978- 9941- 449- 93- 2 GEOPOLITICS AND SECURITY A NEW STRATEGY FOR THE SOUTH CAUCASUS Edited by Kornely Kakachia, Stefan Meister, Benjamin Fricke The 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. The Georgian Institute of Politics (GIP) is a Tbilisi-based non-profit, in- dependent, research and analysis organization founded in early 2011. GIP strives to strengthen the organizational backbone of democratic institutions and promote good governance and development through policy research and advocacy in Georgia. It also encourages public participation in civil soci- ety-building and developing democratic processes in and outside of Georgia. The German Council on Foreign Relations (DGAP) is Germany’s network for foreign policy. As an independent, nonpartisan, and nonprofit membership organization, think tank, and publisher the DGAP has been promoting public debate on foreign policy in Germany for almost 60 years. The DGAP’s think tank undertakes policy-oriented research at the intersection of operational politics, business, scholarship, and the media. More than 30 foreign policy experts work in ten research programs focusing on: transatlantic relations, European integration, Russia/Eurasia, international security policy, energy policy, global economics, the Middle East, and China. Editors: Prof. Dr. Kornely Kakachia, Dr. Stefan Meister, Benjamin Fricke Manuscript Editor: Joseph Larsen Text Design: Irakli Beltadze Cover Design: David Kelberashvili 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, includ- ing the organizations with which the authors are affiliated. © The Konrad-Adenauer-Stiftung e.V 2018 © The Georgian Institute of Politics 2018 © The German Council on Foreign Relations 2018 ISBN 978-9941-449-93-2 Konrad-Adenauer-Stiftung Regional Program South Caucasus 9a Akhvlediani Aghmarti, 0103 Tbilisi, Georgia German Council on Foreign Relations Rauchstraße 17-18, 10787 Berlin, Germany Georgian Institute of Politics 3 Akaki Shanidze str. 0179 Tbilisi, Georgia CONTENTS INTRODUCTION Kornely Kakachia, Stefan Meister, Benjamin Fricke...........................6 THE EUROPEAN UNION’S NEW EASTERN PARTNERSHIP POLICY Licínia Simão...................................................................................18 EUROPEAN UNION ENERGY POLICY: THE ROLE OF THE SOUTH CAUCASUS Brenda Shaffer................................................................................45 RUSSIA’S COOPERATIVE HEGEMONY IN THE SOUTH CAUCASUS: A RETROSPECTIVE ACTUALIZATION OF THE MODEL Andrey Makarychev & Alexandra Yatsyk.........................................74 IN SEARCH OF THE EUROPEAN PERSPECTIVE: GEORGIA AFTER THE ASSOCIATION AGREEMENT Kakha Gogolashvili........................................................................101 AZERBAIJAN’S POLICY TOWARD EU INTEGRATION: UNRECOGNIZED STRATEGIC PARTNER Anar Valiyev..................................................................................128 INFRASTRUCTURE COOPERATION: AZERBAIJAN-GEORGIA–TURKEY Gulmira Rzayeva............................................................................153 PROMISE AND PERIL: THE ARMENIA-RUSSIA-IRAN AXIS Richard Giragosian........................................................................177 THE INTERNAL-EXTERNAL NEXUS IN THE EASTERN PARTNERSHIP: CONSEQUENCES OF THE EU’S CRISIS FOR THE SOUTH CAUCASUS Laure Delcour, Hrant Kostanyan....................................................207 THE IMPACT OF THE UKRAINE AND SYRIA CONFLICTS ON THE GEOPOLITICS OF THE SOUTH CAUCASUS Svante Cornell...............................................................................231 EU GLOBAL STRATEGY, RESILIENCE OF THE EAST EUROPEAN SOCIETIES AND THE RUSSIAN CHALLENGE Nona Mikhelidze............................................................................266 CONCLUSION Kornely Kakachia, Stefan Meister, Benjamin Fricke........................283 5 INTRODUCTION Kornely Kakachia, Stefan Meister, Benjamin Fricke The South Caucasus is a region at the nexus of various economic, political, and energy interests. It is current- ly witnessing some of the most complex and danger- ous events in the world today. It features weak states, direct and proxy wars, and a confluence of great pow- er interests. It is a prism for fundamental challenges to the international system, including separatism, securi- ty, energy transit, and infrastructure. Strategically, the South Caucasus sits at the crossroads of vibrant glob- al markets: Central Asia and China to the east; Turkey and Europe to the west; Russia to the north; and Iran and the Middle East to the south. However, the lack of regional unity and unresolved ‘frozen conflicts’ remain the biggest hurdles to developing a functioning regional security architecture. These conflicts hamper and com- plicate regional efforts toward independence, econom- ic prosperity, and equal and secure co-existence. The greatest single challenge to regional development and security is the absence of a ‘regional identity.’ As stated by Peter Semneby, former EU Special Representative for the South Caucasus, ‘with its ill-defined borders, weak economic links, absence of realization of the region’s po- tential and lack of the ‘us’ feeling of a shared identity, the South Caucasus could not yet be called a coherent region’ (Sammut 2008). In this sense, the South Cauca- 6 sus exists as a ‘region’ only for outside players. This fact undermines regional development and security (German 2012). Moreover, in recent years a new and significant el- ement has been added to the region’s troubled search for equilibrium. As Russia’s economic fortunes improved starting in the late 1990s due to cresting hydrocarbon prices, its policy of reestablishing its sphere of influence grew more assertive, culminating in the formation of the Eurasian Economic Union (EEU) as a counterweight to the European Union (EU). Russia strongly believes the EU is attempting to use its European Neighbourhood Pol- icy (ENP) to spread its norms and values in the region with the aim of expanding its sphere of influence at the expense of Russia. In Moscow’s conception, this is done with an eye toward enlarging the EU and, potentially, NATO. Subsequently, Moscow acts as a spoiler that is determined to prevent the expansion of Western organi- zations into this part of the world. It assumes that any Western actions in the region should have prior approval from the Kremlin.1 Furthermore, the Kremlin has demon- strated its willingness to use any means, including mil- itary intervention and subjugation, to disrupt the inte- gration of the Eastern Partnership countries into the EU. This interventionist approach is exemplified by military intervention in Ukraine and Georgia and by the halted 1 ‘Putin explains why Russia worries about NATO enlargement’, TASS, 21 November 2016, available at: https://www.rbth.com/ news/2016/11/21/putin-explains-why-russia-worries-about-nato-ex- pansion_649687. 7 Association Agreement between the EU and Armenia in 2013 and Armenia’s subsequent integration into the Eur- asian Economic Union. Despite the fact that the EU and Russia are interde- pendent as energy consumers and suppliers, respective- ly, both have different political cultures, mindsets, rules of the game, and tactics for maximizing their regional spheres of influence. For the EU, the South Caucasus rep- resents an alternative to achieve energy diversification vis-à-vis Russian energy supplies. However, it is a tense neighborhood ‘region’ which needs to be stabilized. Rus- sia strives to maintain control over the South Caucasus countries – which it considers to be under its sphere of influence – and to avoid the strategic presence of the EU and NATO. By asserting a sphere of influence vis-à- vis EU, strategists in Moscow hope to prompt a suitably deferential reaction from the West, including, perhaps, regional withdrawal. Moreover, Russia exploits the ex- isting frozen and protracted conflicts, such as Nagorno – Karabakh and the occupied territories of Georgia. Rus- sia´s negative influence is an important obstacle for the region’s Europeanization, hampering the path toward prosperity and further democratization. Consequently, all these conditions impede further regional cooperation and development of a stable regional security architecture. However, viewing the South Caucasus first and fore- most as a geopolitical battleground obscures important layers of a more complex reality. Even as geopolitical and geo-economic conflicts collide in the region, the South 8 Caucasus remains at the margin of EU policy. While the EU’s Eastern Partnership (EaP) supposedly represents an attempt to increase European involvement in domestic developments in the South Caucasus by offering associ- ation and free trade agreements with the EU in exchange for reform, democratization, and gradual adoption of the EU’s legal framework, the EU has not been able to pro- vide strong incentives for reform. Regional elites have had only limited interest in implementing EU-directed re-