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Warsaw, November 2013

Adam Balcer Dimitar Bechev

Turkey as a mid-sized power in the post-Soviet region: implications for the EU

Policy Paper considerable internal problems. ’s ris- ing influence in the region constitutes both a Introduction challenge and an opportunity for the EU. On In the early 1990s, had a monopolistic the one hand, Turkey, alongside the US, is the position in the post-Soviet region. Now, the closest and the most relevant third actor in the game of ‘post-Soviet chess’ is being played post-Soviet region for the EU. On the other, by several parties. They are the four giants: often does its own thing without coor- Russia, China, the EU (internally diversified) dination with Brussels. and the USA. The leverage of the two neigh- The massive pro-European demonstrations in bouring medium-sized powers, Turkey and to and a spectacular tour de force of the a lesser degree , as well as India, Japan, Chinese president in September 2013 in Central and South Korea is also on the rise. Asia are just two of the most recent examples Tectonic shifts in the balance of power be- of the post-Soviet region’s importance to the tween the key players in the post-Soviet re- EU and Turkey. Moreover, the crisis of the EU gion are likely to continue over the next few neighbourhood policy both in the East and decades. Taking into consideration economic South makes a search for options and strate- and demographic perspectives, a further grad- gies in the EU’s approach to both regions indis- ual weakening of Russian influence should be pensable. This paper is part of a joint project expected. Nevertheless, will certainly of the ECFR Office and demosEUROPA remain one of the main stakeholders in the (supported by the Ministry of Foreign Affairs of post-Soviet region. the Republic of ) investigating the role One of the main beneficiaries of this geostra- of Turkey as a key player in EU’s Eastern neigh- tegic earthquake could be Turkey, an emerging bourhood. It draws conclusions from an inter- medium-sized power. However, its influence in national expert conference held in Warsaw in this region will depend on its ability to resolve October 2013. policy paper»

Adam Balcer both countries. Moreover, is situ- ated between Russia and Iran, bordering the Turkey and the Wider Northern Caucasus and the Iranian province of Azerbaijan. Due to its on-going guerrilla Caspian Region war and serious internal crisis the Northern The Wider region, comprising Caucasus constitutes Russia’s Achilles’ heel. On Central Asia and Azerbaijan, is an area of key the other hand, the Iranian province is a home importance in the New Great Game in Eurasia. to an Azeri community almost two times larg- The EU and Turkey play a significant role in er than the population of their co-nationals the region, albeit a secondary one. Because of living in Azerbaijan. Central Asia is also an im- their similar levels of influence, an overlap of mediate neighbour of , a hotbed agendas and the impressive and quick rise of of radical Islam. The Central Asian nationalities China’s leverage, the EU and Turkey should es- like the Tajiks, and comprise tablish close cooperation in the region which around 40% of Afghanistan’s population. For will be mutually beneficial. The establishment instance, the Tajik community in Afghanistan of an EU-Turkey axis together with more active is larger than the Tajik population of . engagement with the US and Japan could be a Afghanistan itself constitutes one of the big- game changer in the region. gest challenges to hard and soft security on The EU’s and Turkey’s further position in the a global scale (Islamic terrorism, heroin pro- region will to a large degree depend on their duction and smuggling). The region possesses ability to get Kazakh oil and Turkmen gas into huge natural reserves and is marked by a high via Anatolia. In the other cases their level of instability. The significance of the re- influence will gradually diminish in favour of gion in the international arena also stems from China and Russia. its position as a playground for the key world For many social, economic, political, cultur- and regional players (China, the US, the EU, al and historical reasons, Central Asia and Russia, Iran, Turkey and others including India, Azerbaijan comprise a relatively coherent re- South Korea, and Japan). China is cur- gion which can be referred to as the Wider rently gaining the status of the most important Caspian Sea region. Central Asia is the heart player in Central Asia, although in the medium of Eurasia and a key crossroad between, on term Russia will remain a key stake holder in the one hand Europe and China1, and on the the Wider Caspian Sea region. other hand Russia and India. At the same time, Central Asia and Azerbaijan are struggling with Azerbaijan is a bridge between Central Asia a lot of serious deficiencies which undermine and the Caucasus and outer Anatolia. Central their stability. Some problems are related to ba- Asia constitutes China’s and Russia’s under- sic issues like the decaying state of infrastruc- belly because it borders the Chinese ture. As the International Crisis Group’s report and the Russian Volga Federal District, re- rightly points out “Quietly but steadily Central spectively.2 As a consequence, the region Asia’s basic human and physical infrastructure – has a high priority in the foreign agenda of the roads, power plants, hospitals and schools as well as the last generation of Soviet-trained 1 Maritime routes dominate in Chinese-EU trade, but specialists who have kept this all running – is land routes are gaining in importance and this trend is supposed to intensify in coming years. disappearing. [...] All the countries in the region 2 Xinjiang makes up approximately 17 per cent of Chi- are to some degree affected, but the two po- na and is inhabited mostly by the Muslim Turkic peo- orest, and Tajikistan, are already in ples (, and Kyrgyz). Ethnic separat- dire straits.”3 In fact, both countries are on the ism and Islamic extremism in Xinjiang, strengthened by Chinese colonization politics, represent the most verge of becoming failed states. On the other serious challenges to China’s internal security. Xinji- ang’s importance for China is derived from its huge sources (oil, gas, copper, etc.) and inhabited by large natural reserves (natural and shale gas, conventional Muslim communities (, and Kazakhs). and shale oil, coal and rare earth elements). The Vol- 3 ICG, Central Asia: Decay and Decline, Asia Report ga Federal District in Russia is very rich in mineral re- N°201 – 3 February 2011, p.i, http://www.crisisgroup. 2 policy paper»

hand, the authoritarian character of political More importantly, the region is exposed to ne- regimes (excluding Kyrgyzstan) deprives the so- gative spill-over from Afghanistan and between cieties of a safety valve: fair and free elections as the regional countries. It should be noted that a way of channelling social disappointment and the Uzbeks from Central Asia are over-repre- grievances. The countries of the Wider Caspian sented in terrorist groups active in Pakistan and Sea region have mostly multi-ethnic and kin-ba- Afghanistan. The terrorist organizations led by sed structures and by default are vulnerable to the Uzbeks went global: they have attempted to deep ethnic and regional divisions (particularly organize terrorist attacks and launched recruit- in Kyrgyzstan). The regional states also struggle ment activities in Western Europe. In effect, the with serious social tensions (i.e. frequent strikes future of Afghanistan after the US exit in 2014 in ) and their societies are suffoca- is of key importance for the region. The worst ting under the burden of rampant corruption. case scenario would be the creation of safe ha- In the coming years Kazakhstan and vens for terrorists with a global agenda at local will have to sort out the unresolved issue of the level in the failing states of Central Asia. succession of power. A subsequent fierce con- However, contrary to that gloomy image and frontation within the political elites should not the Cassandric prophecies evoked many times be excluded. It could provoke a domino effect since the dissolution of the USRR, the region by triggering the eruption of suppressed social has managed to muddle through for more than tensions and in the worst case scenario it could 20 years. Indeed, the region should not be per- result in a violent domestic conflict (particular- ceived only as a threat but also as an opportu- ly in Uzbekistan). And last but not least, the re- nity. The Wider Caspian Sea region, inhabited gion has to cope, to a varying degree in each by around 75 million people, has substantial individual country, with a rise in radical Islam, economic potential. The region’s GDP (PPP) ap- including its most extreme forms such as terro- proaches 550 billion USD and its GDP (PPP) per rism.4 Currently, Islamic terrorism does not pose capita exceeds seven thousand USD. Kazakhstan, an immediate vital threat to the region, but its without doubt the biggest economy in the re- importance may increase and its rise would gion, has GDP (PPP) per capita greater than the have global ramifications. Unfortunately, the countries in South East Europe. Azerbaijan and already described political, social and economic have per capita national incomes deficiencies create quite favourable conditions that are higher than most countries in the for the further growth of radical Islamic groups. European Neighbourhood. The region has ex- perienced a very fast pace of growth since 1998. org/~/media/Files/asia/central-asia/201%20Cen- For instance, between 2000–2007 Kazakhstan tral%20Asia%20-%20Decay%20and%20Decline.pdf 4 This phenomenon is to a certain degree caused by had an annual growth rate of around 10% and domestic issues, while on the other hand it has been Azerbaijan witnessed an even more impres- strengthened by external interference (the Middle sive pace of growth in the same period (around East, Northern Caucasus, Afghanistan and Pakistan). 15%). Moreover, the Caspian economies have The radicalization is also provoked by the repressive policy of the political regimes which use collective good forecasts for economic growth in coming responsibility and exploit the Islamic threat as a pre- years. According to the IMF, between 2014–2018 text for fighting the opposition. Although the level they will grow at a pace of around 6% per an- of religious practice and obedience have increased num. According to the World Bank, conditions significantly since the fall of communism, the Mus- lims in Central Asia and Azerbaijan remain substan- for doing business in Kazakhstan or Azerbaijan tially more secular than the average in the Muslim are considerably more favourable than in sev- world. Azeri Turks, Kazakhs and Turkmens should eral European countries, most of the CIS states be perceived as some of the most secularized Mus- and the BRIC countries. lim societies in the world. The correlation between fundamentalism and the phenomenon of terrorism The region contains very large quantities of cannot be denied, but it should not be overestimat- strategic natural resources (almost 15% of the ed. The social research conducted in recent years world’s recorded reserves of uranium, 11% of showed that a clear and direct correlation between gas, 4% of coal, and almost 2.5% of oil). And the Salafist or Wahhabi movement and terrorism cannot be proved. last but not least, according to the estimations 3 policy paper»

substantial deposits of rare earth elements are The EU treats Central Asia as one of main area also located in the region (around 5–10% of of engagement for the work undertaken within the world’s reserves). Moreover, new discover- the framework of the CFSP. In 2005 the EU es- ies of deposits of various resources are expect- tablished a Special Representative for Central ed in coming years, taking into consideration Asia. In 2007 the EU launched its strategy for recent successful explorations. Central Asia for 2007–2013. However, the EU There is a striking discrepancy between the re- member states’ diplomatic presence in the gion’s importance in Eurasia and the level of region is below needs and expectations. The the EU’s engagement, which is certainly insuf- UK, France and Germany are the only three EU ficient. The EU is an important player in the member states to have established diplomatic region, but its leverage is substantially weaker missions in every Caspian country. Besides the than that of Russia or China. The EU’s under- “Big Three”, only a few Central European states performance can be exemplified as follows: and Italy have a relatively strong representa- very limited engagement in the hard security tion in the region. In Uzbekistan, the most sphere, “traditional” insufficient coordination populous country of the region and the sec- of national foreign polices within the frame- ond biggest economy (by GDP [PPP]) the EU is work of the CFSP, relatively limited diplomatic only represented, excluding the “Big Three” by presence of EU countries and a rather feeble the embassies of , the , position concerning soft power and decreasing Italy, , Poland, and . economic leverage in the region. On the oth- Romania also has an embassy in Turkmenistan. er hand, huge levels of FDI and shares in the By comparison, Spain only has an embassy in trade balances of Kazakhstan and Azerbaijan Kazakhstan. The EU does not have a delega- constitute the strongest points of the EU in tion in Turkmenistan. Moreover, in July 2013 the region. The EU is the main trade partner the Europa House in Ashgabat was closed of Kazakhstan (with 30% of Kazakh trade vol- down. While it is true that Turkmenistan is the ume) and Azerbaijan (45%). In the case of oth- most authoritarian regime in the region, the er Central Asian states, the EU countries have EU has still managed to establish delegations limited importance as economic partners. The in such countries as Zimbabwe and Gabon. EU share of their trade volumes varies from 5% to 10%. Meanwhile, the levels of FDI originat- Turkey in the region ing from the EU in Turkmenistan, Uzbekistan, Turkey is part of a group of a few third coun- Kyrgyzstan and Tajikistan are modest. It should tries for which the Wider Caspian Sea region be also taken into consideration that the EU’s is of strategic importance – albeit not “the advantage over China concerning the volume number one priority” – and at the same time of trade with Kazakhstan is not substantial has significant leverage in the region, though and will probably decrease further due to the substantially less than that of Russia or China. intensification of trade between China and Nevertheless, in some countries Turkey’s lev- Kazakhstan. Moreover, China’s investment in erage is similar or even greater than that of pipeline infrastructure, the production of oil the most important EU member states and and gas and the signing of new contracts has less often even China or Russia. Turkey be- resulted in a substantial increase in China’s longs to a small group of countries outside of dominance in the Central Asian energy sector the former USSR that have embassies in every since 2008. China’s key importance for the econ- Central Asian country.5 In terms of bilateral omies of the region is confirmed by the very political relations at the highest level, Turkey large loans provided by Beijing to Central Asian is, alongside Russia and China, the most im- countries. The EU’s significance for the region portant partner for Azerbaijan, Kazakhstan, in this aspect is modest. Contrary to Russia, the Kyrgyzstan, and Turkmenistan. Turkey main- EU plays an extremely limited role as a destina- tion for labour immigrants from the region and 5 These countries are France, Germany, the United Kingdom, the USA, China, India, Iran, Pakistan, Af- by default, as a source of remittances. ghanistan, Saudi Arabia, Korea, and Japan. 4 policy paper»

tains substantially more intensive diplomatic tion based on the requirements of neutrality relations with these countries than the EU which it considers to be the fundamental part has.6 On the other hand, difficult political re- of its foreign policy. However, it does not rule lations with Uzbekistan, which seriously limits out the possibility of changing its position. the development of economic cooperation, On the other hand, as a result of the crisis in constitutes Turkey’s Achilles’ heel in the re- Turkish-Uzbek relations, Uzbekistan has been gion.7 Because of the Turkic kinship, Turkey boycotting the Turkic summits since 2004. As often perceives Azerbaijan and Central Asia part of the development of cooperation in as one region, namely the Wider Caspian Sea Central Asia, at the beginning of 2013, Turkey region. Turkey also at time uses a more wide established the Organization of Eurasian Law ranging definition of Central Asia, which Enforcement Agencies with Military Status includes the Chinese province of Xinjiang (TAKM), the purpose of which is the coopera- (most of its residents are Muslim and Turkic tion of military police in the soft security sec- Uyghurs and Kazakhs, Afghanistan (especial- tor. Its members are Azerbaijan, Kyrgyzstan, ly the northern part inhabited by the Central and . Kazakhstan was also invited to Asian Tadjiks, Uzbeks, and Turkmen) and join. even Mongolia. Turkey is the main promoter Without doubt, the most serious challenge to of the cooperation between Turkic countries. Turkish ambitions regarding the strengthening In 2008-2009, based on Turkey’s initiative, of Turkic cooperation is its bad relations with the cooperation between Turkic countries Uzbekistan which, after Turkey, is the most was institutionalised. At the end of 2008, the populous Turkic country. Uzbekistan also has Parliamentary Assembly of Turkic Speaking the biggest economic potential (size of econ- Countries (TURKPA) was established, while in omy) in the region after Kazakhstan.8 Turkish- the autumn of 2009, the Cooperation Council Uzbek relations already began to worsen in the of Turkic Speaking States was founded. In sub- 1990’s, when leaders of the Uzbek opposition sequent years further institutions were estab- found refuge in Turkey. However, the main cri- lished under its umbrella. The Council was sis in relations took place in 2005, when Turkey not accepted by all Turkic states, however. Its strongly condemned the brutal crackdown formal members are Azerbaijan, Kazakhstan, against anti-government demonstrations in Kyrgyzstan and Turkey. Thanks to Turkey’s ef- Andijan which was carried out by the Uzbek forts, Turkmenistan participates in summits, regime and resulted in the deaths of hundreds supports the idea of the Council, but has not of protesters. Since then, Uzbekistan perceives joined it. Turkmenistan has justified its posi- Turkey as a trouble-maker. Only a change in the ruling regime in Uzbekistan could lead to 6 Between 2003 and 2013, Prime Minister Erdogan met a significant improvement in relations with with President of Azerbaijan or spoke Ankara. It would be, to a certain degree, a with him by telephone more than 25 times. In com- similar scenario to the one which occurred in parison, 7 years passed between the last two visits of Vladimir Putin to Azerbaijan (2006 and 2013). Turkmen-Turkish relations after 2006. Gurbanguly Berdimuhamedov, the President of Turk- Turkey possesses quite substantial econom- menistan, has visited Turkey five times since 2007, ic leverage in the region, comparable to the while the President of Turkey responded with four most involved EU players. Turkey’s strong eco- visits to Turkmenistan. Almazbek Atambayev, Presi- dent of Kyrgyzstan has visited Turkey three times nomic position is best illustrated by its slightly since the end of 2011. In the same period of time, the smaller, and sometimes even greater, share in President of Turkey visited Kyrgyzstan twice, and met the trade balance of Kyrgyzstan, Turkmenistan, the Prime Minister once. In 2007–2013, the President Uzbekistan, and Tajikistan than that of the en- of Turkey visited Kazakhstan five times, while the President of Kazakhstan responded with four visits. tire EU. Moreover, for Azerbaijan Turkey is a 7 Turkish exports to Uzbekistan are currently much more important trading partner than Russia lower than Turkish exports to Kyrgyzstan and Ta- jikistan. Taking into account the sizes of the Central 8 The most serious challenge to Turkish ambitions re- Asian economies, these proportions should be op- garding the strengthening of Turkic cooperation is posite. definitely the bad relations with Uzbekistan. 5 policy paper»

and China and for Turkmenistan it’s more im- mately 90% of construction contracts are exe- portant than Russia. Turkey plays a key tran- cuted by Turkish companies). The contracts ex- sit role for Azerbaijani gas (the –- ecuted by Turkish construction companies are Erzurum gas pipeline), Azerbaijani oil (the BTC), worth USD 38.5 billion. This is a huge amount and an important role in the case of Kazakh oil taking into account the size of Turkmenistan’s (tankers that sail through the Straits).9 economy (2012 GDP [PPP] was USD 48 bil- Ankara has the greatest economic influence lion). Turkey also plays a very important role in in Azerbaijan and Turkmenistan, followed by Azerbaijan’s construction sector. In the year up Tajikistan and Kyrgyzstan. Turkey’s share in to November 2013, Turkish companies carried the trade balance of Azerbaijan, Turkmenistan out contracts worth USD 7.5 billion. On the and Tajikistan varies from 8% to almost 15%.10 other hand, after Turkmenistan the value of Despite the political tensions and under-per- construction contracts completed by Turkish formance, Turkey remains a rather important companies is – in absolute numbers – great- economic partner of Uzbekistan. Its share est in Kazakhstan. In the year up to November in Uzbekistan’s trade balance approaches 2013, Turkish companies have undertaken con- 5% or even 7% (according to the EU statistics). struction contracts worth USD 17.5 billion in However, the economic relations between Kazakhstan.12 Turkey and Kazakhstan, the largest economy in On the other hand, unlike the EU, Turkey does the region, are definitely below the potential not possess a strong position in the region re- level. Turkey’s share in the trade balance of this garding direct investments. The only exception country does not exceed 3%. Turkey’s problem is Azerbaijan. Turkey is one of the top inves- is its low level of exports. According to Turkish tors in Azerbaijan. Its share of the total foreign data, Turkish exports to Turkmenistan in 2013 direct investment in this country is estimated (January–October) were nearly twice as big to be 10–15%. Turkey is definitely the most as exports to Kazakhstan, even though the significant destination for Azerbaijani invest- Kazakh economy is six times bigger than the ments and its importance will clearly increase Turkmen one. The rise of Turkey’s importance as a result of the implementation of the energy to Kazakhstan can occur under the condition projects which will boost Azeri FDI in Turkey to that the flow of Kazakh oil through the BTC oil 17 USD billion by 2018.13 And last but not least, pipeline is increased.11 Turkey shares a very limited importance with Turkey’s specialty in the region lies is the con- the EU as a source of remittances and loans. struction sector. Turkey has a dominant posi- Turkey plays a substantially more important tion in Turkmenistan’s very dynamic construc- role as a soft power actor in the region than tion sector (according to estimates, approxi- the EU does. After the USA, Turkey provides the largest amount of development aid to 9 The importance of Turkey as a transit country for the region. Turkey also plays a role regard- Kazakhstan may increase substantially if Kazakh oil ing security in Central Asia. Turkey is a par- starts to be pumped through the BTC pipeline. Azer- baijan and Kazakhstan concluded an agreement re- ticularly significant country for Kyrgyzstan as garding this in 2009. In the event of the implementa- the main donor of development aid. In total tion of the Azerbaijani-Kazakh agreement, Kazakh- development aid constitutes more than 7% stan would become the most important supplier of oil to the BTC pipeline (half of capacity), while 1/3 of the oil currently exported by Astana would flow 12 Turkey also plays a significant role in the construc- through this pipeline. tion sector of Kyrgyzstan (the value of completed 10 Turkey accounts for approximately 3.5% of Kyrgyz- construction contracts is nearly USD 650 million as stan’s trade turnover. at 2013). The share of Turkish companies in the Ta- 11 Kazakh oil constituted approximately 10% of the jik construction sector is also significant (contracts oil transported through the BTC in 2009. However, worth more than 530 million have been completed in 2010 Kazakhstan stopped using the BTC for the by 2013). The value of the contracts performed by transit of its oil. In October 2013, the company Ten- the Turkish construction companies in Uzbekistan gizchevroil, which is operated by US Chevron, an- exceeds USD 2 billion. nounced that it is going to resume oil transporta- 13 Turkey is one of the more important investors in tion via the BTC. Kyrgyzstan (a nearly 5% share in FDI, 7th place). 6 policy paper»

of its GDP. In 2005–2011, Turkey provided culture, especially TV shows, a large number Kyrgyzstan with nearly USD 540 million in aid. of which have recently been purchased by Turkish aid constitutes nearly 20% of the de- Kazakhstan, Azerbaijan and Uzbekistan.15 velopment aid received each year by Bishkek. Turkey has closer ties with the region in Turkey operates six universities in the re- the military sphere than the EU countries. gion (two in Kyrgyzstan, two in Kazakhstan, Nevertheless, its leverage is definitely of sec- one in Turkmenistan and one in Azerbaijan). ondary importance compared to Russia. Turkey According to international rankings, the large is the main Western partner of the countries in university in Manas, Kyegyzstan is the best this region in the NATO “Partnership for Peace” university in Central Asia. It also hosts many programme and in the bilateral formats (with students from Kazakhstan, Uzbekistan and Azerbaijan, Kazakhstan and Kyrgyzstan). Turkey Tajikistan. often travel abroad to is a key partner of Azerbaijan for security (edu- study. Their main destination is Turkey, which cation, military manoeuvres and financial aid). hosted 7.4 thousand Azerbaijani students in In 2010, both countries concluded a treaty of the 2012/2013 academic year. This number has mutual defence in the event of aggression by increased six-fold over the last 10 years. On the another country. Azerbaijani soldiers served other hand, Turks make up the biggest group of under Turkish command in Kosovo. However, foreign students in Azerbaijan. In 2012, there Russia is definitely Azerbaijan’s most impor- were nearly 3,000 Turks at Azerbaijani univer- tant weapons supplier. sities. There are currently 6,100 Turkmen stu- dents in Turkey. Their number has increased The EU and Turkey in the five-fold in the last 10 years.14 However, region the number of students from Kazakhstan, Turkey and the EU share the region’s strategic Tajikistan and Uzbekistan studying in Turkey interests (flow of fossil fuels to the West and is considerably below the potential level. The geopolitical pluralism). Their current stakes in post-Soviet region is the main area for the ac- the region are more or less at a similar level. As tivities of Turkish religious structures. In 1995, a consequence, separately Turkey and the EU Turkey created the Euro Asiatic Islamic Council, are secondary players, but if they were to join in which the leaders of all Islamic communities forces they could advance to the first league. from the former USSR except for Uzbekistan Unfortunately, two of the main European play- participate. Turkey has also established facul- ers in the region, namely France and Germany, ties of theology in Azerbaijan, Kazakhstan, and have rather difficult relations with Turkey. Kyrgyzstan, at which most of the Sunni imams Without a general rapprochement between in these countries study. them a serious improvement of cooperation As far as person-to-person relations between between the EU and Turkey is unlikely to be Turkey and the region go, they are considerably expected. more intensive than relations between the re- Despite its multi-vector policy, in the post- gion and the EU. Contacts between Azerbaijani Soviet region Turkey has the closest agenda and Turkish societies are particularly strong. to the EU and the USA, while Russia’s and Turks make up the biggest group of foreign China’s positions are much stronger. Without visitors to Azerbaijan. After Russia, Turkey is Western support, Turkey has no chance to re- the main travel destination for Azerbaijanis. alise some of its key goals such as the south- Turkey is one of the most popular travel des- ern energy corridor. Turkey cooperates with tinations for Kazakhs and Turkmens. The soft power of Turkey in the Wider Caspian Sea re- 15 In 2010, out of 65 television shows that were ex- ported by Turkey, Kazakhstan purchased 42, Azer- gion is also based on the popularity of mass baijan bought 23, and Uzbekistan 13. On the other hand, Azerbaijan prohibited the broadcasting of 14 Turkey is also a popular study destination for eth- foreign television shows, including Turkish shows, nic Kyrgyz students from Kyrgyzstan. More than on Azerbaijani TV channels. However, they are still 900 of them studied at Turkish universities in the very popular, as they are watched on Turkish chan- 2012/2013 academic year. nels via cable and satellite TV. 7 policy paper»

the EU and the USA for example by support- in the energy sector in Turkmenistan (produc- ing bringing the regional states closer to the tion and transit). Ashgabat has to be convinced West and cooperation in the energy sector that the inflow of FDI from the West will not (Turkish-Western-Azerbaijani BTC, BTE and mean interference in its internal political af- TANAP oil and gas pipelines, joint talks with fairs (looking at the example of Azerbaijan) and Turkmenistan regarding the shipment of gas will be highly beneficial for the Turkmen elite to Europe). Turkey strives to play the role of an because it will allow Turkmenistan to counter- intermediary between the Caspian states and balance the current Chinese dominance of the the West. In a certain sense, Turkey would like Turkmen economy. In order to confirm their de- to obtain the status of the main representative termination, Turkey, the EU, the US and Japan of the latter in this part of the world. For this ought to achieve, through political support reason, it is important for Ankara to have its and financial guarantees, the establishment opinion and position taken into account by the of joint ventures between the energy compa- EU and the USA when they conceptualize and nies that have stakes in the BTC, TANAP or BTE implement their policies for Central Asia and and intend to invest in Turkmenistan gas fields. Azerbaijan. There are no unbridgeable differ- Ankara, Brussels and Washington should also ences in terms of values between Turkey and engage more decisively in negotiations be- the West in the region. Ankara is certainly not tween Baku and Ashgabat on disputes concern- a promoter of human rights as is the case with ing the gas and oil fields located in the Caspian certain EU member states. However, it should Sea. Furthermore, the EU, the US and Turkey not be viewed, like Russia, as a country that should also persuade Kazakhstan to substan- views democratisation a priori with suspicion. tially increase the pumping of oil via the BTC. A Turkey repeatedly declared its support for Russian backlash silently endorsed by Beijing is Kyrgyzstan as an island of democracy in the inevitable. It can only be deterred by the firm region. Turkey was also one of the sharpest and common stance of Turkey, the EU, the US critics of the crimes committed by the regime and Japan. The EU and Turkey cannot compete in Uzbekistan in 2005 during the anti-govern- with Russia when it comes to hard power co- ment protests there. operation in the region. However, they do pos- A new framework of the EU Strategy for Central sess impressive potential when it comes to soft Asia (2014–2020) provides the EU with a win- power. In effect, the cooperation in this re- dow of opportunity to reinvigorate its engage- spect (common projects concerning the ODA, ment in the region. Turkey should be involved education and NGOs) should become a sec- as strongly as possible in the implementation of ond pillar of the EU-Turkey partnership in the the strategy. It is shocking that Turkey was not region. Democracy in the region scores badly even mentioned in the Progress Report on the due to the serious deficiencies in Kyrgyzstan. implementation of the EU Strategy for Central Therefore, the best way to promote democrat- Asia (2007–2013) published in 2012. The future ic values in the region would be the sustain- of the EU’s and Turkey’s position in Central Asia able improvement of Kyrgyzstan’s performance depends mostly on their ability to repeat the with the support and assistance of the EU and scenario from Azerbaijan, namely to engage Turkey. decisively in cooperation with the US and Japan

8 policy paper»

Dimitar Bechev status quo. An autocrat like Vladimir Putin is fully comfortable with the presence of au- thoritarian regimes or weak, unconsolidat- Russia, the EU and Turkey ed democracies and the oligarchic model of in the Black Sea Region state-business relations, so long as the elites  The interests of Russia and the EU intersect in power act in compliance and do not go too in the Black Sea area, with Turkey trying to far off line. The second point of divergence establish itself as a pole in its own right; is the fact that Russia is not intrinsically in-  The region is characterised by a growing terested in solutions to conflicts like those in trend of economic interdependence and Nagorno-Karabakh and Transnistria. While it Turkey has expanded trade and investment does participates in joint initiatives with ei- links with Black Sea littoral states; ther the EU or its members geared towards  Turkey and the EU share interests in the sta- finding a settlement, Moscow’s default posi- bility and peaceful integration of the Black tion is to either act as spoiler or manipulate Sea area. They could and should do more to conflict dynamics to twist the arms of the co-ordinate their policies. parties involved. A fresh piece of evidence is Russia’s threat to sell weapons to Azerbaijan The region in order to blackmail Armenia into walking The Black Sea is a region where the interests out of EU association talks. And last but not of several powers, the EU, Russia and Turkey, least, the approach of Russia and the EU to intersect. In recent years it has been witness the critical gas sector differ. The Kremlin and to a tug-of-war between the Gazprom often, although not always, use gas (EU) and Russia, with Turkey watching from the as a political tool to exert pressure on neigh- sidelines. Two rival projects, the EU’s Eastern bours and cement vassalage ties. The EU Partnership (EaP) and the Eurasian Union pio- seeks to foster competition, open markets, neered by Vladimir Putin, offer alternative vi- empower consumers and transform the gas sions of the region’s political order. Countries issue to one associated with business dynam- like , Ukraine and are stuck ics, not geopolitics. This approach is at the in-between, with their domestic politics frac- core of the European Commission’s anti-trust tured by the gravitational pull of Moscow and case launched against Gazprom on allega- Brussels driving them in opposite directions. tions that the Russian giant has engaged in Belarus and Armenia, by contrast, are firmly unfair commercial practices in a number of in Russia’s orbit, owing to their dependence member states. on oil and gas imports and security. But even Relations between EU and Russia in their their governments seek to maintain a degree shared “near abroad” have only lately become of autonomy in critical areas, at times resist more antagonistic. To a large degree, the ten- pressure from the Kremlin and flirt with the sions have resulted from the withdrawal of EU. Azerbaijan is in a league of its own. While US under the presidency of Barack Obama. Baku does find itself compelled to strike a com- Previously, the Kremlin used to look down on plex balancing act, its large off-shore deposits the Union due to its lack of military power, of oil and gas give it much greater leeway com- viewing the US as its principal rival and NATO pared to the rest of the pack. Nevertheless, au- expansion as the threat. Now that the Alliance tonomy in its case is a convenient shield to but- has halted its enlargement into the post-Sovi- tress one of the most repressive regimes in the et region, the EU has come to the top of the neighbourhood, rivalled only by Lukashenka’s adversaries’ list. The economy rather than mil- Belarus. itary affairs represents the main field of stra- It would be wrong to view the competi- tegic competition. The rift between Moscow tion between the EU and Russia exclusively and Brussels is driven by the design of the through the lens of power, as it has a lot to do Eurasian Union as an economic entity that with principles and values too. While Brussels emulates, in form if not in content, the EU. Its champions, via its conditionality policy, dem- cornerstone is the Russia-Belarus-Kazakhstan ocratic rule and the modernisation of these Customs Union that came into existence in economies, Moscow wants to preserve the 2010. The prospect of Ukraine signing an as- 9 policy paper»

sociation agreement with the Union at the overall turnover with the region has gone forthcoming Vilnius Summit has ignited full- from USD 10bn in 2002 to about 50bn (or 16% blown rivalry, with the Kremlin using all man- of Turkey’s total trade) in 2012. Turkey is the ner of economic levers to pressurise President main counterpart for Georgia. Ukraine, one Viktor Yanukovich. The loss of Ukraine and of Turkey’s largest partners in the ex-Soviet Moldova – and potentially Georgia – to the Union, has received USD 12 bn in Turkish FDI EU is seen as a core threat, not unlike the and has a total turnover of USD 6 bn, running prospect for NATO enlargement prior to the a large surplus. Summit of April 2008. Putin’s bully- Russia is the principal supplier of energy to ing tactic could, however, prove counterpro- meet the needs of the booming Turkish econ- ductive. Eager to defend their turf and safe- omy, while Azerbaijan is becoming ever more guard their own clientelistic networks, preda- prominent thanks to strategic projects such as tory elites in EaP countries are likely to resist the Baku–Tbilisi–Ceyhan (BTC), Baku–Tbilisi– pressure and opt for expanding and deepen- Erzurum (BTE) and TANAP (projected for 2018) ing institutional ties with the EU. The ten- pipelines carrying Caspian oil and gas. Turkey’s sions in Ukraine following Yanukovich’s deci- construction sector is present in all Black Sea sion to reject the EU’s Association Agreement countries. In Russia alone, Turkish contrac- in the run-up to Vilnius and turn to Moscow tors are involved in projects worth USD 50bn, for financial support, has deepened the inter- with ENKA Insaat, one of the bigger players, nal rift. It has posed a tremendous challenge behind large undertakings such as Terminal 3 to the EU: on the one hand, engagement in at Moscow’s Sheremetyevo Airport, the Toyota Ukraine is a must in order to de-escalate do- factory near St. Petersburg and a stadium in mestic polarisation and wrestle Kiev out of Donetsk. Millions of tourists flock annually to the Kremlin’s orbit. On the other hand, the and the Turkish Black Sea resorts. The Union has to uphold its values and principles, Black Sea region is both a source and destina- denounce the repression against pro-Europe- tion of FDI: in 2010 Turkey received USD 517m an protestors unleashed by Yanukovich and from the region and invested USD 349m into stick to its conditions, including the demand it. Azerbaijan alone has received USD 7 bn in to release Yulia Tymoshenko, imprisoned on investment, and itself invested USD 4 bn as of trumped-up charges. 2012. EU remains a top trading partner for all Turkey’s vision also prioritises the forging of the countries in the region. Its share varies close institutional links with the region as from 26.6% in Georgia to 54% in Moldova. a means to expand economic interdepend- Ukraine, where the Union accounts for ence. To that end, it has established High-Level roughly one third of the turnover, is the Cooperation Councils (joint cabinet meetings) most important market, and the country ex- with a number of Black Sea countries, includ- ports iron, steel, mining products and ma- ing Russia (2010), Ukraine (2011) and Bulgaria chinery to the EU. (2012). Furthermore, it has lifted visa require- ments for citizens of all Black Sea littoral Turkey’s approach states, except Moldova whose agreement is Like the EU and Russia, Turkey has also been yet to enter into force. These bodies are cen- pursuing an outreach policy which dates back tral to Ankara conducting its neighbourhood to the early 1990s. The overarching aims are policy across more than one neighbouring re- to gain economic benefits and expand the gion, especially under the rule of the Justice country’s political clout, and also to make and Development Party (AKP) from 2002 to the most of the opportunities provided by the present day. Of course, the intensity of the end of the Cold War. President Turgut commitment and interest varies according to Özal was behind the Black Sea Economic distance. One should therefore distinguish Cooperation (BSEC) which was inaugurated in between several sub-regions with varying sig- 1992 by the Black Sea littoral states, as well as nificance for Turkey. The Southern Caucasus and Albania ( and (Armenia, Georgia, Azerbaijan) comes on top joined in 2004). Russia, Ukraine and Romania thanks to the nexus of security, energy and are all key trading partners for Turkey whose historical issues that link it to Turkey. Ukraine 10 policy paper» and Moldova are primarily viewed through an support from Turkey in the conflict about the economic and functional perspective, while breakaway province of Nagorno-Karabakh Bulgaria and Romania cannot be considered which is controlled by Armenia. The Turkish- outside of Turkey’s tangled relations with the Armenian border is sealed off and Ankara has EU as a whole. made its re-opening based on the condition Russia, quite understandably, is at the centre that Armenian forces’ withdrawal from sever- of Turkey’s Black Sea policy. Though a NATO al counties adjacent to Karabakh. But to view member, Turkey has traditionally tried, as far Azerbaijan as Turkey’s “little brother” or client as possible, not to antagonise Russia. It armed misses the point. The ability of Ilham Aliyev, Georgia in 2008-9, supported its NATO ambi- Baku’s authoritarian ruler, to undermine the tions but during the conflict of August 2008 Turkey-Armenia rapprochement which was un- refused to let three US military vessels through der way in 2009–2010 by leveraging joint gas the Bosphorus. Russia and Turkey have agreed projects testifies to the complexity of the re- to disagree on Syria and proceed with the de- lationship. Furthermore, Azerbaijan has man- velopment of business links. Trade is booming, aged to establish a significant business pres- with Russia being one of Turkey’s most signifi- ence in Turkey, especially in the gas and oil cant partners, especially regarding imports. sector. Energy comprises more than half of Turkish Despite the lasting strategic significance of imports from the Black Sea, with Russia tak- hydrocarbons and the political importance ing the lion’s share. This goes beyond gas, of countries such as Russia and Azerbaijan however. Russia’s Rosatom is involved in in Turkey’s foreign affairs, the Black Sea has building Turkey’s first nuclear power plant moved in a downwards direction regarding at Akkuyu near Mersin. Furthermore, Ankara the overall neighbourhood strategy pursued and Moscow are the chief stakeholders in re- by Ankara compared to the 2000s. The reasons gional initiatives such as BLACKSEAFOR which for this are quite straightforward. The Arab focusses on maritime security. In addition, Awakening and the turmoil in Syria has caught Turkey has not supported the closer involve- the attention of policymakers and the public ment of NATO in the Black Sea area (as pushed at large, leaving little space for the regions by Romania, for instance). What also matters laying to the North and West of Turkish bor- to Russia is Turkey’s co-operative stance on ders (in fairness, however, the turmoil in the conflicts in the Northern Caucasus. Ankara has south has taken its toll on Turkish trade and long kept at bay radicals amongst the numer- construction, while the upward trend in the ous diasporas from the area in order not to Black Sea area has kept up). The only excep- create extra points of friction with its mighty tion is, of course, Russia which remains a cen- neighbour across the Black Sea. While Turkey tral partner – as well as an adversary in Syria. is pushing for the integration of the region into But Russia is in a league of its own, regarding the Western sphere of influence, it is treading its leverage in global affairs and, not least of cautiously to limit damage in relations with all, its involvement in key Middle East dossiers, Moscow. from the future of Syria to nuclear talks with Azerbaijan is another key partner due to close Iran, thanks to its permanent seat on the UN ethnic and linguistic ties and extensive hy- Security Council. drocarbon resources. Indeed, Turkey relies on Caspian gas to diversify its growing needs What can the EU and Turkey away from Russia (50% of imports) and Iran. do together in the region? Since the early 1990s relations between Baku Turkey and EU have convergent interests when and Ankara have been on an upward trajecto- it comes to the Black Sea basin. Both parties ry, and in both Turkey and Azerbaijan the talk seek stability through economic integration. of a “one nation in two states” is common- The difference, of course, is that EU is more place. The construction of the BTC oil pipeline willing to confront Russia, even if constructive is an important milestone in adding economic engagement is what most member states con- depth to the relationship, although one should verge around as a policy. Turkey, by contrast, not forget that the US has been a key player is much less willing to take risks and eschews in the project. In addition, Azerbaijan received a policy based on democratic conditionality. Its 11 policy paper» realist stance in part also reflects the flaws in the respective ministries in Turkey. And last the Turkish democratisation process, with AKP but not least, there’s the multilateral route – widely blamed for sliding back towards au- the EU could do more to breathe life into re- thoritarianism. Despite such caveats, Brussels’ gional bodies such as BSEC through Black Sea policy with the Eastern Partnership (EaP) bene- Energy and similar initiatives. fits Turkey, directly and indirectly. For instance, The Southern Caucasus, where Ankara’s in- the new association agreements with Ukraine, terest is at its densest and most multi-dimen- Moldova and Georgia, which include a broad sional, merits special attention. This com- free-trade component, will deepen integration prises security, both hard and soft, road and not only with the EU but also with Turkey which rail infrastructure and, not least of all, energy. is part of the Customs Union. At the same time, The EU has to invest in sub-regional coopera- EU has not done much to involve Turkey in the tion and encourage formats where Turkey multilateral formats and initiatives it sponsors, could be a stakeholder (e.g. Turkey-Georgia- such as the Black Sea Synergy (although this is Azerbaijan). somewhat moribund at the moment). The key issue is Turkish-Armenian relations. Turkey has a stake in the EaP but cannot 2015 is looming on the horizon and reconcili- take part in it as it could be seen as a diver- ation efforts should be renewed. This means sion from its path to accession. Ankara keeps decoupling Ankara-Yerevan dealings from itself an arm’s length from the European the issue of Nagorno-Karabakh, to the extent Neighbourhood Policy (ENP) and rebuffed that this is feasible. The EU should reassure French President Nicolas Sarkozy when he at- Armenia, provide it with the right incentives tempted to add it to the Mediterranean Union such as an offer to conditionally open the joint as a substitute track to membership talks. border, and reach out to social actors in Turkey Turkey is already a member of the informal who are pushing for reconciliation. Also it group of the friends of EaP but more can be should coordinate policies towards Moscow done to co-ordinate issues on a bilateral level. on that particular dossier. Despite political constraints, EU and Turkey The EU should do more to bolster economic should find ways to align policies in the EaP and political co-operation between Turkey and areas. The existing dialogue between the Ukraine. As part of the EU-centred Customs European External Action Service (EEAS) and Union, Turkey has a large stake in trade liber- Turkey is an obvious vehicle to that end. One alization with Ukraine, so the EU has the most can also envisage cooperation in such fields as to do in its role as a functional link between trade, energy and the free movement of peo- those two large neighbours. ple involving the European Commission and

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