The Views from Armenia, Azerbaijan & Georgia

370 Pages·2013·3.42 MB·English

THE SOUTH CAUCASUS 2018
FACTS, TRENDS, FUTURE SCENARIOS
Konrad-Adenauer-Stiftung (KAS) is a political foundation of the Federal Republic
of Germany. Democracy, peace and justice are the basic principles underlying the
activities of KAS at home as well as abroad. The Foundation’s Regional Program South
Caucasus conducts projects aiming at: Strengthening democratization processes,
Promoting political participation of the people, Supporting social justice and sustainable
economic development, Promoting peaceful conflict resolution, Supporting the region’s
rapprochement with European structures.
All rights reserved. Printed in Georgia.
Konrad-Adenauer-Stiftung
Regional Program South Caucasus
Akhvlediani Aghmarti 9a
0103 Tbilisi, Georgia
www.kas.de/kaukasus
Disclaimer
The papers in this volume reflect the personal opinions of the authors and not those of
the Konrad Adenauer Foundation or any other organizations, including the organizations
with which the authors are affiliated.
ISBN 978-9941-0-5882-0
© Konrad-Adenauer-Stiftung e.V 2013
Contents
Foreword ........................................................................................................................ 4
CHAPTER I
POLITICAL TRANSFORMATION: SHADOWS OF THE PAST, FACTS AND
ANTICIPATIONS
The Political Dimension: Armenian Perspective
By Richard Giragosian .................................................................................................. 9
The Influence Level of External Factors on the Political Transformations
in Azerbaijan since Independence
By Rovshan Ibrahimov ................................................................................................. 23
Georgian Politics in Transition: Trends and Obstacles for Potential Transformation
By Kornely Kakachia ..................................................................................................... 43
CHAPTER II
SOCIO-ECONOMIC DYNAMICS: COMMON CHALLENGES,
DIFFERENT SOLUTIONS?
Economic Development Challenges of Armenia
By Levon Barkhudaryan ............................................................................................... 63
Economic and Social Development Perspectives of Non-Oil Sector
of Economy in Azerbaijan with a View to 2018
By Vugar Bayramov ...................................................................................................... 77
Challenges and Economic Policy Directions of Georgia
By Alex Aleksishvili ........................................................................................................ 101
CHAPTER III
CROSSROADS FOR ENERGY SOURCES AND ROUTES:
TRENDS AND SCENARIOS
Energy Security in Armenia: Challenges and Opportunities
By Armen Manvelyan .................................................................................................... 127
Recent Trends in Energy and Oil Revenue Management Policy in Azerbaijan:
Challenges & Future Scenarios
By Gubad Ibadoglu ........................................................................................................ 143
Georgian Energy Sector: Trends and Prospects for Development
By Teimuraz Gochitashvili ........................................................................................... 159
CHAPTER IV
SECURITY AND CONFLI CTS: GEOPOLITICAL DYNAMICS
AND CLASHING CONCEPTS
Security Perceptions: The Views from Armenia, Azerbaijan & Georgia
By Richard Giragosian, Zaur Shiriyev & Kornely Kakachia ............................ 187
The South Caucasus 1918-2018: One Hundred Years of Hostility?
By Mikayel Zolyan .......................................................................................................... 225
A Bleak Future for Nagorno-Karabakh: Models, Formats and Prospects.
An Azerbaijani Perspective
By Zaur Shiriyev ............................................................................................................. 241
The Reciprocal Impact of Unresolved Conflicts on the Process of Democracy
Building - Georgia in the Regional Context
By George Khutsishvili ................................................................................................. 285
CHAPTER V
DYNAMIC ENGAGEMENT: THE EUROPEAN FUTURE OF THE
SOUTH CAUCASUS
Armenia-Europe: Minimizing Opportunity Costs
By Alexander Iskandaryan .......................................................................................... 305
The South Caucasus: The European Future
By Kakha Gogolashvili .................................................................................................. 319
CHAPTER VI
THE WAY AHEAD: RECOMMENDATIONS
Recommendations Armenia ....................................................................................... 341
Recommendations Azerbaijan ................................................................................... 350
Recommendations Georgia ......................................................................................... 358
Contributors Biographies ...................................................................................... 364
FOREWORD
The Konrad Adenauer Foundation has been known for a long time for its pro-
grams in international dialogue and cooperation. We value dialogue as an
important component of the foundations overall cooperative approach in con-
ducting activities in more than a hundred countries worldwide. On the na-
tional and international level, we conduct civic education activities to promote
peace, freedom, and justice. Our key concerns include consolidating democ-
racy, enhancing interreligious and intercultural understanding, and promoting
peaceful conflict resolution.
In the South Caucasus, the Foundation has been active for almost a decade with
the primary goal to support transformation processes for stronger democratic
structures and more sustainable economic developments. Equally important
is support for regional understanding and rapprochement of the region with
European structures. Our commitment to that vision of a more free, prosper-
ous and peaceful development in the South Caucasian Countries shall be a
source of inspiration for our activities also in the future.
The publication at hand is part of the Konrad Adenauer Foundations activities
undertaken in the region to promote greater understanding between nations,
countries, cultures and religions. It contains articles written by senior and
junior experts from Armenia, Azerbaijan aanndd GGGeeeooorrrgggiiiaaa... �MMaaannnyyy bbbooooookkksss aaannnddd aaarrrtttiii---
cles have been produced en mass since the early 1990s, when three coun-
tries – Armenia, Azerbaijan and Georgia, regained their independence and the
international community discovered the strategic importance of the region at the
crossroad between Europe and Asia - ridden by conflicts, protracted transitions,
problems of domestic consolidation, and power games of exogenous actors.
The uniqueness of this compilation is that it has been initiated by the au-
thors themselves. The articles follow the same structure that the authors had
agreed upon during preparation workshops. This allows the reader to com-
pare developments, trends and scenarios, whether in the political sphere, eco-
nomic sector or in the perception of security in the three countries. Another
unique feature of this volume is that the authors look forward and try to
foresee major tendencies the region and their respective countries will face
in the years to come. The main concept of the publication is to avoid getting
lost in discussions about causes. Instead, authors try to analyze trends and
offer scenarios. One would argue that looking forward implies attempting to
understand and explain the past as well. Articles in the collection cannot avoid
5
analyzing legacies of the past, however with the intention to link the dynamic
of current developments towards visions, outlooks and perspectives. 2018 is
therefore not only a symbolic year referring to the 100th anniversary of the
first independence of the South Caucasian countries, but allows with a five
year time frame a realistic analysis of future trends. A specific added value of
the volume is that it summarizes a set of recommendations in various policy
fields for opinion shapers and decision makers of the respective countries.
Publications with the title South Caucasus on their front page always attract
critical remarks questioning the very existence of the region as such. Indeed,
what unites AArrmmeenniiaa,, AAzzeerrbbaaiijjaann aaannnddd GGGGeeeeoooorrrrggggiiiiaaaa,,,, eeeexxxxcccceeeepppptttt tttthhhheeee ppppaaaasssstttt���� IIIIssss tttthhhheeeerrrreeee aaaannnnyyyy----
thing beyond soviet and pre-soviet legacies of inter-ethnic conflicts and conflict-
ing foreign policy orientations that could melt three policies into one region? In
other words, does the region have a future? The authors of articles certain-
ly provide some interesting answers. Even though the building blocks of the
region South Caucasus are not always positive factors – conflicts, authoritarian
backlashes, increasing social disparities, shadows of the past will with high
probability still prevail in 2018, there is hope for the joint future of the region.
Models of economic and social developments, scenarios for domestic poli-
tics, the role of EU engagement and the possible Europeanization of nation-
al policies as well as outlooks for cooperation in the energy sector – arti-
cles of the collection cover not all but the most relevant topics in the South
Caucasus of today and years to come. “The South Caucasus 2018: Facts,
Trends, Future Scenarios” is a valuable source for those who are interested in
many aspects of the region and its three countries – Armenia, Azerbaijan and
Georgia. At the same time, this publication will be a helpful guide to closely
follow developments on the ground. We owe many thanks to all those who
have contributed in different ways to this publication. The successful comple-
tion of this challenging project however is thanks to the commitment of the
distinguished authors who have volunteered to contribute to this volume.
We are confident that this publication with highly valuable analysis and future
assessments will contribute to a further debate in and about the region and
will be of great interest to the members of the think tank community, regional
and foreign researchers dealing and working with the region as well as political
decision-makers and the general public.
Dr. Canan Atilgan
DirectorRegional Program South Caucasus
Konrad-Adenauer-Stiftung
6
I
CHAPTER
POLITICAL TRANSFORMATION:
SHADOWS OF THE PAST, FACTS
AND ANTICIPATIONS

THE POLITICAL DIMENSION:
ARMENIAN PERSPECTIVE
Richard Giragosian
Director Regional Studies Center (RSC)
Yerevan, Armenia
Introduction
Throughout much of history, the South Caucasus has served as an
arena for the competing interests of much larger regional powers and
has been hostage to the broader clash of rival empires. Since the col-
lapse of the Soviet Union, the three small countries in the region, Ar-
menia, Azerbaijan and Georgia, have once again emerged as arenas
for competition between more powerful states, as Russia, Turkey and
Iran have sought to exert their own influence over the region. Even
more significantly, the South Caucasus continues to face a daunting
combination of historical legacy and current conflict, posing funda-
mental threats to the future development of these three infant states.
Against this backdrop of regional insecurity, the three states of the
South Caucasus region remain burdened by a difficult course of eco-
nomic and political reform, systemic transition and nation-building.
While the region continues to struggle in overcoming a shared legacy of
constraints and challenges stemming from seven decades of Soviet rule,
it is not only the external pressure form competing greater powers that
has tended to mark this region as an arena for confrontation. The lack
of a common shared vision, exacerbated by the conflicts and divisions
between the three states, also pose a fundamental challenge to longer
term development. Moreover, the deeper regional fragility and vulner-
ability also stems from profoundly destabilizing unresolved conflicts.
Although the lingering “frozen” conflicts of the South Caucasus have
fostered greater international attention and external mediation, the
real prerequisites for regional security and stability are rooted more
in internal issues. �ore specifically, for the South Caucasus, the inter-
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nal imperatives of legitimacy, leadership and statesmanship are the
most essential ingredients for durable security and stability. A second
interesting paradox in the region is the fact that, while the strategic
perception of the South Caucasus has been largely defined by grand
geopolitics, the regional reality is defined more by local politics and
economics. From this perspective, it is democratization that must
come first, prior to any hopes for an effective or lasting resolution to
the “frozen” conflicts in the region. And it is clear that the institutions
of democracy matter much more than any individual democrats for
real democratization. Consequently, it is the leaders themselves who
hold the key to their future. But over the long-term, there is an obvi-
ous need for more attention on regional reintegration.
Abrupt Independence
For much of the past two decades, each of the three states of the South
Caucasus region, Armenia, Azerbaijan, and Georgia, have been pursu-
ing a difficult course of economic and political reform, systemic transi-
tion and state-building, with a widening variance in consistency and
commitment. As a region, these countries also continue to struggle to
overcome the legacy of constraints and challenges stemming from sev-
en decades of Soviet rule. In terms of the record of reform and state-
building in Armenia, the early period of independence was marked by
a daunting set of challenges. Even well before independence, Armenia
was beset by two seminal events: the eruption of the Nagorno Kara-
bakh conflict and the subsequent outbreak of war with Azerbaijan in
February 1988 and a devastating earthquake in December 1989.
Against that backdrop, the sudden and unexpected collapse of the
Soviet Union left Armenia largely unprepared for the urgency of in-
dependence. The infant state also faced a grave and urgent threat
to its survival, as the Karabakh conflict intensified, leading to an ex-
panded war that disrupted trade and transport routes, cut key energy
links, and triggered a near blockade of the country by neighboring
Azerbaijan and Turkey. To this day, the sudden breakdown of the re-
gion’s energy infrastructure and trade and transport links has never
10