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Instability in the Balance: The Baku-Ceyhan Pipeline

The signing of the Istanbul Protocol on the Baku-Ceyhan pipeline at the recent OSCE meeting was highly important politically to the leaders who signed it. But the project will in the long run be more important to the peoples of the region than to those leaders who expended so much effort bringing it about. The pipeline deal presents regional leaders with a fateful decision. Should they fail to use local suppliers and train local labor for its construction, current disparities in income distribution will become aggravated. This could create civil unrest, leading to political instability that would threaten the pipeline project itself. But by using local NGOs to train a capable workforce, individual workers would experience the decision-making autonomy necessary to foster democratic institutions, build civil society, and perhaps also lead to civil unrest.


Since the early 1990s, the United States and regional powers in Eurasia have sought influence in the circum-Caspian basin region by promoting construction of different oil export pipelines consistent with their interests. Russia pushed for the Caspian Pipeline Consortium (CPC) project, a line for Tengiz oil from northwest Kazakhstan across southern Russia to the Black Sea port of Novorossiisk. The United States and Turkey sought to promote a Main Export Pipeline (MEP) from Baku, Azerbaijan to the East Mediterranean port of Ceyhan, Turkey.

The Istanbul Protocol is a tremendous victory for the United States and Turkey. But pipeline construction will do more than merely lay the groundwork for the future geopolitical development of the region in the next century. Energy resource development in the region is crucial to economic growth of the region whose current GNP in the region is at best slightly declining. Therefore just as important as whether the pipeline gets built is what happens to resulting revenues if it is built. Income disparities in Azerbaijan are striking and do not bode well for civil tranquillity in the future of Azerbaijan. Nor is Azerbaijan alone in the region in this respect.


The population of the Turkic crescent from Anatolia through Kazakhstan is already over a third of a billion and will roughly double in the next quarter-century. In planning the pipeline's construction, local suppliers and labor must be employed wherever possible, lest current disparities in income distribution become aggravated. Not to do so would create greater potential for civil unrest, leading to political instability that would threaten the pipeline project itself.

Throughout the Caspian region, the national publics are increasingly literate, informed, and politically active. The incorporation of citizen participation in the formulation and and implementation of pipeline construction decisions therefore does not contradict energy development and economic growth in the region: it promotes these. During the 1990s, a large number of non-governmental organizations (NGOs) sprouted and even took root in the region spreading democratic tendencies. Many of these NGOs are concerned with environmental issues. Part of the success of the Azerbaijan International Operating Company (AIOC) is attributable to a kind of "virtual participation" by the Azerbaijani public in policy making through the intermediary of such NGOs.

If successful, the Baku-Ceyhan MEP will establish Turkey as a geopolitical linchpin for Central Asian and Caucasus countries. Yet its failure would not mean the re-imposition of hegemony by Russia, although Turkey’s influence would certainly increase. But Russia’s influence could be curtailed through other possible routes that skirt Russia shipping Caspian oil across the Black Sea to various European pipelines through Ukraine, Romania, Moldova, or Bulgaria.


The signing of the Baku-Ceyhan agreement is only the first step towards the pipeline's construction. And the Istanbul signing does not mean that the pipeline will ever get built. If the training of the local workforce receives as much attention as the petroleum engineering, the projected pipeline presents a unique opportunity to promote regional stability. But the Baku-Ceyhan pipeline will not necessarily solve any of the more fundamental problems in the Caspian region itself. Already there is not enough water in the region. And nearly all the arable land is under cultivation. Then there is the oncoming population explosion. Such geo-demographic givens are "harder" facts than projected 10-20 years into the future by "power politics" perspectives. Indeed, ignoring just such sorts of facts is what made the Iranian Revolution such a surprise two decades ago.

Copyright © Robert M. Cutler unless otherwise noted.
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URL:  http://www.robertcutler.org/blog/1999/11/instability_in_the_balance_the_2.html
First published in Central Asia – Caucasus Analyst 1, no.
1 (24 November 2000): 5–6.

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This page contains a single entry from the blog posted on November 24, 1999 5:59 AM.

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