Robert M. Cutler on Energy and Eurasia

It was announced recently that Georgia will sign this week a host government agreement with private investors in the oil pipeline pipeline from the Azeri capital Baku, through the Georgian capital Tbilisi to the Turkish Black Sea port of Ceyhan. This agreement represents the final piece in the legal framework for the Baku-Ceyhan Main Export Pipeline (MEP). Accordingly, I bring the series I began late last year on this topic to a conclusion, although future columns will undoubtedly revisit the issue.

Ceded by Turkey under the 1921 Treaty of Kars, Ajaria under the Soviet regime enjoyed the status of Autonomous Republic inside Georgia. As the USSR withered away, the modern Georgian state was established as a unitary political entity without autonomous sub-units, but Ajaria retained de facto autonomy after 1991. After Eduard Shevardnadze was re-elected President of Georgia last month [April 2000], the parliament in Tbilisi voted to change the constitution, transforming the administrative region of Ajaria into the Ajarian Republic. This federal precedent may help resolve the status of South Ossetia, but it will not satisfy Abkhazian demands. To establish Javakhetia as a federal entity could create more problems than it solves.

Three weeks ago I began describing part of the industrial infrastructure problem in the Caspian region. Limitations of physical geography require relative self-sufficiency in the development of basic infrastructure and installation of production facilities. The amount of investment required to build up the infrastructure capacity also limits the pace of the region's development. Steel fabrication capacity is especially key.

Russian President Vladimir Putin just spent the weekend of May 19-21 in Ashgabat where he reached an agreement in principle to increase Russian gas purchases from Turkmenistan. It is yet another indicator of Russia's renewed interest in Central Asia since Putin assumed control. Russia and Turkmenistan have reached an agreement in principle to renew and expand their December 1999 agreement to export 20 billion cubic meters (bcm) for calendar year 2000 and increase this figure by 10 bcm per year for three to four years until import levels reach 50-60 bcm per year. But Russia's real target in Central Asia is neither Turkmenistan nor Uzbekistan but Kazakhstan.