Caspian Watch # 11: U.S. Interests Jeopardized As Moscow’s Man in Armenia and Armenia’s Man in the Kremlin Prevail

(Washington, D.C.): The success of Prime Minister Robert Kocharian
during the second
round of Armenia’s fraud-riddled presidential elections sets the stage for renewed conflict with
Azerbaijan over the disputed territory of Nagorno-Karabakh. This electoral outcome — and the
resumption of hostilities likely to threaten the free flow of oil from Azerbaijani oil fields in the
strategic Caspian Sea Basin — will be welcome news to a man whose own, recent return to power
in the Kremlin threatens to impinge upon vital U.S. interests more broadly, both in the region
and
well beyond.

The latter man, Russian Foreign Minister Yevgeny Primakov, has evidently
been restored to
de facto control over his country’s foreign policy, defense and intelligence portfolios,
notwithstanding his nominal termination last week, along with the rest of Boris Yeltsin’s cabinet.
Primakov’s “re-upping” means that, in addition to reinvigorated Russian efforts to destabilize the
strategic Caspian Basin and southern Caucasus region (affording Moscow an opportunity to
renew its control over some $4 trillion in oil and gas reserves assessed to be there),
further
mischief is to expected from Primakov’s clients in such quarters as Iraq, Iran, Cuba,
China,
Libya, Syria, North Korea, etc.

‘Heads You Win, Tails I Lose’

As it happens, both Armenian presidential candidates were on the record as being
in favor of
maintaining Yerevan’s ill-gotten gains in Nagorno-Karabakh, achieved in the course of an eight
year war that was suspended by a cease-fire negotiated in 1994. Similarly, both Kocharian and his
opponent — former Communist Party First Secretary, Karen Demirchyan, who governed Armenia
when it was a Soviet republic — supported the removal of former Armenian President Levon
Ter-Petrossian. Ter-Petrossian’s “crime” was his willingness to exhibit greater flexibility in
advancing
a workable settlement of the Nagorno-Karabakh dispute. In other words, Primakov
couldn’t
lose, but the U.S. strategic imperative of securing the free flow of oil from the Caspian
basin can, and probably will.

Despite these serious reverses for U.S. policy, the Clinton Administration seems determined
to
whistle past the graveyard. After Israel, Armenia remains the largest per capita recipient
of
U.S. foreign aid of any country in the world. The most the Administration seems
prepared to
do, according to yesterday’s New York Times, is to threaten lowering such inordinate
assistance to
the Armenians from $87.5 million this year to $80 million in Fiscal Year 1999. It still
lacks the
political courage to seek the immediate repeal of the discriminatory Section 907 of the
Freedom Support Act of 1992 which, in effect, denies any direct U.S. assistance to
Western-oriented Azerbaijan.

Worse still, the Center for Security Policy has been advised that the Clinton team is backing
away
from the priority it professes to attach to the Main Export Pipeline (MEP) for Azerbaijani oil.
The MEP is intended to start in Baku, traverse Georgia and Turkey and have its outlet in the
Turkish Mediterranean port of Ceyhan — thereby keeping such flows out of Moscow’s clutches.
The compelling strategic arguments for doing so were recently provided by one of the Nation’s
foremost experts on the Caspian region, Dr. S. Rob Sobhani, Adjunct
Professor of Government
at Georgetown University, in the 8 March edition of the Washington Post (see href=”index.jsp?section=papers&code=98-D_56at”>the attached).

Recent remarks by Ross Wilson, a special advisor to Ambassador-at-Large
for CIS countries
Stephen Sestanovich, is symptomatic of this shift. During a conference held in
Washington on
11 and 12 March entitled “Oil and Gas in the Caspian Sea Region,” according to the Turkish
Daily News, Wilson stated on behalf of the U.S. State Department: “There will not be any
commitment to Baku-Ceyhan [the route of the MEP] in 1998. There is just no way … It would
be crazy for AIOC⁽¹⁾ to commit itself firmly to Baku-Ceyhan
that soon, with so much uncertainty
[in the region].”

In addition, according to Paul Goble, a distinguished member of the
Center’s Board of Advisors,
the United States is, in effect, advocating the deployment of Russian “peacekeepers” on
Azerbaijani soil, pursuant to deliberations of the so-called Minsk
Group. This diplomatic
initiative is apparently so intent on achieving a “regional settlement” in the southern Caucasus that
it is even on Moscow’s hegemonic terms.

The Bottom Line

Clearly, these latest developments demonstrate an urgent need for congressional intervention
leading towards a U.S. policy course-correction. The dithering that has characterized the Clinton
Administration’s approach to this region before and after Azerbaijani President
Aliyev’s
successful visit to Washington last summer simply must not be allowed to continue.

In addition to the list of U.S. humanitarian and security-related assistance to Baku and other
measures previously called for by the Center,⁽²⁾
further U.S. aid flows to Armenia should be
withheld until such time as an equitable settlement of the Nagorno-Karabakh dispute is in
place. After all, U.S. strategic interests would be better served by a suspension of aid to
Armenia
and the provision of assistance to Azerbaijan — an approach 180 degrees different from the course
being pursued today by the Clinton Administration.

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1. The AIOC is the Azerbaijan International Operating Company, a 12
member consortium of oil
companies, which is developing Azerbaijan’s oil and gas reserves.

2. These measures include, for example, the immediate repeal of
Section 907 of the Freedom
Support Act, urgent support for “The Silk Road Strategy Act” introduced last year on the Senate
side by Sen. Sam Brownback (R-KS), the substantial bolstering of U.S. security-related assistance
to Azerbaijan and Georgia, the expansion of joint exercises in the region and the strengthening of
the so-called Eurasian battalion comprised of Ukranian, Azerbaijani and Georgian forces. See
Caspian Watch # 10: Russia Makes Its Move In Yeltsin’s ‘Pipeline
War’ (No. 98-D 28, 12
February 1998) and Caspian Watch # 9: Emboldened By Iraq ‘Victory,’ Russia
Intensifies
Effort to Undermine Azerbaijan (No. 97-D
180, 26 November 1997).