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The Black Sea Ambitions of Armenia, CU Issue 14, December 15, 2008

Between 1 November 2008 and 30 April 2009, Armenia holds the rotating presidency of the Organization of the Black Sea Economic Cooperation (BSEC), a regional economic body. One of the many groups, clubs and forums operating on Europe’s eastern fringes, BSEC rarely gets a high profile, unlike more political-security organisations such as NATO or the Russian-led Collective Security Treaty Organisation. However, BSEC should not be dismissed out of hand – its failures and achievements mirror the wider situation in the region, and it may yet prove a useful tool in stabilising the Caucasus. The timing of the Armenian chairmanship – in the middle of an ongoing push to settle the Karabakh conflict, and whilst the region struggles to cope with the financial crisis – could have a decisive effect.

To be clear, the impact of BSEC is limited by its nature. The organisation, which is the only sub-regional organisation to unite all the states of the wider Black Sea region, aims to turn its region “into one of peace, stability and prosperity” and to promote good-neighbourliness and mutual respect. However, its scope is restricted to trade, transport and economic co-operation, notwithstanding some limited work on combating crime and trans-border smuggling. In particular, BSEC acknowledges the oil and gas riches of the region (specifically, Caspian energy flows from and through Azerbaijan), and views this hydrocarbon wealth as a priority area of its activities, especially when it comes to dealing with the EU.

It is in the field of energy that BSEC’s weakness is made clear. Large energy projects, which cost tens of millions of dollars and cross national boundaries, are extremely political issues and are simply not decided by economic blocs. An emphasis on co-operative arrangements between BSEC members faces the insurmountable problem that two of its members, Armenia and Azerbaijan, simply do not and will not co-operate on something so critical as energy. In April, this point was sharply illustrated when, after the latest declaration had been made, Azerbaijan stated sharply that it would not apply any of the statement’s provisions to Armenia until Armenia had liberated the occupied territories. Armenia responded that it considered energy co-operation a “mechanism on the path of settlement” of Karabakh, an implicit reference to the long-standing plan to build a ‘peace pipeline’ through Armenia.

In this sense, the Armenian chairmanship provides Yerevan with an opportunity to push BSEC towards energy and transportation networks in which it has a serious stake, and it has highlighted energy as a priority area of its tenure in office. Armenian Foreign Minister Edward Nalbandian announced during his address to the BSEC secretariat on November 24 that his chairmanship would begin planning an “integrated BSEC regional energy strategy”. Furthermore, he stated that a meeting of BSEC energy ministers would take place in Yerevan to discuss energy cooperation with the EU. Given the importance of energy links with the EU for Azerbaijan and Turkey at the moment, including the urgent discussion on the future of the Nabucco gas network, the fact that such a meeting should be held in the capital of a state being outside of all regional energy projects for the last fifteen years and having almost no relations with the both mentioned states must be somewhat galling. That said, no decisions on Nabucco or other pipelines seem to be finalised in Yerevan, since the stakes for each country involved are far too high to be decided in such a meeting.

In any case, politics are carefully excluded from the workings of BSEC. Mr. Nalbandian was careful to stress this during an earlier address to the BSEC Council of Ministers of Foreign Affairs. Noting that in recent years there have been attempts to push “sensitive regional and global political issues” onto BSEC’s agenda, he insisted that this politicisation of socio-economic projects “impedes the basis of multilateral economic cooperation among the BSEC Member States, thus threatening to turn the forum into endless deadlocked deliberations on political matters”. To an extent this reflects Armenia’s desire to integrate itself into the region’s economy, weakening the effectiveness of its isolation, without having to compromise on Karabakh or relations with Ankara.

But the statement also reflects standard BSEC policy. The exclusion of politics from BSEC took an interesting turn in September when Ali Babacan, the Turkish Foreign Minister, raised the issue of Ankara’s proposed Caucasus Stability and Cooperation Platform (CSCP) at a working lunch of BSEC Ministers in Albania. CSCP, Mr Babacan stated, would in time establish a working relationship with other regional organisations, such as BSEC, “in order to complement their work toward achieving establishing peace and stability in the region”. However the secretary-general of BSEC, Leonidas Chrysanthopoulos, responded by emphasising that regional tensions must be kept separate from the organisation’s work if it was to continue, and warned that “economic infrastructure projects must not be negatively affected by such crises”. There is a note of unreality about this, given that the Russo-Georgian war crippled the transportation routes between Armenia and Georgia through which most of Armenia’s trade passes, causing an estimated $700 million damage to the Armenian economy, and that pipelines to the West have taken a long, expensive detour around Armenia for purely political reasons. Whether or not projects are affected by regional problems is not, given the organisation’s economic remit, within the scope of the Secretary-General to influence.

Nonetheless, BSEC still has a contribution to make alongside other, more political organisations such as the OSCE or the EU. There is a certain well-timed symbolism about the Armenian chairmanship arriving in the middle of gradually thawing relations with Turkey and alongside the ‘Moscow declaration’ on a Karabakh peace process signed by Azerbaijan and Armenia on November 2. In the course of BSEC activities - even politically insignificant ones such as road transport agreements and agri-business - diplomacy and co-operative measures can help to advance peace and stability, however incrementally. It should not be forgotten, for instance, that the Armenian foreign minister made his speech at BSEC headquarters in Istanbul.

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