BAKU (Azerbaijan) and TEHRAN – When Azerbaijani President Haydar Aliyev – a gruff ex-KGB commander – met with the always unflappable Iranian President Mohammad Khatami in Tehran recently, one might reasonably have expected the defusing of a key time bomb in the New Great Game. Khatami diplomatically told a press conference that both countries believed that the Caspian “is a sea of peace and security and that it belongs to the five littoral states.” For the moment, though, the Caspian remains a sea of trouble for those five countries – Iran, Azerbaijan, Russia, Kazakhstan and Turkmenistan.
And as far as Iran is concerned, the source of the trouble is none other than Washington, which Tehran suspects is interfering in the crucial Caspian issue.
Mohamad Reza Jalili, a professor of international relations at Geneva University, analyzes the Caspian dispute between Iran and Azerbaijan in terms of Baku moving ever closer to Washington, while Iran is engaged in an anti-US policy.
Pro-reform Iranian journalist Ahmad Zeidabadi says, “Since the US special envoy regarding Caspian Sea affairs visited Azerbaijan before Aliyev’s visit to Iran, it is quite evident that Tehran will face difficulties in coming to terms with Baku on finalizing the Caspian legal regime.” The “difficulties” remain. A new technical meeting scheduled for June is supposed to solve the bitter bilateral dispute between Iran and Azerbaijan – at odds since 1991 despite their common historical, cultural, social and religious bonds.
Sadeq Zibakalam, a Tehran University professor of political science, denies that Aliyev had a message regarding Iran-US relations. He says, “The Americans do not have any message to send to Iran. If they want to do so, they can convey their message through their interest section office in Tehran.” Iranian Information Minister Ali Younesi also denies any secret talks currently being held between Tehran and Washington – in Cyprus or elsewhere. Younesi stresses that “even dissident groups and those opposed to the Islamic system believe that in this climate of US intimidation any talk will be against national dignity and interest.”
While Tehran and Washington seem to be in a political deadend at the moment, Azerbaijan itself is at a political crossroads. Pressured through history by Russian and Turkish influence, among the new Caucasian nations it is now the most intimately incorporated to the evolution linking Central Asia to Turkey and Iran. And of course, it has already been defined as the new Kuwait.
All five littoral Caspian states have earth-shaking differences on how to divide the sea (or lake), a matter that involves not only the fabulous oil and gas wealth, but rich caviar stocks. The Caspian – an area the size of California – used to be regulated by agreements between the extinct Soviet Union and Iran dating back to 1970. It holds an estimated 10 percent of the world’s oil reserves. Oil will only come out by 2005. The total output may be 10 times less than the Middle East – but this remains the last unexplored petro-region on earth, now being cleaned up of major impediments such as Chechen guerrillas, Kurdish traffickers and hardcore Islamic wild cards. Oil executives expect the Caspian to be pumping 3.8 million barrels of oil a day by 2010.
Russia and Kazakhstan reached a bilateral deal at the beginning of May, evenly dividing the wealth on the northern shores of the Caspian: Tehran was outraged because it was not consulted. Azerbaijan is poised to sign similar deals both with Russia and Kazakhstan later this year. Of the five Caspian states, Iran and Azerbaijan are the furthest from reaching an agreement. In an ideal world, Azerbaijan, Kazakhstan and Turkmenistan would like to explore their part of the wealth without interference from Russia or Iran. Naturally, this is out of the question.
Technically, the Caspian Sea (Darya-ye Khazar in Persian) is the world’s largest lake – or a salt sea, about one-third as salty as sea water. For Iran – and also for Russia, as well as Turkmenistan – the Caspian is a lake. For Azerbaijan – and also for Kazakhstan – the Caspian is a sea. If the Caspian is considered a lake, it is to be divided equally among the five states. If it is a sea, each country should receive territorial waters according to its coastline. In this case, Iran would not get 20 percent, but only 13 percent. The official Iranian position is to battle for its 20 percent at all costs.
Kazakhstan is forced to export its riches through Russia – that’s why it had no choice but to reach an agreement with Moscow. Turkmenistan is allied with Iran – in the sense that both countries are claiming parts of the southern shores of the Caspian, which Baku says should be controlled by Azerbaijan: to the chagrin of Tehran and Ashkhabad, American multinationals have already been signed to develop the oil and gas on these shores.
Of all the littoral states, Azerbaijan is the most open to the West – meaning American oil giants. Washington’s game – as everybody in the region knows – is black and white: to allow the construction of many pipelines to prevent a monopoly by any particular nation; to allow at least one going through Russia; to allow not a single one to pass through Iran. It is an absurd policy because the Iranian route is the cheapest. Iran – as its diplomats are fond of saying – has “its hands on the Caspian and its feet in the Persian Gulf.”
At the Rajin’ Cajun bar in Baku – where Texas meets the Caucasus – an American executive, between two burritos, does not mince his words: “If I could, I would sign right now with Iran. They are the most trustworthy partners in the region. To talk about terrorism is nonsense: they would never sabotage their own pipelines.” This position is still absolute anathema in Washington.
Until recently, the holy grail of the New Great Game – at least for Washington – was the Baku-Ceyhan pipeline crossing Georgia and the Caucasus. Kazakhstan and Turkmenistan should also export their oil through this pipeline. Turkey, Georgia and Azerbaijan agreed to build it, at a meeting in Istambul in November 1998. But the pipeline – a partnership of Bechtel with GE Capital – will cost a fortune, more than US$4 billion, and it simply cannot be finalized before 2005.
Turkey – displaying enormous regional ambition – for years has been a crucial player in the New Great Game: it wants at all costs to impose itself as the main export route for the riches of Central Asia. But in practice Iran – holding the world’s second-largest gas reserves after Russia, and 93 billion proven barrels of oil – wins by a knockout. Iranian oil officials stress that the Iranian route for Central Asian oil is “the easiest, the safest, and the cheapest. Its cost, for us, would not be more than $300 million. You cannot compare that with the $4 billion for a pipeline going to Turkey.”
Russia, of course, is not sitting idly by. Everybody in the Caucasus and Central Asia knows that the Chechen war, the war between Armenia and Azerbaijan, and internal conflicts in Georgia were influenced or directly exacerbated by the Kremlin to secure routes for its pipelines.
Turkey has intimate historical, cultural and ethnic links with four of the Turcophone republics of Central Asia; besides, Azerbaijan and ethnic minorities of the Russian Federation speak Turkish dialects. Turkey dreams of a pan-Turkism swathe from the Bosphorus to western China. Iran, for its part, has deep economic and geopolitical interests in Central Asia and the Trans-Caucasus.
Of all these players, Azerbaijan is arguably in the most vulnerable spot: its relations are tense with all the big players, especially Iran. Many observers are puzzled by the fact that Shi’ite Iran has a pact with Christian Armenia, which occupies 9 percent of the territory of an also Shi’ite Azerbaijan, while at the same time an enormous population of Azerbaijanis live in northwest Iran.
The new rounds of the New Great Game are bound to be fiercer than ever. It is unlikely that Baku and Tehran will solve their differences by divine intervention. For Tehran, Baku’s foreign policy is totally subservient to the US – to the extent that it overshadows Azerbaijan’s national interests. Tehran simply cannot admit the obsession – fuelled by the US – with the Baku-Ceyhan pipeline, which is indeed a financial and technical nightmare, according to the majority of oil analysts. And Tehran also suspects that old KGB Aliyev’s visit to Tehran is part of the overall American strategy to seek maximum advantage in the Caspian for its client regime Azerbaijan and American oil giants. Let the games begin.