Russia, The South Caucasus and the Caspian: A Handbook
By: G.P. Armstrong, Ph,D. {1}August 1998

EXECUTIVE SUMMARY

Note: The complete text of the report will be posted on this site after it is made available in both official languages.

The Caspian Sea area is shaping up to be one of the biggest sources of oil and gas in the world. A conservative estimate gives about one-sixth the amount of oil as there is in the Gulf area. Every major oil-connected company (including many Canadian companies) is involved today in the oil business in and around the Caspian. Other interests will pull Canada, and the West, into the area.
The Caspian area – particularly the Caucasus – is extraordinarily complicated: there is no other like it anywhere. Dozens of distinct peoples claim it as their home. Many more peoples have arrived "recently" (ie in the past millennium). Since 1991, six wars have been fought in the Caucasus and none of them has produced a final settlement. There are at least nine outstanding border disputes – ten if one counts the Caspian Sea itself. The area is so uniquely complicated, with such an entanglement of ethnic and historical concerns, that ignorance of its complexities can be fatal for wise policy.
This paper is intended to be a reference guide and not to be read straight through; continuous reading would, therefore, reveal a good deal of duplication. The Table of Contents has been arranged so that the reader can directly turn to the sections of concern.

The sections are summarized below.
"Oil and Gas" discusses current expectations of Caspian hydrocarbon reserves. It is thought that the Caspian area contains at least 100 billion barrels of oil and 500-600 trillion cubic feet of gas. But, as much is not yet explored, there may be more.
"The Land" gives an overview of the geography of the territory under discussion.
"The Peoples of the Caucasus" describes the extraordinary ethnography of the Caucasus in which are found, at least, twenty-six distinct peoples who call the area home. In addition to the "natives", the years in the Russian and Soviet Empires means that many other peoples now make the area home.
"History" sketches the major events of the Caucasus from early times to the present. Generally speaking, the Mountaineers (the peoples of the North Caucasus) were independent until conquest, after a tremendous resistance, by Russia in the Nineteenth Century. The South Caucasus had lost its independence centuries before to Ottoman and Persian power. It was conquered (if Muslim) or "liberated" (if Christian) by Russia during the Nineteenth Century until, by 1900, for the first time in history, one power ruled the whole Caucasus. All peoples tried for independence after the collapse of the Tsarist Empire but were brought under communist power. Demands for independence re-appeared after the fall of the Soviet Empire.
Memories are long in the Caucasus and the section "National Dreams and Nightmares" recounts the national myths of the area. Georgians dream of the Greater Georgia of the Twelfth and Thirteenth Centuries. Armenians cannot forget the massacres of Armenians by Turkish power. Azerbaijanis seek to find their identity whether as Turks, as Caucasians or as Muslims. Mountaineers dream of a Mountain Republic, free from outside power. The collapse of Soviet power liberated all these dreams and nightmares.
"Diasporas" speaks of the large and influential populations of Armenians and Mountaineers who have transported their national myths to their new countries.
"Soviet legacies" briefly touches on the problems and – even – the benefits of seventy years of communist rule on the area.
"Sufism-Wahhabism – An Islamic Fissure" discusses a tension that has already caused strife in Chechnya and Dagestan and may cause much more. The traditional form of Islam in the east North Caucasus – Naqshbandi Sufism – appears to be under threat from a rigorously purist form of Islam from Arabia – Wahhabism.
"Post 1985 wars" gives a brief account of the wars fought in the area since the Gorbachev reforms began to release the pressures built up by the communist system – the Karabakh war between Armenians and Azerbaijanis; the Ingush-Ossetian troubles; the Russo-Chechen war; the Georgian civil war; the war between the Abkhazians and the Georgians and between the Ossetians and the Georgians. This section is the most argumentative portion because the fairly widely held belief that Moscow started and maintained these troubles must be combated. In most cases, these wars have their origins in Stalin's border decisions, which the world recognized in 1991 and 1992.

"Potential Border Disputes" deals with some potential war-causing territorial and ethnic disputes. These have not so far caused any great amount of violence but could explode.
"Historical Hatreds" attempts to describe the attitudes that Armenians and Azerbaijanis; Georgians and Russians; Chechens and Russians have towards each other. These attitudes – hatred or contempt for the most part – greatly affect relations in this small area.
The sections "Kalmykia" and "Tengiz Oil and Gas Field" move the reader out of the Caucasus proper to the north end of the area. The Tengiz field is already producing and one of the possible pipeline routes from it passes through Kalmykia. Output may also be connected to the central Caspian fields and so this area may become connected to the Caucasus.
"Caspian Sea Borders" discusses one of the initial problems: the littoral states cannot agree on how to divide up the Sea. However, now that Moscow has virtually agreed to the position that Baku has held all along, this issue is close to settlement and the entire area will likely be exclusively divided among the littoral states.
"Pipeline Routes" briefly discusses the principal routes suggested for the exit of the oil and gas to their customers. A vexed question which has attracted some extreme statements, it seems that the Russian and Georgian routes will certainly be used while the others depend on the price of oil.
"National Interests" sets out what the players can expect to gain from the Caspian hydrocarbons. President Aliyev of Azerbaijan has very cleverly involved almost all players in almost all possibilities. This represents a force for stabilization as nearly all can become "winners" of something. But, three players – Armenia, Karabakh and Abkhazia (and the last two are the local military powers) – have been altogether left out. Russia's involvement is also discussed and it is argued that Moscow's involvement is no more or less malign than anyone else's and that any attempt to cut Moscow out of the profits is, simply, impossible.
"Federalism" highlights what is probably the only stable long-term solution for the area in which a mono-ethnic "homeland" state can only be established by war.
Finally, "Canada's Interests" discusses Canadian involvement in the area – small at the moment, but likely to grow.
A number of appendices complete the Handbook.
If there is as much oil and gas in the Caspian as there seems to be, the Caspian, and all the peculiar problems of the peoples who live nearby, will be the stuff of headlines, international meetings and briefings for years to come.