corrosion.

Measures that would be taken in line with the threats against the critical infrastructure facilities would be helpful to minimize the actual and potential risks to these systems. Furthermore, they will also contribute ensuring stability in economic and political spheres. However, those measures should be taken in a global fashion. Most of the protection measures are closely in the responsibility of security forces, but at the same time, critical infrastructure security requires implementation of multidimensional policies including social awareness, diplomacy as well as infrastructure safety.

To sum up, energy security cannot be only reduced to resource diversification policies based on supply and demand security. In this sense, energy infrastructure security should be integrated to the analysis to have a holistic approach.

[1] M. Melih Başdemir, Mitat Çelikpala, "Türkiye’de Petrol ve Doğal gaz Boru Hatlarının Güvenliği: Uygulanan Politikalar Ve Öneriler", Stratejik Araştırmalar Dergisi, Ocak, 2010

[2] Faruk Demir, Enerji Güvenliği, Enerji Ekonomisi, Enerji Diplomasisi, Ankara, 2007

[3] Alexander E. Farrell, Hisham Zerrifi, Hadi Dowlatabadi, "Energy Infrastructure and Security", Annual Review of Environmental Resources, 2004, p. 439.

This piece was traslated by Betul Buke Karacin.

Rising tension in the Caucasus and the Nagorno-Karabakh conflict

2011-05-01T02:26:00.000+03:00

2010 was a year of increasing tension in the Caucasus. An increase in bombing activities in Dagestan, Chechnya and Ingushetia, along with armed skirmishes in Nagorno-Karabakh brought questions of stability to Turkey’s doorstep.

It is clear that the region has significant importance as a Turkey main gateway to Russia and the Caspian basin as well as a transit route of energy resources. Therefore, any increase in tension in the region will have significant impact in Turkey. It also has some capacity to generate negative impacts on the political atmosphere and cause problems for ongoing and future projects.

Following the Russia-Georgia war in 2008, attempts to reach a resolution in the Nagorno- Karabakh conflict bilaterally and internationally gained impetus. While Armenia and Azerbaijan met six times in 2009, they came together only three times in 2010. The Minsk Group followed more pro-active policies during this period but even after this traffic, Baku and Yerevan are still far from a resolution.

In fact, since August 2008, we have seen that the peace process becoming more problematic. The unilateral efforts of the parties are causing some uncertainty in the determination of the actors’ roles in the peace process. Russia, while trying to shape arrangements as a co-president of the Minsk Group, is also playing an active role through the policies orchestrated by Kremlin. This paves the way for debates on the insufficiency and weaknesses of the Minsk Group’s policies while strengthening the position of Moscow. In fact, Russia is giving the message that “no solution is possible without my approval!”

Apart from regional and international dynamics, domestic politics has an important role to play. In this context, the Armenian administration is suffering from the rising tension in domestic politics and has limited maneuvering space. On the other hand, Azerbaijan has continued to stick to its policies since 1994 and expects action from Yerevan that is generally isolated from most of the integration policies in the region. In this environment, Azerbaijan and Armenia’s accelerating arms race, coupled with aggressive rhetoric and some clashes in the conflict zone, is not helping draw a positive picture for the future.

Increasing arms race in the region

Armenia has 70,000 soldiers, including militia forces, in Karabakh. Azerbaijan has 90,000 soldiers. Georgia has nearly 40,000 in military forces. In this respect, during the cease-fire period, it is clearly seen that the military forces of both Armenia and Azerbaijan exceed their needs.

Since the cease-fire, Azerbaijan has started to modernize its army. One of the main motivations behind this was the inability of the Azerbaijani army to fight a total war in the Karabakh conflict, which resulted in the occupation of almost 20 percent of its territory. In this respect, Baku has made great achievements in personnel training, armaments and military modernization. In addition, the military budget has increased to $3.12 billion, when it was only $135 million in 2003. On the contrary, Armenia allocated $400 million for military expenses in 2011. That amount would likely increase to up to $600 million when combined with the spending of the Karabakh administration.

Although the military budget of Azerbaijan is higher than Armenia’s military expenditure, including the Karabakh administration’s expenditures, Russia has taken some steps to eliminate that difference. According to Azerbaijani resources, Russia made weapon, equipment and machinery transfers worth $800 million to Armenia in 2009. Russia’s military base in Gyumri plays a crucial role in this respect. Moreover, Armenia enjoys some privileges while purchasing weapons from Russia as a member of the Collective Security Treaty Organization. With Azerbaijan’s efforts at obtaining S-300 missiles from Russia a complicated story, Armenia has already deployed S-300 missile systems to strategically critical points.

Azerbaijan tried to make its policies legally and politically legitimate by passing a new military doctrine in June 2010. Actually, the military doctrine waited for quite a long time for the approval after 2007 although this was in parallel with Azerbaijan’s pro-status quo stance. Recently, however, Baku has given some signals that it can start taking a tougher position. In this respect, Azerbaijan, with its new military doctrine, has emphasized the possibility of the war option if a diplomatic solution to the conflict cannot be found.

Armenia responded aggressively to that political change and, in the following days, Armenian officials made some aggressive statements. Armenian officials emphasized their decisiveness in terms of protecting Armenian interests. Moreover, these statements were coupled with a military modernization program for the period 2011-2015.

In 2010, as the language of the politicians became tougher, the atmosphere at the frontline started to get warmer. Azerbaijan has accelerated its intelligence activities in the conflict zone with the help of unmanned aerial vehicles while cease-fire violations have started to increase during the summer. According to the International Crisis Group Report, compared to 2009, cease-fire violations increased nearly 55 percent, and, at least 25 people died during conflicts in 2010.

The clashes in the conflict zone appear to be muscle-flexing. The most best example of this is the Azerbaijani operation in June 2010. The operation, in which Mübariz İbahimov lost his life and became a national hero, was seen as a tactical pre-planned operation by Azerbaijani authorities. It is argued that the Azerbaijanis not only tried to understand the capabilities of the Armenian forces, but also wanted to show the capabilities of the Azerbaijani army. Although there were fewer cease-fire violations toward the end of 2010, clashes restarted in January 2011. These clashes also resulted in loss of life for both sides. Accordingly, this atmosphere has caused some worries for the future of the region.

In this respect, it is critical to continue peace initiatives with decisiveness to avoid a unwanted results. For the future, resolution efforts have the capacity to prevent the potential snowball effect of cease-fire violations. Nevertheless, the Kremlin’s attempts to control the process through the Minsk Group and unilaterally via the Kremlin make the process much more complicated. At the same time, Minsk Group members’ lack of showing political will and having a perspective for the resolution when coupled with being unfamiliar with the dynamics of the region have put the peace process into deadlock. In this sense, the noninvolvement of Turkey in the process can be seen as the missing part of the puzzle. However, the tentative behavior of the United States, France and Russia harden the Turkish position as well.

To sum up, the peace process will certainly take long time. However, the revision and enhancement of the cease-fire measures is urgently needed in the short run for the smooth continuation of the peace process. Looking at the picture, micro-level conflicts have a potential to turn into a snowball that could damage the regional stability on a larger scale.

Hasan Selim Ozertem

USAK - Center for Energy Security Studies

E-mail: hozertem@gmail.com

This op-ed was firstly published in Hurriyet Daily News on 25 April 2011.

Turkey's Nuclear Ambition in the New Era

2010-12-30T18:55:00.000+03:00

Throughout the previous decade, one of the main rhetorics in Turkish diplomacy was to become the fourth energy artery for Europe. Parallel to this motto, Turkey pursued a pro-active policy in the Middle East and Caspian Basin. However, it had to face political constraints in Iran and Iraq, whereas in the Caspian Basin could only succeed in finishing several projects in its own modest way.

Even though Turkey is yet to succeed in becoming an energy hub, it is an important country for energy potential and existing policies. However, again mega projects like Nabucco, South Stream, Samsun Ceyhan and the Trans-Caspian Pipeline cannot be imagined without Turkey. Thus, looking back, Turkey strengthened its position on an international level and became one of the main actors in the energy sector in its region.

Over the years, Turkey's strategy has shown energy business that it has a multidimensional character which is not only technical, but includes detailed policy that incorporates issues of the economy, foreign policy and security. In this sense, these policies while helping Turkey to strengthen its geostrategic position also contributed to Turkeys energy security. However, it seems Ankara has to take more serious steps to safeguard its immediate future in the sector. Thus, it could be argued that national motives will gain a greater importance in Turkeys energy strategy, while the international dimension of Turkish energy policy remains high on the agenda.

Focusing on energy policies for national purposes

In the last decade, Turkey has tried to increase the share of the countrys national resources used in its energy consumption. In this regard, hydropower policies and renewable energy investments, along with thermal energy, recently gained impetus. Accordingly, the Turkish state reformed the legal basis and its policies in order to stimulate projects and create a favorable environment for both foreign and Turkish entrepreneurs.

Even though Turkish strategy is to support investments using national resources, the problem is that Turkey has limited resources, and apart from coal reserves, renewable energy and hydropower, is open to fluctuations because of seasonal effects. Moreover, despite promises it represents, renewable energy seems to be secondary in the countrys strategy when compared to conventional energy resources. In this sense, Turkey is in need of sustainable, stable energy resources. However, its dependence on foreign resources places the issue of diversification high on the agenda.

In terms of diversification, Turkey's is hardly one of the success stories. The country is particularly dependent on Russia for natural gas from which it obtains 65 percent of its gas requirements as well as other partners such as Iran, Azerbaijan and a number of African states, and it hardly has the capacity to substitute Russian dominance in the Turkish market. Moreover, among energy partner countries, Iran seems to be the least reliable partner because of problems of stability in the colder winter periods.

In general terms, Turkey is dependent on imported energy to a level of 70 percent and increases in demand sit at around 5.5 percent to 6 percent per year. In times of economic prosperity this may reach to 8 percent. Thus, Turkey is facing a compromise between growth and increasing its capacity in energy generation. Considering the fact that Turkey will be growing at around 5 percent to 6 percent annually over the next three years and aims to climb the steps of the G20 by 2023, a second option for Turkey is not on the cards.

Nuclear ambitions: Seeking for partners in the East

Turkey wants to minimize fluctuations in energy generation and needs big scale investments in the new period. In this sense, over the next decade Ankara intends to include nuclear technology in its portfolio without any delays. However, there is the urge of diversifying its partners in energy sector as well. In this regard, Russian nuclear power plant in Mersin Akkuyu seems to be the first investment with the capacity of 4800 MW and Turkey is looking for another investor in the Black Sea coast of Turkey, Sinop.

The Russian project is important for Turkey as being a reference model for other projects. However, it has its own constrains. First of all, the interdependence between Russia and Turkey will be increasing in energy sphere apart from Turkey's existing dependence on Russian hydrocarbon resources. Turkey intends to balance this situation by persuading Moscow to provide the necessary financial source to the project. In this sense, while bringing foreign direct investment to the country, Turkey also aims to minimize the risk.

It seems that Russia perceives the project more strategic than commercial and decisive in terms of finalizing the project. When finalized the power plant will be active for 60 years and there is a state guarantee that Turkey will buy the generated electricity for 20 years. Even though 20 years is perceived as a long-term commitment, the $20 billion dollar of investment of Russians and depreciation of price due to time lag makes it understandable.

However, there is another risk that arises in the security sphere of the Russian project. Even though the project seems attractive, Russian political cultures not being liberal is causing some concerns about the future. The Russian reflex in a possible regional conflict between Russia and Georgia is hard to imagine if Turkey pursued a different strategy to Moscow. However, the Turkish government continues to support the project as both economically and strategically beneficial for Turkey.

As mentioned, Turkey is aiming to find new partners in the energy business. Accordingly, Energy Minister Taner Yıldız is looking for new investors in the Asia Pacific region. The shuttle diplomacy between Turkey and the countries in the region has gained impetus recently. Even though Turkey failed to ink an agreement with South Korea, it seems that Japan is appearing as another promising potential partner. Turkey and Japan signed a memorandum of understanding in Tokyo to build a nuclear power plant in Sinop. Another meeting will be made between two partners to discuss the terms and conditions of the parties in three months time. If parties sign an agreement the security and dependency problem will be overcome, up to a certain extent, for Ankara. Japan, as a country specialized in nuclear technology, is known to be building reactors resistant to earthquakes and the countrys disciplined business culture could be an asset to Turkey. However, Turkey should continue to look for other partners in the world to create a dynamic environment and culture in nuclear technology. Considering the fact that efficiency and lower cost is the main essence of competition, Turkey would benefit from these partnerships.

Turkey aims to generate between 5 percent and 10 percent of its energy needs from nuclear technology over the next decade. In this sense, Turkey needs a consistent and sustainable nuclear energy strategy. Recent steps taken should be analyzed carefully and the energy ministers steps should also be supported by diplomatic channels. The agreements should be made in terms of mutual benefits and it should be underlined here that these initiatives are vital not only for Turkey. Considering the global financial crisis and slowing economies, mega projects are also important for investor countries.

Moreover, the Turkish private sector should take an active role in these projects. In the 1960s and 1970s, Turkish engineers learned how to build hydroelectricity power plants from Western engineers. Now, Turkish companies are not only building hydroelectricity power plants in Turkey but also taking over big projects all over the world which shows the competitive capacity of the Turkish economy.

Hasan Selim zertem

Center for Eurasian Studies

E-mail: hozertem@gmail.com

Note: This op-ed is first published at Hurriyet Daily News and Economic Review

Thursday, 30 December 2010

What Does NATO Try to Accomplish in the post-Cold War Era?

2010-11-22T14:20:00.000+03:00

NATO will forge its new strategic concept for the upcoming era after a decade-long period. Looking at the new concept one can easily grasp the desire of becoming a balancing power on a global scale. However, there is a tradeoff then for the new era: What will happen to the United Nations and to the role of the Security Council? Secondly, is there room for NATO to transform its system of values and functions for the new period? Looking at the existing structure, the priority of NATO seems to be the need for legitimization and a clear definition of “the other” to keep the bonds within the organization salient.

When NATO was established in the post-World War II period there were mainly three goals. These can be summarized as “Soviets out, Germans down and the U.S. in.” In this sense, a militarist institution like NATO was necessary to balance a power like Soviet Union. Moreover, it would serve U.S. aims to create strong bonds with NATO member countries. Under the Cold War dynamics, NATO fulfilled all these given targets and served as a transformative mechanism in Eastern Europe during the 1990s. However, the targets indicated above have lost their power of influence in time and the role of NATO cannot be legitimized easily for the new period. In this sense, the clues given for the new framework of the strategic concept seem to be functional to overcome this problem. Primarily, it underlines the need for international cooperation against threats like cyber terror, the need for sustaining security and stability in the routes of supplies – which are under the threat of pirates, like in Somalia – and the need for coordination and cooperation against terrorism and radicalism.

These new targets show a good reading of global challenges in the 21st century. Yet, there is still a problem of finding “the other” to keep the alliance as strong as in the Cold War period. The integration of the Eastern bloc to the West postponed this necessity up until now and the attempts of substituting the communist threat with an abstract definition of radical terrorism failed. One of the main reasons of this is the fact that the actors composed of states need foes in an institutional framework and non-state actors neither helping international organizations to keep their dynamism up nor serving to shape the public opinion smoothly. In this context, there is an endeavor to define Iran and, up to a certain extent, North Korea as “the other,” which threat the values of the West and global security. Even though these new threats lack a challenging ideological basis as in the Cold War period, it would certainly help NATO to fill the missing part for a while. But one thing is for sure that these attempts of finding “the other” are so artificial that they do not emerge as a common perceived threat, as in the case of USSR, among the members of the alliance. Surely, this does not mean that these countries and the threats posed them can be underestimated.

However, looking at the big picture it is hard to claim that Iran or North Korea play the role of “glue” as successful as Soviet Union, which has been looked for a long time at the NATO headquarters. Apart from these factors, it should be underlined here that these efforts are challenged by several other factors. These can be summarized as “the problem posed by the new member states,” “the situation in Afghanistan” and “Russia.” These are all interrelated with each other one way or another.

In the post-Cold War period, NATO has pursued a policy of enlargement and the states of Eastern Europe have become members of the alliance. The main motivation for these countries was becoming a part of the Western bloc and balancing a possible Russian threat in the future. Particularly, Obama’s policies helped the U.S. to pass a certain threshold in its relations with Moscow. Yet it is hard to claim that Eastern Europe countries’ threat perception turned into a relationship based on trust and security with Russia. They still push for a prudential stance in NATO’s relation with Kremlin. This is one of the main cracks in terms of unity among the alliance members.

Nevertheless, countries which have become members of the Euro-Atlantic alliance in the last two decade are comparatively smaller in terms of economic and military power. In this sense, the responsibility of NATO has increased, but not in balanced terms. The older members still carry the bigger portion of the main burden, but they have to consider the sensitivities of the other states because of the consensus-based decision mechanism. This causes inefficiency in the policy making process and the lack of a unified stance in certain conditions like in the Georgia war in 2008.

On the other hand, Afghanistan continues to represent a failure story for the alliance. The situation in the country requires strong cooperation with Russia and the support of member states. However, the situation in the country worsens as time passes. Thinking of the current identity crisis of NATO, it is for sure that NATO needs success stories but no failures to be able to preserve the strong image of the organization. In this sense, the redefinition of relations with Russia is so crucial not only in terms of European security, but also for sustaining stability and for finding a safe exit from Afghanistan. The existence of skeptics both in the West and Russia are hardly helping to find a solution for this issue.

Moreover, Russia-NATO relations are elaborated from a civilizational prism. It is hard to say that the relations of Russia and the West are mainly identified through NATO. Considering the problematic characteristics of Russia-EU relations, which has a greater potential than NATO in terms of creating dynamism based on interdependency and transformation, it is hardly logical to expect miracles from these efforts for future of the West and Russia in the long run.

To conclude, NATO is on the right path by pursuing a proactive policy in terms of adopting a new strategic concept. This would surely help NATO to avoid turning into an organization like the OSCE, which has become a low-profile institution because of its loose structure starting from the late 1990s, in the new period. In this context, efforts of creating new common interests and enemies have utmost importance for NATO’s future. It seems that these efforts are not based on natural consequences like in the Cold War period, rather gives the feeling of being based on artificial dynamics. Moreover, there are some structural problems that NATO must face in the new term, which would crucially undermine these efforts. Lastly but not least, it is hard to claim that an organization like NATO can keep the bonds among the member states strong enough by being based on high politics. The reality of the 21st century is based on economics and a militarist organization like NATO has its own limitations. Without being able to create interdependent relations based on economic cooperation, it is also hard for the U.S. to sustain its leadership through NATO-like organizations in the wide geography that the alliance comprises after its enlargement policies. On the other hand, the new global concept of NATO, if successfully created, will give Washington a maneuvering space in the international arena in militaristic terms while undermining the functional power of the UN Security Council.

The Impasse in Turkish - Armenian Relations

2010-09-03T10:30:00.000+03:00

Turkish foreign policy has been undergoing a process of transformation since the end of the Cold War. However, each transformation period comes with new crises and advantages that should be assessed carefully. Turkey has been trying tackle these challenges by pursuing a proactive foreign policy since the end of 1990s. In this respect, the “zero-problem” concept, introduced to Turkish foreign policy by Foreign Minister Ahmet Davutoğlu, has been effective in overcoming certain chronic problems with its neighbors and creating a better environment to stimulate regional partnerships. In the Caucasus, particularly good relations with Azerbaijan beginning in the 1990s have turned into a regional integration process, with Georgia’s enthusiastic participation in the 2000s. The South Caucasus has become a transit zone for trade, energy products, and transportation. However, compared to Turkey’s cooperation with the Middle East, the dynamism in the Caucasus is limited. One of the main reasons is the exclusion of Armenia from the mega projects, those are conducted in the region. The conflict between Azerbaijan and Armenia is only one side of the coin. On the other side, the impasse in Turkish-Armenian relations also stands in the way of further cooperation opportunities, due to the complex characteristics of both countries’ internal and external policies.

Turkish-Armenian relations entered a new era with the “football diplomacy” visits of both countries’ leaders in 2008–2009. In this paper, the current state of relations between Turkey and Armenia will be examined in a critical manner to understand the continuing impasse. In this framework, the dynamics of Turkish politics will be scrutinized; this will then be compared to the picture in Armenia. It is argued that both sides need time to regain energy and move forward. Conjectural changes over this period can function as a catalyst for development in relations.

Turkey in Transformation, but in an Unfavorable Environment

In the aftermath of the Cold War, Turkey failed to grasp the structural changes taking place in the international arena. The problematic nature of NATO and the emergence of conflicts in the region forced Turkey to act in a reactive manner in its foreign policy. The creation of a new concept in Turkish diplomacy was put off until 2000s. Yet even this new approach, known as “zero-problem diplomacy,” has some shortcomings.

Turkish-Armenian relations are one of the main pillars of this approach. The issue is multidimensional, even affecting Turkey’s policies in the West and the rest of the Caucasus. Moreover, Turkey has succeeded in overcoming or de-escalating its problems with all of its neighbors by pursuing economic, political, and cultural policies—except with Armenia. In this respect, domestic and international dynamics have played important role in the current position of Turkey and prevented a solution through normal means. As is known, Turkey and Armenia both signed protocols restoring relations in 10 October 2009, but since then both the Armenian and Turkish parliaments have failed to ratify them. Since then, the issue has remained high on the political agenda but has started to move down, particularly since the spring of 2010.

One of the main reasons for this delay in the political sphere has been the political and economic transformation process in Turkey. In domestic terms, politics hangs in an extremely sensitive balance. The high-profile Ergenekon case, which began in 2007 and has sought to uproot a “deep state” intent on destabilizing Turkey, has been a big blow to the status quo in the country. In addition to ongoing judicial process, tensions between the mechanisms of the bureaucracy and the political sphere peaked in 2010. This has undermined the efficacy of politicians to enact needed changes and led to administrative crises, particularly in the executive and judicial branches. As a result, the AKP[1] government took a radical decision to propose serious amendments to the constitution to be able to overcome the legal shortcomings as well as enhance democratic and individual rights. These two issues, combined with a resurgence in the activity of the PKK terrorist organization, have dominated the political agenda in the country. With its hands as yet tied by power struggle of political parties and bureaucracy, it is difficult for the government to take a radical step toward a long-lasting solution with Armenia, in spite of its large majority in the parliament. Moreover, the prospect of general elections, to be held in 11 months, has put the government in a critical position. Support for the AKP has decreased recently; in this political environment, nobody wants to take further risks. Nationalism plays a role in this respect. The territorial dispute between Armenia and Turkic Azerbaijan over Karabakh is emotional and draws reactions particularly from those with nationalist and conservative tendencies.

While the domestic environment seems unfavorable, recent international dynamics play a mixed role in fostering reconciliation. The status quo in the Caucasus certainly changed as a result of the Russo-Georgian war of August 2008. In the war’s aftermath, Turkey drafted a proposal for a Caucasian Cooperation and Stability Pact. Though it failed to bring together the countries in the region, the discussions did help to enhance Turkey’s relations with Caucasian countries, one by one, via shuttle diplomacy. Among Georgia, Azerbaijan, and Turkey, a cooperation zone had existed even prior to the war. This became the platform for “mega projects” such as the Baku-Tbilisi-Ceyhan Pipeline, which brought investment and interest to the region. Yet the inclusion of Armenia is clearly required for further cooperation in the region. In line with Turkey’s “zero-problem” diplomacy, Turkey also searched for further cooperation options with Armenia. It was in this context that the football diplomacy started by Presidents Abdullah Gül and Serzh Sargsyan were a prelude to the October 2009 protocols in Zurich.

The role of the United States in the project of Turkish-Armenian rapprochement cannot be ignored. As is known, U.S. President Barack Obama explicitly declared during his election campaign that the events of 1915[2] should be recognized as genocide, to garner the support of the Armenian diaspora in the elections.[3] Thus, especially just before the presidential speech on 24 April 2009, Turkey focused its efforts on making Obama avoid referring to “genocide” in his statement on the events of 1915. Though Obama did not explicitly used the word “genocide”, he sought common ground by using the word “metz yeghern”, which means the “great catastrophe” in Armenian. However, this did not affect Turkey’s decision to sign the protocols in October 2009. During the ceremony in Zurich, both the U.S. secretary of state and the Russian foreign minister played crucial roles. However, the role of the Obama administration in creating the protocol should not be exaggerated. Obama’s administration played the role of catalyst, not of founder, since secret negotiations had already started in Zurich between the two parties long before the election of Obama as president.

The process which began in Zurich, however, has come to a halt because of structural problems in the region. In this respect, relations between Turkey and Azerbaijan should be scrutinized carefully. After the collapse of the Soviet Union, Turkish leaders Turgut Özal and Süleyman Demirel and Azeri President Heydar Aliyev developed a relationship based on friendship and bilateral interests. Bonds between two nations have developed quickly thanks to cultural and economic cooperation based on education, media, and commerce. Azerbaijan became Turkey’s main gate to Caucasus and Caspian, while Turkey’s membership in NATO and accession membership in the EU made it the main gate for Azerbaijan to the West. However, Turkey’s insistence on pursuing a “zero-problem” policy and Azerbaijani sensitivities during the Turkish-Armenian rapprochement revealed the fact that even though bilateral relations between Azerbaijan and Turkey are described as “special”, when it comes to national interest, Azerbaijan will act in line with realist motives.

Both Azerbaijan’s political elite and public opinion view the normalization process between Armenia and Turkey as a Turkish abandonment of Azerbaijan. In this respect, it is hard to ignore the rising voice in Baku’s political sphere of the Russian lobby, which has attempted to turn Azerbaijan’s gaze toward Moscow in the country’s “best interest”. The process between Turkey and Armenia was used as a tool of manipulation, and Turkey had to resort to restating its stance, held since the 1990s, that any rapprochement rests on a solution to the Karabakh issue. Sour reactions could only be brought under control by public statements by the foreign minister, president, and prime minister of Turkey at different platforms. In particular, Turkish Prime Minister R. Tayyip Erdoğan’s statements in Azerbaijan’s parliament, which reiterated that Turkey would not approve the protocols without ending the Armenian occupation in Azerbaijan’s territory,[4] was a critical point in Turkish diplomacy.This gave Turkey a small space to maneuver, but helped to mend the relations with Azerbaijan to a certain degree. Nevertheless, all the efforts of Turkish authorities still seemed insufficient to regain the confidence of Azerbaijan. Azeri Foreign Minister Elmar Memedyarov, who visited Turkey at the end of 2009 with the intent of signing a protocol that would abolish visas between two countries, left the country without signing the agreement.[5]

Perhaps Turkey’s prerequisite of linking the normalization process to Karabakh issue should have been indicated before the start of negotiations, since the closure of the borders between Armenia and Turkey was itself a result of the occupation of Azerbaijani territory by Armenian forces. Nevertheless, due to the delicate nature of relations, which also caused some problems during the signing the protocols, this problem could not be put forward explicitly. Rather, in the protocols, there are indirect references to the conflict and the need for a solution within the framework of international law. The absence of an explicit reference to the issue could be perceived as a problem. However, Turkey’s use of the Karabakh conflict as an excuse for not approving the protocols in parliament was indirectly criticized by international actors. Both American and Russian authorities stated openly and indirectly that normalization between Turkey and Armenia should not be linked to the peace process in Karabakh.[6]Nevertheless, it is hard to claim that such declarations on the part of Russia and the United States actually help to solve of the problem, since they simply encourage Armenian recalcitrance rather than pushing them to reach a solution to the conflict, an open violation of international law.

Last but not least, the decision of the Constitutional Court of Armenia[7] caused some suspicions in Turkey regarding the Armenia’s sincerity, since it eviscerated the very essence of the protocols.[8]Meanwhile, the Turkish government, which defends the protocols, had two strong arguments. One of them was that the 1915 events should be examined by a common history commission composed of members from both states. The second is that the border between Armenia and Turkey, which was drawn up by the Kars Treaty in 1921 and ratified by both countries, will be recognized by post-Soviet Armenia, which still makes references to Turkish territory as “Western Armenia” in its declaration of independence (Article 11).

Armenia – Stuck Between Diaspora and Nationalism

The turn in Armenian foreign policy toward a pro-peace stance was perceived positively both in Turkey and the international arena. Unlike his predecessor Robert Kocharyan, Armenia’s current President Sargsyan came together with his Azeri and Turkish counterparts in different venues despite domestic political pressure, especially after Georgian-Russian War. However, regarding the Turkish-Armenian rapprochement, domestic barriers similar to those of Turkey give the Armenian government very little leverage. While dialogue with Turkey was harshly criticized, especially by opposition parties in the country, the reaction of the Armenian diaspora was even stronger. Sargsyan’s meetings with intellectuals in Armenia or in the Diaspora were anything but positive for the president’s political career. Yet, both Turkish and Armenian governments are continuing to take steps that would break political and social taboos.

Turkish and Armenian foreign ministers have left behind one of the main obstacles on the way to the long lasting solution on 10 October 2009, when the protocols released on 31 August were signed both by Turkish and Armenian ministers in spite of a last-minute crisisthat emerged in Zurich. Armenian Foreign Minister Eduard Nalbandyan, implicitly referring to the Nagorno-Karabakh issue, wanted to emphasize the principle of starting relations unconditionally. However, his Turkish counterpart Ahmet Davutoğlu wanted to underline the importance of a solution to all regional problems in the South Caucasus, also an indirect reference to the Nagorno-Karabakh problem. The presence of these issues in the texts of the ministers’ speeches caused the ceremony’s start to be delayed, but Turkey’s proposition to cancel ministerial speeches after the ceremony helped to overcome this problem. Although the political will of the Minsk Group members, particularly Russia and the United States, proved to be sufficient in terms of overcoming this problem, their attitudes later regarding the process have been less than constructive, as noted above.

In Armenia, some obstacles to reaching a long-lasting solution in the Caucasus began to emerge after the protocols were signed. One of the main questions for Armenia is the will of the Turkish parliament to ratify the protocols quickly. Armenian politicians have suggested that the Turkish parliament ratify the protocols first. In fact, they started to impose deadlines, particularly before 24 April 2010. As suggested above, the Turkish government continued to emphasize the Nagorno-Karabakh issue and underline that these two processes are not independent from one another. This discussion was followed by three important developments. The decision of Constitutional Court of Armenia was followed by a government bill, ratified by parliament, that would make it easier for Armenia to annul its normalization agreements with Turkey,[9]and finally by a suspension of the protocols.[10]

One of the main factors behind this step was the reaction of the diaspora to the protocols. During his five-stop tour of major diaspora Armenian communities in France, the United States,and the Middle East, Sargsyan faced harsh criticism.[11]With its strong financial support of the country and its political power, the diaspora is a significant factor in Armenian politics. Moreover, in Armenia itself, the hardliner Dashnaktsutyun Party threatened the government with “regime change” and pushed for the president’s resignation.[12] Remembering the fate of former President Levon Ter-Petrossian, who was forced to resign under similar circumstances, it becomes harder to ignore these kinds of comments from opposition parties. Actually, the ruling Republican Party is in power only with the support of the coalition party, and it is hard to presume whether other members of parliament are going to vote in favor of the sensitive protocols. Additionally, the government lost the support of the Dashnaks in April 2009. Bearing in mind the fact that the Republican Party stays in power with the coalition and 64 seats out of 131 is belong to the Republican Party. This also brings new political risks for the president.

Last but not least, the global financial crisis in the country has made it difficult for the government to force through unpopular policies. The country’s economy contracted by 14.4 percent in 2009, and the expectations are not optimistic for 2010.[13]Moreover, when Turkey explicitly linked the normalization process to the Nagorno-Karabakh conflict, Sargsyan also chose the non-risky way and began to pursue an aggressive stance regarding the protocols. In other words, he again had to play the nationalist card to court the public support.

Conclusion

Structural problems between Turkey and Armenia persist: the border issue, the events of 1915, and the Karabakh issue. The problematic relation itself is multidimensional and, when it is combined with international and domestic dynamics of these two states and the region, it becomes even more complicated. Additionally, a democracy deficit in both Armenia and Azerbaijan presents a political ground fertile for political exploitation of Karabakh issue by playing on nationalistic tendencies.

The political will shown for starting diplomatic relations and opening the border between two countries, which began with the conjectural changes in the region and domestic policies of both countries in 2008, has come to a standstill due to rapidly changing international and domestic political agenda in both countries. Nevertheless, we might find some hope for future prospects in the fact that the process of reconciliation has not been abrogated, but merely suspended. Conjectural changes, which helped the process to start, can again help to take the process further. The peace efforts of Russia and the Minsk Group in the conflict over Karabakh have a capacity to directly affect the rapprochement between Armenia and Turkey. A road map that would be accepted by Azerbaijan and Armenia and aftermath start of a normalization process would open a new phase in the Caucasus that would turn into a region-wide integration project. For this, the international community must pressure these countries to come up with a long-lasting solution. Under current circumstances, peace in the Caucasus stands on delicate ground.

Thus, the process in the Southern Caucasus should be carried out simultaneously both in Karabakh and Turkish-Armenian relations. Otherwise, the normalization of Turkish-Armenian relations would be limited and would carry the potential to bring new political risks for both countries’ governments. In the future the two countries should strive to keep the channels of dialogue open, but not in an aggressive manner. In this context, the power balance between Armenia and Turkey is not equal. Demands dictated by third parties are causing new reflexes in Turkey that are not in line with a solution. Turkey, unlike Armenia, is more ready to assess the process objectively, and demands from Turkey should likewise be rational. Territorial claims or compensation demands from Turkey by Armenians in Armenia or the diaspora simply affect the process of rebuilding relations negatively and pave the way to stronger taboos in Turkey.[14]

Instead, the relations between the two nations should be enhanced via cultural organizations, which would help politicians to overcome the public resistance. In this regard, Turkish-Greek relations represent a good model. The normalization process which began after the 1999 earthquake near Istanbul turned into a political success. The friendly dialogue among politicians and increasing interaction between the two nations helped the relations to develop. Yet again, the predominance of the Armenian diaspora in Armenian politics would influence these efforts.

Finally, outside players in the region and the international community have shown their intention to act pragmatically in the region. However, to solve the problems facing the South Caucasus, there is also need for rationalism among the Caucasian nations themselves. Rational policies should be pursued based on mutual interests as well as respect for international law and the sovereignty of each nation.

[1] Justice and Development Party

[2] Under the circumstances of World War I, Ottoman Empire decided to relocate Armenian minority to Damascus Province of the Empire due to increasing attacks of Armenians to the Muslim minority in the Eastern part of Anatolia. However, during their travel to the South Turkish and Kurdish groups attacked to Armenians, who wanted to take revenge of their losses in their families, caused many losses in the Armenian side. Moreover, during their transfer many Armenians lost their lives on the road due to unfavorable conditions. Yet, the losses were not the result of systematic ethnic cleansing policies of the Ottoman Empire as suggested above. Rather Ottoman Empire wanted to decrease the tension in its eastern provinces due to the ongoing war.

[3] “Days Left to U.S. Presidential Election, Obama Again Pledges to Recognize Armenian Genocide”, Panarmenian.net, 03 November 2008.

[4] “Bakü’nün Şüphelerini Sona Erdirdi”, Sabah, 14 May 2009.

[5] Duygu Güvenç, “Azerbaycan ile Vize Kaldırmaya Rötar”, Hürriyet, 26 December 2009.

[6] Joshua Kucera, “Turkey: Obama Administration Official Cautions Against Armenian Genocide Solution”, 16 March 2010; 'Путин: Увязка карабахской проблемы и армяно-турецких отношений – стратегически неверна’ (Putin: Uvyazka Karabahskoy Problemi i Armyano-Turetzkih Otnoşeniy – Strategiçeski Neverna), REGNUM, 13 Ocak 2010.

[7] For the full text of the Constitutional Court of the Republic of Armenia please refer to http://www.conco urt.am/english/decisions/common/pdf/850.pdf.

[8] Sedat Laçiner, “Bir Ermeni Tasarısı Hiç Bu Kadar İşe Yaramamıştı”, USAK Gündem, 15 Mart 2010.

[9] “Armenian Parliament Ratifies Law on Nullifying International Treaties”, Asbarez.com, 24 February 2010.

[10] “Armenia Suspends Ratification of Turkey Deal”, RFERL, 22 April 2010.

[11] Aza Babayan, “Sarkisian on Last Leg of Diaspora Tour”, Azatutyun.am, 07 October 2009; “More Than 12000 Protest Sarkisian, Protocols in Los Angeles”, Asberez.com, 05 October 2009; Hasmik Smbatyan and Gevorg Stamboltsian, “Sarkisian Continues Diaspora Tour”, Azatutyun.com, 05 October 2009.

[12] Sargis Harutyunyan, Irina Hovannisian, Ruzanna Stapanian, Dashnak Leader Threatens ‘Regime Change Drive’, Armenian Liberty, 08 October 2009.

[13] Armenia Reports Mounting Economic Growth, RFERL, 23 March 2010.

[14] A recent law suit against Turkey was opened by diaspora Armenians in Los Angeles. For more information please refer to Minhac Çelik, “Diaspora Tazminat Davası Açtı, ‘Sessiz Diplomasi’ Etkilenebilir”, Zaman, 31 July 2010.

Russia’s Strengthening Military Presence in the Caucasus and Black Sea

2010-08-25T12:53:00.003+03:00

Throughout 2010, Russia has pursued pro-active foreign policy to strengthen its military presence outside of its borders in the Caucasus and the Black Sea. Even though Moscow has failed to preserve its dominance just after the collapse of Soviet Union, it succeeded to rebuild its presence in the post-Soviet space in line with a strategic doctrine that requires preserving its stance in this geography for the country’s sovereignty in its own territory. In this sense, Russia is creating a buffer zone out of its borders, and trying to take preventive measures as well as act like a balancing power in the region.

Russia has started to strengthen its position in the eastern and northern part of the Black Sea, after becoming neighbors with NATO forces in the west and southern part of the region as a result of eastern expansion of the North Atlantic Alliance. In fact, Russia gained some privileges in 1990s, thanks to the emerging conflicts and its psychological influence or structural superiority on Newly Independent States. Before these privileges coming to an end Russia has taken decisive steps that will shape the balances in the region in the upcoming 25 years.

Russian fleet in Crimea has a strategic importance in terms of preserving Moscow’s dominance in the Black Sea and being able to reach to the Mediterranean when necessary. Accordingly, the very essence of the existence of the fleet is one of the main reasons behind Russia’s aggressive reflexes recently. In this sense, causing a great concern in the Kremlin, the debate on Russian fleet’s existence -which was guaranteed until 2017 by an agreement that goes back to 1997- acted as a catalyst that gave a big blow to Yushchenkos’s political career in Ukrainian politics. As can be recalled Yushchenko started a new rhetoric just after the Russo-Georgian war, which is based on the arguments that “Russian fleet should leave Crimea” and “Russia should not use its navy in Ukraine for its irredentist policies”.

Consequently, Russia had to face the fact that it had to deal with a similar scenario in Ukraine, which is perceived as a natural part of fatherland, like in Baltic region that it encountered after Estonia, Lithuania and Latvia’s membership to NATO. To tame this kind of “twisted ideas”, Russia started to use energy instrument more efficiently on Ukraine to weaken Yushchenko administration and the existing system, and also stimulated its relations with the opponents of the pro-Western leader. This aggressive change in Russia’s policies created a favorable environment for Yanukovich to come to the power in 2010 presidential elections. As a result, pro-NATO discourse eliminated from Ukrainian political sphere and Russia gained the privilege of keeping its fleet in Crimea up until 2042 with the signed agreement with Kiev in April 2010.

In fact, Ukraine only represents a small portion of the latest change of balances in the region. In this respect, the dynamics that emerged after August 2010 can be examined to be able to understand how important the balances of the Black Sea for Russia’s strategic concerns. According to some experts, having well-founded concerns regarding its existence in Crimea, Russia did not hesitate to recognize Abkhazia and South Ossetia’s independence in spite of having a fragile-federal structure back at home. Recognizing Abkhazia’s independence, Russia would extend its coastline in the Black Sea, and would guarantee the existence of the Russian fleet in the Black Sea. Thus, Russia could use Ochamchira port efficiently and “Plan B” would be ready when necessary.

In this respect, Russian Federation does not hesitate to enlarge its presence in Abkhazia and South Ossetia in the expense of violating the ceasefire treaty with Georgia. Abkhazia and South Ossetia agreed to host Russian military bases for a period of 49 years. Currently there are 1700 Russian troops in Guduata town of Abhkazia and this number is expected to reach 3000 with the new agreement. By the way, Ochamchira port is being rehabilitated for the efficient use of Russian Navy.[1] Moscow also deployed S300 air defense systems in Abkhazia, but according to Georgian authorities this is an open violation of the ceasefire.[2] Yet, it should be emphasized here the deployment of powerful systems like S300 missiles, does not feel like a measure taken against Georgia, rather a message to NATO and the US.

Ariel Cohen argues that Russia’s next step would be rehabilitation of the biggest airbase in the South Caucasus, which is located in Bomboro near Guduata. “This is the largest military airfield in the Southern Caucasus, boasting a 4-kilometer long runway, thus making it a strategically coveted facility. The runway ends less than 100 meters from the sea, allowing aircraft to take off at very low altitudes over the sea and proceed undetected by enemy radar in the initial phases of flight.” [3] When all these restorations and deployment of troops completed it is assumed that there will be 4000-5000 Russian troops in Abkhazia. Thus, Russian dominance will strengthen not only in the Black Sea, but also in the Caucasus.

Moscow also increases its grip in South Ossetia as well. Signing a similar agreement with the de facto government of Tskhinvali, Moscow aims to deploy 1700 troops, T-62 tanks, light armored vehicles, air defense units and aircrafts in “the seperatist region”. Not hesitating to flex its muscles, Moscow also guarantees the security of Abkhazia and South Ossetia by taking some efficient defensive measures.

Where does Armenia Stand in the Big Picture?

Armenia could not avoid becoming a satellite of Moscow, in spite of rising nationalism against Russian chauvinism that created a national awareness among Armenians. Being a landlocked country, having limited resources that cannot keep up Armenian economy without foreign transfers, and having a security deficit, Yerevan has become an outpost of Moscow in the post-Cold War period. Russian dominance in Armenian politics is not limited in hard politics but also in economic sphere. In time, Russia has become a monopoly in energy, mining, and petro-chemical sectors of the country and holds a certain share in telecommunication. ^{^[4]} This creates an asymmetric interdependence in favor of Moscow and makes it difficult for Yerevan to pursue an independent foreign policy.

Non-resolved Karabagh problem, which poses security risks, is one of the main reasons for Armenia’s seek for Russia’s support in the region. Unlike Armenia, Azerbaijan has succeeded to find new funds after the independence thanks to energy resources of the country. This creates an unbalanced situation between Yerevan and Baku in terms of military expenditure. Azerbaijan’s military budget rose to $1.1 billion in 2007, whereas Armenia’s is assumed to be around $280 million.[5] Apart from having better weapons than 1990s, Azeri army has gained a well-disciplined character thanks to the reforms implemented in the last decade. Relying more on its economy and army, from time to time Baku does not hesitate to give messages to Armenia that the military solution to the problem still remains on the table. Furthermore, Azeri Parliament recently approved a new Military Doctrine. This document officially puts forward the reasons of casus belli and underlines the fact that Armenia’s uncompromising attitude for a political solution of the problem can cause emerge of a new war in the region (Article 43).[6]

A war between Azerbaijan and Armenia will have severe consequences than the Russo-Georgian War in 2008. Neither Russia, nor the US desires de facto stability to turn into a war and cause deeper crises in the region. In this sense, Kremlin is trying to play a balancing role in the South Caucasus to be able to preserve its control over Armenia, while developing its relations with Azerbaijan, which has gained momentum recently. Russia’s balancing role has a vital importance for the faith of North Caucasian Republics of the Federation, as well as Moscow’s hegemony that it has started to rebuild in the South Caucasus.

Under these circumstances, timing of the agreement between Russia and Armenia to extent the right of keeping a military base in Armenia’s second biggest city Gyumri until 2044 is well chosen.[7] Just after the release of military doctrine and the clash between Armenian and Azeri forces in the disputed area of Karabagh[8], the signed agreement gives direct messages to Baku.

Two reasons can be proposed for this interpretation. Firstly, the extension was done so early. 1995 agreement expires in 2020 and there is almost 10 years more to discuss the faith of the base. Secondly, Armenia is a member of Common Security Treaty Organization, and it enjoys the protection of Russia against a possible attack. Thus, the military base in Gyumri is not necessary to protect Armenian territory and people.. Yet, it has a deterring impact on Azerbaijan.

On the other side of the coin Russia also mitigates the messages coming from Yerevan that emphasizes Russia will be protecting Armenia better than before with the new agreement.[9] Sergey Lavrov indicates that after the agreement the role of Gyumri base did not change, and also added that he believes that no state in the region plans to launch new military operations, because it would be catastrophic.[10]

Even though the government seems to be satisfied with the agreement, Armenian opposition criticizes the decision of extension. They argue that the new agreement makes Armenia more dependent on Russia. Raffi Hovanissian says that the base is also a burden for Armenia. It is a Russian base abroad that Russia does not pay any rent or reimbursement.[11]

Conclusion

Russia is playing the role of balancing in the region without changing its position radically. In other words, it is telling Azerbaijan that “the developing relations between Baku and Moscow are not at the level of ignoring a war against Armenia”. On the other hand, it scratches Yerevan’s back.

In conclusion, Russia aims to decrease the tension in the region with the new agreement. However, Moscow also strengthens its position in the Black Sea and the Caucasus by taking another complimentary step to build up a stronghold in the post-Soviet space after its maneuvers in Ukraine and separatist regions of Georgia. The new agreements shape the next 20-30 years and creates new barriers for those who intend to challenge Russia’s position in the region, while building wave breakers in front of Russia’s fragile region, the North Caucasus.

USAK - Center for Eurasian Studies

Hasan Selim Özertem

[1] “Russia Gains Military Base in Abkhazia”, RFERL, 17 February 2010.

[2] “Russian S-300 Systems in Abkhazia Threaten Regional Balance of Forces – Georgia”, RIA Novosti, 11 August 2010.

[3] Ariel Cohen, “Georgia: Russia Plans Three Military Bases in Abkhazia”, Eurasianet, 5 February 2009; http://www.eurasianet.org/departments/insightb/articles/eav020609g.shtml.

[4] Marianna Girgoryan, “Armenia: Opposition Blasts Russia’s 49-Year Lease on Military Base”, Eurasianet.org, 12 February 2010; http://www.eurasianet.org/node/61730.

[5] Jean-Cristophe Peuch, “Armenia Azerbaijan Mull CFE Treaty Withdrawal in Year of ‘Many Uncertainties’ for OSCE”, Eurasianet. Org, 6 January 2008; http://www.eurasianet.org/departments/insight/articles/eav010708a.shtml.

[6] For the full text of the article please refer to http://meclis.gov.az/?/az/law/183#comment.

[7] According to the previous agreement signed in 1995, Russia would be keeping its troops in Gyumri until 2020.

[8] Maria Kiselyova, “Four Armenian and One Azeri Killed in Karabakh Clash”, Reuters, 19 June 2010.

[9] Daisy Sindelar, “Deal Signed on Extending Russian Military Presence in Armenia”, RFERL, 20 August 2010.

[10]“Russian FM Downplays Importance of Armenian Defense Pact”, RFERL, 19 August 2010.

[11] Raffi K. Hovanissian, “Whither CSTO: Russian Power, Armenian Sovereignty, and a Region at Risk”, Times.am, 14 August 2010; http://times.am/2010/08/14/whither-csto-russian-power-armenian-sovereignty-and-a-region-at-risk/.

The Dilemma of Russia and NATO: To Destroy or Not Destroy the Poppy Fields in Afghanistan

2010-03-31T02:44:00.003+03:00

Last week, one of the main debates in the Russia NATO Council was the poppy issue in Afghanistan. The core of the debate was the difference between the Russian and NATO approaches to tackling the poppy cultivation in the country. The Russians proposed destroying poppy fields and solving the problem by using hard measures that would definitely hamper the poppy production in 2010. Moreover, the Afghan authorities also demand a similar policy be implemented to weaken the economic instruments of the Taliban.

On the other hand, NATO did not accept this proposal due to its indirect and direct repercussions. NATO's thesis is based on the fact that eradication of the poppy fields was tried before, but this has not helped to reach a long lasting solution in fighting against the drug problem in the country. On the contrary, this process triggers another problematic mechanism that ends with pushing farmers to the ranks of Taliban. NATO's diagnosis seems to be fair, but the situation has turned into a structural problem and Russia wants to pursue a radical policy in Afghanistan. However, for a long lasting solution of the problem, hard power measures can only result in disappointments. The parties should go down to the root reasons of the problem.

Understanding the Causal Mechanism

Actually, poppy cultivation in Afghanistan is a long-term problem that has global and regional repercussions. One of the main reasons of poppy cultivation is the easily gained rent from drug trade. Unlike other agricultural products, thinking about its cost/profit balance,opium is a magical commodity, due to its non-competitive nature in the market. For the rest of the story please click here!

Aftermath of the Energy Crisis – Russia Still Dominant in the Market!

2009-02-13T15:20:00.003+03:00

Every year starts with new hopes, great expectations, and efforts to forget bad memories of the past. While nobly intended, I feel that we only change the calendar and begin, once again, counting down each day until the New Year.

Unfortunately, this feeling of mine failed to change once again due to two crises which broke out just next door of Turkey. One of them was the gas dispute between Russia and Ukraine, which has become a tradition, and the other one was Israel’s Gaza operation, the effects of which were felt even in the Davos Summit. Even though the second one is not in the framework of this article, I still/continue to wish a long lasting peace would come to the Middle East, bringing stability and prosperity to the region.

A Ritual or the Rules of the Game?

So, what do Russia and Ukraine want from each other? Peter Rutland describes the ongoing dispute as an annual ritual that breaks out in January between Russia and Ukraine, as Ukraine complains about the transit payments and being overcharged by Russia for its natural gas consumption.[1] The book was published in 1999, but the main discourse has not changed in 10 year time period.

In the past few years, Russia has followed a more pragmatic policy while selling its natural gas to major consumers in Europe. It can be described as multi-vector market domination, since Russia follows a pro-active policy having both economic and political concerns. While conducting this policy, Russia is also well aware its comparative advantages. It is a known fact that Russia has the richest natural gas reserves in the world, and it has inherited not modern, but well established distribution and extraction infrastructure.So, what are the pillars of Russia’s multi-vector market domination? First, Russia is gradually increasing the price of natural gas. Gazprom executives talk about market prices, but it is mainly the Russian locomotive that gives signals to the market to increase prices. Here is the question: what are the dynamics of the market, and who decides the prices? .......... for the rest of the story click here!

Access to Previous Issues of Journal of Central asian and Caucasian Studies

2008-12-24T21:49:00.008+03:00

Journal of Central Asian and Caucasian Studies (JCACS) is a refereed journal and publishes scholarly articles on social sciences in Turkish and English. Articles submitted for consideration of publication are subject to peer review. The editorial board and editors take consideration whether submitted manuscript follows the rules of scientific writing. The appropriate articles are then sent to two referees known for their academic reputation in their respective areas. Upon their decision, the articles will be published in the journal, or rejected for publication. The referee reports are kept confidential and stored in the archives for 5 years. For the full details about the journal see the Notes for Contributors section or feel free to contact with the editors. Send your manuscripts to turgutdem@yahoo.co.uk, esrhat@gmail.com, or hasanozertem@gmail.com.

JCACS focuses on legal, political, sociological, cultural, social, religious, anthropological, and economic studies regarding the Central Asia, Caucasus and neighboring states’ (Turkey, Iran, Pakistan, India, Afghanistan, China, Mongolia, Russia) and regions’ (Black Sea, South Asia, Middle East, Far East) relations with the Central Asia and the Caucasus. The journal encourages interdisciplinary studies. Manuscripts submitted to JCACS should be original and challenging, and should not be under consideration by another publication at the time of submission.

For further information and issues:

http://www.usak.org.tr/EN/dmenu.asp?id=55

Journal of Turkish Weekly: New Design Spectacular Content

2008-12-24T21:39:00.009+03:00

Journal of Turkish Weekly (JTW) is a respected Turkish news source in English language on international politics. Established in 2004, JTW is published by Ankara-based Turkish think tank International Strategic Research Organization (USAK - ISRO).

Apart from its staff's news and comments, JTW also republishes the articles from respected international news sources including Anadolu Agency, RFERL, VOA News, IWPR, Jerusalem Post, Mehr News, Swissinfo, voxEU.org, Project-Syndicate, REGNUM, Eurasian Home, Uzreport, Sofia News Agency.

Now, JTW has been redesigned, and waiting for your critiques,

To see the new face please visit www.turkishweekly.net

Editor
Hasan Selim Ozertem

The US, Economic Crisis and Politics

2008-10-10T18:26:00.003+03:00

It has been more than a month that the conflict in Georgia broke out and since then the diplomacy has gained impetus in the region. Even though different reactions have been shown against Russia it has become clear that there is a dispersion of hegemonic power of the US in the world politics. Multipolarity and chaos have become the new popular keywords. However, it seems rather difficult to say certainly that the power getting concentrated on a specific country as in Cold War era or the 20th century.

Especially, beginning with the Iraq war and negotiations beforehand carried out by the US diplomats to get the support of its allies has been one of the major milestones in this process of dispersion of power. Or maybe the reality has become more obvious. After the end of the Cold War in spite of the main rhetoric that the US is the only superpower, it was really hard for this country to change the minds of its allies in terms of opening a new front in Iraq. Turkey and many countries in the EU did not support this adventure of Bush government.
One can claim that Afghanistan and Iraq operations could ....(for the rest of the story please click here!)

Oil: A Global Perspective and Turkey

2008-07-16T07:04:00.003+03:00

There is this overselling of energy issue for more than half a decade. Even in the academic circles it has become so popular that everybody has something to say and really curious about it. There are several dimensions of this issue, such as geopolitics, economics and social repercussions.
A couple of years ago, on BBC Turkish there was a program that lasted for a couple of weeks and during this series specialists commented on energy issue and repercussions of this on world’s citizens. They claim that if prices continue to increase the life style of people has to change and the area that they are active or mobile will be limited. It is logical up to a point and we even see some tendency that gradually people trying to decrease the frequency of using their private vehicles. However, I am not among those pessimists, on the contrary hoping to see new energy resources and technologies to be presented for the use of humankind in the medium and long term and believing the area of mobility will continue to expand.
Until research and development endeavours reach to a solution, it would be naïve to deny the dominance of hydrocarbon resources and mainly oil in our lives. The main problem is that oil is not a simple commodity anymore and as a result it is not only seasonal neither production or consumption dynamics that have the role in drawing oil’s path in the fancy graphics of NYMEX. It is true that people are consuming this commodity, but due to decreasing and dull profits that gained from other financial instruments such as bonds or the market, oil has become a safe heaven or a new opportunity for brokers and big investors.
It is wrong to claim that oil is the sole commodity that helps people to accumulate wealth recently. Materials such as cement, steel, copper, aluminium and others have important share in this increasing inflation in global scale. It is true that incredible growth rates especially in China and India cause a high consumption and prices to soar. Increase in consumption in this extend also prepares a good basis for speculation. However, it is oil that an ordinary person has to consume in his everyday life and has to resist its price when that person’s tight budget is taken into account. On the other hand, in countries, which are not capable of meeting their consumption with existing reserves, inflation in energy prices cause constraints in financial terms.

Turkey and Economics in the Shed of Increasing Oil Prices
As known since the crisis of 2002 Turkey has implemented economic reforms in a disciplined manner. In this framework, it is following tight fiscal and monetary policies. (The recent critics is that in the last economic program the tightness of fiscal policies has loosened whereas due to high interest rates of Central Bank the monetary policy of Turkey is well too tight, but here I will not asses these critics)

Thanks to these reforms and also the favourable international environment Turkey has entered a trend of growth after the crisis and also it succeeded to reduce inflation rate from double digit numbers to single digits (in 2003 CPI was 25.3% and in 2007 it was 8.76%). Even though Turkish monetary elite overshoots the inflation target of 4% for a couple of years, it would be harsh not to appreciate the success of Turkish economy. Fluctuations in international markets especially in oil and food prices have negative repercussions on Turkish economy just like in many other countries around the world. Moreover, Turkey draws a profile of a stronger economy when regional and domestic instabilities considered in the region.

For the rest of the story please click here!

Hydrocarbon Resources and Their Impacts - Iran

2008-07-16T06:57:00.003+03:00

Hydrocarbon resources and their impacts have always been one of the main topics of multi-disciplinary discussions. These debates try to understand whether having hydrocarbon resources is a blessing of the God or even a curse for a country. In this sense, all these studies represent a bunch of multidisciplinary cases ranging from political economy, sociology, politics, economics and international relations. It is for sure that oil has been an influential matter not only in romantic sense as well as inspired academic studies.
Oil is so valuable that humankind fought for it and it caused many wars, as well as in modern times it has become one of the main factors that play role in our lives providing a comfort in transportation and with its byproducts like plastic it is hard to think a life without oil. On the other hand, this matter has some side effects like global warming and in political sense it is claimed that in the absence of well developed institutional basis it paves the way for authoritarian regimes.
Michael Ross[1] making an analytical study, concludes in his article “Does Oil Hinders Democracy” with four findings,
i. Oil does hurt democracy
ii. Its harmful influence is not restricted only in the Middle East, but also in Africa, Latin America and it may well have the same effect on the oil rich countries of Central Asia.
iii. Not only oil but also wealth based on other minerals negatively affects a process of democratization in a country.
iv. Oil causes a rentier effect in a country.
Even though it was oil in the centre of the debate, it has become hydrocarbons, thanks to extended area of utilization of natural gas. It has become one of the main resources for electricity production as well as heating, especially for about two decades. Unlike oil, utilization of natural gas needs to pass several processes to be shipped or stored. Thus, it has a comparatively limited area than oil. However, thanks to recent developments like LNG, natural gas has become one of the most important energy components in countries’ energy policy formulations. Moreover, extension of pipeline networks makes it easier to transfer natural gas from producers to consumers. While oil is being called as the black gold, it seems that natural gas has become the blue gold of this decade. As a result, it is not oil rich countries, but also countries with vast natural gas resources have become important countries in geostrategic terms. Thus, it is hard to ignore the repercussions of hydrocarbons on these countries.
The Caspian region represents a good area of research for these debates about impacts of hydrocarbons on countries in political, economic and sociological terms. As known, there are five littoral states around Caspian Sea and four of these have appeared in world politics only seventeen years ago. On the other hand, Iran, being a Middle Eastern country has been in the centre of the rentier state debate for more than three decades. Below you may find a detailed discussion of hydrocarbons and its impacts on Caspian States, but this study is just an exercise that would represent a basis for a more detailed study in the future.
Iran
As stated before rentier state concept is not something new in the literature and was used by Hossein Mahdavy[2] for Pahlavi’s Iran and then it has become one of the popular instruments to be able to explain and understand the political and economic structure...for the rest of the story click here!

Understanding ‘The New Great Game’

2008-06-08T17:43:00.004+03:00

Eurasia experienced many conflicts, wars and traumas during 20th century. Two world wars, and then Cold War was the main issues in this geography that caused a differentiation between perceptions to be created on two sides of Berlin Wall.

Western Europe with the US and the USSR were representing two different sides in political and economic terms. However, when we came in 1980s the leaders of the Soviet Union died one after another and then Gorbachev had to take over a country with problematic mechanisms that prevent system to operate due to corruption, war going on in Afghanistan and old fashioned infrastructure that fail to modernize itself in parallel to the necessities of the time.

His liberalization reforms perestroika and glasnost were not enough or suitable to prevent the demise of the Union in 1991. However, collapse of a gigantic system like the USSR has brought new challenges and new actors, fifteen new states to the world politics. These challenges were liberalization of these countries in political and economic sense to be able to adapt new rules of the system and building up new states and nations in this period. Fukuyama describes this period as “the end of history as such: the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.
”[1] The question of whether western liberal democracy as a concept succeeded to be the only valid form of human government in Post-Soviet geography does not have a single answer,.........

For the rest of the story click here!

Independence of Kosovo and the Nagorno-Karabakh Issue

2008-06-08T17:39:00.003+03:00

I believe that it would not be wrong to define International Relations, in a limited sense, as a discipline that tries to depict the formation of new systems and the elimination of the old ones systematically. Moreover, it draws a framework for the art of diplomacy in an interdependent fashion and regional conflicts represent one of the most interesting parts of this area in this context. Since, this topic is an interdisciplinary issue and each conflict requires a sui generis approach.

Formation and dissolution of unions cause instability in terms of politics, economics and security. In this context, the last decade of 20th century was really dramatic when we recall the collapse Iron Curtain, with the fall of Berlin Wall and revolutions in 1989 which was followed by inevitable dissolution in the Eastern Bloc.

After the elimination of old system, state controlled economies were forced to transform into market economy which was totally an unknown issue for those countries. Issues such as democracy, human rights also have been started to be brought up ever so often.

In such an environment with the disappearance of powerful-authoritarian state image, which had surpassed ethnic and nationalist movements, serious problems have started to take place in the Former Yugoslavia and Former Soviet geography.

In Balkans Serbian nationalism headed by Milosevic caused massacres firstly in Bosnia and then in Kosovo and initiated a process in which micro-nationalism deepened.

Clashes between Serbians and Albanians of Kosovo required military intervention of NATO in 1999 and international community has taken control in Kosovo, which was once a part of Yugoslavia. Until the declaration of independence of Kosovo in 2008 a new period in which formation of new states and.............

For the rest of the story click here!

World Economy and Energy: Where are we heading?

2008-02-10T19:22:00.001+03:00

Production and consumption are two interdependent concepts in the economy and one triggers the other in a certain period of time. Growth has become one of the main realities of the new millennium and two new global actors China and India have become the main catalysts of the world economy in this period.

Mainly China devastated the concept of economy that we know with its competitive, low tech but low priced goods all around the world. It has become really hard to survive against this giant and not only in developing countries but also in developed ones the walls of protection against Chinese goods were seen as effective instruments. However, this type of a policy formulation contradicts with the principles of international trade which claim mobilization of goods and services would bring competition, specialization and prosperity to the world economy.

In this decade while certain sectors have suffered this situation, consumers have enjoyed this competition, since domestic producers while trying to keep their costs lower to be able to compete with the goods that occupy their markets the quality and technological innovation have gained impetus in global sense.

For several years the US economy is moving on a delicate path that FED is trying to prevent a possible unwanted result by pursuing proactive monetary policy. Using interest rates as an economic instrument they firstly tried to prevent an inflationist tendency in the country but then with the collapse of mortgage market, the threat of recession has become more serious.

The world is getting used to ups and downs in financial markets since then, due to the fear of a general recession to triumph in the world economy. Last week Bush government announced the new economic package which aims to cool down markets by implementing fiscal policies. This package of $160 billion aims to stimulate the US economy by increasing consumption in the country. However, some economists like Ercan Kumcu[1], are skeptic about the effectiveness of such an implementation. Kumcu, showing permanent income hypothesis of Friedman as a theoretical basis for his claims, says that announcing this policy as temporary Bush government has already undermined the effectiveness of this policy.

We will see if this new economic package will succeed or not, but the truth is, it is not enough to cool down the international markets, and even the floating continues in the Asian markets this week.

Why the US matters?

A certain question comes to one’s mind, “Why does it matter a problematic situation in the US?”. I accept that it is a question that keeps the answer in it, “Because the US matters”. First of all, the US is the biggest buyer (or in other words the biggest consumer) of the world economy

For the rest of the story click here!

Who Killed Bhutto and Why?

2007-12-30T03:05:00.000+03:00

27 December 2007 will be remembered as one of the darkest days of Pakistan’s history. Benazir Bhutto who was one of the ex-PMs of this country was assassinated in a bomb attack just before the general elections in 8 January 2008. The place of this unpleasent incident was the same one where Zulfikar Ali Bhutto –Benazir Bhutto’s father- was executed in 1979.

Pakistan, especially after 9/11 has become one of the most important pillars of the Greater Middle East Project. Its position in the region and the radical groups in the country is a matter of concern for the ones who are seeking stability in this geography. Especially, political instability, military regime and the existence of radical groups in the country have become the main subjects about Pakistan. Everybody was seeking for a smooth passage to democracy, which is seen as a key factor for stability in the country. (For the rest of the story click here!)

Georgian Democratization Process and the Latest Developments

2007-11-21T01:48:00.001+03:00

Post Soviet states and their transition experience have differed from each other. However, Transcaucasia might be one of the most difficult one in this gigantic territory. Composed of three countries, Southern Caucasus has experienced many armed conflicts, revolutions and wars aftermath of the collapse of the Soviets.

Azerbaijan is relatively more advantageous than Georgia and Armenia and enjoying the blessings of its hydrocarbon reserves. Even though Nagorno-Karabakh issue is still a big problem for this country, politics of multibillion projects has become more dominant recently on the agenda. On the other hand, Georgia experienced a civil war, a velvet revolution and now a political crisis. It is politically a fragile country and unlike Armenia and Azerbaijan has to deal with the secessionist groups in the country.

After the collapse of Soviets, the first president of Georgia’s -Gamsakhurdia’s- era was a typical authoritarian period. This type of an authoritarian administration was seen a way for territorial integrity as well as for independence of Georgia and later for democracy. (Nodia, 1997, p.4) Thus, democracy was not seen as the priority. Moreover, Nodia claims that Gamsakhurdia’s populist nationalist policies “… provoked armed conflict in South Ossetia” (1997, p.4)
These policies not only undermined the strong position ...........for the rest of the article please click here!

Pipeline Politics and Turkey

2007-08-10T14:32:00.001+03:00

Sustainable growth and reaching a natural rate of unemployment -that would not cause social unrest- have always been desirable targets for a country. These two concepts are highly correlated with each other. It is hard to talk about a low unemployment rate or social welfare in the times of instability. On the other hand, stability in inputs of an economy is sine qua non for sustainable growth. In this context, energy security has always been high on the agenda since the 20th century.

Daniel Yergin in his Price discusses Sir Winston Churchill’s dilemma while deciding a great transformation in British navy; using oil as the mean of fuel instead of coal just before the World War I. If we take this great change as a milestone, since then hydrocarbon resources and having control over them have become an important issue for the Western civilizations.

As the price of oil and consequently input costs are increasing, energy issue and finding new alternatives that would decrease the dependency to hydrocarbon resources have become more pronounced by the policy makers and nongovernmental circles. On the other hand, economists blamed Asia-Pacific countries because of their increasing demand; even some discussed the peak oil theories more enthusiastically.

Another aspect of this energy game is being played by the governments and multibillion dollar companies. Recently, what is being witnessed in energy politics can be called as pipeline projects inflation.

Supplier countries and companies being aware of monopolistic power and having accumulated a great amount of petrodollars from price increases in global scale are looking forward to protect this sweet revenue in the long term and perhaps to use this power as leverage when necessary. On the other hand, consumer....for the rest of the story

Is Turkey Back in the Game?: New Deal with Iran and Nabucco!

2007-07-20T10:22:00.001+03:00

In today’s world, competitiveness and sustainability are among the most important issues of the world economy. In this sense, energy security with its two crucial components: diversity and finding reliable, sustainable and affordable energy sources has a vital role to play in a country’s welfare and growth structure.

Being located in a region that is between the richest energy resources and energy demanders, Turkey plans to be an energy terminal between the East and the West. In this context, Baku- Tbilisi-Ceyhan (BTC) crude oil pipeline and Baku-Tbilisi-Erzurum gas pipeline are two projects –up to a point- helps Turkey to diversify its sources and increase its geopolitical importance. Moreover, these two also help Azerbaijan and Georgia in political and economical sense.Turkey’s political ambition to become an energy terminal mostly relies on the projects like Samsun-Ceyhan crude oil pipeline that links Turkey’s northern coast to southern coast, Nabucco and surely on BTC. (There are also other projects like Turkey-Greece natural gas pipeline etc.) These projects basically aim to transfer Caspian region’s rich hydrocarbon resources via Turkey to the Western markets. Moreover, being mostly dependent on Russia, the EU also sees the route that would pass via Turkey as a good alternative for Russia. Liam Fox states the critical role of Turkey by saying “No energy security strategy can work without the support and cooperation of these two states [Norway and Turkey].”[1] However, being aware of this fact, beginning from this year’s second quarter Russia has begun to take an aggressive initiative in this energy game. Firstly, signing an agreement with Greece and Bulgaria for the construction of Burgas- Alexandropoulos crude oil pipeline, Russians made their first strike to Turkey’s Samsun-Ceyhan project. After that Calik Group has started to the construction of Samsun-Ceyhan with its Italian partner ENI just before Putin’s unexpected visit to Kazakhstan and Turkmenistan. After this visit the future of the pipeline was a big dilemma, however this week three licences were given to both national and international companies for the establishment of new refineries in Ceyhan; the final destination both for Samsun-Ceyhan and BTC. It can be said that these three refineries while meaning $15 billion of investment and new employment opportunities for about 3000 ..........for the rest of the story

Kazakhstan-One of the Important Player In Energy Game On Eurasian Area

2007-06-08T00:22:00.002+03:00

This commentary is from USAK's Energy Review Newsletter http://www.turkishweekly.net/energyTo subscribe email to energyreview@turkishweekly.net
Kazakhstan gained its independence in 1991 after collapsing of the Soviet Union and immediately began to seek ways to implement the use of their own oil sources. It is estimated that the country has resources between 30 and 40 billion tons of oil.

With geopolitical position in Central Asia, Kazakhstan has borders with countries such as Russia and China and is one of the largest countries in the Eurasian space. The main oil fields in Kazakhstan like Tengiz oil field which is located on the northeast shores of the Caspian Sea, then the Karachaganak oil field located inland near to Russian border, another Kashagan is one of the largest field with projected reserves of somewhere between 7 and 13 billion Barrels, and the Kurmangazy field, located in northern Kazakhstan. As it seen the major oil fields are located in the western part of the country near the border with Russia. Although there is some small oil fields near the Chinese border, their industrial exploration has not yet to begin
.
Neighborhood with Russia and China play the key role in the development of national energy policy. For example, Kazakhstan is interested in cooperation with Russia firstly because this country is the main transit route for oil exports to the European markets. Indeed, during the Soviet period the only oil pipeline from which export of oil from Kazakhstan was possible has been linked to the Russian city of Samara, where through internal oil pipeline infrastructure came to the Black Sea port of Novorossiysk.

Subsequently in 2001 with the aim to exp[ort of oil from Kazakhstan Caspian Pipeline Consortium was built which is also passing through Russia. The length of this pipeline is about 1510 km, and connects the Tengiz oil field with the port of Novorossiysk. It also plans to export oil extracted from fields Kashagan and Karachaganak to date ......................

By Rovshan Ibrahimov

For the rest of this story: http://www.turkishweekly.net/comments.php?id=2625

Oil, Gas and Kazakhstan

2007-06-08T00:08:00.001+03:00

The period between the World War II until the collapse of Soviet Union is defined as the Cold War Era in the world’s history. After the dissolution of USSR not only this war came to an end, but also from Baltic region to Central Asia new states have appeared in the international arena.

For years, this closed geography has been an unknown equation for the Western world with its people, culture and surely with its rich resources. Thus, emergence of new countries caused a curiosity with excitement among big actors in the world politics. Especially, Central Asia was defined by many as the region that can be an important center for energy resources and an alternative for Middle East’s hydrocarbon suppliers.

Until now, it is partially proven that Caspian Basin can represent a good alternative with its hydrocarbon reserves for the world economy. It is hard to say that it can be a hundred percent substitute, but it is for sure that with policies that would be implemented carefully, this region can help for diversification of resources.

In this region one of the most promising countries with its wide territory and rich resources is Kazakhstan. After the collapse of Soviets, Kazakhstan by taking serious and decisive steps has developed relatively a better and stable state structure when compared to others.

Kazakhstan is a country that is located both in Central Asia and Caspian Basin. As neighbors it has Central Asian countries as well as global powers like Russia and China. It is a well known fact that the geopolitical location of a country has always a big impact on a country’s both foreign and internal affairs. Thus, having two neighbors like Russia and China and being in a geography that is geopolitically fragile and attractive, it is so important for Kazakhstan to conduct a well balanced foreign policy.

What makes this geography so attractive with its deserts and hard climatic conditions? First of all Russia for centuries has been an important actor in the region. This has not changed even after the collapse of USSR. Now, Russia does not want to lose its high hand and conducts a proactive foreign policy in the region. When I talk to Kazakh analysts they say that apart from diplomats and officials, President Putin and Nazarbayev meets almost 10 times in a year. As known also US tries to become a dominant power in the region politically and economically. In fact, the well known “Great Game” still takes place in this geography even though the actors change in time. In this New Great Game the main actors are Russia and the US. However, one should not ignore the rising star of China in the region, especially in Kazakhstan. Since they have to satisfy their energy hunger due to their fast growing economy and being in the same geography they think that these countries can represent a good solution for their problem.

So, where does Kazakhstan stand in this big picture? According to data of 2005[1], Kazakhstan with its reserves of 39.6 million barrels of oil holds 3.3% of the world’s proved oil reserves. Moreover, Kazakhstan is the second largest producer in the former Soviet Union and produces 1.6% (1.36 million bpd) of the world’s total oil production. The main oil fields of Kazakhstan are Tengiz, Karachaganak, Kurmangazy, Uzen and Kashagan. Among these, “the Kashagan field is the largest oil field outside the Middle East and the fifth largest in the world”[2]. It is estimated this reserve to hold 7-13 billion barrels of oil. Uzen...................

By Hasan Selim Ozeretem

For the rest of the story: http://www.turkishweekly.net/comments.php?id=2624

ExxonMobil investments in Azerbaijan

2007-05-02T15:56:00.000+03:00

This commentary is from USAK's Energy Review Newsletter http://www.turkishweekly.net/energyTo subscribe email to energyreview@turkishweekly.net

For over one century, Azerbaijan has been an oil and gas producer and has had a petroleum refining industry. The country’s most significant reserves in terms of value are its oil reserves.

Azerbaijan’s oil production occurred primarily offshore in the Caspian Sea. One field, Guneshli, 60 miles off the Azeri coast, accounted for more than one-half of the country’s oil production. All crude oil produced in Azerbaijan was refined at Azerbaijan’s two domestic refineries in Baku; only petroleum products had been exported.[1]

Oil production, however, began at the country’s first production sharing agreement (PSA) project at Chirag. With the planned development of new oilfields in the Caspian Sea through joint ventures and PSA’s, Azerbaijan’s oil production should increase to levels far exceeding its former peak production within the next 10 to 15 years. As of 1997, Azerbaijan had signed nine oil development PSA’s, and 20 companies from 12 countries were engaged in offshore development. The Azerbaijan signatory to the PSA’s was Socar (State Oil Company of the Azerbaijan Republic).

A number of foreign firms are involved in projects to develop these reserves. One of these firms is Exxon Azerbaijan Operating Company, a subsidiary of the U.S. Company ExxonMobil, invested more than $1.5 billion in oil projects in Azerbaijan between 1995 and 2003, according to ...........................
For the rest of this comment:http://www.turkishweekly.net/comments.php?id=2587

Oil Markets: Samsun-Ceyhan Oil Pipeline and Iran’s Nuclear Crisis

2007-05-02T15:51:00.000+03:00

This commentary is from USAK's Energy Review Newsletter http://www.turkishweekly.net/energyTo subscribe email to energyreview@turkishweekly.net

This week an important step was taken for a dream to come true; first stone was laid for the “Samsun Ceyhan crude oil pipeline project” in Turkey. Also known as Trans-Anatolia Project, Samsun Ceyhan Crude oil pipeline is another leg of Turkey’s initiative of becoming an energy corridor between western markets and the eastern energy resources.
The project will be undertaken by two prestigious groups and will cost nearly $1.5 billion. One of the partners of the project is Turkey’s well known Calık Holding and the other one is Italian energy giant ENI. Having a 555 kilometer length, the pipeline initially will carry 1 million barrels of oil per day and then it is expected this number to increase to 1.5 million barrels of oil per day. This pipeline with the existing Baku Tbilisi Ceyhan (BTC) crude oil pipeline will be another main route for the Caspian Basin’s energy resources to be transported to the western markets and present a good alternative for the sake of energy resource diversity. This week also another important development was happened in Turkey not only for international politics but also for the oil markets. Iran’s nuclear envoy Larijani and EU’s senior foreign policy official Javier Solana had a meeting in Turkey’s capital Ankara. They discussed the uranium enrichment program of Iran. After the meeting, Larijani said that "In some areas we are approaching a united view,”. It should be noted that being a speculative and a delicate issue for the oil markets any improvement in this context is important for the stability in the markets. This week was stable for the Brent oil; it only increased $1 when compared to last week’s closure. However, WTI increased $3.3 and became $65.98. This increase also helped the difference between WTI and Brent to decrease in the markets. Since the middle of the March WTI has lost its price superiority over Brent due to WTI’s ample supply in the Cushing region. On Friday, capture of Al-Qaeda militants in Saudi Arabia also supported price increases. It was stated that these captured terrorist, for about 172 people, were planning to conduct terrorist attacks to refineries and oil installations. This kind of a possibility caused the tension in Middle East to increase. It should be noted that Saudi Arabia has the biggest oil reserves and the biggest producer in the world.

Oil Prices (USD$)Source: Financial Times
Last week, also the oil stock values of the previous week’s (20 April) in the US were announced. Gasoline continued to decline whereas oil stocks increased by 2.07 million barrels. However, the stocks in crude oil are 10 million barrels less when compared to the last years’ 345 million barrels of oil stock.

Stocks in the US Source: Energy Information Administration
Now, there are three important geopolitical threats for the oil markets; current political situation in Nigeria, possibility of Al-Qaeda attacks to the refineries and oil installations in the Middle East and Iran’s Nuclear Crisis. Moreover, in the middle term, the decline in gasoline stocks can cause a further demand pressure on crude oil with the returning of refineries back to production after the term of rehabilitation. For this week, 14 of 33 analysts that participate in Bloomberg’s survey expect a rise in prices and 11 of them expect oil prices to decrease. Bulls that expect prices to rise claim that the speculation of U.S. gasoline supplies will remain below normal going into the summer after refiners shut units for repairs can cause prices to increases. (Bloomberg)

For your comments: hozertem@gmail.com

This commentary is from USAK's Energy Review Newsletter http://www.turkishweekly.net/energyTo subscribe email to energyreview@turkishweekly.net

Turkmenistan, Russian Monopolist Gazprom and European Union

2007-05-02T15:47:00.000+03:00

Development of energy policy on the territory of Eurasia in the era of globalization reveals some interesting trends. One of the such trends is the dependency of stable development of the integration process within the EU from a neutral Turkmenistan. At first glance, this might seem unrealistic. But the reality is another.

On 23 April, President of Turkmenistan Gurbanguly Berdimukhamedov made his first official foreign visit to Moscow. For Russia and Turkmenistan, the major theme was cooperation in the energy sphere. President of Turkmenistan hopes to attract more foreign investment for the development of gas fields and construction of additional transport corridors for exporting the Turkmen gas to world markets.

Topic of buildig additional pipelines is also a hot issue in Russia; it wants new export routes to pass through its territory. It is no secret that Turkmenistan with the support of the EU is looking for alternative ways to transport Russia and primarily it was the Transcaspian gas pipeline. The parties have agreed to build a new Caspian pipeline. This pipeline will be held along the shore of the Caspian Sea on the territories of Turkmenistan and Kazakhstan...........
For the rest of this article:http://www.turkishweekly.net/comments.php?id=2583

Oil Markets: Falling Prices and the Gasoline

2007-04-24T02:35:00.000+03:00

This commentary is from USAK's Energy Review Newsletter To subscribe email to energyreview@turkishweekly.net
You can also visit www.turkishweekly.net/energy to download USAK's Energy Review's previous issues.

Crude oil prices fell both for WTI and Brent oil when compared to last week’s market closure. This week prices started with a downward trend in oil markets, but the prices slightly increased on Friday due to worries about elections that was made in Nigeria this weekend; Africa’s biggest oil producer.

For about one month everybody is talking about gasoline stocks and gasoline production due to beginning of driving-season. Gasoline production and stock levels are important indicators in this context when compared to the role of distillate oil in the winter.

According to Energy Information Administration (EIA), gasoline stocks declined 2.7 million barrels and became 197 million barrels in the US. Due to increased demand retail gasoline prices became 287 cents. However, EIA in its weekly report suggest that prices increased so much that it would not be surprising to see them to decline or stabilize over the next several weeks, since the high prices are so attractive that it stimulates production of gasoline.

Gasoline
Source: EIA

This week oil prices drew a wavy trend. In the absence of political disputes (when compared to previous weeks) or the expectation of big economic problems for the near future, the prices, especially the Brent oil began to fall in the beginning of the week. The Energy Department announcement that refineries operated with 90.4 percent capacity last week (Bloomberg) was effective in this downward trend. Even though the Brent has increased slightly on Friday due to worries about elections in Nigeria, the closing price closing price ($66.22) was $2.6 lower than previous week’s closure.

Oil Prices
Source: Financial Times

On the other hand, the superiority of Brent over WTI continues. It even became $61.7 this week. The reason is still the same; ample supply of WTI in the Cushing prevents WTI crude oil price to increase. Moreover due to maintenance and some problems in the refineries of the region, the demand of WTI does not increase, but as the situation returns to normal probably, the price of WTI will increase with the rising demand.

For the stability of the oil prices, tranquility in the political environment and the positive economic expectations are important, since emergence of any conflict or any change in expectations cause speculative motives to gain ground and accordingly prices begin to fluctuate in the market. In this context, political situation in Nigeria and Middle East is so important. For the next week, according to Bloomberg’s survey 17 out of 38 analysts expect oil prices to fall, whereas 10 of them expect prices to increase.

22 April 2007
For your comments:
hozertem@gmail.com
This commentary is from USAK's Energy Review Newsletter
To subscribe email to energyreview@turkishweekly.net

Energy Policy in EU Region-National Priorities vs. Common Policy

2007-04-19T18:44:00.000+03:00

Rovshan Ibrahimov

An interesting situation developed in the energy sector of EU regarding the import of the hydrocarbons. From one side EU is trying to develop a common energy policy, while some member states have tried to carry on their own strategy in this area.

Establishing of Common Energy policy in EU is one of the essential steps towards creating a political union among its members. Without a stable flow of hydrocarbons to the markets of the EU, it is impossible to ensure the safety of the future of a federal European state. This federative state will always be open to threats which may rise from dependency on external energy resources, especially from certain supplier’s states.

Till now, the EU is a major consumer of oil and gas in the Eurasian area. So, with only 6% of the world's population of 27 States members of the EU consumes 16% of supplied energy. During the year, the EU states consume as much as 19% of total world consumption of oil, 16% of gas, 10% coal and 35% of uranium. Up to 50% of the EU energy is supplied by imports, in which the share of oil is 80% and gas 40%, and those figures continue to rise.

However, the energy comes from a limited number of locations and dependence on those regions quite high. Thus, in 2005 the EU states imported oil from the following sources: 27% from Russia, 19% from the Middle East, 16% Norway, 12% from North Africa to 5% from other sources. With regard to natural gas, 46% of it came from domestic sources, 25% of Russia from 15% Norway, and 14% from North Africa, 6-8% of the supply of LNG from North Africa and the Middle East. According to the specialists' forecasts, by the year 2020, the imported oil is expected to increase to 90%, and natural gas consumption to 70% in the EU.

One of the main politics of the EU in the field of energy supply is the creation of alternative transport corridors for the delivery of hydrocarbons from alternative sources. EU INOGATE program designed to achieve that goal. The priority region for alternative supplies is the states of the Caspian region.

Already through the Baku-Tbilisi-Ceyhan oil pipeline and Baku-Tbilisi- Erzurum gas pipeline, oil and gas exported to the European markets from this region is expected to increase. Gas through the pipeline will
transported to Turkey and Greece and later to Italy, Spain and Portugal. Subsequently, it is expected that through these pipelines hydrocarbons will be exported from Kazakhstan and Turkmenistan.

Last week, Romania, Serbia, Slovenia, Italy and Croatia, and representatives of the European Commission signed in Zagreb Declaration on the construction of Pan-European pipeline, which will connect the Romanian Black Sea port of Constanta to the Italian city of Trieste on the Adriatic Sea. This pipeline will be built to bypass the Turkish straits and it is scheduled to exports of oil from the Caspian .........

For the rest part of this comment:
http://www.turkishweekly.net/comments.php?id=2569

Oil Markets: Brent on the Edge of $70

2007-04-17T16:08:00.000+03:00

This commentary is from USAK's Energy Review Newsletter To subscribe email to energyreview@turkishweekly.net

Political agenda determined the price trends with the capture of British soldiers by Iran in March. Even though Iran released them almost two weeks before, oil prices preserve their high levels in the markets. Especially, Brent oil increased almost 13.5% in a month and became $68.82.

This week the news for oil markets were not so encouraging for the future. First of all, the IEA reported that OPEC production decreased in March by 165000 barrels per day and tightened supply may cause further declines in inventories. Moreover, in two weeks time gasoline stocks decreased almost 10 million barrels in the US. On the other hand, distillate stocks and crude oil stocks increased slightly in the US. However, it should be recalled that we are moving towards the driving season and the weather conditions are not as determinative as before. This means gasoline stocks are more important than distillate stocks as an indicator for this time of the year.

US Energy Secretary Samuel Bodman said Friday that US gasoline supplies will meet demand this summer, but he warned of price run-ups due to refinery constraints. Moreover, he added that with refineries down due to annual maintenance and for a switchover to summer gasoline blends, gasoline on the market could be limited and prices could rise to levels seen last summer. (Platts)

Oil Prices
Source: Financial Times

As can be seen from the above graph, even though the Brent oil and WTI oil were strongly correlated with each other in the past, the two has begun to diverge from each other with the beginning of April. There is almost a difference of $4.5 between them. The reason of this was indicated by the Financial Times that the storage tanks are full in the Cushing with WTI oil. Also, there are some refinery outages in the region and for this reason WTI is piled up this much. This kind of an abundant supply prevents WTI price to increase when compared to Brent oil. The other important thing according to Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York, is Iranian and Nigerian oil grades are priced according to a Brent based formula, so political tensions and conflicts in these regions cause bigger increases in prices. (Bloomberg)

The tension in the Middle East is still so high and this kind of a situation always represents a potential threat for the oil markets. As seen in the incident of capture of Britons even a gossip can cause big volatilities in the markets. However, Iran’s nuclear crisis and the situation in Iraq are still so delicate issues in the political agenda. Especially, blasts in the “Green Zone” in Baghdad shows that even the places with highest security measures cannot be controlled. Moreover, Ahmedinejad’s latest statements about Iran’s nuclear energy capabilities show that the Iranian nuclear crisis will preserve its importance on the agenda.
For the next week, according to a Bloomberg’s survey 15 out of 31 analysts expect oil prices to rise, whereas only 5 of them expect a fall in prices. Moreover, the inventory level of gasoline stocks in the US that would be announced this week might be an important factor on the markets.

For your comments:
hozertem@gmail.com

This commentary is from USAK's Energy Review Newsletter
To subscribe email to energyreview@turkishweekly.net

Understanding the Climate Change and the IPCC Report

2007-04-12T13:13:00.000+03:00

Killing slowly the earth; this is what we are doing for centuries. Unfortunately, the latest report of Intergovernmental Panel on Climate Change (IPCC) approves this; climate change is man made and his share in this is 90% in the last 50 years.

The main reasons for the climate change are;
i. Greenhouse gases
ii. Changes in the solar activity
iii. Movement of tectonic plates
iv. Change in the earth’s orbit
v. Volcanism
vi. Meteor Strikes

There is a high correlation between temperature changes and solar activities but in the recent years greenhouse gases have become dominant in global heating. Tectonic movements and change in the earth’s orbit are effective, but in the very long term. On the other hand particles that emerge from volcanic explosions or from a meteor strike (for example like in the prehistoric period) prevent sunlight to reach to the earth. As humans, among these we can only control greenhouse gas emissions; the most effective one.

Human made factors like urbanization, aerosols, CFC (Chlorofluorocarbons), fossil fuels, agricultural activities, deforestation and transportation can be stated as the factors, which are effective on climate change.

With the “industrial revolution” human activities have increased and accordingly the greenhouse emissions in the atmosphere. The main greenhouse gases are Carbon Dioxide (CO2), methane (CH4), and nitrous oxide (N2O). In addition, according to scientific researches CH4 is 21 times and N2O is 310 times effective than CO2. These are also called anthropogenic gases and since 1750 these have markedly increased as a result of human activities. In global scale increases in carbon dioxide concentration are due primarily to fossil fuel use and land-use change, while those of methane and nitrous oxide are primarily due to agricultural activities. (IPCC Report) These gases absorb sun lights and causes increase in the earth’s temperature. Moreover, CFCs deplete ozone (O3) layer in the atmosphere. However, in 1990 it was agreed to stop CFC usage until the 2000 in London Protocol............

Hasan Selim Ozertem (USAK)
11 February 2007

Israeli Pipeline: Ashelon-Eilat-The Second Breath

2007-04-12T12:17:00.000+03:00

There are many new oil and gas pipelines which are built or planned to construct in the past few years on the territory of Eurasia. Such a number of projects make us to talk about the inflation in transit corridors. Without a doubt one of the main reasons for this increase is the desire of states to ensure safe transit routes for transporting of hydrocarbons.

Israel is also no exception and also searches for additional corridors in importing oil for its own market. Encircled by the potential enemies Israel, as any other country, needs to ensure its national security, including in the field of energy.

Ironically, situated in a region where the huge portion of oil world production realized, Israel has not substantial deposits and mostly dependent on imports. The possibilities of purchasing oil from the neighboring Arab states are equal to zero, and therefore, Israel is compelled to buy oil from suppliers that are outside of the region.

Nowadays, Israel demand is about 300,000 barrels of oil a day. Until the mid-1990s, oil has been imported from Egypt. Now up to 80% of Israel's oil comes from Russia.

In the 1960s, during the ascent of Arab nationalism in the region, Israel has to find a partner in the face of Iran which also carious about the growing wave of Pan-Arabism. For this reason, Israel as a country aspiring to a stable flow of oil, and Iran, as a state which is desire to export own oil to the European market, have agreed to construct a pipeline Ashelon-Eilat. This pipeline was to have been held throughout Israel and connect terminals at the Mediterranean Sea and the Red Sea. This pipeline was planned as an alternative to transport via the Suez Canal, which by that time had been nationalized by Egypt.

Both Israeli cities are in strategic locations and the convenient for the transportation of oil to bypass Canal. However, the military luck Israel against Egypt and the change of .........

Rovshan Ibrahimov

Did Burgas-Alexandrupolis really Bypass Turkey in the New Great Game?

2007-04-11T12:39:00.000+03:00

09 April 2007
On 15th of the March President of Russian Federation Vladimir V. Putin visited Greece in order to sign intergovernmental agreement for the construction of Burgas-Alexandrpolis pipeline (BAP) which will transmit Russian oil from Black Sea to the Aegean through Bulgaria and Greece. The pipeline will have the capacity to transmit 35-50 million tones of oil per year. What makes the deal so striking is the fact that this will become the only pipeline in EU and NATO territory controlled by Russia which guaranteed %51 stakes in the operation. Since the politics of pipeline has been seen as the key theme of what some have termed the New Great Game for control of the energy rich Eurasia region arose after the collapse of the Soviet Union, the successor state of Soviet Union, Russia made a striking drive in the game by securing to deliver oil to the world markets under its control.

Russia chose BAP option over different alternatives and mainly over Turkish proposal of Samsun-Ceyhan. Some argued that Russian move not only intended to by-pass Turkish straits but also aimed to diminish the role of Turkey that adopts a strategy to become an energy transit country relying on its geographical location for becoming.............

Volkan Özdemir
http://www.turkishweekly.net/

The EU and Isolating Armenia

2007-04-11T11:17:00.000+03:00

23 March 2007

Through which way the European Union (EU) and Armenian relations has recently proceeded is the European Neighborhood Policy (ENP). If requires to remind, the ENP signifies a newly-established approach of the EU which differs from the existing foreign relations of the Union. Instead, including the neighboring countries on the Eastern and Southern encompassing borders of new expanding the EU, the policy goes beyond the present relations with the intention of sharing the benefits of the EU enlargement with the interested neighbors by means of increase in security, stability and interests. In this sense, the ENP sets objectives based on commitments to shared values and effective implementation of political, economic and institutional reforms. The implementation of the ENP is to be supported with financial and technical assistance. For the benefited side, the prospect of this policy seems to create incentives for the promotion of comprehensive economic and political reforms. .............

http://www.turkishweekly.net/comments.php?id=2542

House of Lords Reform and the Minority Groups in Britain

2007-04-11T11:15:00.000+03:00

13 March 2007

Last week there was an important development in British Parliament. House of Commons voted for the future of House of Lords. There was a package which is called as White Paper and different variations to be voted. (You can reach this document from the official website of UK parliament) If you look over this paper you will see that this is not the first reform initiative. Previously there were amendments accepted in this context in 1911, 1945, 1958 and so on. The most recent initiative was in 2003 and the Joint Committee recommended seven options for the reform of House of Lords;

1. Fully Appointed
2. Fully Elected
3. 80% appointed, 20% elected
4. 80% elected, 20% appointed
5. 60% appointed, 40% elected
6. 60% elected, 40% appointed
7. 50% appointed, 50% elected

However, no clear consensus found among the members of the parliament, and the lords on the other hand voted for a wholly appointed House.

After this initiative current government restarted another initiative for the reform in the House of Lords and on March, 7 2007 the reform draft..............

Hasan Selim Ozertem (JTW-USAK)

Turkey's Combat against the Religionist Terrorism: A Success Story?

2007-04-11T10:56:00.000+03:00

02 April 2007

When we compare the Al Qaeda and other Islamist activities in Turkey and other Sunni Muslim countries of the Middle East, we see a success story in the Turkish case in terms of murders, number of terrorist attacks and the people’s support to the security forces.

There are many reasons yet the most important ones for that result can be listed as follow:

1) Turkish Islam: Turkish people do not allow spreading of the religionist terrorism in society. This is a civilian resistance instead of official fight, and the Turkish security forces realized this advantage and encouraged the civilian resistance against religionist terrorism. Terrorists could not abuse the Islamic matters as much as they do in different countries. Turkish society does not see the terrorists as representatives of Islam, and thus terrorists cannot take hostage the religion.

Turkish Islamic understanding is more critical, and not only accuse the other faiths or peoples in the problems. At the same time Turkish Islamic interpretation is the most liberal one in the Muslim world.

Turks mostly do not equate Christianity with the West and Judaism with Israel. They have learned through experience that religion has a larger meaning than political factions. Since a significant proportion of the population was Christians and Jews during the Ottoman times, these religions are not alien to Turkish people.

Turkish Islam does not interpret worldly affairs solely through religious dogma. The Turkish tradition is noted for its pragmatic and practical approach.

Turkish Islam did not evolve in a conflict environment. Instead of accusing the other faiths, Turkish Ottomans first questioned .........(Link)

Link:
http://www.turkishweekly.net/editorial.php?id=55

Oil Markets: Oil prices increase as the tension increases in the Middle East

2007-04-11T10:51:00.000+03:00

02 April 2007

After becoming $49.90 in the first half of the January, oil prices turned back to their increasing trend in the market. Firstly, cold weather conditions after mild weather caused demand for heating oil to increase, then OPEC’s production cut in the beginning of February increased oil prices up to around $55-57 in the market. Everyone was waiting problems to emerge once again in the Middle East and the first signal was the beginning of negotiations among UN Security Council members for imposing stronger sanctions against Iran. All members agreed on a new package on the third week of the March and last Saturday voted for it unanimously on the UN Security Council. However, just a day before this vote to take place, on 23 March Iran captured 15 British naval personnel in the Shatt al-Arab waterway, which separates Iran and Iraq. Everyone has forgot all the other things and started to talk about these 15 soldiers after then.

UK claimed that Britons were seized in Iraqi waters and demanded its sailors to be released. Moreover, on March 28 Foreign Secretary Margaret Beckett in a statement announced that they would be imposi...............(Link)

Link:
http://www.turkishweekly.net/comments.php?id=2555