Tuesday, January 11, 2011

REPORT: Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests (fas.org)

By Jim Nichol, Specialist in Russian and Eurasian Affairs
December 21, 2010

Congressional Research Service, 7-5700
CRS Report for Congress
Prepared for Members and Committees of Congress

The United States recognized the independence of Armenia, Azerbaijan, and Georgia when the former Soviet Union broke up at the end of 1991. The United States has fostered these states’ ties with the West in part to end their dependence on Russia for trade, security, and other relations. The United States has pursued close ties with Armenia to encourage its democratization and because of concerns by Armenian-Americans and others over its fate. Close ties with Georgia have evolved from U.S. contacts with its pro-Western leadership. Successive Administrations have supported U.S. private investment in Azerbaijan’s energy sector as a means of increasing the
diversity of world energy suppliers. The United States has been active in diplomatic efforts to resolve regional conflicts in the region. As part of the U.S. global counter-terrorism efforts, the U.S. military in 2002 began providing equipment and training for Georgia’s military and security forces. Troops from all three regional states have participated in stabilization efforts in Afghanistan and Iraq. The South Caucasian troops serving in Iraq departed in late 2008. The regional states also have granted transit privileges for U.S. military personnel and equipment bound for Afghanistan.

Beginning on August 7, 2008, Russia and Georgia warred over Georgia’s breakaway regions of Abkhazia and South Ossetia. Russian troops quickly swept into Georgia, destroyed infrastructure, and tightened their de facto control over the breakaway regions before a ceasefire was concluded on August 15. The conflict has had long-term effects on security dynamics in the region and beyond. Russia recognized the independence of Abkhazia and South Ossetia, but the United States and nearly all other nations have refused to follow suit. Russia established bases in Abkhazia and South Ossetia—in violation of the ceasefire accords—that buttress its long-time
military presence in Armenia. Although there were some concerns that the South Caucasus had become less stable as a source and transit area for oil and gas, Kazakhstan and Turkmenistan are barging oil across the Caspian Sea for transit westward, and the European Union still plans to build the so-called Nabucco pipeline to bring Azerbaijani and other gas to Austria.

Key issues in the first session of the 112th Congress regarding the South Caucasus may include Armenia’s independence and economic development; Azerbaijan’s energy development; and Georgia’s recovery from Russia’s August 2008 military incursion. At the same time, concerns may include the status of human rights and democratization in the countries; the ongoing Armenia-Azerbaijan conflict over the breakaway Nagorno Karabakh region; and threats posed to Georgia and the international order by Russia’s 2008 incursion and its diplomatic recognition of South Ossetia and Abkhazia. Congress may continue to scrutinize Armenia’s and Georgia’s reform progress as recipients of Millennium Challenge Account grants and the region’s role as part of the Northern Distribution Network for the transit of military supplies to support U.S. and NATO operations in Afghanistan. Some members of Congress and other policymakers believe that the United States should provide greater support for the region’s increasing role as an eastwest trade and security corridor linking the Black Sea and Caspian Sea regions, and for Armenia’s inclusion in such links. They urge greater U.S. aid and conflict resolution efforts to contain warfare, crime, smuggling, and terrorism, and to bolster the independence of the states. Others urge caution in adopting policies that will increase U.S. involvement in a region beset by ethnic and civil conflicts.

Most Recent Developments ... 6
Background ... 6

Overview of U.S. Policy Concerns ... 6
Regional Responses After the September 11, 2001, Terrorist Attacks on the United States ... 9
Operations in Iraq and Afghanistan ... 10
Azerbaijan and the Northern Distribution Network (NDN) ... 10
U.S. Policy After the August 2008 Russia-Georgia Conflict ... 10
The South Caucasus’s External Security Context ... 12
Russian Involvement in the Region ... 12
Military-Strategic Interests ... 13
Caspian Energy Resources ... 14
The Roles of Turkey, Iran, and Others ... 15
The Armenia-Turkey Protocols of 2009 ... 15
Iran ... 16
Others ... 17
Obstacles to Peace and Independence ... 17
Regional Tensions and Conflicts ... 17
Nagorno Karabakh Conflict ... 18
Civil and Ethnic Conflict in Georgia ... 20
Economic Conditions, Blockades, and Stoppages ... 26
Recent Democratization Problems and Progress ... 27
Armenia ... 28
Azerbaijan ... 28
Georgia ... 31
U.S. Aid Overview ... 32
U.S. Assistance After the Russia-Georgia Conflict ... 33
U.S. Security Assistance ... 34
U.S. Trade and Investment ... 37
Energy Resources and U.S. Policy ... 38
Building the Baku-Tbilisi-Ceyhan and South Caucasus Pipelines ... 39
Regional Energy Cooperation with Iran ... 41

Figure 1. Map of Caucasus Region ... 45

Table 1. U.S. Foreign Aid to the South Caucasus States, FY1992 to FY2010, and the
FY2011 Request ... 43
Table 2. U.S. Humanitarian Assistance to Nagorno Karabakh ... 44
Table 3. The $1 Billion in Added Aid to Georgia by Priority Area ... 44

Author Contact Information ... 45

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