Volume 7 Issue 3-4 2013 1 THE & GLOBALIZATION

INSTITUTE OF STRATEGIC STUDIES OF THE CAUCASUS

THE CAUCASUS & GLOBALIZATION

Journal of Social, Political and Economic Studies

Volume 7 Issue 3-4 2013

CA&CC Press® SWEDEN 2 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION FOUNDED AND PUBLISHED BY INSTITUTE OF STRATEGIC STUDIES OF THE CAUCASUS Registration number: M-770 Ministry of Justice of Republic

PUBLISHING HOUSE CA&CC Press® Sweden Registration number: 556699-5964 Registration number of the journal: 1218

Editorial Council

Eldar Chairman of the Editorial Council () ISMAILOV Tel/fax: (994 – 12) 497 12 22 E-mail: [email protected] Kenan Executive Secretary (Baku) ALLAHVERDIEV Tel: (994 – 12) 561 70 54 E-mail: [email protected] Azer represents the journal in Russia () SAFAROV Tel: (7 – 495) 937 77 27 E-mail: [email protected] Nodar represents the journal in () KHADURI Tel: (995 – 32) 99 59 67 E-mail: [email protected] Ayca represents the journal in () ERGUN Tel: (+90 – 312) 210 59 96 E-mail: [email protected]

Editorial Board

Nazim Editor-in-Chief (Azerbaijan) MUZAFFARLI Tel: (994 – 12) 598 27 53 (Ext. 25) (IMANOV) E-mail: [email protected] Vladimer Deputy Editor-in-Chief (Georgia) PAPAVA Tel: (995 – 32) 24 35 55 E-mail: [email protected] Akif Deputy Editor-in-Chief (Azerbaijan) ABDULLAEV Tel: (994 – 12) 561 70 54 E-mail: [email protected] Volume 7 IssueMembers 3-4 2013 of Editorial Board: 3 THE CAUCASUS & GLOBALIZATION

Zaza D.Sc. (History), Professor, Corresponding member of the Georgian National Academy of ALEKSIDZE Sciences, head of the scientific department of the Korneli Kekelidze Institute of Manu- scripts (Georgia) Mustafa AYDIN Rector of Kadir Has University (Turkey) Irina BABICH D.Sc. (History), Leading research associate of the Institute of Ethnology and Anthropology, Russian Academy of Sciences (Russia) Douglas Professor, Chair of Political Science Department, Providence College (U.S.A.) W. BLUM Svante Professor, Research Director, -Caucasus Institute, Silk Road Studies E. CORNELL Program, Johns Hopkins University-SAIS (U.S.A.) Parvin D.Sc. (History), Professor, (Azerbaijan) DARABADI Murad D.Sc. (Political Science), Editor-in-Chief, Central Asia and the Caucasus, Journal of ESENOV Social and Political Studies (Sweden) Jannatkhan Deputy Director, Institute of Strategic Studies of the Caucasus (Azerbaijan) EYVAZOV Rauf Ph.D. (Psychology), Leading research associate of the Center for Strategic Studies under GARAGOZOV the President of the Azerbaijan Republic (Azerbaijan) Archil Ph.D. (Geography), Senior fellow at the Georgian Foundation for Strategic and GEGESHIDZE International Studies (Georgia) Elmir Director of the Department of Geoculture, Institute of Strategic Studies of the Caucasus GULIEV (Azerbaijan) Shamsaddin D.Sc.(Economy), Professor, Rector of the Azerbaijan State Economic University HAJIEV (Azerbaijan) D.Sc. (History), Professor at (Azerbaijan) Stephen Professor, Russian and Eurasian Studies, Mount Holyoke College (U.S.A.) F. JONES Akira Ph.D., & the Caucasus, Program Officer, The Sasakawa MATSUNAGA Peace Foundation (Japan) Roger Senior Research Fellow, Department of Politics and International Relations, University of MCDERMOTT Kent at Canterbury (U.K.); Senior Research Fellow on Eurasian military affairs within the framework of the Program of the Jamestown Foundation, Washington (U.S.A.) Roin D.Sc. (History), Professor, Academician of the Georgian National Academy of Sciences, METREVELI President of the National Committee of Georgian Historians (Georgia) Fuad Ph.D. (Economy), Counselor of the Chairman of the Board of Directors of the International MURSHUDLI Bank of Azerbaijan (Azerbaijan) Michael Associate professor, Near Eastern Studies Department, Princeton University (U.S.A.) A. REYNOLDS Alexander Professor, President of Georgian Foundation for Strategic and International Studies RONDELI (Georgia) Mehdi SANAIE Professor, Tehran University, Director, Center for Russian Studies () Avtandil D.Sc. (Economy), Professor, Tbilisi University of International Relations, Corresponding SILAGADZE member of the Georgian National Academy of Sciences (Georgia) S. Frederick Professor, Chairman, Central Asia-Caucasus Institute, Johns Hopkins University-SAIS STARR (U.S.A.) James Professor, Director of the International and Regional Studies Program, Washington V. WERTSCH University in St. Louis (U.S.A.) Alla D.Sc. (History), Professor, head of the Mediterranean- Center, Institute of YAZKOVA Europe, Russian Academy of Sciences (Russia) Stanislav D.Sc. (Economy), Senior Researcher, Institute of World Economy and International ZHUKOV Relations, Russian Academy of Sciences (Russia)

The materials that appear in the journal do not necessarily reflect the Editorial Board and the Editors’ opinion

Editorial Office: THE CAUCASUS & GLOBALIZATION © The Caucasus & Globalization, 2013 25 Ajami Nakhchivani, building 2 © CA&CC Press®, 2013 AZ1108, Baku, Azerbaijan © Institute of Strategic Studies of WEB: www.ca-c.org the Caucasus, 2013 4 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION THE CAUCASUS & GLOBALIZATION

Journal of Social, Political and Economic Studies Volume 7 Issue 3-4 2013

CONTENTS

GEOPOLITICS

THE CAUCASIAN PENTAGRAM: Kenan A CURSE OR A LUCKY CHANCE? ALLAHVERDIEV 7

ASYMMETRIC WARFARE: WHERE THE WEAK ARE STRONG AND Parvin THE STRONG ARE WEAK DARABADI 26

THE NAGORNO- ISSUE IN UKRAINIAN FOREIGN POLICY Alexander (1992-2012) (Part One) DUDNIK 32

GEO-ECONOMICS

THE FINANCIAL ECONOMY Vladimir IN A GLOBALIZING WORLD LUKYANOV 44

REGIONAL PROBLEMS OF Ramaz ACCELERATING ECONOMIC DEVELOPMENT RATES ABESADZE, IN THE CONTEXT OF GLOBALIZATION Vakhtang (A GEORGIAN CASE-STUDY) BURDULI 50 Volume 7 Issue 3-4 2013 5 THE CAUCASUS & GLOBALIZATION

SMALL AND MEDIUM BUSINESSES Igor IN A GLOBALIZING WORLD LIUTY, Rufat KULIEV 64

GENESIS OF Avtandil POST-COMMUNIST ECONOMIC DEVELOPMENT: SILAGADZE, OBSTACLES AND PROSPECTS Mikhail (A GEORGIAN CASE-STUDY) TOKMAZISHVILI, Tamar ATANELISHVILI 72

TAX POLICY AND FOREIGN DIRECT INVESTMENTS Giorgi (A GEORGIAN CASE-STUDY) KUPARADZE 82

GEOCULTURE

ISLAM AND Akushali THE SOCIOPOLITICAL DEVELOPMENT OF SHAFI JALAL, NORTH CAUCASIAN SOCIETY Rajab (A DAGHESTAN CASE STUDY) SHAKHABASOV 96

GLOBALIZATION AND ARTISTIC CULTURE Gulfiya IN KABARDINO-BALKARIA BAZIEVA 101

RELIGIOUS CULTURE OF THE PEOPLES OF THE NORTHERN CAUCASUS AND THE RUSSIAN AUTHORITIES Lyubov (FIRST HALF OF THE 19TH CENTURY) SATUSHIEVA 105

HOW BAHA’ISM TRAVELLED FROM THE EAST TO THE WEST (IDEOLOGICAL EVOLUTION OF THE NEO-UNIVERSALIST Leyla RELIGIOUS DOCTRINE) MELIKOVA 115

GEOHISTORY

A QUESTION MARK IN THE HISTORY OF GEORGIAN-SELJUK RELATIONS ON THE EVE OF Zurab THE BATTLE OF MANZIKERT PAPASKIRI 131 6 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

THE : 200 YEARS AFTER (THE RUSSO-PERSIAN WAR OF 1804-1813 AND THE TREATY OF GULISTAN IN THE CONTEXT OF Oleg ITS 200TH ANNIVERSARY) KUZNETSOV 141

THE IN : AGRARIAN POLICY OF Fazil THE LATE 19TH-EARLY 20TH CENTURIES BAKHSHALIEV 157

Index THE CAUCASUS & GLOBALIZATION, Vol. 7, 2013 165

Contributors please use the following guidelines: — begin articles with a brief abstract of 300-500 words and keywords; — articles should be no less than 3,000 and no more than 6,000 words, including footnotes; — footnotes should be placed at the bottom of each page; if there are references to Internet resources, please give the author’s name, the name of the document, the website address, and the date it was made available, for example, available 2007-04-19; — quotations, names of authors and other information from English-language sources should be duplicated in brackets in the original language, that is, in English; — the article should be divided into sections, including an introduction and conclusion; — the author should include the following personal information: first name, last name, academic degree, place of work, position, city, country.

All articles accepted are published in Russian and English, in the Russian-language and English-language versions of the journal, respectively. The editorial board takes responsibility for translation of the articles. Volume 7 Issue 3-4 2013 7 THE CAUCASUS & GLOBALIZATION

GEOPOLITICS

Kenan ALLAHVERDIEV

Ph.D.(Philos.), Associate Professor, Department of Political Science and Political Administration, Academy of State Administration under the Republic (Baku, Azerbaijan).

THE CAUCASIAN PENTAGRAM: A CURSE OR A LUCKY CHANCE?

Abstract

n this article the author identifies and ana- only crop up in all sorts of contexts, the pro- lyzes the dynamics of five factors that most tracted conflicts in the Caucasus included, but I affect the development trends of the Cau- may also change the geopolitical balance and casian region, the results of which may not military-political configuration of the region.

KEYWORDS: The Caucasus, the Caucasian pentagram, globalizational, geopolitical, ethnopolitical, confessional, national-strategic.

Introduction

Even the most superficial analysis of what political scientists have written about the Caucasus reveals several key narratives as starting points: — Geopolitically and geostrategically, the Caucasus is an extremely important region; — It can be described as a hub of the varied interests of the global and regional actors of inter- national politics; 8 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION — The role of numerous international mediators acting in different formats and combinations (real, declared, and potential) in settling the post-Soviet conflicts in the Caucasus is huge because: (a) civilizationally—they prevent mutual extermination; (b) preventively—they keep the conflicts frozen; (c) constructively—they may encourage the conflicting sides to move closer or even push them into a semblance of peace. It is not my task to assess these theses as realistic or mythologized. Depending on the political context, certain external and internal factors can be added to the above, viz. transformation trends of political regimes; peace initiatives; armed clashes (the Russian-Georgian war of August 2008 can serve as an example); or the threat of armed clashes (the notorious “Iranian threat”), etc. These are short-term factors that may affect the Caucasian agenda; there are also fundamental, or long-term, factors responsible for its qualitative parameters: globalizational, geopolitical, eth- nopolitical, confessional, and national-strategic. I have written this article with the sole purpose of analyzing these five systemic factors of Cau- casian realities, which I have called, with a great degree of conventionality, the Caucasian pentagram.

The Global Dimension of the Caucasian “Political Palette”

Globalization as a movement toward stronger universal interconnections is based on communi- cation means; national economies that are moving toward a single global economy and new interna- tional forms of infrastructure. At the same time, it stirs up varied, some of them mutually exclusive, development trends. Today, the following can be described as the hubs of contradictions: (1) The challenges and threats (international terrorism and international crime, drug trafficking, slave trade, etc.) generated by globalization, the scope and possible repercussions of which have already neutralized or even diminished the unique development opportunities it cre- ates. (2) The vague relations between nation-states and quasi-states, between ethnicities and supra- national integrias. (3) The development of a unipolar world and factors of its rejection. The pillars of the emerging worldwide Anglo-Saxon hegemony are indirectly undermined by other global trends: today a meager 7% of the world population uses English as its native language, while over 20% speaks Chinese, etc. (4) The “elitist” nature of globalization, which widens the gap between regions: unequal dis- tribution of wealth makes rich countries richer and poor countries poorer. This far from complete list of the globalization processes shows that they exacerbate the prob- lems of development (North/South relations) and the problems of peace (West/East relations). It is no accident that many analysts say we are moving toward new world disorder rather than the desired New World Order. On the strength of the above, globalization can be described as a geohistorical process that is demonstrated, with different degrees of intensity, in different aspects of social life and in different regions; depending on their “qualitative” parameters, it creates different impulses and development vectors. Volume 7 Issue 3-4 2013 9 THE CAUCASUS & GLOBALIZATION In this context, the contemporary ethnopolitical processes can be analyzed within two main components: the way globalization affects the ethnic processes proper and the forms of their political institutionalization. The analytical community agrees that the 21st century will unfold under the aegis of two op- posing trends: ethnic consolidation and ethnopolitical mobilization, on the one hand, and ethnic inte- gration and the quest for a new form of global community, on the other. This describes the disintegra- tion of the as the rejection of a historically untenable globalist model and an impulse that should have set in motion (and did set in motion) mechanisms of adaptation of the regional “development potentials” to a new globalist model. In the Caucasus, where for a number of objective historical reasons1 the processes of nation- building and nation-state development, as well as ethnopolitical development on the whole have not been completed, the global trend of encouraging ethnic activism proved to be useful. The existing political-historical realities of the region set in motion specific mechanism of protection and adapta- tion, viz., ethno- based on the policy of ethnic domination and protection from the real or imaginary domination of other nations. At first glance, driven to extremes, this mechanism leads to its opposite: nation-state development falls into the trap of ethnocracy, national imperialism, which rejects supranational integration trends, everything that is alien, etc. Contradictions are the daily bread of the dialectics of development; globalization as a geohistorical process is manifested not as a uni- lineal ongoing and ascending stream, but as a sine wave, or mathematical curve, along which peoples and regions of the world are distributed. I would like to say in this connection, still keeping to the middle of the road, that the ethnopolitical processes in the Caucasus and, probably, in the Central Asian countries should, for historical reasons, pass (and have passed) through several stages. In view of the fact that stadial ethnopolitical development is part of the “socially compressed time” created by globalization, the visible signs of evolution in the Caucasus of the still dominant ethnonationalism toward plebiscitary nationalism, which supplies democratic tools of ethnic compro- mises and ethnic cooperation, should come as no surprise. It seems that we should not confuse two absolutely different processes: emergence and con- solidation of modern nations and ethnicities in the Caucasus and the related specific political phenom- ena, on the one hand, and confirmation of ethnic exclusiveness based on violence, ethnic cleansing, deportations, annexations, etc., on the other. Widescale migration flows, including waves of ethnic migration, make a “global village” out of the planet; most countries, including those that were recently relatively mono-ethnic, are turning into ethnic patchworks. As could be expected, quite a few ethnopolitical problems are moving to the fore, including: — The relations between the “titular” and “non-titular” peoples, the so-called “center” and ethnic regions and enclaves; — Ethnic reductionism, ethnic nationalism, and ethnic regionalism; — The rights and statuses of ethnic minorities; — The accents shifted from political to ethnic identity, etc. Moreover, in some countries uncontrolled ethnic migration has already created the very real threat of ethnic succession (an extremely vast change in a territory’s ethnic composition). The situa- tion in the Russian Far East, where the 5-million-strong permanent Russian population is living alongside 3 million (according to certain sources) Chinese migrants, can serve as a pertinent example.

1 They include the geographically determined polyethnic structure of the Caucasian region; a weakly developed economic component of ethnosocial development; the absence of historically sustainable centralized states or strong supra- national territorial-state units, etc. in the region until the turn of the 20th century.

10 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION The gradually globalized demographic processes unfolding in the main ethnicities of any given country or region play an important role in the relatively fast crumbling of the previously fairly stable ethnic structures, a process fraught with ethnopolitical challenges and threats. In the foreseeable future, a greater role of the ethnopolitical component in public life may cause fragmentation of polyethnic states, destruction of the current system of international relations, and numerous ethnopolitical clashes and conflicts that might develop into interstate or even regional wars. The world community is concerned about the prospect of “disintegration of the unity of the world,” “exploded ethnicity,” and the prospect of “increased aggressiveness of ethnonational minorities de- termined to protect their specifics and prospects from globalization.”2 There is one more problem created and actualized by globalization. I have in mind the weaker role of nation-states, the foundations of which are undermined by different factors: — Disappearance of national borders and emergence of transnational economies; — Transformation of national sovereignty because of the growing number of transnational in- stitutions; — A new world without information borders; — Stronger transnational migration and mounting pluralism of cultures and ethnicities. According to some of the Western analysts (Yale Ferguson, Richard Mansbach, and others), globalist trends are undermining the states and the system of states as a whole. They warn that in the next few decades the world will be plunged into chaos, the authority of international organizations will be undermined, WMD will spread far and wide, a wave of international terrorism, crime, ethnic intolerance, and ethnic conflicts will rise high, economic inequality will become more obvious while ecological disasters more frequent, etc.3 Other authors write4 that even though it is wrong to absolutize the nation-state as the only pos- sible form of state, it is equally wrong to talk about its death. They argue that there are up to 5 thousand ethnicities in the world and only about 200 states and that in 50 years there will be about 400 to 500 member states of U.N. This means that nation-building and nation-state development will go on. This is not yet as obvious as the supporters of this thesis surmise; if accepted, their logic suggests that globalization has triggered two opposite trends—integration and disintegration, centrifugal and cen- tripetal—in ethnopolitical processes. It takes no wisdom to conclude that even though the number of states increases, not all nations will build their own states. This causes a lot of pain in those that “missed their chance” and is the pivotal point of ethnopolitical and interstate relations in the Caucasus. Let me specify.  First, we should accept (unrelated to our political, ethnic, or emotional preferences) that as long as there are nations, the national development and the whole gamut of related issues in the world, the national self-determination issue will survive in one form or another. Donald Horowitz, an American expert in conflictology, has written that “national self-de- termination is a problem rather than an answer… Much can be said in favor of the concepts of compromises and against the arguments in favor of self-determination.”5 The following arguments can be applied to the Caucasian region:

2 R.G. Abdulatipov, Etnopolitologia, St. Petersburg, 2004, pp. 239-240. 3 See: A.I. Utkin, “Geostruktura XXI veka,” Nezavisimaia gazeta, 1 September, 2000. 4 See: L.M. Drobizheva, “Etnichnost v sovremennom obshchestve,” Etnopolitika i sotsialnye praktiki v Rossiyskoy Federatsii, No. 2, 2001. 5 Quoted from: V.A. Tishkov, “Vstupitelnaia statia”, Bulletin No. 4 Mezhdunarodnogo proekta “Uregulirovanie etnicheskikh konfliktov v postsovetskikh gosudarstvakh,” Moscow, 1995, p. 16, footnote 3 “Donald Horowitz, Irredentas, Secessions and Self-Determination, 1995, p. 15.”

Volume 7 Issue 3-4 2013 11 THE CAUCASUS & GLOBALIZATION (1) The threat of a “domino effect.” We all know that even if frozen or latent ethnic disagree- ments continue gathering destructive potential, it means that the very fragile “neither war, nor peace” in the Caucasus can be blown up by any more or less consistent attempt to set up ethnic states. The interdependent nature or even closeness of ethnopolitical processes in all the Caucasian republics will inevitably spread the fire of “self-determi- nation as a nation-state” started in one of the republics to other republics (the domino effect). This may happen for different reasons—geopolitical, economic, or resource—the main one being the presence of “autochthonous” ethnic minorities with external statuses (a state in which this ethnicity is either the only one or one of the titular). (2) The threat of the “nesting doll” effect which will inevitably complement the domino effect to create new coils and levels of ethnopolitical activity. (3) The threat of a “big bang” or a “big Caucasian war,” which may become a shocking reality if one of the above scenarios is realized. Much has been written about the pos- sible “five Karabakhs” in the Caucasus, a total war of bellum omnium contra omnes (the war of all against all) that will turn the Caucasus into “another Balkans,” etc. Some of the prophecies are obviously unfounded (the Caucasus as the source of another world war); the absolute majority of them proceed from what is going on in the region. The possibility (so far highly hypothetical) of an “independent” Chechnia or the “reunifica- tion” of Ossetia may trigger political shifts in the ethnopolitical space of the Caucasus caused by the use of force. It will suck in not only the seven North Caucasian constitu- encies of the Russian Federation and Russia proper, but also the three Central Caucasian states, Turkey, Iran, and who knows which other countries.  Second, the thesis of self-determination of a nation or a small ethnicity within a polyethnic state (that is, any state in which over 5% of population belongs to an ethnicity other than the titular) should not necessarily lead to ethnic separatism, extremism, or secession. Aca- demics and politicians point to a multitude of other forms of self-determination: the right to internal self-determination, cultural-national autonomy, unhampered development of spiritual values, language, customs, historical and religious traditions, etc. So far, these ideas are not popular in the Caucasus. Why? Because they belong to the fairly sensitive area of political and ethnic psychology—emergence of hostility, prejudices, and fears. This calls for clarification of the following two points. (1) It is an open secret that the Caucasian states with ethnic minorities (especially those with external statuses) not infrequently fear that external forces or states that patronize the minorities in their territories might move in to protect these minorities or, in extreme cases, annex their territories. The state takes preventive measures in the form of cor- responding ethnic policy that forces the minorities to ask patron-states for protection. This justifies the suspicion of disloyalty of these minorities and sets in motion the mechanism of “self-fulfilled prophecies.” (2) The course of numerous conflicts in the Caucasus (Nagorno-Karabakh, , Os- setia, Chechnia, Kabardino-Balkaria, and Karachaevo-Cherkessia) has demonstrated that ethnicity, the slogans of “liberation,” and aggressive defense of the ethnic minor- ity’s rights are used to promote the interests of the ethnic elite6 frequently intertwined with the interests of local criminal groups and clans. If satisfied, even minimal demands to develop national languages and cultures and open national universities will escalate ethnic demands. Deliberately or not, ethnic elites are leading the ethnopolitical pro-

6 For more details, see: V.A. Tishkov, “Zabyt o natsii,” Voprosy filosofii, No. 9, 1998.

12 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION cesses into a dead end; this excludes all peaceful solutions; radical measures become the only option.  Third, regrettably, authors of political works and the ordinary people are wrongly con- vinced that the emergence of nation-ethnicities and nation-states is identical. They are mutually dependent and mutually complementary processes; in the contemporary world, however, they could and should be placed in the spheres in which they are formed. Rama- zan Abdulatipov has offered a memorable image: “A nation-state in the 19th and even 20th century meant, more likely than not, domination of one nation and the dissolution of others for the sake of its state status… A nation-state in the 21st century is a closely knit, equal, and equally dignified unification of ethno-nations into a single political community with a common social and political destiny.”7 Is this idyll possible in the Caucasus? On the one hand, there is a lot of generally accepted pessimism: “The plural society, constrained by the preferences of its citizens, does not provide fertile soil for democratic values or stability.”8 On the other, there is a much more optimistic practice of democratic, polyeth- nic, and multicultural Western countries. So far, this balance of power and ethnicity, dis- tribution of powers on the basis of polyethnic democracy, is unattainable in the Caucasus. We should bear in mind, however, that when talking about the ethno-political process in the context of globalization, we should not dwell, theoretically or practically, on the po- tentially conflicting factors and processes (including the right to self-determination). We should, instead, try to predict their evolution and study the processes that create new transnational multi-ethnic entities. This approach looks absolutely understandable if we take into account that globalization creates a communication “network” of interdependen- cies and interpenetrations across the borders and boundaries to create a global entity at the civilizational level. I will limit myself to a general observation: many well-known futurological scenarios related to ethnicities speak of weakening factors of national determination and the nations’ typical features. This means that the principle of ethnic self-determination, the extreme forms of its realization in particular, will no longer be adequate. This can be easily explained: the challenges and demands of globalization will force all peoples (both those that “managed” and those that “did not manage” to set up their states) to choose between ethnic identity in its historical form and a new formula of harmonization of ethno- social content. The current development trends show that, in the final analysis, this will determine the historical destinies of peoples and their intrinsic integration into global civilization. On the one hand, all ethnicities are acquiring unique opportunities to organize their national existence on the principles of civil solidarity and social partnership, while on the other, globalization moves political and ethnic mythologems aside to let peoples take care of their real, rather than imaginary, ethnopolitical and ethnocultural demands and requirements. Some of what has been said above does not fit the current ethnopolitical situation in the Cauca- sus or even contradicts it and the strategic aims of the main actors on this “playing field,” to borrow a term from Brzezinski. In the most generalized form, this crops up as a confrontation between the growing ethnic regionalization and the objective requirements of the region’s political and economic integration dictated by globalization. We have to admit that so far a compromise between two opposing paradigms is hardly possible. This relates not only to the right of nations to self-determination but also to many other no less acute ethnopolitical issues. Politics has acquired hypertrophied ethnic forms; as a result, the minimum de- mands of one of the conflicting sides far exceed the maximum concessions of the other side. The

7 R.G. Abdulatipov, op. cit., pp. 104-105. 8 A. Rabushka, K. Shepsle, Politics in Plural Societies: A Theory of Democratic Instability, Coiumbus, 1972, p. 186.

Volume 7 Issue 3-4 2013 13 THE CAUCASUS & GLOBALIZATION situation is even much worse: these issues have been pushed, with appalling irresponsibility, into the sphere of political-armed struggle when “the weapons of criticism” are easily replaced with “criticism by weapons.” If no large-scale integration projects are implemented in the Caucasian Region and if no wide- scale and final transfer to the multicultural model of ethnic politics very much in line with the demands of globalization is carried out, these contradictions will, sooner or later, revive as an open ethnic confrontation. We all know that statehood in the Caucasus is obviously ethnocratic (one language and the actual and formal privileges of the titular nations); this can be remedied if the states agree to accept the principles of concessional democracy when dealing with ethnopolitical problems. It seems that in the context of globalization and in view of Caucasian reality, this type of democracy will help preserve the best possible form of sustained economic and political order based on consistent national relations, among other things.

The Caucasian Chessboard: Geopolitical Dimension

Much has been written about the conflicts in the Caucasus: some authors are objective, others are too engaged to be objective; some authors indulge in theorizing, while others look at practical matters, etc. Practically all of them regard conflicts as antinomies: either ethnopolitical reductionism, which ignores the geopolitical context, or dependence on the interests of the great powers and involve- ment in the global geopolitical processes. The latest academic and publicist approaches contain three key paradigms.  First, the paradigm of passive involvement, which denies the Caucasus its own geopolitical subjectness; it is seen as one of the zones of global confrontation of thalassocratic and tel- lurocratic powers. Isabel Gorst of The Financial Times sees the Caucasus as a “scene of a new chapter in the Great Game.”9 Alexander Dugin from Russia agrees: “Any discussion of the Caucasian region in the geopolitical system of coordinates presupposes that, in the final analysis, the highly com- plicated picture of the real balance of power will be reduced to a global geopolitical dualism and confrontation of the geopolitical interests of Russia and the , which are invariably opposite (or wider, between Russia and the countries of the North-Atlantic Alliance).”10 Frederick Starr and Svante Cornell of the Central Asia-Caucasus Institute, Johns Hop- kins University (U.S.), look at the Caucasus through the prism of the hierarchy of geopo- litical subjects: “Viewing the entire Caucasus within the prism of a greater Black Sea region makes sense politically as well as economically… In this context, the Caucasus is a discern- ible geographical entity forming an important eastern pillar in the Black Sea region, and hence a gateway to both Central Asia and Iran for the EU.”11 Janusz Bugajski, senior associate in the Europe Program at CSIS, believes that the situation in the region is determined by three factors: first, territorial integrity of states ( occupies part of the territory of Azerbaijan, while Russia de-facto controls part

9 I. Gorst, “Foreign Investment: Caucasus is Scene of New Chapter in the Great Game”, The Financial Times, 31 October, 2007. 10 A. Dugin, “Kavkazskiy vyzov,” available at [http://www.arctogaia.com/public/vtor11.htm]. 11 S.E. Cornell. S.F. Starr, The Caucasus: A Challenge for Europe, Silk Road Paper, Washington, D.C., June 2006, p. 73.

14 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION of Georgian territory); second, observance of international regulations (on the one hand, international law frequently contradicts local traditions; on the other, there is a struggle for control of energy and transportation flows, which leads to conflicts); and third, the indepen- dence of Azerbaijan, Armenia, and Georgia which, under the impact of stronger players, cannot always act independently.12 The opinion that “at no time did the Southern Caucasus play an independent geopo- litical role” can be described as highly chauvinistic. “It had to choose its patrons. Under the patronage of the northern power (that is, Russia), the Transcaucasian countries were invari- ably protected from all threats much better than when they depended on other neighbors.”13  Second, the paradigm of active involvement does not deprive the Caucasus of its own geo- political activity and says that together with the Caspian it is an independent entity of world geopolitics. According to several analysts (Ariel Cohen, Pele Escobar, and others), its resource and pipeline potential makes the Caucasian-Caspian region the central segment on the maps of the new “Great Game.”14 Here is what Bay Fang, Deputy Assistant Secretary of State in the Bureau of European and Eurasian Affairs, has written: “Today, there is a new map of Central Asia, pored over by governments and oil company executives. It is known as ‘hub and spoke.’ The hub is the , and the spokes are the multiple pipe-lines emanat- ing from it, representing potential export routes for the vast oil and gas resources that lie beneath.”15 We have to admit, therefore, that the geopolitical and geostrategic importance of the communicational potential of the Caucasus and the Caspian goes far beyond the re- gion’s limits and should be discussed in the Eurasian context.  Third, the paradigm of autonomy. Experts in the Caucasus and Caucasian developments write a lot about the geopolitical consequence and the region’s autonomy within the New Great Game:  As an intertwining of the relations among Azerbaijan, Georgia, Armenia, Turkey, Rus- sia, and Iran, the Caucasus can be described as a Greater Indivisible Caucasus;  As a subject and vehicle of specific historical mission, the Caucasus serves as a bridge between the North and the South and the East and the West;  As a geo-strata, the Caucasus is the region where geopolitical projects are either syn- chronized or clash, etc.16 The above paradigms are present in the state of the conflict between Azerbaijan and Armenia over Nagorno-Karabakh and the efforts to resolve it. Alexander Dugin, for example, is convinced that, in an effort to avoid a settlement, the United States lobbied the Armenian-Turkish protocols. “It was a large-scale geopolitical project: Americans tried to draw Armenia into their sphere of influence and put huge pressure on Turkey.”17

12 See: “Yuzhny Kavkaz: puti razvitia,” available at [http://www1.voanews.com/russian/news/Analysis-and-perspectives/ Caucasus-development-2010-02-23-85151567.html]. 13 “Pokhishchenie Kavkaza,” available at [http://russianews.ru/newspaper/20/15923]. 14 Cohen A. “The New ‘Great Game’: Oil Politics in the Caucasus and Central Asia,” available at [http://www.heritage. org/research/russiaandeurasia/bg1065.cfm], 25 January, 1996; Escobar P. Oil Pipelines Are the “New Great Game,” available at [http://www.huffingtonpost.com/2009/03/24/oil-pipelines-are-the-new_n_178715.html], 24 March, 2009. 15 B. Fang, “The Great Energy Game,” available at [http://www.usnews.com/usnews/biztech/articles/060903/11game. htm]. 16 See: V. Maysaya, “Kavkazskaia geostrata—sinkhronizatsia ili konfrontatsia geopoliticheskikh proektov: soprikosnovenie teoriy Attali i Huntingtona?,” available at [http://cge.evrazia.org/geopolitics_10.shtml]. 17 [http://www.day.az/news/politics/205632.html].

Volume 7 Issue 3-4 2013 15 THE CAUCASUS & GLOBALIZATION The last decade saw numerous initiatives with high sounding titles that invariably spoke of security, stability, and cooperation and a multitude of regional security models of the “3 + 3” and “3 + 3 +2” type; in 2008, the Turks moved forward with The Caucasus Stability and Cooperation Platform, etc. This brought no desired results, not because the Caucasian peoples refused to live in peace and prosperity, but because these projects and initiatives were geared toward the strategic interests of individual players (or their alliances) in the New Great Game in the Caucasus and, as could be ex- pected, were blocked by their opponents. We cannot but wonder whether the Nagorno-Karabakh conflict can be resolved in conditions of geopolitical pluralism that have already led the process into an impasse. The answer is that as long as the regional status quo and the current balance of power survive, endless discussions of all sorts of settlement (the use of force, compromises, intermediate, package, stage-by-stage, etc.) will bring no practical results either in short- or long-term perspective. This stirs up doubts: what if the international efforts to settle the conflict are nothing but a po- litical myth? The international intermediaries have been working for twenty years now, hence the conclusion that “only Azerbaijan is not satisfied with the present state of affairs; all the other countries are willing to accept the status quo.”18 — The international peace process has not yet exhausted all its potential; however, to be suc- cessful, it must reach at least one of the three key conditions: — The geopolitical interests of the global and regional actors of world politics (the U.S. and Russia in the first place) must coincide in time to lead to coordinated efforts; — The geopolitical balance of power and the military-political configuration in the Caucasus must undergo radical changes; — The domestic political situation in one of the states of the must change. In view of the above, I would like to say the following about the geopolitical possibilities of settling the Nagorno-Karabakh conflict: (1) As things stand today, the conflict is of a cognitive nature: each of the sides wants more than the opposite side is prepared to give. Armenia wants horizontal relations between Baku and the Armenian population of Nagorno-Karabakh, while Baku insists on vertical relations. Neither of the sides is prepared to commit political suicide by moving away from its rigid position. (2) The conflict’s bilateral nature is an illusion: from the very beginning it has been an inter- national conflict. Today, we are getting a much clearer picture of the opposing interests of the United States, NATO, Russia, Turkey, and Iran and of the conflict’s multisided format. (3) The regional outcrops of global geopolitical rivalry do nothing for conflict settlement. If the regularly repeated incantations about prompt settlement are realized, bringing peacekeepers into the conflict zone to ensure observation of a peace agreement without settling its main (cognitive) disagreement may, in the final analysis, have dramatic consequences:  Numerous precedents have taught us that foreign military humanitarian interference leads to the country’s dismemberment (this happened in the Congo, Yugoslavia, and Cyprus). Today, the future of as three independent states (Sunni, Shi‘a, and Kurd- ish) is actively discussed;

18 A. Rar, “Trudnooshchutimaia dinamika,” 28 December, 2009, available at [http://www.ng.ru/dipkurer/2009-12-28/9_ dynamics.html].

16 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

 Foreign military presence “with humanitarian purposes” will prove to be an ideal instru- ment for drawing Azerbaijan into the orbit of the New Great Game, which presupposes new state borders in the Caucasus and the Middle East. In 1999, Paul Goble published an article titled “New Moves on Caucasus Chessboard,” in which he wrote, in particu- lar, that new railways and oil and gas pipelines “will allow the countries of this region to reach Europe without passing through either Russia or Iran… Together, these moves on the chessboard of the Caucasus may come to transform the geopolitical environment of both this region and Eurasia as a whole;”19  Today, the mechanisms of peace enforcement are being implemented by scenarios that have little or nothing in common with the real interests of the sides (this is going on in Iraq, , the Balkans, and Georgia). This brings to light another aspect of the same problem: a new regional power center, which could become a reality. For obvious reasons, Georgian, Azeri, and Armenian political scientists see their own countries in this role. It should be said that the most justified claims come from the Azeri political elite; indeed, the rich and stable republic has every reason to claim regional leadership and realize it. Azerbaijan is an “unsinkable ship,” a regional power to be reckoned with, irrespective of what other countries want or think. Azerbaijan has already demonstrated that it is an independent player at the regional level:  It has become abundantly clear that those who say that Azerbaijan is not a self-sufficient state and cannot ensure its national security are trailing behind the times;  The Azeri leaders and the Azeri public have no illusions about the true aims of the players of the New Great Game: no one is being duped by the talk of “strategic partnership” (the U.S. and Russia); “fraternal friendship” (Turkey and Iran), and other political and diplo- matic elegancies.  The country is using the oil-and-gas and pipeline diplomacy for the purpose of national development; it not only chooses partners that suit its interests, but is also successfully blocking all the attempts of players in the New Great Game to infringe on its interests. This has given rise to a new (Azeri) vector in the geopolitical situation in the region and made the outcome of the games being played in the Central Caucasus uncertain. It remains to be seen whether the new vector will retain its stability and whether it will tip the regional balance of power or affect the course of settlement of the Nagorno-Karabakh conflict. It has become clear that the “old players” must radically revise their plans and abandon, at least partially, the old habit of using the conflict as a lever of pressure. Those who write about conflict settlement and its place in world politics have changed their tune: “Strange as it may seem, Europe’s future will be determined not in , Berlin, , or Brussels, but in the Southern Caucasus, a tiny territory where several strategic oil and gas pipelines cross. They are the only routes outside Russia that bring energy resources to Europe. Meanwhile, those who control the pipelines that bring energy resources to Europe control Europe as well.”20 The above is a clear indication that the struggle for another redivision of the global geopolitical space is underway. There is a more or less generally accepted opinion that this struggle is being fed by the mount- ing might of Europe and the need to stand opposed to it. There is an opposite opinion: Washington agreed to partial restoration of Russia’s influence in the post-Soviet space (Ukraine, Kyrgyzstan, and

19 P. Goble, “New Moves on Caucasus Chessboard,” Asia Times, 21 April, 1999,” available at [http://www.atimes. com/c-asia/AD21Ag01.html]. 20 [http://www.inosmi.ru/caucasus/20090508/248967.html].

Volume 7 Issue 3-4 2013 17 THE CAUCASUS & GLOBALIZATION some of the integration projects, such as the Collective Peacekeeping Forces, the Customs Union) to draw Moscow to its side in order to build up an anti-China tandem, settle the Iranian issue, etc. Time will show whether these are mere illusions, or whether there is a grain of truth in these deliberations. It should be said that an unfavorable combination of global geopolitical impacts may defrost the “frozen” conflicts, an unwelcome possibility perilous for Azerbaijan and the post-Soviet space as a whole.

The Caucasian “Patchwork”: Ethnopolitical Dimension

All ethnopolitical conflicts have at least two dimensions: internal and external. The former is characterized by the active involvement of ethnicities as actors of the political process. This triggers an ethnopolitical process, i.e. the interaction of fairly large population groups, each of which has its own clear ethnic identity, on the one hand, and certain (real or desired) institutions of sovereignty, on the other. Their ethnic demands immediately become political demands for wider sovereignty, while the political, economic, and humanitarian demands assume ethnic hues and, therefore, rely on mech- anisms of ethnic mobilization.21 Ethno-national movements tend to progress from ethno-cultural to economic demands and on to political and status demands. This means that their struggle becomes fiercer, while the lulls are used to accumulate force to resume fighting rather than to look for a way out of the conflict. The external dimension of ethnopolitical conflicts is manifested in the fact that in the epoch of globalization they develop into geopolitical problems (for example, conflict settlement in Kosovo, Abkhazia, and has an international causal importance). It comes as no surprise that nearly all the governments drawn into the whirlpool of ethnic conflicts blame foreign interference (real or imaginary). The history of the world has proven that an ethnopolitical conflict can easily move from the non-violent to the armed stage. According to British sociologist Evan Luard, who studied the origins of war, between 1400 and the present, about half of the armed conflicts were fought by states. “Alto- gether, in the period since 1945, there have been at least 127 significant wars,” about 37 of them could be described as international.22 These ethnopolitical conflicts are rooted in the nature and conditions in which ethno-national communities function. The geographical boundaries of ethnic communities that do not coincide with the political division of the world transform the space in which states-territories are created into an arena of struggle for national (ethnic) states; this gives birth to ethnic movements and conflicts. There are from 3 to 5 thousand ethnic groups in the world; the number of ethnic minorities is even larger since many ethnicities are scattered across different countries; 269 ethnicities are over 1 million strong; 90 percent of nations and nationalities live in multinational states; 291 ethnic mi- norities living in 99 countries can be described as risk factors. C. Kegley and E. Wittkopf have written in their World Politics: Trends and Transformation that “since the end of the it is argued that ethnic conflict is among the world’s greatest killers.”23 (p. 498). Between 1993 and 1994, 50 large-scale ethnic conflicts turned over 26 million people into forced migrants; each of these con-

21 See: D.V. Dragunsky, “Etnopoliticheskie protsessy na postsovetskom prostranstve i rekonstruktsia Severnoy Evrazii,” Polis, No. 3, 1995, p. 40. 22 See: Obshchaia i prikladnaia politologia, MGSU, Soyuz Publishers, Moscow, 1997, p. 195, footnote 1 “E. Luard, The Blunted Sword: The Erosion of Military Power in Modern World Politics, London, 1988, p. 65.” 23 C. Kegley, E. Wittkopf, World Politics: Trends and Transformation, 5th edition, Saint-Martin’s, New York, 1995, p. 498.

18 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION flicts killed about 80 thousand; 32 percent of the international crises that occurred between 1918 and 1988 had an ethnopolitical dimension.24 It should be said that the academic community has not yet arrived at a clear definition of the ethnopolitical dimension of social processes. Those who side with the constructivist (post-modernist) approach speak of ethnicity as one of the dimensions of the main spheres of public life (political, economic, spiritual, etc.) they manifest and, therefore, cannot be described as an independent subjec- tive-objective sphere. They argue that the ethnic in its pure form is “absent from nature; hence the reduction of ethnicity to either an artificial artifact or a cognitive picture of the social world formed by individuals.”25 In this context, even the sharpest forms of ethnopolitical conflicts are reduced to different configurations of familiar social, political, economic, and other factors. In the most extreme cases, this approach resolutely excludes the ethnic factor from the list of national security determi- nants: “The following can be described as the main national security components: military, eco- nomic, social, ecological, and informational.”26 Those who disagree with the above and support the theory of primordialism proceed from a fact they regard as obvious and unbeatable, i.e. that the entire set of ethnic relations, ethnic life as a whole, and everything related to it (ethnic history, psychology, mentality, etc) functions as a special social substance, the ethnic sphere. Having accepted the ethnic substance as real, the primordialists, not infrequently, go to extremes: they conclude that ethnicity is the only reality. In view of the fact that in recent decades, ethnic identification and politicization of ethnicity have become dominant and even threatening all over the world, the primordialists insist that security problems in the ethnic sphere should receive more attention. The most consistent of them suggest that ethnopolitical security should be identified as a new segment of national security. What has been written on this problem can be put into the following nutshell:  First, the terms are not strictly scientific from the logical and conceptual point of view; so far, they are fairly attractive linguistic and semantic formulas that need profound catego- rial substantiation.  Second, the formation of nations and nation-states is a historical process rooted in antiq- uity. On the other hand, nation-building has been gaining momentum since the early 20th century. In 1910, there were 15 states; today, there are about 200 states in the world. Each epoch of geopolitical earthquakes (World Wars I and II, the collapse of the colonial system and of the world socialist system) added vigor to the otherwise natural process that multi- plies the number of dividing lines between the state-forming peoples (nations) and ethnic minorities.  Third, when analyzing the ethnopolitical factors in the context of globalization, we should not concentrate on the potentially conflicting factors and processes. This approach looks absolutely understandable if we take into account that globalization creates a communica- tion “network” of interdependencies and interpenetrations not only and not so much among nation-states as across the borders and boundaries which disunite peoples to unite diverse ethnic identities into a global entity at the civilizational level.  Fourth, the challenges and threats of globalization have created a dilemma that relates to practically all peoples (with or without their own states): either preserved ethnic identity in its historical context, or a quest for a new formula of harmonization of its ethnosocial con-

24 See: M.A. Medvedeva, “Etnopoliticheskiy konflikt kak faktor ugrozy mezhdunarodnoy bezopasnosti,” in: Filosofia XX veka: shkoly i kontseptsii. Nauchnaia konferentsia SPbGU, 21 November, 2000, St. Petersburg, 2001, p. 156. 25 S.E. Rybakov, Filosofia etnosa, IPK Gossluzhby, Moscow, 2001, p. 8. 26 Z.A. Jade, “Natsionalnye interesy i bezopasnost Rossii v kontekste geopolitiki,” available at [http://www.vestnik. adygnet.ru/files/2005.2/123/jade2005_2.pdf], p. 60.

Volume 7 Issue 3-4 2013 19 THE CAUCASUS & GLOBALIZATION tent. This means that no country, especially those with polyethnic populations, can con- tinue ignoring ethnic problems and contradictions when dealing with its national security concerns.  Fifth, the contradiction between the international legal regulations that establish the limits of state sovereignty and ongoing globalization is deepening. Globalization supplies inter- national and regional organizations with pretexts (ethnic conflicts in particular) to interfere in the domestic affairs of states; at the same time, this invites accusations of neo-imperial- ism, the desire to re-divide the world, and dual standards hurled at the leading powers of the world and international supranational actors.  Sixth, throughout the better part of the last century, the “security” category was rarely, if ever, used by political scientists when dealing with ethnic matters. In the West and in the Soviet Russian schools, ethnicities were “dissolved” in the social-historical communities, an approach that dominated in the political writings of the 20th century. I have in mind the classes (prevalent in Marxism), population groups (the stratification theory), states (statist ideology), and all sorts of ideological constructs. The bloody ethnopolitical conflicts of the late 20th century revealed that the problems caused by ethnic mobilization caught the world community unaware. They also triggered considerable transformations of the philosophy of ethnic security in the epoch of globalization. The Human Development Report-2005 tried to meander between “territorial integrity of states” and the “right of nations to self-determi- nation,” but under the pressure of security threats had to admit: “In security terms, a cohe- sive and peaceful international system is far more likely to be achieved through the coop- eration of effective states ... than in an environment of fragile, collapsed, fragmenting or generally chaotic state entities.”27 This means that at the turn of the 21st century and in the context of the democratic transit, po- litical science and political practice have readjusted their ideas about the ethnopolitical dimension accordingly. In the era of globalization, which is changing the causal foundations of the conflicts that shatter the world, it has become clear that the world needs a new theoretical-methodological paradigm of comprehension of ethnopolitical processes and corresponding research fields.

The Caucasian “Patchwork”: Confessional Dimension

Mankind’s accelerated development, mounting internationalization of permanent violence, and ethnic and religious conflicts as some of the typical features of globalization make the widest possible cooperation of all public forces for the sake of mending the holes in civil peace and socio-cultural harmony an absolute necessity. Quite a few academics, inspired by Samuel Huntington’s well-publicized forecast of the “clash of civilizations”28 with strong religious overtones, hastened to prove that the future had come. Politi- cal scientists developed a taste for such formulas as “ethno-political and ethno-confessional conflicts” without bothering to look inside them and clarify the meaning of the new coinages. The authors of a fundamental monograph called Konflikty na Vostoke. Etnicheskie i konfessionalnye (Ethnic and Con-

27 Human Development Report-2005, Chapter 5, p. 162, available at [http://hdr.undp.org/sites/default/files/reports/266/ hdr05_complete.pdf]. 28 S. Huntington, The Clash of Civilizations and the Remaking of the World Order, Simon and Schuster, London, 2007, 368 pp.

20 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION fessional Conflicts in the East) did not bother to discuss the phenomenon of ethno-confessional conflicts as a target of their studies in theoretical-methodological terms even in the first chapter “Etnokonfessionalnye konflikty sovremennosti i podkhody k ikh uregulirovaniiu” (The Present Eth- no-confessional Conflicts and Approaches to Their Settlement). The authors have limited themselves to studying the religious (confessional) factor, which makes ethno-confessional conflicts nothing more than one of several types of ethnopolitical conflict.29 There is any number of monographs,30 educa- tional programs, and textbooks31 that demonstrate a similar approach to these categories as being absolutely or partly identical and interchangeable. In the late 20th century, the world community began exerting efforts to use the potential of peaceful coexistence of peoples and religions accumulated throughout centuries to bridge the gaps between ethnicities and religions. We have every reason to say that Azerbaijan, a country of ancient traditions of peaceful coexistence of peoples and confessions, is one of the historical zones of religious and ethnic tolerance. The phenomenon of tolerance as a readiness to accept opinions, convictions, and behavior models different from those prevalent in any given society has stirred up and continues to stir up very contradictory responses ranging from positive to aggressively negative. On the one hand, Western mentality ascribes to tolerance the miraculous ability to bring together, in the most natural way, wide communicativeness and the freedom of self-identification of individuals and groups. In this context tolerance is seen as a social-cultural tool for settling accumulated contradictions. On the other hand, not infrequently, tolerance is interpreted as a factor that destroys nations and states and annihilates everything that could have united individuals on an ethno-confessional or state platform. Primordialism looks at tolerance and its varieties (social-ethnic, religious, etc.) as an immanent quality present in all peoples. The participants at the All-Russia Scientific Conference on Preserving Tolerance in Polyethnic and Multi-Confessional Regions held in Makhachkala in 2007 spoke of eth- nic tolerance as a feature present in all ethnicities and an inalienable part of ethnic mentality.32 The cruel realities of the early 21st century in the Caucasus and elsewhere dampened this optimism. This explains why the development of Azeri statehood was closely associated with deliberate reliance on the traditions of tolerance. Many public and religious figures pointed out that the demo- cratic development vector of contemporary Azeri society and the state added vigor to confessional tolerance. At all times, swords are crossed over interrelations between religion and politics and their de- rivatives: traditional and political cultures, values, and institutions. Academics and politicians, who have produced mountains of political-religious, academic, and quasi-academic works about the new conditions in which religion and ethnopolitics have to live side by side, have left many lacunae. Meanwhile, these issues are of huge importance for the countries living through the transition period in their development (all the Soviet-successor states, including those in the Caucasus). The incomplete processes of ethnosocial and nation-state development, the far from simple democratic transit, and the superimposition of political, ethnic, and confessional problems create tension accom- panied by a fairly involved combination of threats with great conflictogenic potential. I should say that the ethnic and confessional characteristics are not so much mutually exclusive as mutually complementary: the varied types of negative and positive, integrating and disintegrating processes are mainly balanced. At the same time, since it is hard to identify the exact mechanisms of

29 See: Konflikty na Vostoke. Etnicheskie i konfessionalnye, ed. by Prof. A.D. Voskresensky, Aspekt-Press, Moscow, 2008, 512 pp. 30 See: Etnosy i konfessi na Vostoke: konflikty i vzaimodeystvie, MGIMO, Moscow, 2005. 31 See: E.M. Travina, Sovremennye problemy etnokulturnykh i konfessionalnykh otnosheniy, St. Petersburg, 2007. 32 See: Z.M. Dzarakhova, “K voprosu o tolerantnosti v etnokulture narodov Kavkaza,” in: Vserossiyskaia nauchnaia konferentsia “Problemy sokhraneniia tolerantnosti v usloviiakh polietnichnogo i mnogokonfessionalnogo regiona (Makhachkala, 2007),” available at [http://www.ingush.ru/serdalo395_2.asp].

Volume 7 Issue 3-4 2013 21 THE CAUCASUS & GLOBALIZATION interaction of the immanent properties of ethnic and confessional factors, we should identify the contact zones of such interaction responsible for the new social and anthropogenic reality—ethno- confessionality, a blend of ethnicity and confessionality. The specific vector of the ethno-confession- al impact is the sum-total of the influence of social-ethnic and religious-confessional institutions and target-oriented policy of the institutional system designed to regulate ethno-national and state-con- fessional relations. Here are the vectors arranged according to the mounting conflictogenity. 1. Ethnic and confessional tolerance—the state in which any given society exists at a low level of ethnic and confessional awareness, while preserving its ethnic and confessional identity at a normal level. 2. Ethnocentrism—a high level of ethnic awareness combined with a relatively low level of confessional awareness. Discrimination in the form of deliberate insistence on “superiority” of the titular ethnicity and passive intolerance push all other ethnic and confessional com- munities to the periphery of social life. 3. Religious fanaticism—a high level of confessional awareness combined with a relatively low level of ethnic awareness. In transition states, the resultant incompatibility between the dominant confession and all other religions may lead to conflicts in the struggle “for the purity of religion,” etc. 4. Ethnic and confessional intolerance—a high level of ethnic and intolerably high level of confessional awareness. Such societies demonstrate the inability, sometimes in fairly ag- gressive forms, to live side by side with other ethnic and confessional identities. This suggests two questions: What is the mechanism of the ethno-confessional impacts on the national security system? What are the specifics of this process in the transit states of the Caucasus? To answer the first question we should bear in mind that the four types of ethno-confessional impacts discussed above are not realized in the form of direct impacts: ethno-confessionality—eco- nomic security; ethno-confessionality—political security, etc. It seems that there is a segment in the national security system that serves as a natural outlet for the basic ethno-confessional impulse that has taken shape in society. I believe that this role belongs to ethnopolitical security, within which specific vectors of the ethno-confessional impacts (intolerance) and the set of national interests that appeared in the context of ethnonational existence are balanced out. This makes the choice of interests (real or false, strategic or short-term, important or not) as interests of national importance dependent on an ethnopolitical filter of sorts. It was in the last quarter of the 20th century that the ethno-confessional dimension of the prob- lem of tolerance was pushed to the fore by revived conflicts in the Middle East (Cyprus, Lebanese, Kurdish, etc.). This was when politicians, public and religious figures, and academics tried to use the philosophy of tolerance to build an efficient system of prevention and neutralization of security threats. In the transit Caucasian countries, ethno-confessional impulses are reflected in ethnopolitical security differently than in the European countries.  First, the external factor plays a much greater role in determining any specific ethno-con- fessional vector of ethnopolitical security in the Caucasus than in the developed demo- cratic countries;  Second, there is a much wider scope of ethno-confessional models: — In Armenia—ethno-confessional intolerance; — In Georgia—a trend toward ethnocentrism; — In Azerbaijan—ethno-confessional tolerance. 22 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

 Third, the opposing ethnic elites rely, to a much greater extent, on the ethno-confessional factor to be used as a mobilization instrument or a unification banner.  Fourth, ethno-confessionality removes the borders between confessional and ethnopolitical conflicts and highlights the trend of internationalization of regional or even local conflicts. This means that the ethno-confessional factor plays an important role in structuring the system of ethnopolitical security of the transit states in at least two aspects.  First, as distinct from the ethnic and confessional spheres, ethno-confessionality is not an independent segment of life. It is a product of these spheres blended by the logic of history into a qualitatively new social and anthropogenic identity. It creates a social and psycho- logical background against which the ethnicity is further structuralized through the ethno- national implementation of religion, the translation of confessional context into ethnic forms, and the construction of new systemic components of the social life of an ethnicity.  Second, ethno-confessionality that does not stay within certain borders cannot be and is not a direct cause of ethnopolitical conflicts, but supplies them with specifics and vectors. In the majority of polyethnic transit states (in the Caucasus in particular), ethno-confessionality has become a pragmatic ideological and political basis for all sorts of constructs of national ideas, national ideology, and national ideals (in Russia this is the idea of Russia-nism; in Azerbaijan, the ideology of Azeri-nism). This means that the development of ethnicities (nations) is reduced to a movement toward an ideal (idea, program ideology), which suggests a question: To what extent is this social ideal “national,” or to what extent is this national ideal “social?” It seems that ethno-con- fessionality, as a universal accumulator of the historically developing ethnic, social, and spiritual experience of people, serves as the yardstick. In the context of international, regional, or national security, ethno-confessionality may be a positive or (unfortunately, more frequently) negative factor. In the former case and in the context of ethnopolitical security of the post-Soviet transit states, ethno-confessionality should create a social- psychological attitude of tolerance in all subjects and at all levels. In the latter case, the images of “chosen” and “inferior” peoples created on the basis of ethno-confessionality push the ethnic elites and a large part of population toward aggression. History has repeatedly demonstrated that the never- ending struggle against “enemy nations” under the slogan of “freedom and security” for one’s own nation pushed the society suffering from intolerance into tyranny, under which there is neither freedom nor security.

The National-Strategic Dimension of Development

Today we have to admit that the negative dynamics of the geopolitical and geostrategic threats in the Caucasus and the Caspian caused by the clashing interests of international political actors in the region and the failure of some of the members of the system of regional security to adequately formulate their interests remain as obvious as ever. There is an amazing paradox of political science and political practice: on the one hand, frequent repetitions have made a banality out of what is said about the need for every nation and every state to adequately identify its development models; while, on the other, these deliberations are not accompanied by practical steps comparable to the problem’s dimension. It has not been buried, yet neither academics nor politicians have come forward with more or less clear paradigms or theoretical constructs. What is said about “national development” lacks clarity and generally accepted categories—much is said, instead, about national development strate- gies, national development concepts, all sorts of national development programs (projects), etc. Volume 7 Issue 3-4 2013 23 THE CAUCASUS & GLOBALIZATION For example, the National Development Strategy of Moldova for 2008-2011 approved in 2008 was the basic document of strategic mid-term planning that identified the priority development trends and specified corresponding steps. The Russian Federation, too, has numerous and widely publicized national programs in health care, , affordable housing, etc. Adil Toygonbaev, Head of the Expert Center for National Strategy (Kazakhstan), has offered a very interesting combination of four poles of national development: cultural, political, national indus- try, and high-quality education and science.33 The content and meaning of the “national development” category varies from one aspect to another by: — the subject of realization (ethnonational, ethnocratic, national-state, civil-political, etc.); — the spheres of realization (economic, housing, cultural, demographic, information technolo- gies, etc); — the time of realization (short-, mid-, and long-term); — the degree of conceptual concentration (an idea, concept, project, model, strategy, etc); — the scope (state, macro-regional, regional, public-civilian, etc); — the “core” interests as the foundation and the driving force behind national development (geopolitical priorities; military-strategic aims, “national idea,” the past, ethnopolitical im- peratives, etc.). The national strategy of the United States, for example, can be described as the art and science of development used to move toward the national aims in peace and in war together with the armed forces and also using political, economic, psychological, and other factors of power. Two other levels of American strategy—national security and national military strategies—are subordinated to the national strategy.34 This means that in the United States, national strategy is interpreted as specifica- tion of the aims of national development and the mechanisms for its realization. France, a classical European country, has identified its aims in the form of the National Sustainable Development Strat- egy (NSDS).35 China, which is rapidly building up its economic and geopolitical potential, has offered a dif- ferent official interpretation of the aims and meanings of national development. “The national devel- opment strategy is the core of Deng Xiaoping’s theory which rests on two pillars: the theory of social- ism with Chinese characteristics and the theory of market-oriented socialism. Put in a nutshell, this strategy speaks of the main long-term objective as China’s transformation into a prosperous, strong, democratic and civilized modern socialist state. To achieve this, the country has to travel through three stages. The first (1981-1990) presupposed doubling GNP and producing enough food and cloth- ing… The second (1991-2000) was expected to bring GNP to $1 trillion with a per capita income of $800 to $1000, thus ushering in a period of relative prosperity. The third (2001-2050) will bring China to the level of the developed countries with the main aims of modernization realized.”36 The problems of the transition period and quite a few frozen conflicts have brought together the social and economic reforms underway in the Soviet-successor states, on the one hand, and the “se- curity” problems, on the other, in the “national development” concept. The former is illustrated by the national strategies of the Central Asian countries best described as national action plans, which

33 See: A. Toygonbaev, “Chetyre poliusa natsionalnogo razvitia,” available at [http://www.dialog. kz/?lan=ru&id=93&pub=303]. 34 See: O. Sultanov, Evoliutsia voenno-strategicheskoy kontseptsii SShA (1945-1997), Baku, 2000, p. 4. 35 See: Service des Affaires Internationales EU sustainable development networking event (14-15 July, 2005, Windsor, UK), available at [www.developpementdurable.gouv.fr]. 36 O. Arin, “O vneshnepoliticheskoy strategii KNR,” Nezavisimaia gazeta, NG-stsenarii, February 1999.

24 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION includes mid- and long-term priorities of, mainly, social and economic development, such as the Kazakhstan-2050 Strategy, the Strategy of Economic, Political, and Cultural Development of Turk- menistan until 2020, etc.37 The latter looms prominently in the national security concepts of the Caucasian states. In 2007, for example, Armenia adopted a program document which said that the national security strategy of the Republic of Armenia was a system designed to ensure sustainable development of the state and its security, society, and each of its members, as well as to allow the state to further pursue the policy of preservation of Armenian specifics.”38 The recently adopted program documents of Georgia—The National Security Concept of Georgia and Georgian National Military Strategy (the main part of the National Security Strategy, which significantly shapes implementation of the national defense policy through 2010)—look at development through the prism of security. In Russia, the political community believes that strategic programs should rest on geopolitical dimensions: “This explains why the domestic and foreign policy of any state, the concept of its na- tional security and strategy of national development as a whole should rest on a sober assessment of its geopolitical situation. This is especially important for Russia.”39 Azerbaijan is in a special situation; while concerned about its security and territorial integrity, it pays a lot of attention to national development treated as a priority and concentrates on reforms designed to accelerate economic growth, create a socially-oriented market economy, and achieve comprehensive modernization of society. The Development Concept “Azerbaijan-2020: Outlook for the Future” is geared toward all-round economic development to elevate the status of the Azerbaijan Republic from its current status of the regional leader to the status of a highly competitive member of international economic relations.”40 In short, the strategies and concepts demonstrate a variety of interpretations of the “national development” formula ranging from geopolitical and military-strategic aspects to the moral and psy- chological dimensions of the nations’ existence, as well as the need to fight so-called cultural impe- rialism (imperialism that has captured vast territories by winning over human minds, ways of thinking, and lifestyles).41 It seems that the widely used “national development” term still lacks a categorial definition: “national development” as a system should be discussed outside the rigidly determined international “balance of power” and emotional statements that formulate goals on the basis of a priori and fairly vague values. “Vulgar materialism” of international politics and the axiological component are both present in national development and will remain part of it in the future, too. We should not forget, however, that realization of the proclaimed aims of national development demands an adequate as- sessment of challenges and requirements; the state should compile its own list of possible decisions, realistic assessments of national resources, and their distribution. The system that we call “national development” requires three factors: — as a sum-total of elements, it should be able to produce feedback aimed at its individual elements and the environment as a whole; — “national development” cannot and should not be reduced to a declarative enumeration of national goals and their hierarchy; these operations should stem from clearly identified qualitative and quantitative parameters of available conditions and criteria;

37 [http://www.cagateway.org/ru/topics/19/71/]. 38 [http://www.ra.am/?num=2007022303]. 39 V.V. Zhirinovsky, “Strategia natsionalnogo razvitia Rossii,” available at [http://www.viperson.ru/wind.php?ID= 238034]. 40 “Development Concept “Azerbaijan-2020: Outlook for the Future,” available at [www.president.az/files/future_ru.pdf]. 41 See: V.A. Rubanov, “Sredstvo zashchity mira i bezopasnosti? (Materialy ‘kruglogo stola’),” Bezopasnost Evrazii, No. 1, January-March 2001, p. 230.

Volume 7 Issue 3-4 2013 25 THE CAUCASUS & GLOBALIZATION — the sum-total of ways, methods, and means by which these goals (including alternative ones) can be achieved call for a detailed analysis. The national development strategy is not a pile of important political documents, but a stage- by-stage process unfolding from an assessment of reality and urgent needs to identification of the main development trends, elaboration of the strategy’s program and resource backup, and implemen- tation, feedback, and readjustment of the strategic course according to the results obtained. Caught in a web of steadily rising external challenges, the state should not seek responses in emotional and ideological mobilization and not with the help of the bureaucratic machine. It should seek and find the most rational scenarios and the best mechanisms and means of integration and co- ordination (both horizontal and vertical) in purpose-oriented activities of the individual, society, and the state. This suggests the following definition of the investigated phenomenon: the national develop- ment strategy is a policy for building up the country’s integral potential on the basis of its mid- and long-term prospects realized by all the political actors on the basis of interdependence of all develop- ment aspects, optimization of tactics and procedures, and in close connection with the aims of the development of mankind. In view of the above elaboration of analytical instruments and verification system, a scientifi- cally correct interpretation of the national development concept should take into account: — The stable local spheres of its realization; — The indicators related to the state of the main spheres identified with the help of local sys- temic ties; — The development trends that allow us to provide a description of the system of national de- velopment as a process; — The active ties between local spheres. It seems that a rational choice of national development strategy should not rely on a set of ide- ologemes gathered together who knows when and by whom: they might produce distorted and dis- orienting ideas about the content and essence of what is called national aims. We should proceed from pragmatic arguments based on requirements inherited from the past that have not lost their urgency. Only those strategic lines of national (state) development that take into account the pillars of inde- pendence of society and the specifics of integration of any given country into contemporary civiliza- tion should be taken into account.

Conclusion

The above offers the main conclusion: in the 21st century, old forms of statehood are being dissolved under the pressure of globalization; this makes a new format of geopolitical and ethno- confessional processes and, therefore, a more intensive quest for national development strategies inevitable. In the Caucasus, this quest for and the emergence of a new world order will cause many painful problems, which means that it is too early to think that we have found the answer to the ques- tion asked in the title of this article. 26 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Parvin DARABADI

D.Sc. (Hist.), Professor at the International Relations Chair of Baku State University (Baku, Azerbaijan)

ASYMMETRIC WARFARE: WHERE THE WEAK ARE STRONG AND THE STRONG ARE WEAK

Abstract

his article examines several aspects terrorist structures to wage asymmetric war- of how so-called asymmetric warfare fare have changed in light of the intensive T was organized and waged during the and contradictory globalization processes 20th century. It then goes on to show how going on since the beginning of the 21st cen- the forms and methods used by international tury.

KEYWORDS: Asymmetric warfare, international terrorist organizations, guerilla warfare.

Introduction

The end of the 20th-beginning of the 21st centuries were marked by tectonic changes in the geopolitical structure of the world caused by the end of the Cold War. The relatively clear bipolar configuration of this period has begun to gradually give way to much more complicated relations in the multipolar and poly-civilizational world that is taking shape. All of this has given rise to qualita- tively new forms and methods of armed struggle on the international arena in the form of different modifications of so-called asymmetric warfare.1

Asymmetry in the Guerilla Warfare and Terrorist Acts of the 20th Century

The world has seen quite a large number of asymmetric wars and armed conflicts throughout its history, particular in the past two centuries. It will suffice to mention only a few of them: the Spanish war against Napoleon’s occupation troops at the beginning of the 19th century, the Caucasian war of 1817-1864, the Polish uprisings of 1830 and 1863 against czarist Russia, and the Anglo-Boer War of 1899-1902.

1 See: “A Theory of Asymmetric Conflict,” in: International Security, Vol. 26, No. 1, 2001; I. Arreguin, How the Weak Win Wars: A Theory of Asymmetric Conflict, Cambridge Studies in International Relations, 2004.

Volume 7 Issue 3-4 2013 27 THE CAUCASUS & GLOBALIZATION Asymmetric warfare was manifested in the boldest relief during the numerous anti-colonial wars that raged in several Asian countries, particularly in the two Anglo-Afghan wars of 1838-1842 and 1878-1881. Despite the clear imbalance of forces between the regular English troops and ir- regular Afghan contingents, these clashes demonstrated relatively high proficiency in waging so- called small wars.2 Something similar was also seen at the beginning of the 20th century, during in the combat operations of the British-supported Arab tribes against the Turkish troops in the Arabian deserts.3 Elements of asymmetric warfare were also demonstrated during the numerous anti-colonial uprisings in Latin America, Asia, and Africa, as well as in the combat guerilla operations against the German occupation troops in Europe during World War II. Particular mention in this respect should be made of the operations in the Soviet Union and Yugoslavia, the war for independence in Algeria in 1954-1962, the hostilities in Southeast Asia from the end of the 1950s to 1975, the Afghan war of 1979-1989, the Chechen war of the 1990s in Russia, the continuing warfare the Taliban waged against NATO-led coalition forces in Afghanistan (since 2001), and several others. To these can be added the heinous acts committed by various terrorist organizations and move- ments in Russia, Great Britain, Germany, Italy, France, Spain, Turkey, , and India, to name a few, during the 20th century that have wreaked havoc both in the leading nations of the world and the government structures of certain states. Guerilla warfare also constituted an important component of the overall full-scale warfare waged by regular armed forces. This was the case in the Soviet Union during the Great Patriotic War of 1941-1945 and during the national-liberation war in China during the 1930-1940s. It is no accident that Mao Zedong stressed in particular that “considering the revolu- tionary war as a whole, the operations of the people’s guerrillas and those of the main forces of the complement each other like a man’s right arm and left arm, and if we had only the main forces of the Red Army without the people’s guerrillas, we would be like a warrior with only one arm.”4 In the middle of last century, French political scientist and sociologist Raymond Aron empha- sized in his fundamental work Peace and War: A Theory of International Relations that the great nations were defeated in the colonial wars of the 20th century due to the asymmetry in “insurgent- colonizer” relations. Apart from having unequal forces, Raymond Aron also pointed to the asymme- try in will, interest, and antipathy in the polemics between the insurgents and colonizers.5 In 1975, British international relations expert Andrew Mack first introduced the term “asym- metric conflict” into scientific circulation in an article entitled “Why Big Nations Lose Small Wars: The Politics of Asymmetric Conflict” published in World Politics and analyzing the U.S. war in Vietnam, as well as a series of other defeats suffered by developed countries in Indonesia, Algeria, Cyprus, Aden, Morocco, and Tunisia.6 Andrew Mack came to the conclusion that during asymmetric conflicts, the side with the overwhelming superiority in traditional military force is in no way guar- anteed victory. Even though strong countries may not have suffered a perceptible military defeat in most conflicts of this kind, they have nevertheless suffered defeat in the political sense, being unable to impose their will on the enemy. So such wars become pointless. In these conflicts, the political victory of the weak side is ensured not by its ability to defeat a strong enemy, but by its ability to undermine the strong adversary’s will to continue the fight and

2 See: N.A. Khalfin, Proval britanskoi agressii v Afganistane (XIX v.—nachalo XX v.), Socioeconomic Literature Publishing House, Moscow, 1959, available at [http://militera.lib.ru/h/halfin/index.html]. 3 See: B.H. Liddell Hart, Polkovnik Lawrens, State Military Publishers of the Soviet People’s Commissariat of Defense, Moscow, 1939, pp. 94-102 (English edition: B.H. Liddell Hart, T.E. Lawrence in Arabia and After, Jonathan Cape, London, 1934). 4 Mao Zedong, “Problems of Strategy in China’s Revolutionary War” (December 1936), in: Selected Works, Vol. I, p. 238 available at [http://www.marxists.org/reference/archive/mao/selected-works/volume-1/mswv1_12.htm]. 5 See: R. Aron, Mir i voina mezhdu narodami, NOTA BENE, Moscow, 2000, pp. 84-86. 6 See: A. Mack, “Why Big Nations Lose Small Wars: The Politics of Asymmetric Conflict,” World Politics, Vol. 27, No. 2, 1975.

28 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION force it to cease the struggle before it has achieved its set goals. Asymmetric means of warfare, in particular guerilla warfare, have proven the most effective way to achieve this. On the whole, two tactics of asymmetric warfare have been developed in such armed conflicts—the tactics of organized guerilla warfare and the tactics of individual terror.7 It should be added that both of these tactics are often used together, mutually supplementing each other. The operations of different kinds of guerilla and terrorist groups can be used as examples—“fronts,” “movements,” “parties,” “contingents,” “bri- gades,” “liberation armies,” “revolutionary armed forces,” “self-defense forces,” and so on in Latin America (the guerilla contingent of Ernesto Che Guevara in Bolivia, the Shining Path of Peru, the Tupamaros National Liberation Movement in Uruguay, and others) and Europe (the Red Army Fac- tion in Germany, the Red Brigades in Italy, Action directe in France, the ETA in Spain, the IRA in Northern Ireland, and many more), as well as the Red Army and Aum Shinrikyo in Japan, the Kurd- ish Workers’ Party and Gray Wolves in Turkey, Armenian terrorist organizations (ASALA and oth- ers), dozens of Islamic, whereby not only terrorist and extremist, organizations in the Middle East and other regions of the world dyed in class, religious, ethnic, separatist, and other hues.8 At the same time, relying on the experience of the Cuban revolution, Ernesto Che Guevara believed that “guerrilla warfare is a phase that does not afford in itself opportunities to arrive at com- plete victory.”9 It stands to reason that Che Guevara’s book Guerilla Warfare, which is instructive in nature, is still considered a textbook of sorts that is still pertinent for international terrorists and radi- cal armed movements today. Régis Debray, a French philosopher with leftist inclination, tried to sum up the theory of gue- rilla warfare in the 1950s-1960s by developing a theory called focalism. He believed that the actions of revolutionaries in all Latin American countries should, at least at the initial stage, be limited to armed struggle in the form of guerilla warfare exclusively in rural areas. He believed that combat action is the most convincing way to spread revolutionary ideas and that a guerilla army could grow into a genuine revolutionary party.10 Relying on the experience of the Algerian war of 1954-1962, Frantz Fanon, who idealized and absolutized the armed struggle of the peoples of North Africa, af- firmed that in colonial countries only the peasantry is revolutionary and the most combative.11

21st Century: From Guerilla to Asymmetric Terrorist Warfare

Contemporary asymmetric warfare is increasingly leaning toward worldwide guerilla warfare, whose era of incursion prominent Russian war theoretician Evgeny Messner warned about as early as the 1960s-1970s. He believed that a World Revolution (guerilla warfare) was born and grew in the two world wars and many different local wars of the 20th century, in which warfare became entwined with insurrection and insurrection with warfare, and a new form of armed conflict was created in which the fighters were not only and not so much regular armed forces as national move- ments.12

7 See: “Asimmetriia v vooruzhennom protivoborstve” (Part 2), Voenno-politicheskoe obozrenie, 29 August, 2012, available at [http://www.belvpo.com/ru/15441.html]. 8 See: M.P. Trebin, Terrorizm v XXI veke, Kharvest, Minsk, 2003, pp. 156-157, 367-398. 9 E. Che Guevara, Guerilla Warfare, 1961, p. 4, available at [http://1-media-cdn.foolz.us/ffuuka/board/tg/ image/1378/48/1378489307983.pdf]. 10 See: R. Debray, Re’volution dans la re’volution? La lutte arme’e et politique en Ame’rique Latine, Paris, 1967, pp. 53-68. 11 See: F. Fanon, Les damne’s de la terre, Paris, 1961, p. 46. 12 See: E. Messner, Vsemirnaia miatezhevoina, Moscow, 2004.

Volume 7 Issue 3-4 2013 29 THE CAUCASUS & GLOBALIZATION As early as the beginning of the 1970s, Western military experts thought the most effective way to combat the insurgent movement was to prevent it from becoming organized and to have at least ten times more fighters than the insurgents.13 In the present century, classical terrorism has become a version of asymmetric warfare and re- placed the guerilla warfare that long performed this function in the 20th century. Terrorism differs from the guerilla wars of the last century in its offensive nature, its lower level of dependence on the local population, and its ability to make active use of the infrastructure of the developed countries for its own purposes.14 The difference between guerilla warfare and terrorist strategies is the deliberate use by the latter of advantages of strategic asymmetry. Traditional guerilla movements strove to achieve symmetry in relations with the enemy and then defeat it in an armed struggle. Terrorist groups, on the other hand, strive to undermine the moral and psychological potential of the enemy without coming into direct combat contact with it.15 The widespread international al-Qa‘eda network is the most graphic example of waging asymmetric warfare using terrorist methods. Today it is obvious that by the beginning of the 21st century, this new type of asymmetric war- fare had become the dominant form of armed conflict, also called sixth generation warfare, distin- guished by a striking imbalance between the economic and military-technical capabilities of the op- posing sides. This warfare has no clear front line. Regular army ground units mainly carry out passive functions, such as defense and blockade operations. Active maneuvers in enemy territory, beginning with the destruction of major military facilities and ending with the capture or removal of political and military leaders, are most often carried out by special forces detachments. The primary feature of this warfare is its asymmetric nature—conflict with an unequal correlation of forces (David fighting Goliath), in which the stronger side does not win very often. In asymmetric warfare, the weaker side is most often the actual winner, unless it is completely destroyed that is.16 The main goal of asym- metric warfare is to find vulnerabilities in the enemy’s military strength, discover its weak points, and draw every possible strategic advantage from this. Another specific characteristic of asymmetric warfare is that all of the opposing sides do not recognize international law agreements—the Hague and Geneva on the Laws of War, on the Treatment of Prisoners of War and Hostages, and on the Protection of Victims of International Armed Conflicts. One other distinction of such warfare is that it is usually accompanied by a high death toll among the peaceful population. International policy has tried to keep in mind the specifics of asymmetric conflicts throughout the whole of the second half of the 20th century. States primarily tried to modify the strategy of com- bat operations, paying attention to the special features of warfare against relatively weak adversaries, which included drawing up scenarios of limited direct military clashes, training armed forces to conduct combat operations with small contingents of specially trained troops, carrying out preventive action against irregular enemy units and using information gathered by reconnaissance groups and agent networks, implementing measures to ensure contact with the local population, and rendering military and material support to groups of supporters in the local community. In our day and age, the combat operations of NATO’s antiterrorist forces against the Taliban in Afghanistan are a good ex- ample of asymmetric warfare. In turn, today, ways to wage asymmetric warfare assimilated and practiced by different inter- national terrorist groups differ from the generally accepted classical forms of full-scale wars and local

13 See: E. Hobsbawn, Revolutionaries: Contemporary Essays, London, 1973, p. 167. 14 See: H. Münkler, “Terrorism segodnia. Voina stanovitsia asimmetrichnoi,” International Politik, No. 1, 2004, pp. 4, 6. 15 See: L.V. Deriglazova, “Paradoks asimmetrii v mezhdunarodnom konflikte,” available at [http://www.intertrends.ru/ nineth/007.htm]. 16 See: A. Poltorakov, “David i Goliaf: geostrategiia asimmetrichnykh voin,” available at [http://weandworld.ru/ defence/554-david-i-goliaf-geostrategiya-asimmetrichnyx-vojn.html].

30 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION armed conflicts waged by previous generations in their clandestine political motivations and in their practice of making surprise, unmotivated and targeted strikes using new and often unexpected means and forms of violence. This has a stupefying effect, as well as taking an inadmissible human toll and inflicting significant material damage accompanied by mass psychological shock. Nor are there any customary, clearly marked front lines or visual contact with the “phantom” enemy. Asymmetric war- fare is essentially a geopolitical technique of contemporary international terrorism without a territo- rial framework. Terrorist acts can be carried out anywhere and at any time. The weaker sides in the conflicts understand that the greatest damage, particularly in present-day conditions, can be inflicted by making strikes on the most vulnerable targets. So this is why unprotected civilian targets are often subject to attack instead of sufficiently well-protected military facilities. A paradoxical phenomenon is being observed: the greater the world’s (primarily the West’s) technical and technological develop- ment, the more vulnerable it becomes.17 It is no accident that the leading world nations have been paying keen attention to asymmetric warfare in the last decade and looking for an antidote to this method of warfare. A report titled Joint Vision 2020 drawn up by the U.S. Department of Defense in 2000 notes that “The asymmetric meth- ods and objectives of an adversary are often far more important than the relative technological imbal- ance, and the psychological impact of an attack might far outweigh the actual physical damage in- flicted.” “An adversary may pursue an asymmetric advantage on the tactical, operational, or strategic level by identifying key vulnerabilities and devising asymmetric concepts and capabilities to strike or exploit them,” the report goes on to say.18 This was all essentially demonstrated in the U.S. itself on 11 September, 2001. In 2006, a subdivision with the working name of Asymmetric Warfare Group was created in the Pentagon, the main task of which was to carry out in-depth research of this phenomenon and draw up techniques and ways to counter asymmetric threats to U.S. national security. It also studied the asym- metric warfare methods the U.S. army had already encountered during its operations in Iraq and Afghanistan and carried out inferential research of possible ways of waging asymmetric warfare.19 Some of the main characteristics of asymmetric conflicts are the unpredictable outcome with a clear imbalance of capabilities and statuses of the opposing forces; use by the weak party of a strat- egy that seeks out the “vulnerabilities of the stronger;” use by the weak party of prohibited means of warfare; the tactic of “indirect” combat operations used by the weak party; and the inability of the strong party to defend its position and ultimately crush the weak party. In recent years, suicide bomb- ers have become a much more frequent phenomenon, which is making it much harder for the law- enforcement forces to eliminate terrorist threats. This is especially true since it is frequently people with a specific personality type who are inclined to carry out terrorist acts. They are distinguished by highly active minds, prominent leader qualities, inability to compromise, and contempt for material values and comfort. They are usually members of the anti-elite (according to Vilfredo Pareto), who are unable to occupy a high post, but have a large amount of psychic energy, decisiveness, and con- tempt for danger and death. In some cases, these qualities verge on mental disorder and could become pathological. But statistics show that most people who are professionally engaged in terrorism do not suffer from clinical mental deviations. The difficulty of the task to be performed requires an ex- tremely rational and stable way of behavior. Terrorists have no appreciation of life, nor do they rec-

17 See: V.I. Slipchenko, Voiny shestogo pokoleniia. Oruzhie i voennoe iskusstvo budushchego, Veche, Moscow, 2002, p. 45; “Asimmetria v vooruzhennom protivoborstve” (Part 1), 27 August 2012, available at [belvpo.com/ru/15326.html]; N. Komleva, A. Borisov, “Asimmetrichnye voiny—geopoliticheskaia tekhnologiia sovremennogo terrorizma,” Obozrevatel, Nos. 11-12, 2002. 18 Joint Vision 2020, Approved by General Henry H. Shelton, Chairman of the Joint Chiefs of Staff, Published by U.S. Government Printing Office, Washington D.C., June 2000, p. 5, available at [http://www.fs.fed.us/fire/doctrine/genesis_and_ evolution/source_materials/joint_vision_2020.pdf]. 19 See: “The Pentagon is Studying Asymmetric War,” available in Russian at [http://www.csef.ru/index.php/ru/oborona- i-bezopasnost/project/348-novoe-v-voennom-dele/1-stati/918-the-pentagon-is-studying-asymmetric-war].

Volume 7 Issue 3-4 2013 31 THE CAUCASUS & GLOBALIZATION ognize the difference between life and death. This is shown in their attitude not only to other people’s, but also to their own life. And this is why there are so many religious fanatics, sectarians, and mystics among terrorists.20 On the whole, this kind of warfare is usually not associated with the revolutionary innovations in the warfare carried out by the leading nations of the world in the so-called non-contact warfare of the last few decades. The means used in terrorist acts are sufficiently compact and mobile. Whereby this type of warfare is frequently an expression of protest by those civilizational communities that are against the increasingly widespread globalization of the modern world. Moreover, we should also keep in mind the important fact that some countries and entire regions are ready and striving to enter the globalization process to different degrees. For different historical reasons—political isolation or self-isolation, their technological and economic capabilities, ingrained autarchic traditions inherited from the past and their specific centuries-long spiritual values—many countries are on the periphery of the global processes. Due to the extremely high rate of present-day globalization, the gap between the few countries and regions spearheading globalization (and these are the countries that belong to the G-8) and the majority of those lagging behind is becoming more noticeable with each passing year. And this cannot help but add to the tension between them. It is no accident that even before globalization began, German geopolitician Carl Schmitt concentrated all of his attention on the symbolic figure of the “guerilla.” In his interpretation, the guerilla fighter is the last character in world history to remain faithful to his initial calling, in spite of the watering down of civilization and the dilution of its continental values. And it is he who is protecting in every possible way the tellurocratic order in the face of the all-out attack of the Western thalassocratic world, elabo- rating in so doing its fundamental principles of warfare ethics, which differ dramatically from its traditional forms of conduct.21 The various forms of asymmetric warfare waged by international terrorism forces are aimed at wreaking havoc and causing universal fear in the world community, leading to a “war of each against all.” The asymmetric warfare being waged by the East against the West is a kind of response to glo- balization, which is first becoming Westernization, then Americanization. Moreover, while the world financial and economic crisis that has been going on for several years now is primarily the geo-eco- nomic underside of globalization, asymmetric warfare is its so-called military and political underside.22

Conclusion

The leading nations of the world often use asymmetric warfare as a way to wage armed struggle for achieving their far-reaching geopolitical goals—exporting instability to “unfriendly countries,” destabilizing enormous regions in order to weaken the influence of rival nations in them, launching arms races, and carrying out internal mobilization of their own society. Transnational terrorism is increasingly acquiring the ominous features of an entirely new socio- political global phenomenon—geoterrorism. It is the brainchild of 21st-century geopolitics, in which there is very little difference in the way both international terrorist structures and the antiterrorist coalitions opposing them are waging war. It is enough to take a look at the military-political pro- cesses going on in several hotspots on the planet. In turn, the unbridled and often clearly imbalanced reaction to terrorist acts (several thousand victims in the West and hundreds of thousands in the East and South) could provoke an adequate

20 See: A.G. Dugin, “Geopolitika asimmetrichnykh ugroz: voiny postmoderna,” available at [http://konservatizm.org/ konservatizm/geopolitika/191010163416.xhtml]. 21 See: Iu.V. Tikhonravov, Geopolitika, ZAO Biznes-shkola “Intel-Sintenz,” Moscow, 1998, p. 178. 22 See: A. Poltorakov, op. cit.

32 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION reaction from the competing geopolitical forces of the East and South with unpredictable conse- quences for the whole of mankind. Against the background of the threat of Huntington’s “clash of civilizations,” this could lead to the emergence of a new even wider spread “trans-civilizational” version of international terrorism. And as Russian military expert Vladimir Slipchenko rightly points out, corresponding asym- metric assets and forces are needed to oppose international terrorism, which has demonstrated the ability to develop, organize, and wage asymmetric warfare. Joint, including under the aegis of the U.N. and other major international organizations, operations among states to fight the assets and forces of international terrorism are also important. Here we have the vast untapped organizational potential of international legal, technological, information, financial, military, civil, and other types, forms, and means of interstate collaboration.23 Tapping this potential is becoming all the more vital as the threat of international terrorist groups using different increasingly sophisticated techniques of information and psychological warfare and environmental diversions, as well as different types of nuclear-, chemical-, and bacteriological-packed “instruments,” etc., created during the continuing scientific-technical revolution in warfare, becomes ever more real.

23 See: V. Slipchenko, “Asimmetrichnye voiny,” available at [viperson.ru/wind.php?ID=432672&soch].

Alexander DUDNIK

Ph.D. (Hist.), Senior Fellow at the Ukrainian Presidential Fund under the Vernadsky National Library of Ukraine (Kiev, Ukraine).

THE NAGORNO-KARABAKH ISSUE IN UKRAINIAN FOREIGN POLICY (1992-2012) Part One The Nagorno-Karabakh Issue in the Policy of Presidents Leonid Kravchuk (1991-1993) and Leonid Kuchma (1993-2004)

Abstract

his article attempts to identify the char- gorno-Karabakh conflict over the past twen- acteristics of Ukrainian policy regarding ty years. It takes particular note of the posi- T settlement of the Armenian-Azeri Na- tions and approaches formed, as well as Volume 7 Issue 3-4 2013 33 THE CAUCASUS & GLOBALIZATION

Ukraine’s initiatives and the participation of Ukraine’s relations, primarily with Azerbai- each of the country’s four presidents in this jan, Armenia, and Russia, in looking for ways conflict as they took their turns in power: to settle it. Leonid Kravchuk (1992-1993), Leonid Kuch- It reveals the reasons for Ukraine’s in- ma (1993-2004), Viktor Yushchenko (2005- terest in resolving the conflict and Kiev’s jus- 2009), and Viktor Yanukovich (since 2010). tification of its right to carry out a mediating It points to the common and specific and peacekeeping mission in it. It focuses features of the policy of all the Ukrainian particular attention on Ukraine’s policy re- leaders on this problem and reveals the in- garding this issue within the framework of ternal and external factors that have had an international organizations, as well as on influence on the change in Kiev’s position on Kiev’s achievements and blunders in assist- this question and, correspondingly, on ing this conflict settlement.

KEYWORDS: The Nagorno-Karabakh conflict, the Black Sea-Caspian Region, Ukrainian mediation, conflict settlement, the Minsk Group (MG), the OSCE, the Organization for Democracy and Economic Development (ODED)-GUAM, U.N. Security Council resolutions.

Introduction

Ukraine’s vitally important national interests are being realized in complicated internal and external circumstances that are characterized by several challenges and threats. They include the danger of escalation of the so-called frozen or smoldering regional conflicts close to the Ukrainian border, the most challenging of which is the Nagorno-Karabakh conflict in the Central Caucasus. Today, its possible settlement is complicated by the involvement of other states, the shadow business, and even international criminal groups in it. There are several reasons for Ukraine’s participation in settling the conflict between Azerbaijan and Armenia, the main one being the country’s national security. Based on this, Kiev is interested in forming an international security system in the Black Sea-Caspian region by collaborating with NATO and the European Union, or within the framework of the Organization for Security and Cooperation in Europe (OSCE), the Organization for Democracy and Economic Development (ODED)-GUAM (Georgia, Ukraine, Azerbaijan, Moldova), and other international organizations. Today’s conflicts are transboundary in nature and their negative trends and consequences—growing numbers of migrants, illegal arms trade, international terrorism, and several other crime-related factors—threaten the stabil- ity and development of all of the region’s states. However, as of today, such international structures as NATO, the EU, the OSCE, and the Col- lective Security Treaty Organization (CSTO) (CIS) have been unable to elaborate unified approaches and mechanisms for ensuring regional security, particularly by coordinating their activity in a par- ticular region. None of the guarantees of these organizations, primarily NATO, the CSTO, and the OSCE, ap- ply to the Black Sea-Caspian region as a whole. Attempts to build an “arc of security” by creating ODED-GUAM have not only failed to yield corresponding results, they have stirred up anxiety and resistance in Russia and are even promoting disintegration in the region. The correlation of forces of the main players in the region—Russia, the U.S., Turkey, the EU, and NATO—is instrumental in determining its state of security. The situation is also aggravated by 34 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION termination of the Treaty on Conventional Forces in Europe (CFE), as a result of Russia’s temporary withdrawal from it in 2007. Without the CFE Treaty, countries participating in conflicts are at lib- erty to increase their armed potential, even by means of their settlement mediators, for example, Russia. This is making the Black Sea-Caspian region more vulnerable to negative external impacts and threats to internal sociopolitical stability.1 Therefore, if Ukraine pursues a detached or passive policy in the Black Sea-Caspian Region, this may fully deprive it of the opportunity to have any, even a minimum, impact on the situation in it and even become dependent on it.2 Moreover, if the situation in the Black Sea-Caspian Region develops negatively, Ukraine faces the danger of third forces transferring scenarios of these conflicts to its territory, in particular the Autonomous Republic of the , by making use of its conflict-prone potential. A recent interview with Andrei Illarionov, a Russian expert and former aide of Vladimir Putin (2000-2005), showed the reality of this threat today for both Ukraine and the entire region. According to him, a few years ago, Vladimir Putin said as though by accident, but in fact deliberately, that the Ukraine does not have a long history of its own statehood and a large part of Ukrainian territory is actually Russian territory that Ukraine has no justified right to. He said something like, “Half of Ukraine is Russia.” Illarionov believes that Vladimir Putin recognizes Ukraine’s independence in some measure, but that he nevertheless has an inner conviction that at least part of Ukrainian terri- tory should belong to Russia. Andrei Illarionov emphasized that Vladimir Putin, taking Egor Gaidar’s cue, repeated a phrase that reflects the imperialist view of history by some of the Russian elite: “The collapse of the Soviet Union was the greatest geopolitical catastrophe of the 20th century.” Therefore he has a correspond- ing attitude both toward this event and to those states that have formed in the territory of the former Soviet Union. The ex-aide called this an instinctive, almost unconscious, desire to revive, reconstruct not so much the Soviet Union as the influence of a controlling center (implying the Federal Security Service (FSB) of the Russian Federation) and make use of this influence to bolster its existence. “After all, as it (the FSB) sees it, the world consists of different blocs—be they manifest or unmanifest. The Soviet Union was a manifest bloc in this case. And if it was impossible to take political revenge, economic steps were taken,”3 stated Andrei Illarionov. The trade war between Russia and Ukraine waged by Moscow in August 2013 confirms these words. Ukraine is also interested in settling the Nagorno-Karabakh conflict due to the fact that large Armenian and Azeri diasporas reside in its territory. According to census data, as early as 2001, in Ukraine’s total population of more that 48 million, the size of the first amounted to almost 100,000, while the second exceeded 45,000.4 have been living in Ukraine since the days of Kievan Rus. However, the Karabakh conflict has increased their numbers in the country more than ten-fold over the past twenty years. Today, Ukraine has one of the most powerful Armenian diasporas in the world, which has formed a very influential Union of Armenians of Ukraine (UAU). Although it is becoming integrated into Ukrainian society, the still retains its cultural, national, and religious features.

1 See: “The Crimea, Ukraine, Black Sea Region: Security and Development,” National Security and Defense, No. 4-5, 2011, available in Ukrainian at [http://www.razumkov.org.ua/ukr/files/category_journal/NSD122_ukr_1.pdf]. 2 See: B.O. Parakhonsky, M.M. Gonchar, V.L. Kuznetsov, V.O. Maliarov, O.Ia. Manachinsky, P.O. Moskalets, The Strategic Interests of Ukraine in the Countries of the Black Sea Region and Problems of National Security, Presidential Administration of Ukraine, National Institute of Strategic Research, Foreign Policy Strategy Series, Issue 7, 2007, available in Ukrainian at [http://eu.prostir.ua/library/1545.html]. 3 S. Leshchenko, Putin’s Ex-Aide Andrei Illarionov: Putin Believes that Part of Ukraine Should Belong to Russia, Ukrainskaia pravda, 10 October, 2013, available in Ukrainian at [http://www.pravda.com.ua/articles/2013/10/10/6999733/]. 4 For more on the size and composition of the Ukrainian population according to the results of the All-Ukrainian Population Census of 2001, see: State Statistics Committee of Ukraine, available at: [http://2001.ukrcensus.gov.ua/results/ general/nationality/].

Volume 7 Issue 3-4 2013 35 THE CAUCASUS & GLOBALIZATION Today its representatives belong to Ukraine’s highest power structures and join together to compre- hensively defend the interests of their people.5 Most of the Azeris currently living in Ukraine arrived as refugees after the beginning of the Nagorno-Karabakh conflict. They are mainly engaged in commerce in large cities of Kiev, Donetsk, and the Crimean cities. In recent years, the number of Azeris emigrating to Ukraine has significantly grown. Today they rank second among foreigners officially registered to acquire residence permits or Ukrainian citizenship.6 Like the Armenians, they are not fully integrated and assimilated into Ukrainian society. The Azeris join with representatives of other of Ukraine, in par- ticular, Crimean Tartars, Gagauz, Turks, and . In 2013, they created their own or- ganization—The Joint Diaspora of Azeris of Ukraine,7 which took part in the founding assembly—the Congress of Turkic Peoples of Ukraine (CTPU). As of today, the Turkic peoples comprise more than one million Ukrainian citizens, while the Turkic factor is considered one of the promising vectors of its foreign policy.8 By creating conditions and guaranteeing political and economic rights for a productive life and development of national minorities and the representatives of other nations, including Azeris and Armenians in its territory, Ukraine is confirming its open-mindedness and interest in settlement of the Karabakh conflict. The Ukrainian population in Armenia and Azerbaijan is not such an important issue. This par- ticularly applies to Armenia, where, according to the data of the 2001 population census, only 1,633 Ukrainians lived, or 0.05% of the country’s more than 3-million-strong population.9 There are many more Ukrainians in Azerbaijan. At the beginning of the 2000s, they amounted to 33,000 people in Azerbaijan’s total population of more than 7 million.10 However, their number is constantly decreas- ing, since many of them emigrate. Ukraine’s economic interests play quite an important role in its desire to settle the Nagorno- Karabakh conflict. This primarily applies to attempts to diversify deliveries of energy resources. In so doing, Kiev is not only interested in purchasing and transporting Azeri oil and gas, but also Turk- men and Iranian gas, as well as Kazakh oil. Settlement of the Nagorno-Karabakh conflict, as well as of other conflicts in the Caucasus, will only promote this. As early as the beginning of 1992, a trilat- eral Ukrainian-Azeri-Iranian agreement was signed in Kiev on researching, planning, and building a gas pipeline for transporting Iranian natural gas. An agreement was reached with Iran on building and operating a three-branch gas pipeline for linking Iran with Western Europe.11 Since 2003, the European Union has been actively discussing the possibility of implementing such a project with Iran via Armenia, Georgia, Russia, and Ukraine to Europe.12

5 See: “V Ukraine sozdaetsia odna iz naibolee moshchnykh armianskikh diaspor v mire,” 25 March, 2013, available at [http://voskanapat.info/?p=1337]; “Soiuz armian Ukrainiy: glavneishie sobytiia diaspory v 2012 godu byli sviazany s religiei,” 15 January, 2013, available at: [http://www.religion.in.ua/news/ukrainian_news/20122-soyuz-armyan-ukrainy-glavnejshie- sobytiya-diaspory-v-2012-godu-byli-svyazany-s-religiej.html]. 6 See: “Rezko uvelichilsia potok zhelaiushchikh osest v Ukraine kavkaztsev i aziatov,” 21 October, 2013, available at [http://argumentua.com/novosti/rezko-uvelichilsya-potok-zhelayushchikh-osest-v-ukraine-kavkaztsev-i-aziatov]. 7 See: “Obedinennaia Diaspora Azerbaidzhantsev Ukrainy,” available at [http://aze.in.ua/uabd/]. 8 See: “Tiurksky kongress Ukrainy—obedinenie radi soglasiia,” 5 July, 2013, available at [http://aze.in.ua/2013/07/05/ tyirkskij-kongres-ukraini-objedinenie-radi-soglasia/]. 9 See: “Naselenie Respubliki Armeniia,” available at [http://www.abp.am/armenia/population/peoples/]. 10 See: L.D. Chikalenko, “The Caucasian Vector of Ukrainian Policy. The Azerbaijan Republic,” in: Ukrainian Foreign Policy, Chapter 5, Kiev, 2006, available in Ukrainian at [http://pidruchniki.ws/15840720/politologiya/zovnishnya_politika_ ukrayini_-_chekalenko_ld]. 11 See: Ibidem. 12 See: A. Kovtun, “Why Is Ukraine Still Not Taking Advantage of Alternatives to Russian Gas Deliveries?” Ekonomicheskaia pravda, 24 March, 2008, available in Ukrainian at [http://www.epravda.com.ua/publications/2008/03/24/ 159455/view_print/].

36 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Proceeding from the above-mentioned factors and in the context of ensuring national security, as well as security and stability in the Black Sea-Caspian Region, Ukraine is focusing its attention on settling conflicts in the territories of the ODED-GUAM member states, such as the Nagorno-Karabakh and Transnistria conflicts. For this reason, government structures, politicians, scientists, experts, and journalists are attentively studying the reasons for and possible ways to resolve these conflicts, as well as ways for Ukraine to participate in the negotiation process, use its armed contingents for peacekeep- ing purposes, and form an international security system in the Black Sea-Caspian region. This topic is also made urgent by the fact that Ukraine has declared one of its priorities in chair- ing the OSCE to be promoting the settlement of regional conflicts in the post-Soviet expanse, par- ticularly Nagorno-Karabakh. In order to understand how realistic this is, this article aims to reveal the characteristics and shed light on the achievements and blunders of Ukraine’s policy aimed at resolv- ing this issue in previous years.

Ukraine in Settlement of the Nagorno-Karabakh Conflict during Leonid Kravchuk’s Presidency

Ukraine first officially understood the need to settle the Nagorno-Karabakh conflict while it was still a part of the Soviet Union. On 17 May, 1991, the Supreme Soviet of the Ukrainian Soviet Social- ist Republic headed by Chairman Leonid Kravchuk adopted a statement on the conflict between Azerbaijan and Armenia. In it, the Supreme Soviet, expressing concern about aggravation of the situation and confirming the Ukrainian Soviet Socialist Republic’s intention to develop interstate relations on the principles of sovereign equality, non-interference in internal affairs, and refusal to use force, considered in impermissible to use the Soviet Armed Forces in the conflict between Azer- baijan and Armenia, or to capture and hold hostages. It proposed looking for a solution to this situation in immediate peace talks, believing that the conflict could and should be resolved only by political non-violent means. Leonid Kravchuk believed that it could not be resolved without a show of good will on the part of the Azerbaijani and Armenian leadership, release of hostages, rendering of medical assistance to the wounded, creating conditions for returning people to their homes (assistance to those whose homes had been destroyed or damaged), as well as objective and sober highlighting of the events by the media. “We believe that the efforts of the two neighboring peoples will return peace to Azerbaijan and Armenia,” said the statement of the Ukrainian Soviet Socialist Republic Supreme Soviet.13 On 5 March, 1992, the first president of now independent Ukraine, Leonid Kravchuk, made a statement on the events involving Nagorno-Karabakh. He focused attention on the fact that the conflict had reached its critical point, which had resulted in degradation of the spiritual and cultural life of the peoples, suffering among the population, violation of human rights, thousands of refugees, the murder of hundreds of innocent people, and destabilization of the situation in the region. On behalf of the Ukrainian people, the president called on the parliament and leadership of Azerbaijan and Armenia, as well as everyone able to have an impact on the events in Nagorno-Karabakh, to put an end to the bloodshed and begin a dialog between the sides concerned in order to take specific steps to achieve peaceful settlement of the conflict. In particular, he proposed discussing settlement of the conflict on 20 March, 1992 at a sitting of the heads of the CIS member states in Kiev. Leonid Kravchuk said that in order to restore peace in Nagorno-Karabakh, the hostilities must immediately stop, all sides must

13 See: “Statement of the Presidium of the Supreme Soviet of the Ukrainian S.S.R. on the Conflict between Azerbaijan and Armenia,” Bulletin of the Supreme Soviet of the Ukrainian Soviet Socialist Republic, No. 26, 25 June, 1991, p. 306.

Volume 7 Issue 3-4 2013 37 THE CAUCASUS & GLOBALIZATION guarantee a cease-fire, all armed formations, including the CIS armed forces, must be withdrawn from the region, and democratic institutions of legal power must be created to ensure a return to normal life. He also supported the recommendations of the Committee of Senior Officials of the Conference on Security and Cooperation in Europe (CSCE) for settling the conflict. Leonid Kravchuk believed that the membership of Azerbaijan and Armenia in the U.N. and CSCE would give them the oppor- tunity to make full use of the mechanisms of these international forums.14 A week later, on 13 March, 1992, the Ukrainian representative office in the U.N. handed the U.N. Secretary General a brief statement from the President of Ukraine about the events involving Nagorno-Karabakh. It said that the situation in Nagorno-Karabakh had reached a critical point, as a result of which the population was suffering and there was the danger of destabilization of the situa- tion throughout the region. Ukraine declared its support of peaceful settlement of the Karabakh con- flict with the help of the CSCE and based on the recommendations of its supreme body, the Council of Senior Officials, and also called for withdrawal of all the armed formations from the region, includ- ing the armed forces of the Commonwealth of Independent States. Escalation of the hostilities was confirmed by Azerbaijan on 9 May, when it announced that Armenian troops had seized and destroyed the town of in Karabakh.15 So in 1992, Ukraine, as an independent state, first showed its interest in resolving the Karabakh conflict at the international level and was regarded by the participants in the conflict as one of the mediators in its settlement. Kiev’s active stance in this issue, along with several other states, promoted examination of the Karabakh question by the U.N. Security Council and its adoption of four corresponding resolutions (822, 853, 874, and 884) between 30 April and 12 November, 1993. In them, the Security Council demanded immediate cessation of all hostilities, unconditional release of the occupied territories or withdrawal of all occupying forces, restoration of the economic, transport, and energy links in the region (853), and removal of all obstacles to communications and transportation (874). Moreover, in its reso- lutions, the U.N. Security Council expressed grave concern at the displacement of large numbers of civilians in Azerbaijan and the serious humanitarian emergency. In the context of the latter, Kiev ac- tively supported the establishment of a temporary U.N. branch and a representative body of the Office of the High Commissioner for Refugees in Azerbaijan, which opened in the summer of 1993. In 1992-1993, Ukraine was also actively in favor of coordinating the efforts of the CSCE and U.N. aimed at resolving regional conflicts, including in Nagorno-Karabakh. As a result, it was one of the 35 U.N. member states that adopted a corresponding draft of the resolution on 23 October, 1992 at the 47th session of the General Assembly (GA), which was later approved in 1993 at the 48th ses- sion of the U.N. GA.16 On 30 October, 1993, Head of the Ukrainian Ministry of Foreign Affairs Anatoli Zlenko ex- pounded on Ukraine’s approach to ethnic conflict settlement, including in Nagorno-Karabakh, during the general discussion at the 48th session of the U.N. GA. First, the Ukrainian minister welcomed joint efforts by the U.N. and CSCE to search for ways to put an end to the war in Nagorno-Karabakh and Georgia. This suited Kiev, which refused to recognize the peacekeeping efforts under the aus- pices of the CIS, meaning Russia.17 Second, Anatoli Zlenko stated that the interests of all the states of these regions, as well as of the ethnic communities, should be taken into account when settling all

14 See: “Statement by the President of Ukraine on the Events Involving Nagorno-Karabakh of 6 March, 1992,” in: Ukraine on the International Arena. Collection of Documents and Papers of 1991-1995, in two volumes, Comp. by V.V. Budiakov, ed. by G.Y. Udovenko, Vol. 2, Iurinkom Inter, Kiev, 1998, pp. 300-301 (in Ukrainian). 15 See: Yearbook. United Nations, Vol. 46, 1992, pp. 388–399. 16 See: “Draft of the Resolution on “Coordination of the Efforts of the United Nations and Conference on Security and Cooperation in Europe,” in: Ukraine on the International Arena. Collection of Documents and Papers of 1991-1995, Vol. 1, pp. 597-598. 17 Ukraine refused to recognize the CIS as an entity of international relations and regarded it as a negotiation mechanism for establishing new ties and relations among the post-Soviet states.

38 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION the conflicts in the post-Soviet expanse and in former Yugoslavia, referring to corresponding decisions of the U.N. GA and the principles of international law.18 On 9 November, 1993, Ukraine was one of the 11 states that presented a draft of the resolution on “Emergency International Assistance to Refugees and Displaced Persons in Azerbaijan” at the 48th session of the U.N. GA. The document insistently pointed to the need to continue further interna- tional efforts by the U.N. Secretary General, member states, programs, and organizations with the aim of not only attracting the attention of the international community to the urgent problems of Azeri refugees and migrants, but also of mobilizing their efforts for rendering assistance to these people.19 Since it gained its independence, Ukraine has taken a clear and unequivocal stance regarding settlement of the Nagorno-Karabakh conflict. It proceeded from the need for rigorous adherence to the first principle of the Final Act of the CSCE—“the right of each state to preserve territo- rial integrity,” as well as the principles of the U.N. Charter—All Members shall settle their interna- tional disputes by peaceful means and shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state. So Ukraine was in favor of preserving the territorial integrity of Azerbaijan, settling the Nago- rno-Karabakh conflict by peaceful means with the mediating role of the U.N. and the CSCE, and observing the rights of ethnic minorities in its territory, particularly Armenians, within the boundaries of the Nagorno-Karabakh Autonomous Republic, the status of which should be determined by consent of the conflicting sides. It focused particular attention on the return of refugees. This stance by Kiev in this issue, as well as the military-technical cooperation with Baku, had a negative effect on the development of Ukrainian-Armenian relations.20 This also aggravated Ukraine’s relations not only with Armenia, but also with the Russian Fed- eration (RF). As we know, the RF unofficially supports its strategic ally—Armenia—in the Nagorno- Karabakh conflict by supplying this country with arms totaling more than one billion dollars,21 thus violating all the corresponding international contracts, principles, and resolutions, but guaranteeing its security. Without Moscow’s support, Erevan would be unable to continue occupying Azeri terri- tory. Russian scientists also openly admit this in their research.22 In 2006, a Great Encyclopedia in 63 volumes was published in Russia, in which Nagorno-Karabakh is presented as an independent forma- tion that “historically belongs to the Armenians.”23 And many Russian politicians, such as Konstantin Zatulin and Vladimir Zhirinovsky, are demanding recognition of the independence of Nagorno-Kara- bakh, in the same way as Kosovo, South Ossetia, and Abkhazia.24 However, in the early and mid-1990s, Kiev’s support of Baku in the Nagorno-Karabakh conflict, which was not coordinated with Moscow, also directly threatened its national and, in particular, ter- ritorial security. After declaring the post-Soviet expanse a zone of its national interests, and offi- cially not recognizing the interstate borders in the Commonwealth of Independent States, Moscow threatened the new states that did not agree with this approach with support of separatism in their

18 See: “Speech by head of the Ukrainian delegation, Ukraine Foreign Minister Anatoli Zlenko at a general discussion during the 48th session of the U.N. General Assembly on 30 October, 1993,” in: Ukraine on the International Arena. Collection of Documents and Papers of 1991-1995, Vol. 1, pp. 436-437. 19 See: “Draft of the Resolution ‘Emergency International Assistance to Refugees and Displaced Persons in Azerbaijan’ at the 48th session of the U.N. GA,” in: Ukraine on the International Arena. Collection of Documents and Papers of 1991-1995, Vol. 2, pp. 42-44. 20 See: L.D. Chikalenko, op. cit., Chapter 5. 21 See: A. Iunusov, Azerbaidzhan v nachale XXI veka: konflikty i potentsialnye ugrozy, Adilogly, Baku, 2007, p. 44. 22 See: O. Kuznetsov, “Evolution of Russia’s Geopolitical Interests and Priorities in Transcaucasia,” The Caucasus & Globalization, Vol. 6, Issue 1, 2012, p. 154. 23 Ia. Iakis, “The Impact of the Energy Industry and Frozen Conflicts on Cooperation in the Black Sea Region,” in: Black Sea Synergy. Papers from the International - Conference of 21-23 October, 2007, available at [http://www.kas. de/wf/doc/kas_13443-1522-13-30.pdf?080411074040] (in Ukrainian). 24 See: “Zhirinovsky: ‘Nagorny Karabakh prinadlezhit armianam,’” Rosbalt, 16 September, 2009, available at [http:// www.rosbalt.ru/main/2009/09/16/672487.html].

Volume 7 Issue 3-4 2013 39 THE CAUCASUS & GLOBALIZATION territories (Azerbaijan, Georgia, and Moldova), or openly stated its territorial claims to them. In Ukraine, this applied not only to the Crimea and the Odessa Region, but also to the Donbas District.25 The striving of first president Leonid Kravchuk to pursue a state policy independent of Moscow and oriented toward the West26 was one of the reasons for his early departure from his supreme state post.

The Nagorno-Karabakh Conflict in Ukrainian Foreign Policy during the Presidency of Leonid Kuchma

In the summer of 1993, as a result of an early presidential election, Moscow-oriented Leonid Kuchma was elected as the new head of the Ukrainian state. This was when Ukraine first declared its willingness to participate actively in the negotiations on the Nagorno-Karabakh conflict, supporting, as before, preservation of the territorial integrity and political-economic independence of the Azer- baijan Republic. Leonid Kuchma and heads of the Ukrainian Foreign Ministry Anatoli Zlenko, Gen- nadi Udovenko, and Boris Tarasiuk talked about this repeatedly both in Baku and in Erevan. The Ukrainian president proceeded from the fact that Ukraine was a non-bloc state, that is, was not a member of and did not strive to participate in any military-political or defense organizations or agree- ments, such as NATO and the Tashkent Pact (1992) in the CIS. In addition, Leonid Kuchma believed that, although it was not a full-fledged participant in the CIS, Ukraine should still have an active impact on policy within the Commonwealth. “If we do not participate in establishing the ‘rules of the game,’ these rules will be established without us and to our detriment,” he said.27 When establishing all-round Ukrainian-Armenian relations, Leonid Kuchma constantly referred to the Nagorno-Karabakh conflict, in particular to Kiev’s mediating role in it. In May 1996, during his official visit to the Republic of Armenia, an Agreement on Friendship and Cooperation between Ukraine and Armenia was signed. Leonid Kuchma discussed the situation in Nagorno-Karabakh and in other hotspots of the Commonwealth with Armenian President Levon Ter-Petrosian. The heads of state came to an agreement on the need for their settlement exclusively by political means.28 At the beginning of July 1997, when Ukrainian Foreign Minister Gennadi Udovenko paid an official visit to Armenia, the sides discussed, among other issues of interstate cooperation, looking for ways to promote political settlement of the Nagorno-Karabakh conflict.29 This resulted in Levon Ter-Petrosian paying two official visits to Ukraine at the end of July and in September of the same year. He expressed his confidence that Ukraine could participate in resolving the complicated Nago- rno-Karabakh issue.30 However, the events that unfolded in the Black Sea-Caspian Region at the end of 1997-begin- ning of 1998 changed the situation. First, Georgia, Ukraine, Azerbaijan, and Moldova united in an interstate structure called GUAM in order to uphold their interests in the post-Soviet expanse and resolve the problems jointly. In contrast to the CIS, this union did not envisage the creation of supra-

25 See: A. Zlenko, Diplomatiia i politika. Ukraina v protsesse dinamicheskikh geopoliticheskikh peremen, Folio, Kharkov, 2004, pp. 385-387. 26 During Leonid Kravchuk’s presidency, Ukraine did not sign the CIS Statute or the Collective Security Treaty (CST) in the CIS—Tashkent Pact of 1992. 27 N.P. Baranovskaia, V.F. Verstiuk, S.V. Vidniansky, Ukraine: The Formation of an Independent State (1991-2001), Alternativy Publishing House, Kiev, 2001, p. 657 (in Ukrainian). 28 See: Ukraine on the International Arena. Collection of Documents and Papers of 1996-2000, in two volumes, Comp. by V.V. Budiakov, ed. by G.Y. Udovenko,Vol. 1, Iurinkom Inter, Kiev, 2003, pp. 123-124, 254. 29 See: Ibid., p. 360. 30 See: Ibid., pp. 362-363, 377.

40 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION national centralized structures, established relations among its participants on an equal basis, and orientated itself toward developing political and economic cooperation with the European Union, NATO, and the U.S. The establishment of GUAM meant a complete transfer of the participating states to a multivectoral foreign policy. One of the main reasons for forming GUAM was Moscow’s lack of any real desire to promote settlement of the Nagorno-Karabakh, Transnistrian, Abkhazian, and South Ossetian conflicts, as well as the constant political and economic pressure on these states. This particularly applied to pressure on Ukraine in nuclear disarmament issues, the Crimea, division of the Black Sea fleet, and signing the Treaty on Friendship and Good-Neighborly Relations.31 After GUAM was formed, Ukraine came forward with a new initiative at the beginning of 1998 to create a GUAM joint peacekeeping battalion under the auspices of the OSCE for meeting the needs of the Caucasian region. Although nothing was said about its possible peacekeeping mission directly in the Nagorno-Karabakh settlement, this is precisely how it was implied. As early as the 1994 Bu- dapest CSCE/OSCE Summit, a document was adopted that envisaged possible deployment of the OSCE multinational peacekeeping forces for settlement of the Nagorno-Karabakh conflict on the condition that the sides enter a peace agreement. The OSCE Planning Committee drew up the plan for this operation. But the precise designation and nature of the OSCE’s involvement in the conflict settlement process depended on the actual needs of the sides concerned.32 The Ukrainian initiative was positively perceived by President Heydar Aliev, who noted repeat- edly the significant role of Ukraine and President Leonid Kuchma personally in stabilizing the situa- tion in the Caucasus. He also talked about this during the visit of a Ukrainian delegation led by Prime Minister Valery Pustovoitenko to Azerbaijan in May 1998.33 However, on 3 February, 1998, Armenian President Levon Ter-Petrosian handed in his resigna- tion as president of the country, which the parliament accepted. The reason for this resignation was the split in Armenia’s ruling elite caused by Levon Ter-Petrosian’s consent to the plan for stage-by- stage settlement of the Nagorno-Karabakh conflict proposed by the OSCE Minsk Group. His oppo- nents in the “party in power”—Prime Minister Robert Kocharian, Defense Minister Vazgen Sarkisian, and Minister of Internal Affairs and National Security Serge Sarkisian—did not support this plan,34 proposing instead a so-called package deal that directly tied the status of Nagorno-Karabakh to the withdrawal of troops from the security zone.35 So the change in Armenian leadership essentially thwarted the OSCE Minsk Group’s conflict settlement plan, as well as Kiev’s possible mediation mission in the Nagorno-Karabakh question. Moscow’s position also promoted this, which did not want to allow OSCE or U.N. peacekeepers into the conflict zone, let alone Kiev, since it did not recognize the peacekeeping efforts under the aus- pices of the CIS and had begun openly orienting itself toward the West. The Kremlin continued re- garding independent Ukraine as a temporary phenomenon.

31 See: Anatoli Zlenko, op. cit., pp. 379-464. 32 See: F. Shiller, “Potential of the Ukrainian Peacekeeping Policy in the CIS Region,” in: Ukraine’s Peacekeeping Activity: Cooperation with NATO and Other European Security Structures, National Institute of Strategic Research under the Ukrainian Presidential Administration, Royal Institute of International Affairs, Section No. 3, Kiev, 2001, available at [http:// old.niss.gov.ua/book/Perepel/008.htm] (in Ukrainian). 33 See: Ukraine on the International Arena. Collection of Documents and Papers of 1996-2000, Vol. 1, p. 444. 34 The gist of the plan was to return five or six districts in the security area to Azerbaijan (apart from Shusha, Khankendi, and the Lachin District), to deploy the peacekeeping forces along the borders of Nagorno-Karabakh, raise the blockade on communications, and hold talks on the status of Nagorno-Karabakh, which would be determined by means of a referendum, which Levon Ter-Petrosian had no intention of allowing representatives of the Azeri community to participate in. In exchange, Armenia could acquire full access to all transit energy projects Azerbaijan was involved in. 35 See: “Former Armenian President Levon Ter-Petrosian might head an Orange Revolution in Armenia,” HayBlog— Armenia, 13 August, 2007, available in Russian at [http://hayblog.ru/2007/08/13/byivshiy-prezident-armenii-levon-ter- petrosyan-mozhet-vozglavit-oranzhevuyu-revolyutsiyu-v-armenii/].

Volume 7 Issue 3-4 2013 41 THE CAUCASUS & GLOBALIZATION Conservation of the conflict settlement met the interests of Moscow and the Karabakh clan, the representative of which, Robert Kocharian, became the new Armenian president in March 1998. This again confirmed the fact that from the very beginning, Erevan had been taking direct and immediate part in the conflict. At the same time, rejection of the stage-by-stage Nagorno-Karabakh conflict settlement plan proposed by the OSCE Minsk Group was in a certain sense acceptable to the Azeri side too since the plan did not envisage return of other occupied territory or enforcement of Nagorno-Karabakh as part of Azerbaijan.36 However, the Ukrainian leadership continued the policy it had begun. In particular, in Septem- ber 1998, President Leonid Kuchma said in his statement at an international conference on “The New Possibilities of the Historical Silk Road” in Baku that Ukraine was supporting the efforts of the sides to settle regional conflicts and confirmed its willingness to be a mediator in resolving the Nagorno- Karabakh problem.37 In June 1999, new head of the Ukrainian Foreign Ministry Boris Tarasiuk visited Georgia and Azerbaijan, where he emphasized that Ukraine had always expressed the willingness to promote conflict settlement, but from the very beginning did not agree to participate in forming a peacekeep- ing contingent under the auspices of the CIS which, in his words, “is not peacekeeping in essence.”38 Nor did the beginning of the second Chechen war promote the creation of a GUAM peacekeep- ing battalion, since there were worries that this subdivision might be drawn into actual hostilities. The uncertainty about the negative influence of Ukraine’s activity in this region on the development of relations with Moscow also slowed down its establishment. As a result, in September 1999, Ukrainian Minister of Defense Alexander Kuzmuk said that Ukraine was ready to participate in political consultations, create a Trans-Caucasian transport corri- dor, restore the Silk Road, and significantly raise the level of economic cooperation with the countries of the region in order to ensure stability in the Caucasian region, for which it did not have to send a peacekeeping contingent to the Caucasus. However, the Ukrainian leadership did not reject its mediating peacekeeping mission in settling the Nagorno-Karabakh conflict. In particular, this question was discussed with the New Armenian leadership in December 1999 during Armenian Foreign Minister Vardan Oskanian’s official visit to Kiev.39 In the spring of 2000, after the second Chechen war officially ended, Kiev again brought up the question of its military presence in the Caucasus. There were several reasons for this: first, the OSCE Istanbul summit in 1999, which made amendments to the Treaty on Conventional Forces in Europe (CFE) on the initiative of the GUUAM states, obligating Moscow to limit its military presence in the region40; second, Ukraine’s temporary membership in the U.N. Security Council; and third, the March (2000) visit of Ukrainian President Leonid Kuchma to Tbilisi and Baku. Ukraine, Georgia, and Azer- baijan came to an agreement that personnel for the joint subdivision would be trained at the Odessa Military Institute of Ground Forces. Each of the sides was to independently finance the activity of its part of the battalion, which was no larger than one squadron with the corresponding hardware. Ac- cording to the decision of the three participant states, the battalion was to act within the framework of the U.N. and OSCE mandates.41 This proved rather difficult to achieve primarily due to Russia’s

36 See: O. Sabykhzade: “Conservation of Conflict Settlement Meets the Interests of Moscow and the Karabakh Clan, the Representative of Which is the New Armenian President,” 12 February, 2008, available in Russian at [http://news.day.az/ armenia/107710.html]. 37 See: Ukraine on the International Arena. Collection of Documents and Papers of 1996-2000, Vol. 1, p. 798. 38 See: Ibid., pp. 567-568. 39 See: Ukraine on the International Arena. Collection of Documents and Papers of 1996-2000, Vol. 1, p. 591. 40 In 1999, joined GUAM and the Association was called GUUAM. 41 See: V. Krivokhizha, “Problems of Contemporary Peacekeeping,” in: Ukraine’s Peacekeeping Activity: Cooperation with NATO and Other European Security Structures.

42 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION position, which was in no rush to execute the key decision of the 1999 OSCE Istanbul summit and withdraw its troops from Georgia and Moldova. It saw this as a threat to its military presence in the Central Caucasus and Transnistria. As a result, the OSCE considered it inexpedient to bring the GUUAM subdivision into the region, which might only aggravate the situation there. During President Leonid Kuchma’s visit to Baku (March 2000), a Treaty on Friendship, Coop- eration, and Partnership was signed between Ukraine and Azerbaijan, which was ratified by the parliaments of both states. The document envisaged the development of bilateral relations on the basis of strategic partnership. According to the Treaty, Ukraine and Azerbaijan were to exert efforts to strengthen international peace and stability, placing special emphasis on regional security. The treaty also noted the need for close cooperation within the framework of international, regional, and subregional organizations and structures, in particular further development and strengthening of part- nership relations in GUUAM.42 During his visit to Azerbaijan, President Leonid Kuchma visited the refugee tent camps, where children were born, sick and old people died, and weddings were held. The Ukrainian President gave the refugees one hundred shipping containers, which became their homes. The same year, Azerbaijan offered Ukraine preferential terms for 500,000 tons of diesel fuel needed for the sowing season. In 2002, the women of Ukraine who participated in the Women’s GUUAM Forum43 in Baku decided to render all the help they could and promote a rapid end to the conflict.44 In May 2000, during the Kiev meeting of foreign ministers of Azerbaijan and Ukraine, Vilayat Guliev and Boris Tarasiuk, the Ukrainian minister emphasized that Ukraine’s position in the Nagorno- Karabakh conflict remained unchanged and fully corresponded to the decisions of the U.N. Security Council and OSCE.45 In August 2000, during an unofficial meeting of the leaders of the CIS member states in Yalta, talks were held between Ukrainian President Leonid Kuchma and Azeri President Heydar Aliev and Armenian President Robert Kocharian, during which, along with other problems, the question of settle- ment of the Nagorno-Karabakh conflict was raised. The Ukrainian leadership paid particular attention to this question and tried to accelerate finding a solution that would be acceptable to all sides.46 Ukraine wanted to be the venue for the talks on this problem. Therefore, in Yalta, the presidents of Georgia, Azerbaijan, and Armenia held a separate meeting at which they discussed the situation in the Caucasus.47 At the beginning of September 2000, at the U.N. Security Council summit, Leonid Kuchma said that postponing a final decision on the frozen conflicts in the post-Soviet expanse could lead to ir- reparable consequences. In November of the same year, Anatoli Zlenko, speaking at the 8th sitting of the OSCE Council of Ministers, called for stepping up the Organization’s activity in resolving re- gional conflicts, including in Nagorno-Karabakh. The head of the Ukrainian Foreign Ministry pro- posed convening an assembly of experts of the sides concerned under the aegis of the OSCE in order to determine the main mutually acceptable parameters of conflict settlement. In his opinion, the first step in this direction should be unconditional and mandatory implementation of the Istanbul agree- ments.48 However, all of these proposals directly contradicted Moscow’s interests.

42 See: “Treaty on Friendship, Cooperation and Partnership between Ukraine and the Azerbaijan Republic,” Bulletin of the Ukraine Supreme Council, No. 30, 1993, p. 327 (in Ukrainian). 43 Women’s Forum of the GUUAM Member States (Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova) is a nongovernmental, public association. The main goals and tasks of the Forum are to establish close cooperation between women parliamentarians, state and public figures, and women’s public organizations of the Association’s five countries. 44 See: V. Zamiatin, “Interview, Taliat Aliev: Ukraine Needs to Work in Azerbaijan in the Future,” Den, 18 October, 2001, available in Ukrainian at[http://www.day.kiev.ua/66191/]. 45 See: Ukraine on the International Arena. Collection of Documents and Papers of 1996-2000, Vol. 1, pp. 632-633. 46 See: B.O. Parakhonsky, M.M. Gonchar, V.L. Kuznetsov, V.O. Maliarov, O.Ia. Manachinsky, P.O. Moskalets, op. cit. 47 See: Ukraine on the International Arena. Collection of Documents and Papers of 1996-2000, Vol. 1, p. 667. 48 See: A. Zlenko, “Ukraine’s Foreign Policy: From Romanticism to Pragmatism (Speeches, Statements, Interviews, and Articles of the Ukrainian Foreign Minister A.M. Zlenko),” Ukraine Press, Kiev, 2001, pp. 25-26 (in Ukrainian).

Volume 7 Issue 3-4 2013 43 THE CAUCASUS & GLOBALIZATION In 2000-2001, Ukraine actively assisted the Azerbaijan Republic’s accession to the Council of Europe, thanks to which the Azeri side was able to provide the European community with documen- tary proof that the territory of Nagorno-Karabakh occupied by Armenia is an uncontrolled zone and one of the main transit routes of drugs, and has also become a place for burying nuclear wastes. Moreover, all of Azerbaijan’s cultural monuments and values, as well as schools and mosques have been destroyed there.49 In turn, in 2001, when the question of termination of the powers of the Ukrainian delegation in the European Council was discussed, Azerbaijan spoke against adopting this resolution. In October 2002, during Leonid Kuchma’s official visit to Armenia, he confirmed that Ukraine’s position in the Nagorno-Karabakh question remained unchanged. He believed that the only solution to the current situation was for the sides to agree between themselves. Ukraine, in turn, was ready to support any peaceful resolution of this problem. Leonid Kuchma approved the development of the negotiation process between Erevan and Baku, which, in his words, was occurring as “an open and honest dialog.” He also noted that world experience of settling such conflicts as the Nagorno-Karabakh showed that such settlement could not occur without damage to the sides. Ukraine stated its willing- ness to assist both countries in every way possible in resolving this problem, but in so doing did not intend to play the role of main mediator-negotiator, since the OSCE Minsk Group was already per- forming that function, the co-chairs of which are the U.S., Russia, and France.50 At the end of 2003, at a meeting of the Council of Heads of Foreign Ministries of the OSCE countries, Ukrainian Minister of Foreign Affairs Konstantin Grishchenko called on the members of the Organization to take more active part in resolving conflicts in the post-Soviet expanse as a prior- ity vector in OSCE operations, which are based on observing the fundamental principles of interna- tional relations: respect of sovereignty, territorial integrity, and inviolability of the borders of the member states. He also noted that all the GUUAM countries comprehensively upheld this approach, while the OSCE did not have the necessary resolve and dynamism to settle conflicts in the territory of the former Soviet Union.51 Moreover, Ukraine constantly insisted on holding special extended sittings of the OSCE Parlia- mentary Assembly dedicated to discussing conflict settlement in Nagorno-Karabakh, Transnistria, and Georgia. Kiev tried to get itself nominated for work in the OSCE’s field divisions. So as of 2001, Ukraine was represented in the group of assistants to the Personal Representative of the OSCE Chair- person-in-Office in Nagorno-Karabakh.52

(To be concluded)

49 See: V. Zamiatin, op. cit. 50 See: “The Nagorno-Karabakh Problem Should Be Resolved Exclusively by Peaceful Means, the Ukrainian President Emphasized in Erevan,” in: Countries of the World. Azerbaijan, Ukrinform, available in Ukrainian at [http://svit.ukrinform. ua/Azerb/azerb.php?menu=ukrinform]. 51 See: “K. Grishchenko Calls on the OSCE to be More Active,” Den, No. 218, 2 December, 2003 (in Ukrainian). 52 See: “Ukraine: 10 Years of Independence,” Brama, 2001, available in Ukrainian at [http://www.brama.com/ua- consulate / Independence10.html]. 44 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

GEO-ECONOMICS

Vladimir LUKYANOV

Ph.D. (Econ.), Associate Professor, National Academy of Management (Kiev, Ukraine).

THE FINANCIAL ECONOMY IN A GLOBALIZING WORLD

Abstract

his article is concerned with the current the rise of the financial economy. Another realities and development prospects of purpose of this article is to analyze the main T a civilization phenomenon known as sources, instruments and mechanisms of the financial economy. It examines the basic the development of the financial economy in imperatives of globalization changes in fi- the context of the current possibilities of na- nancial markets as the key drivers behind tional economies.

KEYWORDS: Financial economy, financial globalization, financialization, financial markets, financial instruments.

Introduction

The financial economy is a natural product of globalization. One of the basic trends of the mod- ern economy is an intensification of cross-border financial flows that determines the rapid develop- ment of financial markets and the accumulation of huge financial resources. In developed market systems, the financial market economy is increasingly asserting itself as an essential civilization Volume 7 Issue 3-4 2013 45 THE CAUCASUS & GLOBALIZATION imperative that has an inevitable impact on the development prospects of modern states.1 The global financial and economic crisis of 2008-2009 and the debt crisis of 2011-2012 have clearly shown the importance of an objective and systematic assessment of global trends in world markets, since they inevitably affect national economies.

The Financial Economy as a Natural Product of Financial Globalization

Current economic strategies show every sign of the rise of the financial economy as a civiliza- tion phenomenon, primarily through the expansion of financial markets. In fact, the financial econo- my is nothing but the ultimate embodiment, in terms of both scale and concentration, of modern fi- nancial markets with an appropriate infrastructure. Whereas in the past the financial component only served the physical economy, today it is increasingly positioning itself as a financial economy which (under the impact of globalization changes) is turning into a self-sufficient force and to a large extent dictating its own rules of behavior. As the Azerbaijani economist R. Kuliev rightly notes, “globaliza- tion has changed the structure of the world economy and determined the rapid development of finan- cial markets. Whereas only a few decades ago the main purpose of financial markets was to ensure the functioning of the real sector of the economy, in recent years the world financial market has begun to show self-sufficiency.”2 The financial economy is a natural product of financial globalization, which results in the rapid development of innovative financial products and thus in the accumulation of huge financial re- sources, actually provoking their separation from material production. In other words, competition for financial resources is going global. As the British historian Niall Ferguson (now a professor at Harvard University, U.S.) aptly put it, “Planet Finance is beginning to dwarf Planet Earth. And Planet Finance seems to spin faster too.”3 Today there is good reason to believe that financial globalization is a specific transformation strategy based both on economic forms and methods and on noneconomic factors such as ultramodern technologies. But at the same time, money flows and financial resources do not seek to support the real economy “as a matter of protocol,” and this inevitably results in increasing amounts of virtual capital due to the widening gap between real capital and its market value. In this context, I think it is incorrect to say that modern financial capital has not detached itself from its basis: the real economy.4 The autonomization of financial resources and their separation from the so-called physical economy is fueled by the active positioning and distribution of a wide range of financial instruments and services, while “financial instruments and services are dematerialized and rest on purely psychological categories such as expectations, preferences and uncertainties.”5 As professor I.A. Liuty correctly notes, “in the past, globalization processes were primarily encouraged by superstates and transnational companies, whereas today globalization demonstrates its own powerful driving forces.”6 Such is the creative might now displayed by the financial economy.

1 See: J.M. Buchanan, R.A. Musgrave, Public Finance and Public Choice: Two Contrasting Visions of the State, CESifo Book Series, The MIT Press, Cambridge, Mass., 1999, 282 pp. 2 National Financial Systems in the Era of Globalization, ed. by Prof. I.O. Liuty, Galitskaia Akademiia Publishers, Ivano-Frankovsk, 2008, p. 253 (in Ukrainian). 3 N. Ferguson, The Ascent of Money: A Financial History of the World, Penguin Books, 2009, p. 4. 4 See: L.N. Krasavina, “Tendentsii razvitia mezhdunarodnykh valiutnykh otnoshenii v usloviakh globalizatsii mirovoi ekonomiki,” Dengi i kredit, No. 11, 2011, p. 13. 5 V. Milovidov, “Filosofia finansovogo rynka,” Mirovaia ekonomika i mezhdunarodnye otnoshenia (MEiMO), No. 8, 2012, p. 10. 6 National Financial Systems in the Era of Globalization, p. 13.

46 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION The market infrastructure of the financial economy is multifaceted and diverse. For example, entities operating in the global financial space include super-powerful transnational corporations, bank syndicates, hedge funds, international stock exchanges and brokerage firms, offshore financial cen- ters, regional monetary unions and other modern financial conglomerates. In this context, it must be admitted that the very infrastructure of the financial economy stimulates and intensifies the oligopo- listic nature of the world financial market. The financial economy also includes numerous trading floors, depository institutions and clearing centers, which handle a vast array of contracts and agree- ments on hundreds of types, varieties and modifications of securities, derivatives based on them, and other financial innovations with numerous attributes, criteria and characteristics.7 A natural response to such civilization achievements was the establishment of a special group chaired by Joseph Stiglitz and including four other Nobel Prize winners, whose task was to propose new indicators of eco- nomic performance and social progress in the actively forming financial economy.8

The Globalization Content of the Financial Economy

The key imperative of the globalization content of the financial economy is so-called financial- ization. This term was first used officially in the UNCTAD 2009 Trade and Development Report, which included a special section called “The Financialization of Commodity Markets.” Of course, the current information content of the financial economy provides a public choice, namely, two opposite views of the interaction between market forces and the regulatory role of the state. In other words, there is a “financial secret” behind every civilization phenomenon. Evidently, this is precisely why current mainstream economics shows a lack of understanding of the essence of the financial economy as a key phenomenon of our time, i.e. its sources, drivers, content and forms of manifestation, as well as transformation influences. The lack of competitiveness in economic views concerning the economic substance, causes and effects of financialization and, in this context, of the development of the financial economy is only a temporary negative trend because the term “financialization” used to denote the new global process has a solid basis. In countries which have successfully passed the fifth and are now at the sixth technological development level, the role of the physical economy (rooted in the “smokestack era” with its generally dominant material production) increasingly resembles that of a “maintenance worker.” As I see it, financialization is an aggregate concept denoting the process of financial globaliza- tion, on the one hand, and the result of the impact of this process on national economies, on the other. As a global phenomenon, financialization integrates national capital markets into a single investment area where the accumulated financial resources of individual countries seek profitable investment opportunities throughout the world while national capital-intensive projects are financed by foreign capital. Financial markets and their infrastructure segments are one of the basic drivers of financializa- tion. The modern financial economy is an aggregate of diverse financial markets. Among these, a special role is played by money and foreign exchange markets, the market of financial services, the market of basic securities (stocks and bonds), and also the market of fictitious speculative capital, whose core consists of derivatives and financial instruments based on them.

7 See: D.Yu. Rayevsky, “Raskrytie poniatia ‘derivativ’ v otechestvennoi praktike,” Finansy i kredit, No. 39, 2012, p. 16. 8 See: M. Fleurbaey, “Beyond GDP: The Quest for a Measure of Social Welfare,” Journal of Economic Literature, Vol. 47, No. 4, 2009, pp. 1029-1046.

Volume 7 Issue 3-4 2013 47 THE CAUCASUS & GLOBALIZATION Thus, there is reason to say that financialization is a civilization phenomenon whose considered use helps, first, to enhance the competitiveness of money and stock markets, as well as financial services markets; second, to meet international requirements and standards and thus to reduce the vulnerability of national financial markets to external factors and influences; third, to implement new financial instruments and products effectively applied in developed market economies; fourth, to lower the barriers to the attraction of financial resources available in the world market, etc. The financial economy as a polysystemic category contains a conglomerate, a discrete set of fictitious speculative financial instruments such as derivatives. Although the semantic meaning of the term “derivative” is “that which is based on (derived from) something else, secondary,” it is not right to link all derivative financial instruments without exception to this concept. For example, one re- searcher basically denies the very concept of “derivative financial instrument.” In his opinion, any derivative instrument is fully equivalent to the concept of “derivative.”9 But modern financial engi- neering keeps spawning exclusive financial products that are virtually unrelated to derivatives. Such things as warrants, options, swaps10 (currency, equity, credit default11), forward contracts, futures contracts, etc., are exclusive types of derivatives. At the same time, the use of financial prod- ucts not directly associated with (“unrelated to”) derivatives is growing exponentially. Numerous financial instruments are specific financial innovations. For example, financial instruments such as depositary receipts, covenants, collateralized debt obligations (CDOs), trades, securitized instruments and other products of modern financial engineering are not derivatives. Financial innovations taking the form of diverse and previously unknown derivative instruments as a product of “financial alchemy” produce a synergistic effect, which feeds the pyramid of the fi- nancial economy. Today, global GDP (based on newly created value) is over $70 trillion.12 At the same time, in the financial sphere there is an unprecedented multiplication of previously unknown financial instruments. Their value is an order of magnitude larger than global GDP as the market of derivatives and over-the-counter (OTC) financial instruments has already reached $800 trillion.13 Some authors estimate the global derivatives market at the astronomical amount of $1,500 trillion.14 Thus, the developed financial economy demonstrates an excessive level of innovative productiv- ity: the real (physical) economy in non-CIS countries now accounts for only 10% of the total econo- my, while the remaining 90% is the ever-growing market of derivatives and other financial instru- ments.15 Such dynamics naturally involve systemic risks.

Systemic Risks of the Financial Economy

The financial economy, which is increasingly asserting itself in the global dimension, keeps demonstrating its pro-cyclical nature. The existing differences in the development dynamics of finan- cial markets largely determine the phenomenon of decoupling, i.e. all kinds of distortions and risks in the patterns of operation of the financial economy. In the last decade, excessive growth of the fi- nancial economy has become one of the most serious risks of modern economic development. Mea-

9 See: D.Yu. Rayevsky, op. cit., p. 73. 10 Swaps are derivative financial instruments by means of which the parties involved exchange certain assets (cash flows) for a specified period of time, including with guarantee of their subsequent sale. 11 Incidentally, credit default swap obligations on the eve of the global financial crisis were four times the size of U.S. GDP. 12 See: L.N. Krasavina, op. cit. 13 See: Ibidem. 14 See: P.V. Alexeyev, “Aktual’nye voprosy formirovania mezhdunarodnogo finansovogo tsentra v Rossii,” Finansy i kredit, No. 40, 2012, p. 66. 15 See: “Dolgovoi krizis v Evrope i perspektivy evro. Materialy kruglogo stola,” Dengi i kredit, No. 12, 2011, p. 58.

48 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION sures are being taken on a global scale to regulate the financial sphere. This includes steps (albeit only the first few steps) to clean up the mess around derivatives and the use of an ever-growing array of financial instruments. The above-mentioned facts are one of the most serious macroeconomic risks, and the global crisis of 2008-2009 is convincing evidence of this. The financial crisis has convincingly refuted the belief that it is possible to keep risky assets off bank balance sheets and thus to ensure an optimal allocation of risks across the financial system. In reality, it was the other way round: risks accumu- lated at the very heart of the financial system.16 There is reason to believe that research in the field of finance has recently attracted “financial engineers” rather than financial policy makers. The successes of financial engineering are precisely what leads to excessive financialization of the economy, to the development of a speculative financial market, which inevitably causes financial bubbles and crisis phenomena in the global and domestic financial systems. The first systemic crisis of the globalization era in its excessive financialized version has had a very negative effect on modern financial markets. Global trends in the form of the information (net- work) age or post-industrial society17 and the intensification of cross-border financial flows resulting in a total financialization of economic relations permanently extend to all aspects of the modernization process through various transformation interactions and influences.18 “One can say that financial globalization is a specific financial investment strategy designed to reform the modern financial market of universal financial services based both on economic forms and methods and on the wide use of non-economic factors: ultramodern knowledge-intensive technologies.”19 Information technologies, the basis of the fifth technological order, have set the stage for the so-called post-industrial era, whose attributes include rapidly developing internetization (which has removed the obstacle of “economic distance” between countries and continents so that the global economic space can now function in real time), on the one hand, and the resulting global financializa- tion that affects virtually all national economies, on the other. But most post-Soviet countries (including Ukraine), when following the advice of foreign advis- ers and consultants regarding the financialization of their national economies, usually enter an area of particular risk. Direct contact with markets of speculative financial capital, as a rule, is based on principles that have no proper legal basis. But in the absence of proper legal and regulatory restric- tions, financial flows may suddenly come to a halt, and not necessarily for internal reasons in a par- ticular national economy. The fictitious virtual type of financial capital is precisely what provoked the huge suprana- tional money flows that burst the legal dams of national borders and dictate their strategy for the development of national and global financial markets. That is why one cannot agree with the over- optimistic forecasts of some researchers who believe that in the next 20 to 30 years we should expect to see a new world economic system in which “trade in air” is limited by necessity, with the possibil- ity of an active reindustrialization policy, i.e. a return to real production.20 A sudden cessation or reversal of the flow of financial capital can lead to the bursting of specu- lative bubbles with extremely grave consequences for the economies in question. Such phenomena highlight the need for cross-border regulation of financial markets, especially exchange and OTC trading in financial instruments.

16 See: Niall Ferguson, op. cit. 17 See: M. Castells, The Information Age: Economy, Society and Culture, in three volumes, Blackwell, Oxford, 1996- 1998. 18 See: V. Milovidov, “op. cit., pp. 10-11. 19 G.W. Kolodko, Mir v dvizhenii (in Russian, translated from the Polish), Magistr, Moscow, 2009, p. 25. 20 See: M.G. Yermolayeva, “Global’nye tovarnye rynki, global’nye denezhnye i kapital’nye potoki: osnovnye tendentsii i perspektivy,” Finansy i kredit, No. 33, 2012, p. 45.

Volume 7 Issue 3-4 2013 49 THE CAUCASUS & GLOBALIZATION The Growing Need for International Regulation of Securities Markets

Intensifying globalization processes in the financial sphere make it necessary to regulate the practical use of new financial instruments. The scale and diversity of financial markets, their infra- structure and basic products are truly boundless, and this explains the continued absence of rules and norms backed by effective law enforcement. So far this problem has been addressed more or less effectively only in the European Union, especially within the limits of the eurozone. Nevertheless, one must also admit that the greater share of derivatives and other financial instru- ments is sold over the counter, where trading does not comply with any standards, leaving no oppor- tunity for the prompt elimination of accumulating financial imbalances. This situation is a serious concern for the Group of Twenty. At its recent summits, G20 members have spoken of the need to develop principles and mechanisms for ensuring more effective regulation of exchange and OTC markets. At present, the basic regulator of the global OTC derivatives market is the International Swaps and Derivatives Association (ISDA), which now includes more than 800 financial institutions from 55 countries. For its part, the Bank for International Settlements (BIS) is one of the largest analytical institu- tions which monitors issuing activities in securities markets, the situation with foreign exchange transactions, deals with derivative financial instruments on organized exchanges and in the OTC market, etc. In monitoring these activities and summarizing the information obtained, the two regulators keep track of the processes taking place in this area and develop recommendations for standardizing contracts and transaction terms in the swap market, on the one hand (ISDA), and help to hedge finan- cial risks in the securities market, on the other (BIS). But ISDA, which brings together only the biggest players in the OTC market and sporadically performs control functions, at the same time pays no attention to other (smaller) players in the OTC derivatives market. That is why it is over-optimistic to say that the International Swaps and Derivatives Association is the main regulator of this market. After all, even today each transaction in the use of over-the-counter financial instruments such as swaps is non-standardized and in a way unique as it does not depend on legal regulators but on current market conditions and the reconciliation of the parties’ interests. Such situations are not exceptions but typical manifestations of the financial economy.21 Exchange-traded securities and financial instruments are obviously overvalued because other- wise there is no point in trading them on organized exchanges or trading floors. As a result of market speculation, they are obliged to create the illusion that they constitute real capital whereas in fact we have a process whose only purpose is to “beat the market.” Obviously, moral principles here are low down on the list of priorities.

Conclusion

In the light of the above, we can draw the following conclusions.  First, the international implementing entities that have appeared in recent years are the most adequate expression of financial globalization, on the one hand, and a necessary prerequisite

21 See: J.C. Hull, Options, Futures, and Other Derivatives, Pearson Education, Inc., New Jersey, 2006.

50 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION for regulating and keeping in shape the huge body of rapidly developing international fi- nancial and economic relations, on the other.  Second, financial globalization carries obvious risks of loss of sovereignty by national economies. Moreover, rapidly increasing globality often makes transparent the hidden de- pendencies between countries, actively limiting (or even destroying) national sovereignty.  And third, permanent growth of virtual capital combined with a diversification of financial instruments can be seen as the key imperative of the financial economy.

Ramaz ABESADZE

D.Sc. (Econ.), Professor, Director of the Paata Gugushvili Institute of Economics (Tbilisi, Georgia).

Vakhtang BURDULI

D.Sc. (Econ.), Department Head at the Paata Gugushvili Institute of Economics (Tbilisi, Georgia).

REGIONAL PROBLEMS OF ACCELERATING ECONOMIC DEVELOPMENT RATES IN THE CONTEXT OF GLOBALIZATION (A GEORGIAN CASE-STUDY)

Abstract

his article substantiates the need for validates the vectors for improving a strategy coordinating regional development in of regional economic and social develop- T a post-communist country with global- ment and enhancing the system that coordi- ization. It examines the ways being em- nates and stimulates this development. Tak- ployed today to coordinate regional develop- ing into account the current experience of ment in Georgia. Keeping in mind the experi- several developed and developing countries, ence of developed countries and the specif- the paper offers ways to decentralize public ics of the transition period, it identifies and administration in Georgia.

KEYWORDS: Georgia, development of the regions, economic globalization, “easy loan,” employment, decentralization. Volume 7 Issue 3-4 2013 51 THE CAUCASUS & GLOBALIZATION Introduction

For several years now, ever since economic mechanisms of globalization have begun emerging, many developed and developing countries have set out to improve and restructure regional coordina- tion systems of social and economic development aimed at expanding the functions and powers of regional administration bodies not only to resolve social and infrastructural issues, but also to coor- dinate business development. It can be said that both globalization and regionalization are underway within the country. That is, globalization, which is manifested in the economic sphere in the evolving functions of global and inter-state regulation structures (primarily the WTO) and lending, for example, requires adaptation of the functions of state and regional intrastate coordination and regulation struc- tures. France and South Korea are examples of countries where regional coordination mechanisms have been successfully adapted to contemporary conditions. In these countries, the development of regional coordination has been widely covered in the scientific and journalistic literature. Some of the regionalization measures being carried out in European countries are set forth in the European Charter of Local Self-Government, which Georgia has also joined. Many countries are adhering to the provisions of this charter when implementing measures aimed at enhancing regional and local coordination of social and economic development. However, this charter does not cover issues per- taining to centralized state coordination of regional development, or issues of state and regional de- velopment coordination and business support. During the transition period, the post-communist coun- tries have also begun looking for regional development coordination mechanisms that are expedient for each specific country and can be adapted to globalization conditions. In several Central European post-communist countries, coordination mechanisms have been formed that correspond to current globalization conditions. Several post-Soviet countries, including Georgia, are a little tardy in carry- ing out measures to adapt regional development coordination systems to the challenges of globaliza- tion. This article examines the situation that has developed as of today in the country with respect to regional economic and social development coordination and designates and validates ways to improve these coordination mechanisms in the context of globalization, keeping in mind the experience of countries that are developing successfully.

Improving Regional Coordination of Economic and Social Development as an Important Component of All Measures to Raise the Country’s Economic Development Rate

Georgia has recently made a certain amount of progress in economic development. For example, between 2004 and 2012, Georgia’s GDP rose annually by 8-10%. Compared with other countries, Georgia was able to ride fairly easily through the global financial and economic crisis and economic consequences of the August war. The only adverse effects were a slight slowing of its GDP growth rates and an increase in its already high unemployment index. For example, whereas in 2007 the share of unemployed in the economically active population amounted to 13.3%,1 in subsequent years it topped 16%. Georgia was saved from a significant slump during the crisis by the assistance it received from developed countries after the August war and the relatively low level of its financial and production integration into the world economy.

1 See: Statistical Yearbook of Georgia, 2009, p. 42.

52 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION However, a comparison of the indices of the current state of the economy with the indices of the pre-landslide period (although at that time production operated largely on outmoded technology) shows that many of the current indices are still no higher than the pre-landslide level (as, inciden- tally, is the case in several other post-Soviet countries). Industrial growth has long been relegated to the back burner, the operations of many pertinent traditional branches have been curtailed, while agricultural production has been cut back in recent years. So in order to reach the level of production that existed in the pre-landslide period, even higher GDP growth rates must be reached, primarily by increasing industrial and agricultural grown rates. This requires implementing several measures to improve the structure of the economy broken down into branches of activity, pursuing a more rational industrial and agricultural policy, and so on. This goal can primarily be reached by pursuing an effective regional policy aimed at accelerat- ing economic development of both the country as a whole and of its regions in particular. At present, Georgia is divided into 12 regions (territories) at the first level of administrative- territorial division. According to the nomenclature of territorial units for statistics (NUTS)2 classifica- tion used in the EU, they all (apart from Tbilisi) approximately relate to NUTS 3 level. In addition to this, there is division into local self-administrative territorial units. Hereafter, this article refers to the country’s first-level territorial units of administrative-territorial division as regions, while the rest are called territorial units of the local level. In order to resolve such tasks as improvement of the country’s export-import balance, accelera- tion of industrial and agricultural growth, development of industrial hubs and innovation centers, improvement of the institutional and technological structure of production, diversification of the re- gional economy, development of production regional servicing systems, laying down regional devel- opment programs, and so on, among other measures, the role of state coordination of the country’s economic and social development at the level of regions and local territorial units must be intensified, primarily at the first level of the country’s administrative-territorial division, that is, in the regions (territories). Georgia’s economy is currently in a state of post-socialist transformation. Compared with developed countries that have an established market economy, it is in need of additional measures to create a contemporary business environment that meets current competitive conditions and is capable of organizing a highly efficient economy. Therefore, in contrast to countries with an estab- lished market economy, Georgia must focus more attention on rendering assistance to business development and creating a corresponding business environment in state regulation of social and economic development, including at the regional level during the transition period. This should be its top priority.

Current State of Regional Development Regulation

Georgia has long failed to give due attention to social and economic development regulation at the regional level. Development strategies have still not been drawn up for specific regions (which are particularly needed since many enterprises equipped with outmoded technology closed down during the collapse of the Soviet system), nor is there a budget and tax system at the regional level, which is a rare exception for developed countries. Even in such a small country as Denmark, for example, there is an efficient three-tier tax and budget system,3 while such systems also exist in

2 See: Regionalnaia politika stran ES, IMEMO RAS, Moscow, 2009, p. 11. 3 S. Kuzmin, D. Kuzmin, “K stanovleniiu mestnogo samoupravleniia: ekonomika i sotsialnoe razvitiie naseleniia,” Ekonomist, No. 3, 2003, p. 56.

Volume 7 Issue 3-4 2013 53 THE CAUCASUS & GLOBALIZATION medium-sized and large countries. Local budget and tax systems are built on the basis of an out- moded mechanism in which central transfers account for the largest share, while local taxes and dues are insignificant. This lowers the responsibility of local structures and curtails their rights to dispose of local budget funds and take the initiative in their spending. At present, a one-tier system of local self-government operates in Georgia, according to which 69 units of local self-government have been created: 64 municipalities and 5 self-governing cities. Local budgets are formed within the boundaries of these units. According to the Budget Code ad- opted at the end of 2009, local taxes (property tax) and dues, compensatory transfer, and other reve- nues envisaged by Georgian legislation are considered local own-source revenue. Targeted and special transfers and other revenues set forth in Georgian legislation are classified as external (raised) funds. Local budgets do not receive withholdings from the basic taxes that form the main bulk of tax revenues in the country (income, profit, VAT, excises, and import tax). This shows the insignificant role of own-source tax revenues in the local budgets, in the formation of which an increasing role is played by the budget transfer policy. Some of the reforms carried out in the past few years have played a positive role in regional development. For example, in 2007, an addendum was made to the Law on Georgia’s Budget System about creating a fund for projects to be implemented in the Georgian regions, which was later enforced in the new Budget Code of 2009. Resources are allotted from this fund to first-tier regions of the country’s administrative-territorial division. Resources from the reserve funds of the Georgian presi- dent and government are playing a special role in economic development. In 2002, the Georgian Ministry of Economics, Industry, and Commerce introduced a document On Methodical Recommendations for Developing and Implementing Economic and Social Develop- ment Programs for Georgia’s Territorial Units, on the basis of which in 2003-2005 regional develop- ment programs were drawn up. However, after the Law on the Fundamentals of Georgia’s Indicative Economic and Social Development Plan was abolished, regional social and economic development plans stopped being drawn up.4 Nevertheless, several national programs and projects are aimed at regional development, such as the Millennium Program (supported by a grant from the U.S. govern- ment), the Regional Development Fund project, the Easy Loans Program, employment programs, and so on.5 These programs are making a contribution to regional economic and social development; however, it would be more expedient to draw up scientifically substantiated target programs at the regional level. The regional fiscal and financial systems either have no permanent regional investment, social, or other types of funds at all or they operate periodically in small doses.6 These funds should be sup- plied in part from budget resources and in part from all kinds of grants (including private). Nor do the regions, or the country as a whole, have a securities market for actualizing real investments on a large scale. The economy of regional centers and small towns is not developing quickly enough in Georgia. Economic development of small towns is however a priority in developed countries,7 although they began taking the appropriate steps much earlier.8 For example, as early as the 1980s, diversification of the economy of so-called mono cities began in Great Britain, France, and several other countries

4 See: Ia. Meskhia, E. Gvelesiani, Regional Economic Policy, Tbilisi, 2010, pp. 185-186 (in Georgian). 5 See: Ibid., pp. 186-193. 6 See: Ibid., pp. 184-200. 7 See: V. Burduli, Coordination of Social and Economic Development at the Regional and Local Levels, Meridiani, Tbilisi, 2006, pp. 160-178 (in Georgian); D. Lopatnikov, Ekonomicheskaia geografiia i regionalistika, Gardariki, Moscow, 2006; Regionalnaia politika stran ES. 8 See: P. Didier, “Le Nord-Pas-de-Calais face aux nouvelles dynamiques économiques: practiques et ejeux de l’aménagement regional,” Hommes et Terres du Nord, No. 4, 1989; P. Martin, H. Nonn, “Stratégies des acteurs publics en Alsace en matière de dévelopment économique et d’amenagement: 1982—1989,” Hommes et Terres du Nord, No. 4, 1989.

54 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION (the protests of redundant miners in England in the 1970s activated this process). Russia is also begin- ning to give this some thought: “The state should provide the opportunity for people to earn money, by establishing mono cities, for example, to solve the problem of the planned economy.”9 Such aux- iliary structures as engineering, marketing, and other organizations that serve the development and functioning of technology and assist product sale have still not been formed in the regional centers of Georgia. Such business development-enhancing financial centers as regional depositaries, agricul- tural information support centers, and so on are not being established. Nor have steps been conceived for creating other elements of a favorable investment environment. Not enough attention is being given to the development of regional industrial hubs. Compared with the Soviet period, the role of such regional industrial centers as , , and has even declined. Of course, a major industrial hub cannot be created in every region. However, this should be done in those regions where there are favorable conditions for it, such as Ajaria, Samtskhe- Javakhetia, and Samegrelo-Upper Svanetia (the cities of and Poti). It should be noted that individual modern industrial enterprises have begun opening in Georgian cities in recent years (for example, a factory for the manufacture of reinforced plastic in Tbilisi, a factory for the assembly of household appliances in Kutaisi, and so on), but this is clearly insufficient. A targeted strategy must be drawn up and implemented in order to help local and foreign businessmen establish modern enter- prises in industrial hubs in the Georgian regions. Agricultural development in the regions is impeded for the following reasons: (a) the use of arable land has dropped in all regions of Georgia (a large percentage of farm land is not used), there has been a production drop in both plant and animal products due to the import of cheap foodstuffs and other goods that use raw agricultural material, whereby there are delays in establishing an agricultural organization in which all products would be com- petitive (particularly in price competition) in the internal and external markets. What is more, imported products are sold in retail markets at an artificially raised price, so an arti- ficial mechanism may exist that prevents the sale of domestic agricultural production in the interests of importers, although most types of domestic agricultural products are environ- mentally purer and of a higher quality; (b) the proper attention is not being paid to the institutional organization of agricultural enter- prises and households. In particular, there are few cooperatives at which agricultural op- erations can be carried out more efficiently, households and small farms are not rendered the necessary services from auxiliary organizations and enterprises, while it is difficult for small farms, for example, to purchase expensive machinery, which, along with specialized services, would serve a large number of enterprises (farms and households); (c) there is less demand for the services of plant-cultivating and cattle-breeding stations (farms), resulting in a drop in or overall halt to the manufacture of some agricultural products that are highly competitive. For example, there has been an abrupt drop in the production of high-quality apples, such as Iberian and different types of Antonovka. The demand for rose wines is increasingly growing, while Georgia is no longer cultivating Rkatsiteli grapes; (d) due attention is not being given to strengthening interrelations between agricultural enter- prises and enterprises manufacturing their products, or to streamlining institutional relations between them; (e) there are still no efficient marketing and other services for promoting agricultural products in the markets (particularly international), there are no consulting services (as practiced in developed countries in which such organizations are mainly located in regional centers) for

9 “My posle krizisa. V. Nikitina interviews Director of IMEMO A.A. Dynkin,” AiF, No. 35, 2010, p. 7.

Volume 7 Issue 3-4 2013 55 THE CAUCASUS & GLOBALIZATION providing farmers with consultation and information about efficient farming, about sowing times for particular crops, about weather conditions, about terms for purchasing fertilizers and other things necessary for manufacturing agricultural products, and so on; (f) very little attention is being given to innovations in agriculture. U.S. and European experi- ence in carrying out land recultivation, improving soil fertility, and raising harvest yield should be made use of (for example, the harvest yield of grains in Georgia is 2.5-fold lower than in the U.S. and advanced European countries); (g) although there is a shortage of land, attention is not being paid to preserving arable farm land. For example, high-quality farm land adjacent to city suburbs is often allotted to urban settlement instead of providing amortized building sites for city expansion.

Improving the Regional Development Strategy

The regional development strategy should envisage improving regional and local regulation mechanisms of economic and social development broken down into different levels of territorial formations. The rapid development of new technology in the world and intensified competition in the external and internal markets are causing difficulties in developing export-oriented and import-sub- stituting enterprises. Some of the farm land in the regions is lying idle, which is causing a rise in unemployment and the poverty level. This is making it more important to activate the operation of enterprises at the regional and local levels, which requires the development of the corresponding sup- port infrastructure and use of stimulating tools. The new conditions are raising the importance of efficiently reaching a compromise of interests among the central, regional, and local power structures. The regions are playing a greater role in implementing different kinds of innovation processes around the world, while regional cities and lo- cal businessmen have more to do in developing new technology. The problems of agricultural devel- opment also require greater activation of the regional and local regulation mechanism (but the center must also assist in stimulating production in rural areas). So in order to promote the development of local business, the regional power structures must play a more active part in coordinating economic development. In many countries, including in small ones, a socially oriented economy is developing, which means that several social functions must be transferred to the regional and local levels. So the rational distribution of competences and powers among levels of governance is an important prereq- uisite today for ensuring the country’s accelerated economic and social development and causing a significant drop in the level of poverty in the regions (this urgent question is examined in greater detail in the last section of this article). Improvement of the institutional system should be carried out at all territorial levels. Ca- pacities at the regional level are weak at present in Georgia (apart from Tbilisi and the Ajarian Autonomous Republic). However, in many developed countries, it is the regional administration structures that are responsible for coordinating the goals designated by the state strategy of re- gional social and economic development, assisting business, developing centers of gravity in the regions, and so on. The regional administration structures must be given greater powers in order to perform these tasks (without adding more people to their staffs). They must also be given corre- sponding tools and increased responsibility. The powers of local government bodies should also be increased, particularly in assisting employment and creating local social projects aimed at reducing the poverty level (a social package should exist at all power levels and be coordinated with resolv- ing the designated tasks). 56 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION The regional development strategy should envisage tasks for promoting the establishment of a contemporary technological system. At the regional level, this presumes the following: choosing priority branches for development (in the cities and villages) keeping in mind the conditions and specifics of the region; drawing up a corresponding policy; and assisting the development of re- gional centers of gravity and innovation centers, etc., which will ensure an increase in employment and a drop in the poverty level based on the development of export-orientated, import-substituting, and other pertinent enterprises, as well as help to create the infrastructure, auxiliary facilities, and enterprises necessary for their functioning. In present-day conditions, diversification of regional production (in the cities and villages) has become even more urgent. Whereas 30-40 years ago, this process was largely related in the developed countries to the need to avoid mono specialization or narrow regional specialization, now the likeli- hood of a depressive regions emerging has increased due to the short life cycle of some types of production (particularly high-tech) and the technology itself used to manufacture these products. The importance of regional diversification has grown in rural areas as the stability of their natural condi- tions decreases, as well as due to other phenomenon (for example, the exorbitant spread of pests in certain plants). The terrain in rural Georgia, as well as the need to ensure the country’s food safety should the price of a particular agricultural product suddenly rise also call for production diversifica- tion. A regional strategy for developing small and medium centers of gravity must be drawn up. These centers should draw on different enterprises from the real, financial, and auxiliary sectors, which will reduce infrastructural expenses and provide work for the unemployed living in the cor- responding cities, as well as jobless people migrating from the village to the city. It stands to reason that the development of regional centers of gravity will ensure intensified diversification of the re- gional economy and decrease the regional aspects that aggravate poverty. This trend in the developed countries has existed since the 1960s, but these countries have been paying greater attention to this problem recently.10 “The contrast between the region around the capital and the provinces is an in- dication of how mature the territorial structure of the economy is. The greater this contrast, the lower the development level of the territorial structure of the economy and the country.”11 Since Georgia is a small country, the term “growth pole” cannot be used to describe most Georgian cities since it primarily implies the development of a metropolis or an agglomeration of adjacent cities. In our opinion, a more acceptable term for the conditions existing in the Georgian regions is “center of gravity.” The development of this kind of unit should be based on production diversification, while auxiliary production should also be developed (in order to help solve the problems of industry, ag- riculture, export, and so on). It is obvious today that an innovation sector must be developed in cities- centers of gravity. It is very important to draw up a strategy for simulating the creation and functioning of auxil- iary services and companies (farms in the rural areas) characteristic of the market economy that assist the main production enterprises. In addition to financial services and organizations (funds, banks, or their branches, regional depositaries, insurance companies), centers of gravity should also have engi- neering, marketing, consulting, and information enterprises and organizations that will service urban and rural needs. Innovative plant-cultivating and cattle-breeding enterprises equipped with the latest technology, enterprises for rendering technical services to small farms, amelioration enterprises, en- terprises that assist land recultivation, and forest care services must be developed in rural areas. Es- tablishing advanced training organizations is also extremely important (both in the villages and in the cities) so that businessmen and hired workers can acquire the knowledge necessary for manufacturing competitive products in contemporary conditions. These organizations and enterprises will ensure an

10 See, for example: D.L. Lopatnikov, op. cit., p. 93 ff.; Regionalnaia politika stran ES, pp. 131-133 ff. 11 D.L. Lopatnikov, op. cit., pp. 46, 47.

Volume 7 Issue 3-4 2013 57 THE CAUCASUS & GLOBALIZATION increase in investment activity in both the cities and villages. This will promote the exploitation of unused land, which is very important given the land shortage in Georgia. However, farm land must not be sold to foreigners, since this will be detrimental to the local population and cause negative demographic trends. In many civilized countries (Australia, , China, Sweden, etc.), there is no private ownership of land at all.12 It is extremely important to draw up the right strategy for correlating large, medium, and small businesses. Sustainable development of the economy cannot be attained without the existence of large enterprises equipped with the latest technology. The regional development strategy must envis- age, keeping in mind the special features of the regions wherever possible, the creation of new large enterprises in specific branches or the reanimation of old ones based on new technology (by local businessmen purchasing and developing state-of-the-art technology or establishing enterprises of transnational corporations in regional cities). As we know, large enterprises based on cooperative relations provide work for a large number of small and medium businesses. It stand to reason that a large number of big enterprises cannot be established in Georgia’s regions, however the need for diversifying the regional economy and overcoming poverty calls for creating medium and small businesses in many branches, both in the main sector of production and in the infrastructural and service sectors. Cooperatives based on family holdings must be set up in rural areas to promote ef- fective economic growth. However, Georgia’s difficult terrain and other reasons (for example, the need to provide full employment for rural residents, the need to avoid depopulation of the villages, and so on) also make it necessary to assist and stimulate the establishment of intensive small hold- ings in the countryside. The practice of increasing efficiency in small-scale intensive farming can be developed by studying the experience of some developed countries. The strategy offered will ensure rise in the competitiveness of enterprises of all sizes, increase the density of technological and transaction relations among them, and raise the level of production intensification and employ- ment of the population.

Improving the Regional Development Coordination and Stimulation System

In order to create a favorable investment and economic climate that enhances the functioning of existing enterprises, steps must be taken to improve this climate at the regional and local levels. This requires establishing corresponding institutions and organizations (managerial, financial, and production), as well as creating regulation tools, at the regional and local levels. At present, some functions of economic management are being decentralized in developed coun- tries and the share of the investment part is growing in the budgets of all levels. Some developed coun- tries, particularly those with a powerful export potential, allot special lines in their budgets for supporting priority branches of the private sector, the funds of which are used either directly or with the help of orga- nizations created especially for this purpose (for example, the investment bank and depressive cartels13

12 See: M. Korobeinikov, “Krestianstvo i vlast: otvetstvennost i interesy,” in: Voprosy ekonomiki, No. 2, 2010, p. 151. 13 Such associations have been established in branches that are having serious difficulties, in which a large surplus of production capacities appeared. With the assistance of the government, cartels agreed on a voluntary cutback in manufacture and to preserve only the most efficient subdivisions, while also agreeing to sell or re-profile surplus capacities. The operations of depressed cartels were financed by commercial banks under the government’s guarantee. Small businesses provided jobs for those employees who were laid off.

58 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION in Japan), while some countries have special organizations for supporting food export. Reaching a com- promise among management levels, in addition to decentralizing some management functions, also envisages decentralizing budget funds in an adequate amount. For example, investment, pension, insurance, and other funds (the resources for which are allotted to some extent from budget funds among other things) are often also formed at the regional level in developed countries. Decentraliza- tion within certain limits of competence promotes an increase in the responsibility of regional bodies for the development and efficient functioning of business, an increase in the population’s prosperity, and a decrease in the poverty level within the boundaries of the corresponding territorial unit. Func- tions dispersed after a compromise of interests has been reached among levels are performed on the basis of a corresponding distribution of resources. In some countries, the overwhelming majority of budget funds (more than 80%) is mobilized in the central budget, after which they are distributed among the budgets of different levels with the aid of various transfers (whereby in different countries these transfers have different names and are intended for different purposes, for example, subsidies and grants, subventions, special subsidies). However, in several countries, regional and local budgets were largely formed directly within the limits of territorial subdivisions. This requires not only for local budgets to be replenished by local taxes, but also by revenues from central taxes mobilized in the particular territory. Improvement of the regional fiscal mechanism requires creating a tax and budget mechanism that corresponds to contemporary conditions. We think the country’s budget and tax system requires improvement.  First, there is no budget and tax system at the regional level, while globalization will promote an increase in the functions of regional management in developed countries, particularly in the sphere of business support and the creation of a regional production infrastructure. A corresponding system must be created at the regional level, particularly since the example of the Ajarian Autonomous Republic shows its benefit in supporting business development, raising employment, and lowering the poverty level.  Second, some dues that exist in Georgia are considered taxes in some developed countries (for example, the U.S.) and are allocated to the territorial budgets of the corresponding level.  Third, the regions of several developed countries adopt the practice of granting tax benefits if new jobs are created at enterprises, a practice that would be expedient to introduce in the regions of Georgia. Regional financial policy should be aimed at stimulating the creation of new enterprises equipped with state-of-the-art technology and at supporting existing ones. The priority criteria for creating or promoting the efficient operation of enterprises should be their export potential and the possibility of import substitution, as well as their potential for supporting full employment of the population (with high salaries and the guarantee of long-term employment). Regional financial policy should envisage the creation of investment and other types of funds (not only using budget resources, but also the donations of interested businessmen and foreign grants; in the future, along with an increase in the managerial competence of regional bodies in conditions of market competition, it will be possible to replenish these funds using regional bonds, but it should be noted that in some developed countries the issue of regional bonds has not yielded positive results). By assisting the development of produc- tion and increasing the number of jobs, the noted areas of regional policy will have an indirect effect on reducing the poverty level. The institutional management system should be developed (state and private enterprises and the relations between them) in the regions and local municipal units. Following the example set by de- veloped countries, the diversity of the state enterprise management system should grow, as well as the diversity of contracts, so that state and private enterprises can perform the work contracted by Volume 7 Issue 3-4 2013 59 THE CAUCASUS & GLOBALIZATION state, regional, and municipal bodies.14 State, regional, and local tools must be applied to stimulate the establishment and development of enterprises in the region’s cities. In so doing, the most efficient mechanisms must be chosen for stimulating the creation and development of large, medium, and small enterprises and increasing the interaction among them. Many people are talking about the need to stimulate the development of small and medium business, which in general is entirely legitimate. But today, after the collapse of the Soviet system, it has been impossible to stimulate the creation of large businesses, even on the basis of foreign high-tech production plants. Nor has it been possible to create a contemporary developed economy, ensure full employment of a high percent of the population, or promote a radical increase in export potential without a sufficient number of large production plants in the country. Even small developed countries such as Belgium, , Norway, Denmark, Swit- zerland, Luxemburg, and Singapore have many large production plants that provide work for a large number of small and medium enterprises and even individual businessmen on the basis of cooperative relations. Georgia also needs to stimulate the establishment of cooperatives in agriculture (primarily by granting privileged loans to purchase machinery and carry out field work). In addition to this, due to the appearance of intensive and efficient technology for manufacturing environmentally pure prod- ucts in small businesses and the need to provide full employment in the villages, the creation of small businesses must also be stimulated by creating specialized auxiliary organizations and companies and issuing subsidies to small businessmen, following the example of developed countries. At the regional level, great attention is being paid to institutional relations (tools) being devel- oped on the basis of a dialog and entering contracts, first, between regional administration bodies and businessmen and, second, among regional bodies, trade unions, and businessmen. The market coor- dination mechanism also envisages, within the limits of the law, establishing average or fixed prices for certain groups of commodities in certain markets for certain periods of time (one week, two weeks, etc.).15 This practice should promote complete sale of the products manufactured, particularly their purchase by the poor strata of the population (the latter applies in particular to the sale of food prod- ucts). The development of regional centers of gravity should be boosted as follows: by means of fund- ing, mainly from territorial budgets; building municipal infrastructure facilities that private business- men do not want to tackle (for example, private businessmen are very willing to take on transport servicing, but more often than not do not want to build roads, what is more, facilities of strategic importance, such as railroads and other transportation routes, should not be in the control of private businessmen); and promoting fiscal and financial stimulation of the establishment and functioning of enterprises of the real sector and enterprises, organizations, and funds assisting the establishment and functioning of enterprises and production units in the real sector (including in rural areas). As mentioned above, the real sector of the economy (both in rural and urban areas) cannot be developed without the help of the corresponding auxiliary organizations and enterprises. The function- ing of such institutions and enterprises should be stimulated by means of awareness campaigns and advertizing, using fiscal and financial benefits when necessary and with the help of investment and other regional funds. The most important facilities promoting the development of the country’s econ- omy, for example, plant-cultivating and cattle-breeding stations, can remain in state ownership for the time being.16 If the need to purchase the products of such enterprises is effectively advertized, the

14 See: M. Deriabina, “Gosudarstvennoe i chastnoe partnerstvo: teoriia i praktika,” Voprosy ekonomiki, No. 8, 2008, p. 64; M. Klinova, “Globalizatsiia i infrastruktura: novye tendentsii vo vzaimootnosheniiakh gosudarstva i biznesa,” Voprosy ekonomiki, No. 8, 2008, p. 79; I. Smotritskaia, S. Chernykh, “Institut kontraktnykh otnoshenii na rynke gosudarstvennykh zakazov,” Voprosy ekonomiki, No. 8, 2008, pp. 110, 111, 117. 15 See: V. Manevich, “O zakonomernostiakh stanovleniia rynka,” Voprosy ekonomiki, No. 3, 1993, p. 109. 16 Of course, such enterprises should largely exist in the private sector, but because market relations in rural areas are imperfect at present, private farms of the corresponding profile will not be profitable, while in developed countries, such farms operate at a significant profit.

60 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION state will not lose. For example, the production of high quality apples has abruptly dropped recently, and instances of the cultivation of poor-quality grapes have become more frequent. So potential buy- ers of the products of plant-cultivating and cattle-breeding enterprises should be encouraged by ad- vertizing, marketing, and other awareness campaigns. Ways to stimulate the introduction of elements of the latest technological system must be in- cluded in the regional development stimulation mechanism. At present, elements of the fifth techno- logical mode dominate in developed countries, but technology that applies to the sixth technological mode is enjoying increasingly wider use.17 We believe that certain production plants characteristic of the new technological mode can be created at the regional level in regional centers of gravity. It would be more expedient to incorporate (borrow) the new technology already being used in developed countries, keeping in mind that prob- lems with selling products manufactured using the new technology will not arise either in the domes- tic or foreign markets. There are three main ways to introduce such technology at regional centers of gravity.  The first way is for local businessmen to buy licensed technology. This requires that the country has corresponding auxiliary centers for assisting the assimilation of this technology, while the region has trained highly qualified specialists and workers for ensuring its ap- plication. To stimulate the creation and establishment of such enterprises, the regional gov- ernment must use fiscal and financial tools, including accelerated amortization, declare the corresponding branch a priority, and incorporate national stimulation tools, including the financial support of export for some branches (for which this is envisaged). Marketing as- sistance is also necessary, particularly for selling products abroad.  The second way, the most promising, is to draw transnational enterprises into the regional centers of gravity. In this case, in addition to the usual fiscal methods of stimulation, cor- porations must become interested in relatively cheap cooperation with local enterprises based on the use of outsourcing.  The third way is to use franchising mechanisms. New technology must be used in rural areas in plant-cultivating and cattle-breeding enterprises, as well as to increase soil fertility, and so on. Moreover, Georgia has unique technology for manufac- turing fruit, particularly apples and grapes (for example, Rkatsiteli Rose), which, if reanimated, could easily be incorporated into the contemporary technological mode. Stimulating production diversification in the cities is more expedient for those commodities for which there is an increase in demand in the international and domestic markets. This does not mean that traditional branches should be forgotten (manufacture in which has been reduced essentially to naught as a result of the post-Soviet economic landslide), such as the manufacture of fabric, furniture, footwear, and so on, for which there is a natural raw material base. During diversification in rural areas, the main attention must be focused on branches that are of great significance for the country’s food safety, as well as on those that have significant export potential.

Decentralization of Public Administration

In order to intensify the role of territorial administration bodies in coordinating socioeconomic development within the corresponding territorial units, decentralization of state and public administra-

17 See: S. Glaziev, “Mirovoi ekonomichesky krizis kak protsess smeny tekhnologicheskikh ukladov,” Voprosy ekonomiki, No. 3, 2009, p. 31.

Volume 7 Issue 3-4 2013 61 THE CAUCASUS & GLOBALIZATION tion must be carried out within acceptable limits. But sometimes, decentralization tasks are not un- derstood correctly. For example, transfer of the parliament from Tbilisi to Kutaisi was justified by the need to decentralize, which, of course, is not correct, since the country’s parliament is a central state body. In reality, however, within the state sector, decentralization entails transferring some functions and powers from the central administration bodies to the self-administration bodies of territorial units (regional and local), that is, increasing the powers of the lower administration bodies at the expense of the higher. Decentralization in the public sector could also mean delegating decision-making or administra- tive powers and functions from state and local bodies to private organizations, for example, housing associations or municipal service enterprises, and extending the functions and powers of regional and local administration bodies for coordinating the development and functioning of enterprises of gen- eral (that is, noncommercial) branches (either by transferring some functions or part of them from a higher body, or by introducing a new function). Trends, rates, and level of decentralization. Gradual decentralization of administration and transfer of an increasingly large number of state functions to territorial units (regional and local bod- ies) is the primary trend in the evolution of public administration in contemporary states.18 Moreover, in the second half of the 20th century, there were periods in many developed countries when decen- tralization went quite quickly and fundamentally, followed by periods of relatively little change due to the situation that developed. For example, widespread decentralization occurred in France in the 1970s, after which the functions and powers introduced were officially enforced in the Law on De- centralization.19 In the post-socialist countries of Central Europe, decentralization started at the begin- ning of the 1990s and, as of today, a sufficient number of contemporary models have been created in them.20 But in most post-Soviet countries, including in Georgia, intensive decentralization has still not ended. So when carrying out corresponding measures, Georgia must be guided by the experience of developed countries in this process and in establishing the suitable level of decentralization. Re- cently, a certain shift has been designated in Georgia in this matter. For example, on 21 February, 2013, the government of Georgia approved a document called “The Main Principles of Government Strategy for Decentralization and the Development of Self-Government for 2013-2014,”which was brought up for public discussion. When carrying out decentralization and defining the level of decentralization (as when defining the powers of different ranks of territorial bodies, primarily in mobilizing a financial base and dispos- ing of it, as well as from the viewpoint of the list of functions being used and methods for coordinat- ing them), developed countries are acting in the interest of raising economic efficiency, strengthening social justice, and ensuring macroeconomic stability. Decentralization goals. The experience of developed countries shows that the main goals of decentralization are the following: dividing and distributing powers among the central, regional, and local levels of state public administration institutions, in which mechanisms have been installed that ensure the maximum protection of the population’s interests; raising the efficient use of budget funds of territorial units; improving mechanisms for disposing of, financing, and managing the infrastructure (municipal and communicational) of underdeveloped and depressive regions and local units, as well as mechanisms for regulating the development of general branches (program coordination, fiscal and financial stimulation methods, subsidizing); establishing an effective mechanism for stimulating the development of small and medium towns and supporting their formation as full-fledged territorial socioeconomic centers (centers of gravity); and improving mechanisms for regulating the develop-

18 See: E. Baratashvili, Sh. Veshpidze, Regional Economic Policy, Tbilisi, 2002, p. 111 (in Georgian). 19 See: Ibid., pp. 102-103. 20 See, for example: “Sovremennye finansovye modeli detsentralizatsii publichnoi vlasti: opyt Slovakii,” 2012, available at [yourlib.net/content/view/7446/87/], and others.

62 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION ment and industrialization of agricultural territorial units (in particular, improving municipal services in the villages, land recultivation, and so on). At the same time, some developed countries are focus- ing their decentralization efforts on preventing a buildup of people and industry in the largest cities and improving the mechanism for stimulating production diversification in mono-product cities, while many territorial units in post-Soviet countries are bent on increasing regulation that favors reconser- vation on a renewed technological base of many enterprises equipped with outmoded means of pro- duction. At the current stage of Georgia’s development, along with orientation toward the listed goals when carrying out decentralization measures, the administration bodies of regional and local territo- rial units need to concentrate on dealing with the high unemployment rate in Georgia’s rural areas, which is continuing to rise due to more intensive farming techniques. This is causing an urgent need for rapid economic development of regional cities, primarily regional centers (so that some of the rural population can migrate to these cities in order to ensure real employment). The regional au- thorities must have corresponding powers and functions in order to develop the infrastructure to support these centers. In order for regional centers of gravity to become more appealing for business development, the regional authorities must have the tools they need to organize business development, stimulate it, and, when necessary, support it. Fiscal (budget) decentralization schemes. There are two main alternative budget decentraliza- tion schemes in the world: French and German. The budget systems of these countries are mixed versions with the primary use of elements of a particular alternative scheme. In the French system, the territorial (departmental and communal) budgets are replenished largely by higher-budget transfers called subsidies and donations (in the regions, when necessary, funds are mobilized from the central and lower territorial budgets). Funds received from local taxes and dues comprise a relatively small- er part of the territorial (departmental and communal) budgets. In Germany, on the other hand, as- signations are carried out according to fixed rates from the main state taxes (income, corporate prof- it tax, and value added tax at the middle (lands) and lower (communes) levels from funds mobilized in corresponding territorial units, whereby the rates are sometimes, although relatively rarely, legis- latively revised. The role of transfers from the center is relatively insignificant. Financial aid is also transferred from relatively “wealthy” lands to relatively “underdeveloped” ones. Although after ac- cession of the relatively underdeveloped lands of Eastern Germany, financial aid was more actively transferred to them from the central budget. The advantage of the first scheme is that it is easier in a centralized way to redistribute income from “wealthier” territorial units to “poorer,” underdeveloped, or depressive territorial units. The main advantage of the second scheme is that the interest in re- gional and local administration bodies in production and business development in the territory under their control increases, which prompts them to make active use of the corresponding mechanisms for stimulating production. We think that the current situation in Georgia calls for applying the first type of model (due to the great differences in level of economic development of the regions), later switch- ing to a mixed version as circumstances dictate. Current trends in increasing regional and local production coordination in the general private sector. Another decentralization trend is for the administration bodies of territorial units to develop a general (that is, noncommercial) private business support system. The implementation of priority state business development plans is being stimulated in different countries at regional and local levels, and regional and local initiatives are appearing to support and reinforce industrial structures. Territorial administration bodies and branch associations of the private sector are participating in creating busi- ness incubators, innovation centers, investment funds, and advance training centers, stimulating the founding and development of small and medium enterprises, etc., designating conditions for creating industrial zones, and boosting their establishment, and so on. The implementation of such measures became systematic back in the 1970s in France on the basis of so-called planned contracts and other Volume 7 Issue 3-4 2013 63 THE CAUCASUS & GLOBALIZATION mechanisms and were spread in one way or another in many countries. In our view, it would be ex- pedient to gradually implement corresponding measures in Georgia too. Most urgent decentralization measures in Georgia. Despite several positive aspects, Georgia’s budget and tax system, as well as its legislative and legal regulation (based on the main legal docu- ments) of functions performed at the territorial levels, requires further improvement. With respect to decentralization matters, this is primarily manifested in the following: — the functions and powers of the regional authorities are not enforced at the regional (territo- rial) level either legislatively or by government documents, nor does the regional level have its own financial base (budget). It appears that positive changes will occur in the next few years, particularly since a corresponding conception, as shown above, has been approved at the government level. Moreover, in our opinion, there is no need to create a special deputy corps at the regional level (the members of which operate on a full-time basis), only a coun- cil (the members of which remain engaged in their jobs), which will make decisions within its competence, as well as a small executive body that will be responsible for financial and other economic issues and participate in drawing up an economic and social development strategy for the region under its control; — the share of own income in the local (municipal) budgets is low. Corresponding measures must be drawn up and decisions made in this respect.

Conclusion

The system that currently exists for drawing up economic and social development strategy for the Georgian regions and elaborating a mechanism for coordinating this development does not cor- respond to current demands, which is making it difficult to ensure fuller and more efficient tapping of the country’s potential and reach higher economic growth rates. In our view, the Ministry of Regional Development and Infrastructure, regional administration bodies (after establishing contemporary decentralization standards and regional, that is, territorial power institutions), and corresponding scientific research organizations must pool their efforts to draw up a regional economic and social development strategy that meets current conditions and is vali- dated, keeping in mind the need for deeper integration into the globalized world economic system and rational use of the opportunities presented by globalization at the regional administration level. The strategy should designate in particular the vectors of business development broken down into regions, ways to diversify regional production, ways to develop regional centers of gravity, and so on, as well as possible approaches to stimulating and supporting this development. In order to improve the coordination and regulation of regional economic and social develop- ment in the next few years, a sufficiently decentralized system must be drawn up based on the expe- rience of the developed countries and keeping in mind Georgia’s specifics and the special features of the transition period. This also requires enhancing the system for assisting the development and functioning of business, introducing it cautiously and, where possible, gradually (although the critical state of agriculture makes such gradualness impossible). 64 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Igor LIUTY

D.Sc. (Econ.), Professor, Vice Principal at the Taras Shevchenko National University of Kiev, Chair Head (Kiev, Ukraine).

Rufat KULIEV

D.Sc. (Econ.), Professor at Azerbaijan Technical University and the Taras Shevchenko National University of Kiev, Member of the Milli Mejlis (Parliament) of the Azerbaijan Republic (Baku, Azerbaijan).

SMALL AND MEDIUM BUSINESSES IN A GLOBALIZING WORLD

Abstract

his article looks at the specific features and medium business development models. of small business development and its It gives recommendations on how to use T significance for the economy, as well as world experience in small business develop- at the European, Asian, and American small ment in the post-Soviet countries.

KEYWORDS: Small and medium business, globalizing economy, market economy.

Innovation is the key to success in this business, and creativity fuels innovation. James Goodnight, American businessman, founder and CEO of SAS1

Introduction. Small Business’s Place in the Economy

The market economy today is characterized by a complex amalgamation of large, medium, and small production units. On the one hand, plant concentration is a stable trend of scientific-technical progress: large companies have the greatest material, financial, and labor resources, as well as quali-

1 [http://www.adme.ru/vdohnovenie-919705/slova-velikih-predprinimatelej-415305/].

Volume 7 Issue 3-4 2013 65 THE CAUCASUS & GLOBALIZATION fied personnel. They are able to carry out large-scale R&D. On the other hand, there has been an unprecedented flux in medium and small entrepreneurship recently, particularly in areas where large amounts of capital, significant volumes of equipment, and widespread collaboration are not yet need- ed. Such enterprises are particularly abundant in scientific-intensive types of production, as well as in branches related to the manufacture of consumer goods. Small forms of production have certain viable advantages over large production units: their proximity to the local markets and adaptation to customer requests; their ability to put out small batches of products, which is not advantageous to large companies; their ability to eliminate extrane- ous management links from the production cycle, and so on. Small business is also enhanced by the differentiation and individualization of demand in production and personal consumption. The development of small business is creating favorable conditions for economic revival: a competitive environment is developing; additional jobs are being created; restructuring is going fast- er; and the consumer sector is expanding. The development of small enterprises is helping to saturate the market with goods and services, raise export potential, and make better use of local raw resourc- es. Their ability to enlarge their area of operations and create new opportunities not only for finding jobs, but also for engaging in business activity, launching creative efforts, and making use of free production capacities is of immense importance. The formation of small market structures in every branch and sphere of the economy without exception meets world economic trends: today an increasing number of small enterprises of the most diverse specializations is appearing in all branches of the economy throughout the world. The optimal size of an enterprise depends on the branch specifics, its technological peculiarities, and the economies of scale. For example, some branches that are not distinguished by high capital- intensiveness and large production volumes have no need for large enterprises and it is precisely their small and medium companies that prove to be the most economically justified.

World Experience in Small and Medium Business Development

In recent years, the concentration and centralization of capital has accelerated in West Euro- pean countries. However, although this has made many small and medium businesses bankrupt, this branch of the economy has not disappeared altogether. Small business has proven very hardy and able to make a comeback, while also attracting the interest of large concerns. Small and medium companies are looking for specialized niches where they can act as subcontractors for large corporations. In Western Europe, approximately half of the output of the manufacturing industry is produced by small and medium enterprises. Without being monopolists, they are exerting all their efforts to better adapt to internal conditions of production and sales. Transnational corporations are offering them the op- portunity to be the first to try out new products in order to later launch their mass production. New companies are replacing bankrupt enterprises, so constant renovation is going on. It is worth noting that employment in small business did not drop during the economic crisis. The table below presents indices that characterize the state of small and medium businesses in several European countries, America, and Asia. Small enterprises enjoy state support in all developed countries; they are integrated into the national economy and are playing an ever increasing role in the manufacture of goods and services. When analyzing world experience regarding the functioning of small and medium business, three models of development of small business can provisionally be identified: European (the West Euro- pean countries), Asian (South Korea, Japan, and so on), and American. Let us examine them based on several examples. 66 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

Table 1 Indices Characterizing the State of Small and Medium Businesses (SMB) in Several Countries in 2011

Indices Number of Number of Percentage of Number SMB per employees employees Percentage of SMB, 1,000 in SMB, in SMB of total of SMB in thou. units residents, million number of GDP, % Country units people workers, %

Great Britain 2,630 46.0 13.6 49 50-53

Germany 2,290 37.0 18.5 46 50-52

Italy 3,920 68.0 16.8 73 57-60

France 1 980 35.0 15.2 54 55-62

U.S. 19,300 74.2 70.2 54 50-52

Japan 6,450 49.6 39.5 78 52-55

Russia 844 5.65 8.3 13 10-11

S o u r c e: E.N. Lymar, “Effektivnost gosudarstvennoi podderzhki malogo i srednego biznesa kak uchastnikov rynkov s monopolisticheskoi konkurentsiey,” Chelyabinsk State University Bulletin, No. 10 (264), 2012, Ekonomika, Iss. 38, pp. 95-101, available at [http://www.lib.csu.ru/vch/264/016.pdf].

Europe

For many years now, EU experts point to the exemplary nature of Spain’s small and medium business structure, not only in terms of its organization, but also with respect to its operational results. This assessment is primarily based on the country’s 72% of GDP, which is provided precisely by this sector of business.2 The share of Spanish small and medium businesses in some branches (for example, in agricul- ture) reaches 80%, while in the others (construction, industry, ship-building), it comprises an average of 25-30%. The main branches of small and medium businesses are the agroindustrial complex (ag- riculture, particularly grain production), ferrous and non-ferrous metallurgy, the food industry (man- ufacture of food products, confectionary, winemaking), construction, tourism, and so on. Spain espouses a multitude of small and medium business support and development programs. For those planning to open their own business, various assistance programs have been developed and are being successfully applied. Businessmen do not have to pay taxes for the first five years, while they also have the right to perpetual loans for business development. The Spanish government fo- cuses its main attention on those small businesses that have a high social value, create jobs for so- cially vulnerable groups of the population (students, women, immigrants, and so on), and promote

2 See: Dva kita ispanskoi ekonomiki. Opyt razvitiia malogo i srednego biznesa, ed. by V.L. Vernikov, Ves mir, Moscow, 2010.

Volume 7 Issue 3-4 2013 67 THE CAUCASUS & GLOBALIZATION the upswing of underdeveloped regions. In Spain, the state encourages many organizations and funds to support small business. Minimum red tape is the most important positive factor in the development of small and me- dium business in Spain. A business can be registered and receive a license in 24 hours without un- necessary bureaucratic delays. What is more, anyone can do this, even the citizen of another state. The controlling functions of state structures are also kept to a minimum. The world financial crisis of 2008 greatly aggravated the situation: the drop in business activity and financial collapse of hundreds of large and medium and thousands of small companies caused inevitable cutbacks in employees in many branches, primarily in construction, furniture manufacture, services, and tourism. But even despite this, small and medium business is still rendered vigorous state assistance in Spain. Not every country of the European Union enjoys the favorable conditions for developing small and medium businesses that Spain does, but small and medium business is developed and encouraged in other countries too. Each country has its special features, but this mainly relates to historical tradi- tions, family crafts, and historical sights of interest. The La Tour d’Argent restaurant in Paris is a graphic example of a specific small business in France. The restaurant boasts the largest private collection of wine in the world—25,000 bottles of vintage wine. Visitors can go on excursions to the restaurant’s museum basement and, of course, many wines from this famous collection are included on the menu. Visitors can also try the house specialty, “pressed duck,” which has been served here since 1890. Since the end of the 19th century, all visitors who order this dish have been presented with a numbered certificate and their name entered in a special register along with the names of Alexander II, Charlie Chaplin, Marilyn Munroe, Japanese Emperor Hirohito, and . In Great Britain, the ubiquitous family hotel business is a special feature of small businesses. And this is not simply a hotel business, but accommodation in family castles that have only 2-3 rooms and boast their own history and sights of unique interest.

Asia

Small and medium enterprises have become an important component of South Korea’s econ- omy. The country places priority emphasis on the development of small and medium business since these sectors of the economy promote the creation of new jobs and ensure sustainable economic growth. State policy is aimed at comprehensively supporting small and medium businesses, since any weakness in the small and medium business sector could potentially be of serious detriment to the national economy. The Korean Small and Medium Business Administration (SMBA) operates in the country.3 The strategic goal of the SMBA is to help small and medium businesses gain access to foreign markets. In 2011, the export volume of Korea’s small and medium enterprises amounted to $114.6 bil- lion—20.6% of the country’s total export volume. Despite the global financial crisis, the annual export growth rates of the small and medium business segment are higher than similar indices for large business. In 2011, growth amounted to 16.2% compared to 15.6% the previous year. Korea’s small and medium businesses supply 227 countries of the world with products. These countries include China, Japan, the U.S., Hong Kong, Vietnam, Taiwan, Indonesia, India, Iran, and Russia. The number of small and medium businesses that send products abroad rose from 75,500 in 2008 to 83,000 in 2011. However, the export volume of more than 83% of companies in 2011 did not

3 [http://www.ruskorinfo.ru/articles/economy/3649/].

68 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION exceed $1 million. In other words, most Korean companies belong to the small and medium business segment. The main export articles are car parts, ship hull structures, computers, and household appli- ances. The state’s small and medium business support policy has been characterized in recent years by low interest rates on borrowed funds and multifaceted and comprehensive bank lending programs. The lending programs drawn up by the Small & Medium Business Corporation (SBC), which is the main regulating body, are being successfully implemented in different spheres of the economy and are primarily offered to those enterprises that possess the latest technology and enjoy business appeal. The most important programs are: — the program for financing the development of an enterprise’s technology by granting funds for the commercialization of scientific research; — the program for financing enterprises of the newly developing industrial branch with the promotion of innovative enterprises that have advanced technology in order to raise an en- terprise’s competitiveness. The competitiveness of small business enterprises generated by raising labor productivity and innovated development is strengthened and stimulated by production and technology consultation and support. One of the most important factors for stimulating the development of small innovative business is the education system, which ensures high quality of personnel training. Programs are being devel- oped for offering consulting support in training specialists in technology and management, as well as in instructing employees aimed at increasing the enterprises’ competitiveness. The support of R&D in the interests of small business enterprises is being carried out through technical support programs for implementing technological inventions at the initial stage. Enterprises specializing in the manufacture of spare parts and materials that have not previously received state assistance for carrying out scientific research enjoy special support. Domestic exporters who are transferring to world quality standards also enjoy extensive finan- cial support in the country. The plan for reforming the national standards system includes active participation of state structures, training specialists, and raising budget expenditure on carrying out research. An effective way to support small and medium business in Korea is expanding state contracts with small and medium companies: they account for 56% of the total volume of state purchases. Programs are also being drawn up for managing and raising product quality, developing market- ing, and assisting in reinforcing international competitiveness and enhancing the international market by means of special marketing aimed at stepping up the export of small business products. Throughout the world, Japan’s economic and scientific-technical achievements are primar- ily associated with several dozen of the largest companies and enterprises. At the same time, Ja- pan’s small and medium businesses are also making a considerable contribution to the country’s prosperity. Small and medium companies in Japan, along with large powerful corporations, form an impor- tant element of the economy. There are around 6.5 million small and medium enterprises operating in the country, employing 40 million people (approximately 80% of the total number of employed). Small and medium enterprises account for around 55% of the country’s GDP.4 These enterprises oc- cupy a dominant position in such branches of the economy as garment manufacture, footwear, the haberdashery industry, the manufacture of spare parts and structures, construction, the service sphere

4 See: E.N. Lymar, “Effektivnost gosudarstvennoi podderzhki malogo i srednego biznesa kak uchastnikov rynkov s monopolisticheskoi konkurentsiey,” Chelyabinsk State University Bulletin, No. 10 (264), 2012, Ekonomika, Iss. 38, pp. 95-101, available at [http://www.lib.csu.ru/vch/264/016.pdf].

Volume 7 Issue 3-4 2013 69 THE CAUCASUS & GLOBALIZATION (including the servicing of technical devices), and so on. Japan’s small business is characterized by a widely developed subcontracting system where small and very small enterprises fulfill the orders of large companies—machine-building, airplane-building, car-building, and so on. The Japanese model for assisting small business in carrying out promising scientific-technical developments and technically and technologically reequipping small businesses is considered exem- plary, while the Japanese business support system is recognized as one of the most all-encompassing and mature in the world. In addition to program financing, training, consulting, and development, Japan’s state small and medium business support policy includes programs aimed at raising the competitiveness of small companies and enterprises in the most promising branches and encouraging the modernization of economic activity. Support is rendered by allotting subsidies and loans—issuing direct credits and offering guarantees. More than 80% of subsidies are designated exclusively to scientific-technical programs, including to raise the technical level of production, improve production technology in the light and food industry, and develop, along with universities and scientific research institutes, new scientific-intensive products. South Korea and Japan are graphic examples of the Asian model of small and medium business that enjoy extensive state support, are vertically structured into modern high-tech industrial produc- tion, and cooperate closely with large monopolies, performing contractual work for them.

The U.S.

The small business sphere in the U.S. is a unique mechanism for activating socioeconomic life. More than 70 million people are employed in small and medium businesses, producing more than 50% of the country’s GDP and manufacturing more than 30% of export products. Moreover, in the past 15 years, 64% of all new jobs have been created in the small business sector. State policy regard- ing small business is founded on understanding the high value of small and medium business in ensur- ing the country’s sustainable development and set forth in the Small Business Act PL 85-536 with addenda PL 108-217 of 4/5/2004.5 In order to guarantee sustainable and harmonious development of small business in the con- tinuously changing market situation, the state constantly renders comprehensive support to this sector of the economy. This function is performed by a federal agency called the U.S. Small Business Ad- ministration (SBA) and directly subordinate to the country’s president. The SBA pursues a state policy regarding small business and implements different financial, technical, consulting, and legal assistance programs for small businesses at all stages of their development. At present, in keeping with the current order in the country that envisages a medium-term stra- tegic development and improvement plan for the operations of all government departments, the SBA is implementing the next five-year small business development plan for the 2008-2103 fiscal years. This document lists the main strategic goals for further developing small business and the most im- portant vectors for improving state support measures to achieve these goals. The SBA, the annual loan portfolio of which tops $88 billion, is one of the largest dispensers of state budget funds in the country. In the past five years, the agency’s loan portfolio has burgeoned by 50%, which has made it possible to significantly expand the amount of assistance to small business and efficiently promote its development. In correspondence with the established practice, financial and technical support of small businesses is rendered in the form of a set of programs, including for guaranteeing loans and investment financing. The SBA is not rendering direct financial aid to small

5 [http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_strategic_plan _2006.pdf].

70 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION businesses. This assistance is carried out through a network of partner and intermediate financial institutions that, thanks to the agency’s guaranteed loans, engage in direct lending to small enter- prises. A Loan and Lender Monitoring System (L/LMS) has been created for efficiently managing the multitude of loans at different stages of their realization. Short-day mini kindergartens are a popular type of small business in the U.S. This enterprise is very much in demand. And, as research shows, a service related to the care and instruction of children will only gain in popularity. According to statistics, 85% of working Americans have a family, where- by 78% of married male employees have wives or partners who also work, while 46% have underage children. Approximately one fifth of working parents are single. A mini kindergarten is usually located in a private apartment or home. The instructor, i.e. the landlady, takes care of a small group of children, between 2 and 5 people, while their parents are busy. Parents pay between $15 and $50 an hour for their child to attend such a kindergarten. For example, for $15 an hour, a nanny will take a child for a walk, play with him/her, and read to him/ her. For $50, a child is fed, put to bed, and taken to the movies, theater, or on an excursion (tickets and transportation are additional). The advantage of this type of business is that it requires minimal financial investments. Setting up such a kindergarten may require no more than $1,000. All that is needed is a set of toys and enter- taining games, a good television and video recorder, as well as a few cots, bed linen, and sets of dishes and utensils. On the whole, the American model of small business can primarily be described as innovative (venture companies, startups, business incubators, and so on), and secondarily as a platform of busi- ness opportunism.

Azerbaijan

In post-Soviet states, small and medium businesses have not become as widespread as in the developed countries of the world. For example, in Russia, the share of small and medium business in the country’s GDP is no higher than 11%, while the share of employees is 13% of all those employed in the national economy.6 According to official statistics, as of the beginning of 2012, there were more than 170,000 enterprises operating in the small business sphere in Ukraine, which provided 15% of GDP.7 There are 14,200 small businesses functioning in Azerbaijan with 90,200 employees, which amounts to 2.1% of all those employed in the national economy. Small businesses produce 3.8% of the country’s GDP, and along with private businessmen with certificates of legal status, this index amounts to 8.4%.8 At present, Azeri small businesses have essentially assimilated only one sphere of activity— mediation, while the development of such enterprises in the real sector and primarily in industry are of particular significance for the country’s present-day economy. The development and functioning of small and medium businesses in the country are largely hindered by difficulties in acquiring funds. An important way to resolve this problem is to create a mutual lending mechanism. Mutual lending is implemented by means of loan cooperation, a specific variety of financial activities that calls for businessmen or consumers to voluntarily pool their resources in order to meet their needs for bor-

6 See: E.N. Lymar, op. cit. 7 See: The official website of the Ukrainian State Statistics Committee [http://ukrstat.gov.ua]; “Bolshie problemy malogo buznesa v Ukraine,” available at [http://ezarabotok.info/]. 8 [www.azstat.org].

Volume 7 Issue 3-4 2013 71 THE CAUCASUS & GLOBALIZATION rowed funds. The absence of a legal basis makes it difficult to create mutual lending societies in Azerbaijan. Adopting a law that regulates the activity of small business mutual lending societies will make it possible to create a new source for funding the activity of small and medium businesses in the country. Large financial and industrial groups have been formed and are developing in recent years in Azerbaijan—the prototype of Western transnational corporations. They include SOCAR, the AKKORD Corporation, AZERSUN Holding, GILAN Holding, and several others. These companies are successfully doing business both in the country and in regions of Europe and Asia. Medium or- ganizations are also developing: the BAKU STEEL COMPANY, AZPETROL, MATANAT-A, and others.9 It is hoped that small business will grow, become fortified, and find its niche concurrently with these companies—this is also being promoted by the investment and business climate in the country, which is improving with each passing year. Small business could perform a whole slew of functions that are not advantageous for large companies, and at the same time have its own specializa- tion and development prospects. At present, the Economic Policy Committee of the Milli Mejlis of the Azerbaijan Republic is reviewing the Law on Regulating Audits Carried Out in Business and the Protection of Businessmen’s Interests.” When discussing this law, several deputies emphasized the importance of further develop- ing business in the country, while the coauthor of this article suggested paying more attention to protecting the interests of medium and small forms of production and carrying out several measures to stimulate small business, since these structures are called upon to play a growing role in the na- tional economy. Small business as an efficient way to organize socially vital labor meets the socioeconomic interests of Azerbaijan. Small business is a source of development that Azerbaijan cannot deny either now or in the future.

Conclusion

As we see, world experience is showing how important the small and medium business seg- ment is for the economy of developed countries. The use of this experience in Azerbaijan will help to boost the participation of small business in the country’s accelerated development. It is pre- cisely in conditions of dynamic structural changes in the economy, modernization, and encourage- ment of long-term sustainable economic growth that the advantages of small business are largely manifested. The examples presented above show that small and medium businesses enjoy support in all the developed countries. This activity is equally beneficial both for the country’s economy as a whole and for each citizen in particular, and so has deservedly acquired state recognition and support. Small businesses draw additional labor into public production, which creates new values and multiplies national wealth.

9 [www.sahibkhar.biz].

72 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Avtandil SILAGADZE

D.Sc. (Econ.), Professor, Academician at the National Academy of Sciences of Georgia (Tbilisi, Georgia).

Mikhail TOKMAZISHVILI

D.Sc. (Econ.), Professor at Andrew the First-Called Georgian University (Tbilisi, Georgia).

Tamar ATANELISHVILI

Ph.D. (Econ.), Associate Professor at Ivane Javakhishvili Tbilisi State University (Tbilisi, Georgia).

GENESIS OF POST-COMMUNIST ECONOMIC DEVELOPMENT: OBSTACLES AND PROSPECTS (A GEORGIAN CASE-STUDY)

Abstract

he authors contend that the post-Sovi-- ergy resources, and supplies of under- et economy is developing slowly. De- ground drinking water that the world needs, T velopment of production based on the which can be transported via potential inter- innovative use of national resources is a pri- national pipelines, such as Georgia-Europe. ority for stable development of the post-So- The article concludes that powerful agricul- viet economies. National production in small tural enterprises, insurance mechanisms, post-Soviet countries such as Georgia must an efficient system for servicing agriculture, meet internal demands, for which the latter and technical service, storage, packaging, has the necessary potential. It has untapped and distribution centers must be estab- mining and related industry assets, rich en- lished.

KEYWORDS: Post-communist economy, economy of Georgia, national resources, industry.

Introduction

Despite the recent economic crisis, the world economy continues to grow. In the past thirty years, it has increased 6.6-fold, and between 1990-2011, this growth amounted to 158%. Despite the fact that the gross world product significantly decreased in 2008-2009 as a result of the global economic crisis (see Fig. 1), in 2012 world GDP nevertheless topped $70.0 trillion. Volume 7 Issue 3-4 2013 73 THE CAUCASUS & GLOBALIZATION The economies of the former Soviet republics, now independent states, have developed at dif- ferent rates. At the initial stage of their development, the emphasis was on building independent democratic states with a market economy.1 It has been a contradictory and difficult process. Incon-

Figure 1

World GDP, $T 80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 1012

GDP of the Post-Soviet Countries, $T 3,000

2,500

2,000

1,500

1,000

500

0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 1012

S o u r c e: World Bank, available at [http://databank.worldbank.org/data/home.aspx].

1 See: T. Basilia, A. Silagadze, T. Chikvaidze, Post-Socialist Transformation: The Georgian Economy at the Turn of the 21st Century, Tbilisi, 2001, pp. 16-17 (in Georgian); V. Papava, Economic Reforms in Post-Communist Georgia: Twenty Years After, Nova Science Publishers, New York, 2013, pp. 1-3.

74 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION sistent and nonsystemic implementation of the reforms in all countries, including Georgia, led to er- rors, particularly at the initial stage of the economic reforms. This trend was characteristic of all the post-Soviet countries.2 Other questions also arose, such as: How will the post-Soviet countries resolve the difficult socioeconomic problems and ensure sustainable economic development? What are the priorities of economic development?

The Development Dynamics of the Post-Soviet Economies

Following the downward trend in growth rates, the world economy was able to quickly recover and overcome the negative results of the slump. However, opposite trends were identified in the post- Soviet states.3 When they first achieved their independence, they tried to reach the economic level of 1990. In so doing, the share of the post-Soviet states (apart from Estonia) in the world gross product amounted to 3.2% in 1990 and 3.7% in 2011. During the reforms, their ranking in the world economy essentially did not change. Among the post-Soviet states, the lowest GDP index compared to 1990 was recorded in Georgia (–32.4%, 1994) and (–32.7%, 2000). Moldova and Georgia were the last to reach the GDP level of 1990, in 2007 and 2006, respectively (see Fig. 2). The growth dynamics show that small countries that do not have rich oil and gas resources develop at a slower rate than other countries. Compared to 1990, the highest GDP growth was recorded in the oil- and gas-producing countries in 2011: (868.7%), Azerbaijan (715.5%), and Kazakhstan (698.3%). Despite the fact that during the transition period, the Baltic countries were successful in carrying out their reforms, the increase in GDP in Estonia, Lithuania, and Latvia was relatively low and amounted to 586.0%, 406.6%, and 379.2%, respectively. The GDP increase in Russia and Armenia reached 453.5% and 359.5%, respectively, and the lowest increase was registered in Georgia (185.7%) and Moldova (195.0%). On the whole, the post-Soviet economy grew 3.6-fold (apart from Estonia) in 1990-2011 and 4.9-fold in 1995-2011. So the economic growth rates at the end of the transition period were very slow, although after the post-Soviet countries adjusted to the market economy, they began rapidly rising. According to World Bank data, the highest rates of GDP reduction (compared to the previous year) were registered in Georgia (–44.9%, 1994), Armenia (–41.8%, 1992), Latvia (–32.1%, 1992), and Moldova (–30.9%, 1994). During the past world financial crises, it amounted to –11.4% (1997) in Turkmenistan, –6.5% (1998) in Russia, –18.0% (2009) in Latvia, –14.7% (2009) in Lithuania, –14.1% (2009) in Estonia, and –14.1% (2009) in Armenia. At the same time, despite the moderate growth rates, the Baltic countries enjoyed the highest GDP per capital. This was because they were not part of the Soviet system for long and, consequent- ly, when the Soviet Union collapsed, the economy of these countries proved more developed than in

2 See: T. Basilia, A. Silagadze, T. Chikvaidze, op. cit, p. 132; V. Papava, op. cit., pp. 7-10; idem, Necroeconomics. The Political Economy of Post-Communist Capitalism (Lessons from Georgia), iUniverse, New York, 2005, pp. 129-132; Ia. Meskhia, “The Global Economic Crisis and Georgia’s Macroeconomic Stabilization,” in: Economisti (Tbilisi), 2009, pp. 8-19 (in Georgian); A. Silagadze, General Aspects of the Development of the Post-Soviet Economy—Urgent Problems of the Economies of the Post-Communist Countries at the Current Stage, Tbilisi State University, Paata Gugushvili Institute of Economics, Tbilisi, 2013, pp. 66-67 (in Georgian). 3 See: T. Beridze, E. Ismailov, V. Papava, Tsentralnyy Kavkaz i ekonomika Gruzii, Nurlan, Baku, 2004, pp. 47-48; A. Silagadze, Economic Perspectives in Post-Soviet Georgia. Actual Economic Problems under Globalization, Paata Gugushvili Institute of Economics, Tbilisi, 2011, pp. 89-91; A. Silagadze, General Aspects of the Development of the Post- Soviet Economy—Urgent Problems of the Economies of the Post-Communist Countries at the Current Stage, pp. 66-69.

Volume 7 Issue 3-4 2013 75 THE CAUCASUS & GLOBALIZATION

Figure 2 GDP Dynamics in 1990-2011 (1990=100%)

1,000 900 800 700 600 500 400 300 200 100 0 Latvia Russia Belarus Ukraine Georgia Armenia Estonia* Moldova Lithuania Tajikistan Azerbaijan Uzbekistan Kyrgyzstan Kazakhstan Turkmenistan

* Compared to 1995.

S o u r c e: World Bank. other republics. In 2011, they produced more than $12,000 GDP per capita, ranking high on the list of other former Soviet republics. Russia also enjoyed one of the highest per capita GDPs in 1990. Despite their high level of natural resources, other oil-producing republics did not prosper, and their GDP amounted to only $5,000-11,000 per capita in 2011.4 GDP in the rest of the republics remained lower than average. Today the economies of the post-Soviet states are more or less integrated into the global econ- omy, and the negative phenomena going on in the world also have an effect on them. In 2008, before the world financial crisis, only a few post-communist states (mainly the Baltic countries) enjoyed a growing level of prosperity.5 During the crisis, in 2009, GDP decreased in most post-Soviet countries.6 The level of production fell, particularly in the Baltic countries (Latvia, Lithuania, and Estonia), Ukraine, and Armenia, where reduction in economic growth was registered in double digits. The situation improved somewhat in 2010. On the whole, the overall small share the post-Soviet countries have in the world economy and their relatively low macroeconomic indices make it obvious that, despite their integration into the world market economy, they cannot make an economic breakthrough and their economies have not

4 See: World Bank, available at [http://databank.worldbank.org/data/home.aspx]. 5 See: A.Tvalchrelidze, A. Silagadze, G. Keshelashvili, D. Gegia, Georgia’s Social & Economic Development Program, Nekeri, Tbilisi, 2011, available at [http://www.ifsdeurope.com/prezetation.html]. 6 See: A. Silagadze, “The Prospects for Georgia’s Economic Development,” in: The Economy and Business Processes, Tbilisi, 2011, pp. 19-22 (in Georgian).

76 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION benefited from any significant growth in the last twenty years. The same applies to the oil- and gas- producing post-Soviet countries. Everyone knows that economic growth depends on the use of extensive and intensive factors. If resources are overly exploited, economic growth will not enjoy long-term stability. This may be the reason for the low economic growth in the post-communist countries. Consequently, these states and the structural changes in their economies are developing very slowly, if at all. The post-communist countries are known for their abundant natural resources. In addition to states with large supplies of oil and gas, other countries are rich in agricultural produce, mining in- dustry production, fertilizers, gold, cotton, metals, and other resources, which constitute their main export commodities. And this means that they are only a raw material appendage for the other coun- tries of the world, since the end product is processed and manufactured in the raw material importer countries. This is why the raw material exporter countries are developing at a slower rate. Abundant natural resources do not mean rapid economic growth,7 and in many cases, they have a negative impact on economic growth.8 The literature calls this a “resource curse.”9 The absence of human capital and investment resources also has an effect on economic growth. The shortage of new technology makes economic growth dependent on other, more developed countries. These states do not have a balanced economy and, according to the theory of unbalanced growth, eco- nomic development is restrained by shortages in resources of human capital and investments, as a result of which many branches of the economy are experiencing uncoordinated development. So government investments and long-term prospective plans and programs are vital for supporting strategic branches. The reforms in the post-communist states were based on the concept of the Washington consen- sus. This concept considers the establishment of a liberal market to be an economic prerequisite for enhancing growth and generating market forces and espouses that it should stimulate the intensive use of all production factors. However, market stimuli in the states in question proved insufficient to promote the efficient use of resources. Why then are they faced with economic vacillation and can the insufficient use of natural resources and the absence of production capacities be considered the reason for the macroeconomic instability? We will conduct a case-study of Georgia in order to shed light on this question.

Economic Trends in Post-Soviet Georgia

During the world financial crisis, the socioeconomic situation in Georgia, as in other countries, significantly deteriorated. The economic growth rates and foreign trade indices dramatically dropped, while inflation, external debts, the unemployment level, as well as the number of people living below the poverty line increased. For example, according to Georgia’s Socioeconomic Development Program for 2011-2030,10 if it makes efficient use of natural resources, the country will be able to reach an aver- age European economic level in the next 20 years without a significant increase in external debts. Georgia is a moderately developed country. It has a population of 4.4 million people and its per capita GDP is $3,519. During the past ten years, the GDP growth rates reached a peak of 12.3% in 2007, although, as in other states, the economy slumped as a result of the world financial crisis and

7 See: A. Silagadze, “The Development of Georgia’s Agriculture—The World Economic Crisis and Georgia,” Social Economy, No. 1, 2010, pp. 69-71 (in Georgian). 8 See: D. Benbudi, S. Mamipour, A. Karami, “Natural Resource Abundance, Human Capital and Economic Growth in the Petroleum Exporting Countries,” Journal of Economic Development, No. 35 (3), 2010, pp. 81-122, available at [http:// www.jed.or.kr/full-text/35-3/4.pdf]. 9 J.D. Sackhs, A.M. Warner, “Natural Resources Abundance and Economic Growth,” Natural Bureau of Economic Research, Working Paper 5398, 1995, available at [http://www.nber.org/papers/w5398.pdf]. 10 See: A.Tvalchrelidze, A. Silagadze, G. Keshelashvili, D. Gegia, op. cit.

Volume 7 Issue 3-4 2013 77 THE CAUCASUS & GLOBALIZATION military conflict with Russia in 2008. In 2009, GDP dropped by 3.8%, although this drop might have been worse had it not been for the financial support of international financial organizations, the U.S., and the European Union. For example, the EU provided the country with $4.5 billion in financial support over the span of three years. In 2012, Georgia’s economic growth rates amounted to 6.1%, although in 2013, economic activ- ity sharply fell. Purchasing power dropped, and whereas in previous years foreign direct investments ensured an increase in purchasing power and the high inflation rate, in 2012 inflation was replaced with deflation. The unemployment level was quite high and for many years remained at 13-16%. Foreign direct investments reached their peak in 2007 and amounted to 19.8% of GDP, although in 2012 they abruptly dropped to 5.4%. This sharp fluctuation indicates economic instability. Georgia’s state budget amounted to 27% of GDP. Whereas in 2006, the gross external debt constituted 49% of GDP, in 2012 it reached 84%, 36% of which was state debt. In Georgia’s economy, 17.2% of GDP is produced in industry, 16.6% in commerce, 8.4% in agri- culture, 10.6% in the transport and communication sector, and 11.2% in state management (see Fig. 3).

Figure 3 Dynamics of the Economy (2003 = 100)

250.0

200.0

150.0

100.0

50.0

0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012

Agriculture Industry Construction Commerce Transport and communication State management

S o u r c e: National Statistics Board of Georgia, available at [http://geostat.ge]. 78 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Functioning of the real sector is largely supported by imports and not by the use of national resources. Moreover, products manufactured in the real sector cannot meet even the country’s domestic demand. Low economic efficiency was particularly manifested in agriculture. Rationally organized agriculture can play a significant role in society’s prosperity; however, agriculture and the food industry have never been competitive in post-Soviet Georgia. The country was not ready for the global increase in food prices at the beginning of this century and was unable to take advan- tage of the favorable opportunities for growing agricultural (including environmentally pure) pro- duce.11 The government’s inability to attract investments into this sector led to an increase in the import of agricultural production. During the world financial crisis in 2009, the volume of agricul- tural production dropped by 6% compared to the previous year. The total share of the agricultural industry in the country’s GDP in 2012 dropped by 3.3 percentage points compared to similar indi- ces for 2006 (see Fig. 4).

Figure 4 Share of the Agricultural Industry in Georgia’s GDP (%)

25

20 19.4 18.1 17.5 17.1 17 16.1 15 16.4

10

5

0 2005 2006 2007 2008 2009 2010 2011 2012 2013

S o u r c e: National Statistics Board of Georgia.

The production of the main types of agricultural produce per capita dropped to a critical level— only half of the arable land was under cultivation.12 In 2011 (compared to 2003), the number of swine, cattle, and sheep and goats dropped by 77.8%, 12.5%, and 12.7%, respectively. The same year, com- pared to 2006, the import of meat, potatoes, and vegetables increased 2.2-, 2.1-fold, and 45.2%, re- spectively. As a result, national production does not meet most of the demand for agricultural produce, while the food industry meets only 1/6 of the demand. In 2004-2012, the government ignored the possibility of priority development of national agri- culture. In our opinion, government support is of vital importance in agriculture, particularly in those countries where the open market economy is at the formation stage. Importing products that the

11 See: A.Tvalchrelidze, A. Silagadze, G. Keshelashvili, D. Gegia, op. cit. 12 See: Ibidem.

Volume 7 Issue 3-4 2013 79 THE CAUCASUS & GLOBALIZATION country has favorable natural conditions for manufacturing has a negative effect on the industry’s potential development. Georgia is a graphic example of this. The country’s economic policy has undergone significant changes in recent years. In correspon- dence with the program of the Russian Dream coalition, which won the parliamentary elections in 2012, $1 billion was allotted to support agriculture and the export of Georgian products to Western markets. Export of Georgian products to the Russian market was also included on the agenda. All of these measures were prompted by the crisis in the agricultural sector. In recent years, industry and the construction sector in particular have been in a pretty bad way in Georgia. In 2006-2012, the volume of industrial production rose two-fold and more, while invest- ments in basic assets increased by 95 percent (at current prices). National industry does not produce enough to meet domestic demand, which has led to an increase in import. It is obvious that the low competitiveness of industry will increase the share of imports. Economic instability was also characteristic of the foreign trade sector (see Fig. 5).

Figure 5 External Trade in 2006-2012 ($m)

12,000 10,000 8,000 6,000 4,000 2,000 0 2006 2007 2008 2009 2010 2011 2012 –2,000 –4,000 –6,000 –8,000

Goods turnover Export (FOB) Import (CIF) Balance

S o u r c e: National Statistics Board of Georgia.

In 2012, the country’s foreign trade balance amounted to $5,465 million (compared to $2,738 mil- lion in 2006), which is higher than the state’s annual budget revenue. Petroleum products constitute one of the largest export items, but without the import of primary materials, which Georgia cannot produce itself, the country’s potential export opportunities would be even worse. Nevertheless, na- tional production cannot compensate for the negative balance due to the relative increase in imports. It is obvious that national production opportunities remain untapped. Investments also have an impact on economic instability—the Georgian economy suffers from a shortage of internal investment resources, while the deficit is compensated for by attracting foreign capital. In this respect, before the world financial crisis of 2007, foreign direct investments increased, but later the situation significantly worsened. For example, in 2007, foreign direct investments 80 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

Figure 6 FDI into Georgia in 2004-2012 ($m)

2,500

2,000

1,500

1,000

500

0 2004 2005 2006 2007 2008 2009 2010 2011 2012

S o u r c e: National Statistics Board of Georgia. amounted to $2,014.8 million, in 2008 $1,564.0 million, in 2009 $658.4 million, in 2010 $814.5 mil- lion, in 2011 $1,117.2 million, and in 2012 $865.2 million (see Fig. 6). Figure 7 Georgia’s External Debt in 2006-2012 ($bn)

16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2006 2007 2008 2009 2010 2011 2012

National debt

Debt of the government and National Bank

S o u r c e: [http://www.nbg.gov.gе]. Volume 7 Issue 3-4 2013 81 THE CAUCASUS & GLOBALIZATION There were several reasons for the decrease in foreign investments, including instability of the domestic political situation, inability of the government to protect private property, the world financial crisis, the Russian-Georgian war (August 2008), the low level of capitalization of the national econ- omy, the growing inflation, etc. Inefficient functioning of the Georgian economy led to galloping inflation. In 2006-2008, infla- tion fluctuated between 9.2% and 10%, while in 2010-2012, it oscillated between 7.1% and 8.5%. Due to the drop in aggregate demand, these fluctuations resulted in an inflation rate of 0.9%, which in fact indicated a drop in economic activity. So inflation was one of the results of the economic fluctuations. The state budget was also unstable. In 2006-2012 (apart from 2009), state budget revenue in- creased by 2.2-fold. Nevertheless, it should be noted that the share of the local budgets in the state budget was very small, which points to the weak development of the regional economy. In the mean- time, the external debt growth rates were much higher than the economic growth rates. In 2006-2012, Georgia’s gross external debt increased by almost 3.5-fold, including the debts of the government and National Bank, which increased 2.8-fold (see Fig. 7). Despite the billions in foreign aid Georgia received in the postwar period, which should have played a significant role in the country’s economic revival, these funds have already been used up and Georgia can only count on boosting its economic growth today by developing national production.

Conclusion

In terms of economic growth, Georgia ranks as one of the lowest among the post-Soviet countries compared to 1990. Its abundant natural resources do not ensure it prosperity. The development of production based on the innovative use of national resources is a priority for stable development of the post-Soviet economies. The national economy can only revive by developing the strategic branch- es of agriculture and industry. Competitive national output in the post-Soviet countries, including Georgia, should primarily meet domestic demand. Georgia enjoys the comparative advantage of untapped mining industry as- sets, rich energy resources (including renewable sources of energy), and underground drinking water reserves.13 Unfortunately, politicians are not currently considering this. In order to improve the efficiency of agricultural production and the level of capitalization, powerful agricultural enterprises, insurance mechanisms, an efficient system for servicing agriculture, storage, packaging, and distribution centers, as well as technical servicing centers must be created. Georgia can supply the international market with environmentally pure products (meat and diary produce, vegetables, fruit, juices, and so on). Various monopolies in the economy must be eliminated and anti-monopoly services activated, enterprises must be ultimately freed from state pressure, prop- erty rights must be unconditionally protected, and so on. Only after these and other similar measures have been adopted will post-communist Georgia be able to reach an average European economic level in the next twenty years.

13 See: A. Tvalchrelidze, A. Silagadze, “Georgia’s Fresh Mineral Water for Europe,” The Caucasus & Globalization, Vol. 5, Issue 3-4, 2011, pp. 43-54.

82 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Giorgi KUPARADZE

Doctorate Candidate at Ivane Javakhishvili Tbilisi State University, Researcher at the Caucasian Institute for Economic and Social Research, Editor of the Scientific-Analytical Journal Caucasian Economic Triangle (Tbilisi, Georgia).

TAX POLICY AND FOREIGN DIRECT INVESTMENTS (A GEORGIAN CASE-STUDY)

Abstract

his research examines the role and influ- gia. Since 2005, radical reforms have been ence of tax policy on foreign direct in- carried out in the tax administration sphere. T vestments using the example of Georgia. Georgia has been experiencing unprece- The study covers the period between 2003 dented growth in foreign direct investments and 2012. Countries that have been in transi- during this time. Tax policies are obviously tion since the 1990s require new investment capable of affecting the volume and location resources as their traditional mode of produc- of FDI, since, all other considerations being tion was uncompetitive in the market econo- equal, higher tax rates reduce after-tax re- my. This has created specific competition turns. However, all other considerations are among governments offering generous tax seldom equal. In this research I tried to an- and other kinds of incentives to international swer the following questions: what impact investors for investing in their area. In the aca- does tax policy have on inflows of FDI into demic sphere, it has aroused a considerable Georgia? What is the role of tax policy when debate about whether these tax incentives are making the decision to invest in Georgia? conducive to attracting foreign direct invest- The main thesis suggested here is that tax ments compared to other investment factors. policy factors act as a marginal factor in mak- This debate is still going on and is relatively ing decisions to invest in Georgia. Tax policy new for transition economy countries. has an indirect influence on investors and This article examines the relation be- creates the overall impression of Georgia as tween tax policy and FDI inflows into Geor- a tax-friendly country.

KEYWORDS: Georgia, transition economies, foreign direct investments, tax policy, investment environment.

Introduction

Foreign direct investments have become the main driving force behind economic growth in countries around the world and especially in transition economy countries. According to UNCTAD 1

This article was written with the help of a research grant from the Shota Rustaveli National Science Foundation, “The Impact of Tax Policy on Investments in the Real Sector of the Economy, A Georgian Case-Study,” Georgia, Presidential Grants for Young Scientists, Grant # PG/44/2-230/12.

Volume 7 Issue 3-4 2013 83 THE CAUCASUS & GLOBALIZATION statistics, FDI flows for 2012 reached $1.3 trillion compared to $315 billion for 1995.1 In spite of the economic crisis and fluctuations in the economy, the role and volume of FDI is continuously increasing. For most of countries, FDI inflows are the main source of economic growth. Investors making investments abroad search for new resources and markets in pursuit of higher efficiency and profitability of their business activities. FDI inflows in general are mutually beneficial for both parties. The trade liberalization and opening up of the borders of closed economies that occurred at the end of the 20th century created new possibilities for developing countries to import knowledge and technological innovations into the domestic economy. This made it possible for less developed and transition economy countries to improve their national economies in a comparably short period of time based on the knowledge accumulated in the developed world. The most effective way of transfer- ring technological innovations and financial resources is foreign direct investments. It is common knowledge that FDIs provide recipient countries with the unique opportunity to acquire the gains of technological revolution and import capital and superior knowledge-based assets into the domestic economy. Attracting a substantial amount of foreign direct investments is regarded as an important factor for overcoming the crises that exist in transition economy countries and achieving economic growth in the national economies. Many researchers have found a strong correlation between FDI inflows and GDP growth in transition economies.2 Countries that have managed to attract a significant volume of FDI have largely been able to achieve economic growth by improving productivity through trans- ferring advanced technologies, on the one hand, and efficiency “spillovers,” on the other. Based on the direct and spillover effects that FDIs have been having on national economies in recent decades, an increasing number of governments have tried hard to attract substantial levels of foreign direct investments. The main attention was focused on those factors that determined the in- flows of FDI into specific countries. The decision-making process of investors has been explored in a number of studies.3 Governments, especially in small countries, are mainly using fiscal incentives in the competition to attract FDIs. Such competition has generated debates about the effectiveness of fiscal incentives. Are these incentives able to attract a substantial amount of FDI? This debate about the effectiveness of fiscal incentives is new for transition economy countries. This research focuses on the relation between tax policy and inflows of FDI into Georgia. In my research I tried to answer the following question: are tax incentives that reduce budget revenues able to attract foreign investments? Two main approaches have been used so far to analyze the posed question: a time series econo- metric analysis and selective surveys of international investors.4 This research uses selective surveys of international investors. It should be mentioned that, in the case of Georgia, for a number of differ- ent objective and subjective reasons, the quantitative aspect of foreign investment inflows into the

1 See: UNCTAD (1996) World Investment Report 1996 (United Nations Conference on Trade and Development) UNCTAD (2013) World Investment Report 2013, available at [http://unctad.org/en/PublicationsLibrary/wir2013_en.pdf], 14 March, 2013. 2 See: D. Dyker, Foreign Direct Investment and Technology Transfer in the Former Soviet Union, Edward Elgar Publishing Limited, Cheltenham, UK, 1999, p. 9. 3 See: J.H. Dunning, International Production and Multinational Enterprise, Allen & Unwin, London, 1981; D. Lim, “Fiscal Incentives and Direct Foreign Investments in Less Developed Countries,” Journal of Development Studies, No. 19 (2), 1983, pp. 207-212. 4 For a review of the literature, see: J. Morisset, N. Pirnia, How Tax Policy and Incentives Affect Foreign Direct Investment, A Review, Foreign Investment Advisory Service (FIAS), The World Bank, 2000. For a discussion of the different quantitative models of the potential influence of tax policies on the economy, see: “Tax Effects on Foreign Direct Investment,” Recent Evidence and Policy Analysis, No. 17, OECD, 2007, pp. 28—34; I. Aniashvili, V. Papava, “Models Estimating the Tax Burden Impact on the Efficiency and Volume of the Use of Resources,” Ekonomisti, No. 1, 2011, pp. 8—29 (in Georgian).

84 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION country is almost completely beyond the scope of a statistical survey, and as a result, a more or less realistic assessment of the processes can only be made through indirect estimations. The situation with private capital circulation is especially difficult. Available statistical data is incomplete, scarce- ly covering only very large and notorious investments. In order to fill in the data gap, I conducted quite a time-consuming foreign investors survey using specially designed questionnaires.

FDI Inflows and Tax Policy in Georgia

As already mentioned, FDI is the main source of economic growth for transition economy countries. Foreign direct investment has been a major driving force behind Georgia‘s economic de- velopment, reaching a high of $1.56 billion in 2008,5 accounting for 12.2 percent of gross domestic product (GDP). Net cumulative FDI also reached 44.5 percent of GDP that year. The twin shocks of the 2008 war with Russia and the global recession resulted in a dramatic drop in FDI inflows. Growth in FDI inflows began in 2010 and reached $814.5 million that year. In view of how important foreign direct investments are in Georgia, it is essential to identify which factors of investment environment are essential for attracting additional amounts of investments. The importance of the problematic aspects of the investment environment changes over time. Since the 1990s, Georgia has been striving to attract foreign direct investments. Between 1995 and 2003, the main thrust was toward achieving macroeconomic stability and reducing corruption6. Since 2003,7 the radical changes in the country’s political life have also caused changes in the problematic economic factors. Corruption and macroeconomic stability have been losing their importance as the government finds successful solutions for these problems. Successful reforms have been carried out in the taxation system. Foreign investors have been offered generous tax incentives. By tax policy we mean a targeted policy using the following tools: differentiable tax rates and deduction of costs, tax exemptions, and tax administration. The new economic and political course implemented since 2005 had its own impact on FDI inflows. In 2006, FDI inflows reached $1,190.4 million, which was 128 percent higher than the previ- ous year. For that year, FDI amounted to 47 percent of all investments in Georgia and 15 percent of GDP. In 2005, the share of FDI in all investments was only 25 percent.8 The rising trend of FDI inflows continued in 2007 as well and reached its maximum of $2,014.8 million. This was 1.96-fold more than the previous year (see Fig. 1). The sharp increase in FDI inflows was the direct result of improvements in the business environment in Georgia.9 In addi- tion to the radical political changes, there were changes in tax administration that resulted in greater mobilization of tax revenues and a reduction in corruption of the tax authorities. All of these measures were acknowledged in a number of reports by international organizations. In 2008, there were two crises—the war with Russia and the world economic crisis—that de- creased FDI inflows. After the economy’s essential recovery in 2009, the Georgian government

5 See: National Statistics office of Georgia, available at [http://www.geostat.ge/index.php?action=page&p_ id=140&lang=eng], 10 April, 2013. 6 For more on the discussion of Georgia’s economic policies, see: V. Papava, “Economic Achievements of Post- Revolutionary Georgia,” Problems of Economic Transition, Vol. 56, No. 2, June 2013, pp. 51-65. 7 The Rose Revolution brought about a change in power in Georgia in November 2003 through peaceful protests over the disputed parliamentary elections. The new government began implementing new policies and carrying out radical reforms in the economic and political spheres. 8 See: National Statistics Office of Georgia. 9 See: M. Gelashvili, “The Role of FDI in Stabilization of the Economy,” Collection of Scientific Works of State University, Economics Division, Vol. III, 2008, p. 159.

Volume 7 Issue 3-4 2013 85 THE CAUCASUS & GLOBALIZATION

Figure 1 FDI Dynamics in Georgia, 2000-2011, $m

2,500

2,000 2,014.8

1,500 1,564 1,000 1,190.4 499.1 500 814.5 742 131 109 165 339 449.8 0 658.4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 maintained a course toward attracting substantial amounts of foreign direct investments. The main priority for 2009 was to achieve the level of the previous year. In addition to Georgia’s political problems, there were the limits on the availability of free capital resources, since the world eco- nomic crisis decreased investment resources and created impediments for the new investments.10 In the first quarter of 2011, FDI amounted to $174 million, which exceeds the same data for 2009 and 2010 by 1.5-fold and 2.3-fold, respectively. Furthermore, from the graph above, it can be seen that annual FDIs have been increasing since 2009, i.e. from $658.4 million in 2009 to $814.5 mil- lion in 2010. In order to increase FDI, the Georgian government passed a law on the creation of Free Indus- trial Zones (FIZ), where businesses can enjoy a business-friendly climate, strategic geographical loca- tion, liberal trade regimes on exports, and an educated workforce, while also being exempt from taxes. Currently, there are three FIZs in Georgia—in Poti, Kutaisi, and Tbilisi.11 These FIZs are still in the process of attracting investors and setting up businesses, mostly in the field of industry. As we can see, since 2005, the radical and positive changes in economic and political spheres have resulted in a rise in FDI inflows, which reached its peak in 2007. After that, external and internal factors beyond economic regulation reduced FDI inflows into Georgia. Recovery began in 2009, but it has still not reached the 2007 level. Accordingly, if we exclude external factors, there has been a steady growth in FDI inflows since 2006, which was preceded by radical reforms in the tax adminis- tration sphere. A number of international organizations acknowledged these reforms as positive and yielding effective results. A number of scientists have been exploring the effects of FDI in transition economy countries. Most of them agree that FDI has a direct effect on economic growth. In the case of Georgia, some researchers have carried out a quantitative analysis of the relation between FDI and economic growth.12 If we observe only the quantitative share of FDI in GDP, it reached 20 percent in 2007. But here we should note that the effect of every investment unit has a more lasting impact when we consider foreign direct investments. According to some scientists, a one percent increase in FDI leads to a 0.42 percent

10 See: Georgian Economic Outlook—The First Half of 2011, Economic Policy Research Center, Tbilisi, 2011, p. 20. 11 Main cities of Georgia (see: Ministry of Finance of Georgia, available at [www.mof.ge], 15 April, 2013). 12 See: T. Kbiltsetskhlashvili, “Attracting Investors: Case of Impact of FDI on the Achievements of Economic Growth in Georgia,” IBSU Scientific Journal, No. 4 (2), 2010, p. 36.

86 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION increase in GDP in Georgia.13 FDI positively influences economic growth in Georgia and thus the increase in FDI inflows is of immense importance for Georgia’s economic prosperity. The greatest importance, when talking about FDI inflows into Georgia, pertains to the existing investment climate, which is the major determinant of the amount of FDI inflows.14 As I already mentioned, radical reforms of the tax system have been carried out in Georgia since 2004. The main priority of tax policy, as it was announced, was to create a friendlier environment for business and investment. The main outcome of this liberal reform agenda is a simplified taxation procedure and reduced number of taxes. The number of taxes has dropped from 21 in 2004 to 6 today. Tax reduction has had two potential results for investments: first, it reduced tax costs and second, it made bookkeeping less complicated. Articles of the tax code became clearer, but, as in other respects, a perfect tax code has far from been created. With respect to foreign investments, special features apply to foreign investors: — No payroll tax or social insurance tax; — Capital expenditure can be depreciated fully in the year it occurred, and a 10-year loss carry forward is available; — No capital gains tax; Figure 2 Income and Dividend and Interest Tax Rates for 2004-201414 (according to the announced changes), %

20 20 20 20

10 10 10 10 10 10 10 10 10 10 10 10

5 5 5

3 3 2004 2005 2006 2007 0 2008 2009 2010 2011 2012 2013 2014

Corporate Profit Tax

Dividend and Interest Income Tax

13 See: T. Kbiltsetskhlashvili, op. cit., p. 47. 14 Ministry of Finance of Georgia [www.mof.ge], 15 April, 2013.

Volume 7 Issue 3-4 2013 87 THE CAUCASUS & GLOBALIZATION — No wealth tax, inheritance tax, or stamp duty; — Foreign-source income of individuals is fully exempted. A special status for foreign investors has been introduced into the tax code: international plant, branch of foreign company. Special economic zones where taxation is zero have been created for investment purposes. There are 3 tax-free regimes to take advantage of: — Free Industrial Zones; — Free Warehouse Enterprise; — International Finance Company.15 If we compare the rates at which international companies are taxed with domestic companies (see Figs. 2 and 3), it is evident that tax policy toward foreign investors is quite liberal and friendlier with respect to taxation of investment profits and income. Figure 315 Tax Rates in Free Industrial Zones Compared to Territories Other Than FIZ, %

30

25 25

20 18

15 15 12 10 10

5

1 0 Tax Tax VAT Income Tax Property Tax Customs Tax Dividend and Dividend and Interest Income Interest Income Corporate Profit Corporate Profit

In Free Industrial Zones In the Territory other than FIZ

15 Ministry of Finance of Georgia, 15 May, 2013.

88 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION The rates presented in Fig. 2 are for all domestic economic units carrying out operations in the territory of Georgia, except for free industrial zones. If we compare these rates to those in effect in free industrial zones, it is clear that main dimension of tax policy tax rates applies quite liberal ap- proaches to foreign investors. Corporate tax rates have decreased from 20 percent to 15 percent. As for dividend income tax, it will drop from 3 percent in 2012 to zero. With respect to economic policy, lowering the tax rates on dividends will trigger the development of joint stock companies and so at- tract additional financial resources by issuing financial instruments. Our research focuses on the impact of these changes on FDI inflows. First, let us review the anticipated results of this tax policy and then we will combine this with an impact analysis of investors’ assessments. A special taxation regime is offered in the free industrial zones. As we can see from Fig. 3, there is no corporate profit tax, value added tax, customs, or property tax. It should be mentioned that in- vesting in these areas is not becoming an integral part of the Georgian economy, as such companies are not allowed to import into other parts of Georgia using these tax free regimes. As in previous cases, there are two effects: indirect and direct. The direct effect lowers tax costs for companies, while the indirect effect creates a positive image of the countries’ economic policy. Tax policy directions are also included in ratified conventions on “Avoiding Double Taxation.” The main aims of these conventions are16: to propose certain guarantees for investors, to promote, by eliminating international double taxation, exchanges of goods and services, and to enhance the move- ment of capital and labor. Georgia has signed and ratified these conventions with nearly all of its trade partner and main investment countries (33 countries). These conventions guarantee that investors from the treaty countries will not be taxed twice, in Georgia and in source country as well. Based on the tax burden, the investor can choose where he wants to pay taxes: in the source country or at home. Also these treaties offer lower tax rates on dividend and interest income. For example, if dividends are taxed at 5 percent by the tax code, the investor can get 0 percent tax rates on dividend income according to the double taxation conventions. Average dividend income tax rates, according to the ratified conventions, are 4 percent, 3 percent for interest, and 4 percent for royalties. Tax rates and exemptions vary depending on the specific country, but overall Georgia’s policy, as evident from these conventions, is quite liberal and is aimed at promoting foreign investments in Georgia. These changes lead to a liberal environment for business and investments, what has been ac- knowledged by several researchers and the rankings of some reputable organizations. In 2008, Forbes Magazine assigned Georgia the ranking of “4th Least Tax-Burdened Country.”17 This ranking was based on the Tax Misery & Reform Index. The misery score is the sum of taxes: corporate income tax, personal income tax, wealth tax, employment social security, VAT/Sales. This aggregate sum was used to evaluate whether the policy attracts or repels capital and talent. The coun- tries at the top of the chart impose the heaviest taxes, while those at the bottom are the most tax friendly. The Reform column reflected a reduction in misery. According to this ranking, Georgia was in fourth place after Hong Kong and ahead of most of the advanced economy countries. Georgia re- tained the same position in 2009 as well. According to the report of the Fraser Institute, Economic Freedom of the World18: 2011 Annual Report, Georgia ranked 27th among 141 countries (Economic Freedom Score 7.49). In the previous year, Georgia occupied 23rd place, and in 2009 Georgia ranked 45th. The world economic freedom index is published by the Fraser Institute and based on the following main economic freedoms: size of government (costs, taxes, and plants), legal structure and property rights, access to stable currency, freedom of international trade, regulation of labor market and business.

16 See: OECD Commentary on Art 1, Para 7, Model Tax Convention on Income and on Capital, Condensed Version, Paris, 2005. 17 [http://www.forbes.com/global/2008/0407/060_2.html]. 18 [http://www.freetheworld.com/release.html].

Volume 7 Issue 3-4 2013 89 THE CAUCASUS & GLOBALIZATION Economic reforms and the degree of freedom with respect to doing business are analyzed on an annual basis by the World Bank in a publication called Doing Business. It provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the sub-na- tional and regional level. One of the main components is paying taxes and transparency of tax systems. According to an overall view, Georgia has retained one of the leading positions (see Fig. 4).19

Figure 4 Georgia’s Ranking according to Doing Business,19 2006-2011

112 120

100

80

60 37 40 21 16 17 13 20

0 2006 2007 2008 2009 2010 2011

Georgia ranks 42nd in terms of paying taxes. The World Bank’s report mentions Georgia as one of the leading country in the “Ease of Doing Business” index. The report lists Georgia as one of the twelve economies that do not require the payment of any social security contributions or labor taxes.20 The report also mentions that Georgia is one of the few countries that introduced or enhanced its electronic systems and simplified the tax compliance process in order to make paying taxes easier and lower the tax burden. of the tax system along with reform of other regulation mechanisms in Georgia was positively reflected in: Economic Freedom Index of Heritage Foundation and the Global Com- petitiveness Index of the world economic forum.

How Investors Make Decisions: Results of Selective Investors Surveys

In order to fill in the gap in the official statistics and obtain more precise results in my research, I conducted investors surveys using specially designed questionnaires (interviews were held in

19 [http://www.doingbusiness.org/reports/global-reports/doing-business-2012]. 20 [http://www.doingbusiness.org/~/media/FPDKM/Doing%20Business/Documents/Special-Reports/Paying- Taxes-2012.pdf], 20 June, 2013.

90 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION March-May of 2013).21 I got my list of foreign investor companies from the National Statistics Office of Georgia. Although there were approximately 55 companies on my list, only 25 of them filled out the questionnaire. I mailed all 55 of the companies and visited 35 of them personally. Notwithstand- ing the low rate of response, the answers I received are important since these 25 companies were major investors in Georgia in 2009-2011. They are at the top of the list of main foreign investors in Georgia, thus their view can be extrapolated to other respondents as well. Overall a “typical” re- sponse rate is about 50 percent; a good one is between 60 and 70 percent (B. Kervin, Methods of Business Research, 1992). The survey questionnaire was filled out by the managers of 25 companies in Tbilisi. These companies were formed with foreign capital in 2009, 2010, and 2011. The sector breakdown of the companies was as follow: Services 13, Manufacturing 10, Energy 2. Most of the respondents were people who represent their home companies in Georgia, i.e. manage the capital of their enterprises in Georgia and make strategic decisions to some degree (Country Coordinators). The questionnaire was designed specifically to account for tax factors in the investment environment. The questionnaire consisted of 10 questions and took approximately 20-25 minutes for each respondent to fill out. The questionnaire forms were sent to some respondents electronically as e-mail attachments or using Google questionnaire forms. A special effort was made to ensure the questionnaire was worded in simple terms and to keep the structure and scaling simple. The first section the questionnaire asked for general information about the company: production sphere, size of assets, years of investing in Georgia, and legal forms of business. The second part of the questionnaire concentrated on factors that might contribute to the investor’s decision to invest in Georgia. I selected these factors based on theoretical assumptions that are developed in western scientific literature, and also took the special features of a small and transi- tion country into account. With the fifth question I wanted to identify if investors consider tax policy to be an important factor in their decision to invest in Georgia or not. I split the tax policy factor into the following subfactors: tax rates, depreciation rates, and tax administration. This approach is justi- fied by the model that we have already discussed “OECD Tax Policy Model for FDI.”22 This model was also used to formulate other questions in the survey questionnaire. The last part of the questionnaire was about tax policy factors. Again, the special features of a small and relatively resource-poor country were taken into account. The data collected were analyzed using the statistical package for social sciences (SPSS). The retrieved data were used to find out if tax policy matters when making a decision to invest in Georgia. Among the ten factors relating to making investments in Georgia, tax factors ranked fourth after macroeconomic stability, labor regulations, and transportation costs. I used a ten score scale for this fifth question in ascending order of importance. When calculating the mean scores, 5.33, for tax rates, and 7 for tax administration (see Fig. 5), I excluded the basic factors of investment—market and re- sources—since these factors are included in later questions. This structure for the fifth question en- abled me to concentrate on business infrastructure factors according the OECD Policy Framework Model. As we can see from Fig. 5, the most important institutional factors of the investment environment are: property rights, macroeconomic stability, tax administration, and labor regulations. In this case, it should be noted that the experience of carrying out activities in Georgia has had an influence on the investors’ answers. This may explain why they gave more importance to tax administration than statutory declared tax rates. This result is in accordance with the OECD model regarding the fact that statutory tax rates frequently do not fully reflect the tax burden in a particular country.

21 For the period before 2008, discussion on the investment environment of Georgia see: F. Gürsoy, O. Kursun, “Investment Climate of Georgia,” IBSU Scientific Journal, No. 2 (1), 2008. 22 See: “TAX Effects on Foreign Direct Investment,” pp. 28-34.

Volume 7 Issue 3-4 2013 91 THE CAUCASUS & GLOBALIZATION Figure 5

4.00 4.00

0.67 1.33 1.34 3.00 5.00 5.33 6.33 7.00 7.33 7.67 1.00 1.00 for Investment in Georgia 0.00 0.00 2.00 3.00 5.00 6.00 7.00 8.00 Main Institutional Factors of Decision Making Factors of Decision Making Main Institutional Tax Rates Property Rights Tax Administration Labor Regulations Transportation Costs Cost of Finance (interest rate) Skills and Education of Available Workers Economic and Regulatory Policy Certainty Business Licensing and Operating Permits Macroeconomic Stability (inflation, exchange rate) 92 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION As for the basic factors of investment, I have chosen to compare basic natural and institutional factors in the questionnaire (see Table 1). Most investors answered that market size is the most im- portant factor for them (the so-called empty market effect, which is characteristic of transition econ- omy countries). In this case, market size and macroeconomic stability were given an average score of 3.33 and 3.00, respectively. Tax policy ranked only third among the basic five factors of investment. According to one of the investor’s comments, tax policy is like an additional factor to basic factors such as market characteristic and macroeconomic stability. Thus we can assume that, according to our results, tax policy is only a marginal factor in addition to other basic factors.

Table 1 Main Factors on Investment in Georgia: Natural and Institutional Factors

Main Factors Mean Score

Natural resources 1,67

Market size 3,33

Geographic location 2,67

Macroeconomic stability 4,67

Tax policy 3,00

Figure 6 Most Important Aspects of Tax Policy

12

10

8

6

4

2

0 Tax Depreciation Tax Rates Rates Administration

Number of Respondents Volume 7 Issue 3-4 2013 93 THE CAUCASUS & GLOBALIZATION When listing the specific aspects of tax policy, the respondents ranked tax administration and deprecation rates at the top and tax rates at the bottom. Out of the 25 surveyed investors only 6 ranked tax rates in first place (see Fig. 6). As for the direct question: “Does tax policy matter when deciding whether or not to invest in Georgia,” the respondents gave it moderate importance (see Fig. 7). Four- teen of the 25 respondents stated that tax policy is somewhat important in making the decision to invest. Most of the investors made the interesting comment that the tax policy reforms in Georgia have created overall image of the country, which in turn had an influence on the decision to invest in Georgia. This result can be compared to those international rankings and reports of international or- ganizations that posited Georgia as a country with a tax-friendly investment environment.

Figure 7 How Important is Tax Policy in Making the Decision to Invest in Georgia

16 14 14

12

10

8

6 6 5

4

2

0 Very Somewhat No So Not Important Important Important Important

Number of Respondents

It is obvious that making a decision to invest in other countries involves certain risks, espe- cially in a transition or less developed country. Some of these risks are tax policy risks, since higher taxation makes business unprofitable and in certain cases tax administration is a tool used in govern- ment policy. Thus beneficial and generous tax policies in the opinion of the government offer sig- nificant incentives for foreign investors. In response to our research survey question asking whether a generous tax policy can compensate for other obstacles in the investment environment, the polled investors said that tax policy is only an additional factor (16 out of the 25). Only 8 respondents an- swered that a generous tax policy cannot compensate for other obstacles in the investment environ- ment in Georgia (see Fig. 8). 94 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

Figure 8 Do You Think Tax Policy in Georgia (if it is very important) Can Compensate for the Other Obstacles in Georgia’s Investment Environment?

18 16 16 14 12 10 8 8 6 4

2 1 0 Tax Policy Difficult Yes is Only Additional to Answer No Factor

Number of Respondents

The number of respondents who said that tax administration did have an impact on the invest- ment environment and that tax administration is far more important than statutory tax rates was the same (see Table 2).

Table 2 Cross Tabulation of Q1 (How Important is Tax Policy in Making the Decision to Invest in Georgia?) and Q2 (Can Tax Policy in Georgia Compensate for the Other Obstacles in Georgia’s Investment Environment?)

Q 1

Not so Somewhat Q2 Not important Grand Total important important

No 3 5 8

Tax policy is only an 6 3 7 16 additional factor

Yes 1 1

Grand Total 6 6 13 25 Volume 7 Issue 3-4 2013 95 THE CAUCASUS & GLOBALIZATION The respondents who said that tax policy is “somewhat important” reckon that tax policy is “only an additional factor”. Cross tabulation showed that if tax policy matters it matters only marginally. From an analysis of the survey data, we see that tax policy is very important when ranking it among the institutional factors of investment. As for basic factors (natural resources, market Size, geographic location, and macroeconomic stability), tax policy is less important (third and sixth plac- es, respectively). As some respondents stated, the tax policy changes and reforms in the taxation sphere have created a positive image of Georgia as a tax-friendly country for foreign investors. I conducted this survey among the main investors in Georgia who have experience in doing business in Georgia. Based on this perception, most of the foreign investors consider tax administration to be far more important than statutory tax rates. In light of the basic investment factors, Georgia’s overall tax policy is only of marginal importance. However, I would like to make a disclaimer and say that the data I collected is limited and that this research is relatively new for Georgia at this stage, making it difficult to account for the differences that exist in different industry spheres. In general, these results apply more to the service industry (in our case, 52 percent of investors were from this sphere). The effects of tax policy depending on the special features of different industry spheres will be the subject of future research.

Conclusion

In the case of small countries that do not have rich natural resources, so-called institutional fac- tors matter. This perception assumes that the country has reached macroeconomic stability. One of these institutional factors is taxation, since taxes determine a company’s net profit. Under tax factors, we have analyzed not only statutory tax rates but also tax policy, which covers tax rates and related provisions of the tax code, as well as tax exemptions and special tax free industrial zones. Thus, from the theoretical perspective and taking into account the special features of the Georgian economy, tax factors matter in the investment process. Since 2005, tax administration has been undergoing liberalization. At the same time, FDI inflows into Georgia have grown. The positive correlation of tax rate reduction and FDI inflows suggests that the liberal reforms have triggered inflows of FDI into Georgia. However it is important to determine how important tax policy factors are compared to other factors. The survey of investors shows that tax policy factors occupy a moderate position (5th and 6th) among the ten basic factors, while among the five basic investment factors, tax policy ranks even lower. When investors were asked about the importance of tax policy factors, most of them answered that the reforms and changes in tax policy indicate that Georgia has a friendly environment for foreign investors. This conclusion is reinforced by the fact that Georgia’s tax policy reforms are positively assessed in the reports of international organizations, as well as in international business journals. These publications are generally the source of information for foreign investors. Georgia has enhanced its image as a country friendly to foreign investors by signing double taxation agreements, which have created a legal basis for protecting foreign investors. These agree- ments have become a direct source of information about Georgia’s liberal tax policy in foreign inves- tor resident countries. In conclusion, foreign investors in Georgia consider tax policy issues to be a marginal factor among basic factors such as macroeconomic stability and property rights. Tax policy factors act through indirect channels, giving the impression that Georgia has a friendly environment for foreign investors wishing to invest in its economy.

96 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

GEOCULTURE

Akushali SHAFI JALAL

Member of the Expert Council at the Caucasian Civilization Regional Public Organization (Makhachkala, Republic of Daghestan, the Russian Federation).

Rajab SHAKHABASOV

Chairman of the Caucasian Civilization Regional Public Organization (Makhachkala, Republic of Daghestan, the Russian Federation).

ISLAM AND THE SOCIOPOLITICAL DEVELOPMENT OF NORTH CAUCASIAN SOCIETY (A DAGHESTAN CASE STUDY)

Abstract

he authors analyze how the religious political development of the North Caucasian factor affects the ethnodifferentiating region (and Daghestan as its part) is largely T and ethnointegrating processes in Da- determined by the specifics of religion and its ghestan; they are convinced that the socio- development as a social institution.

KEYWORDS: the Northern Caucasus, development of Islam, maddhabs, the region’s sociopolitical development.

Introduction

Islam as a concept occupies an important place in the minds of most Russian citizens (particu- larly in the Northern Caucasus) and is believed to constitute a threat to the individual and to society Volume 7 Issue 3-4 2013 97 THE CAUCASUS & GLOBALIZATION as a whole. This delusion is caused mainly by the media that describe radical extremist groups, ter- rorism, armed conflicts, etc. as a fundamental part of Islamic philosophy. Many specialists assert that Daghestan is Russia’s most Islamized region. Statistics show that the region is becoming Islamized at a fast pace: in recent years, the republic has acquired more mosques, prayer houses, Islamic educational establishments, etc. than elsewhere in Russia. Since the mid-1990s, hajj and umrah (minor pilgrimage) have become common annual events for thousands of Daghestanis. This, however, failed to change the people’s frame of mind; Islamic science and litera- ture, likewise, killed by years of persecution under Soviet power, have not yet been revived.

Islamic Development in Daghestan: The Main Trends

The unprecedentedly fast developments in the Northern Caucasus launched some twenty years ago have changed the political landscape beyond recognition; the result—hybrid political forms in- stead of expert-predicted liberal democracy—has confirmed the old truth that ambiguous, unpredict- able, and even volatile historical processes rarely, if ever, produce what is expected of them. This makes studies of the political thought of the Muslim countries (Islamism, in particularly, which directly affects the trajectory of social developments in the Northern Caucasus) doubly im- portant. Today Islam in Daghestan demonstrates two mutually exclusive development trends. There is radical Islam, which insists that society should live according to legalized religious norms; this makes an open conflict with the secular form of government inevitable and may even produce armed clash- es. In Daghestan, this approach is supported, among other trends, by officially banned Wahhabism. Another trend, which never clashes with reality, looks at the Islamic values as a moral (indi- vidual) attitude toward the world and society. This is typical of the supporters of Tareqat, the Cauca- sian variant of , who are ready, when necessary, to communicate with the authorities. Today, this is the most popular Islamic trend in Daghestan. Supporters of other Islamic trends are less numerous and, therefore, less noticeable on the social scene than the members of the first two variants of Islam. Despite the prolonged Caucasian War, Sufism (highly popular in the Northern Caucasus) is not a conflicting trend; its supporters seek deeper knowledge of true, that is, divine, reality. Jihad as an armed struggle against the “infidels” is neither rejected nor accepted as the only possible form of communication with other confessions. Confrontation between the Islamic ideology and the secular form of government is inevitable: Islam, like any other religion for that matter, claims a monopoly on the truth; it is very strict about moral values and the meaning of life and is very clear about the public norms of communication among people, etc. Pluralism and tolerance as abstract concepts contradict the religious ideals rooted in the black-and-white picture of the world with all the ensuing logical implications. Religious injunctions cannot be revised to fit objective social reality: society should develop according to immutable reli- gious principles. All the concepts of an Islamic state agree that it should rest on the Shari‘a stemming from the Koran and the Sunna; those who side with this idea look at Muslim society as it existed at the time of the Prophet as the point of departure. As distinct from the ultra-conservative groups that want to shape contemporary society according to the 7th-century molds (this is true of the followers of Juhayman al-Otaybi from Saudi Arabia who in 1979 seized the Grand Mosque in Mecca; partly of the Taliban, etc.), Maududi, Qutb, and Nabhani believed that an “Islamic state” should not be dog- matic with respect to applying Islamic norms in contemporary reality. 98 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION The ideologists of Islamism relied on the concept of itjtihad, which permitted new, direct inter- pretations of the Koran and the Sunna based on their contexts in an effort to bring together the objec- tive need for radical changes and the archaic social ideal viewed as a model.1 Itjtihad proceeds from the scarcity and relative vagueness of the Koranic and Sunnic prescrip- tions related to politics. Prominent expert in Muslim law Leonid Syukiyaynen has offered the follow- ing comment: “These sources do not contain specific prescriptions to be used to regulate the organi- zation and activities of a Muslim state or identifying its essence. They say nothing, in particular, either about the form of governance or a political regime. They even do not use the term ‘state.’ They oper- ate with the terms ‘imamate’ (the original meaning ‘guidance by prayer’) and ‘’ (‘succes- sion’) which only later were used to describe Muslim states.”2 Wahhabism appeared in the mid-18th century in the territory that is now Saudi Arabia as a movement preaching a return to the earliest fundamental Islamic sources. Its founder Muhammad ibn Abd al-Wahhab (after whom the movement was named) traveled far and wide in Muslim areas to finally conclude that the faithful had abandoned the idea of a single God, the cornerstone of Islam; they started worshiping saints and introducing all sorts of novelties. His teaching, as a whole, was an extreme interpretation of the Hanbali principles and was based on the books of Hanbali Taqi ad-Din Ahmad ibn Taymiyyah and Ibn Qayyim al-Jawziyyah. Those who followed in the steps of al-Wahhab opposed all novelties and were extremely critical of the attempts to bring certain elements of rational philosophy of the of saints and the practice of pilgrimages to the burial site of the Prophet into Islam. Later they rejected even dhikr and seclusion, two key elements of Sufi practices. It was missionaries who brought Wahhabism to the Northern Caucasus where it clashed with Sufism, the traditional teaching that changed a lot before it became adjusted to the North Caucasian context. At the earliest stages, Sufism was geared at the folk pre-Islamic beliefs, in which veneration of the burials of ancestors, orolatria (cult of the mountains) and other ideas held the central place. Sufism was inevitably affected by the local mentality, way of life, and mindset. The faithful absorbed the Sufi theory and became consistent followers of its theory and practice, albeit adjusted to local specifics; this type of Islam is practiced in Chechnia, Ingushetia, and Daghes- tan. Any attempts to interfere in the theory and practice of Sufism by those who preach a return to original Islam are seen as encroachments on and deliberate distortion of traditional religion. Wahhabism emerged in the mid-18th century as an attempt to rally the peoples of Saudi Arabia together. Later the aim was to drive away the British colonialists. The fact that they succeeded in the past does not mean that they will succeed elsewhere, in Daghestan in particular. The Hanbali maddhab presupposes that the folk traditions of the country in question should be replaced with the traditions of the Hanbali adats. This means that Wahhabism, which rests on Hanbali maddhab, is opposed to three (Shafiya, Malakit, and Hanafi) maddhabs. In Daghestan, the faithful mainly follow the Shafiya maddhab, which teaches that Islam in an alien country should not only respect its traditions and adats, but should also adjust its adats to the traditions of the host country. Contrary to the widely share opinion, Shamil was not fighting against the adats of the Daghestanis: he was determined to weed out the signs of degradation of Da- ghestani society. This means that Islam is not only a religion, but also a philosophy and culture.

1 See, for example: Taqiuddin an-Nabhani, Concepts of Hizb ut-Tahrir (1953), available at [http://www.hizb-ut-tahrir. org/PDF/EN/en_books_pdf/Concepts.pdf]; O. Carré, Mysticism and Politic: A Critical Reading of Fī zilāl Al-Qur’ān by Sayyid Qutb (1906-1966), Transl. from the French by C. Artigues and revised by W. Shepard, Brill, Leiden-Boston, 2003, p. 185; S.A.A. Maududi, The Islamic Law and Constitution, Islamic publications (Pvt.) Ltd., Lahore, s.d., p. 76. 2 L.R. Syukiyaynen, “Kontseptsia khalifata i sovremennoe gosudarstvenno-pravovoe razvitie zarubezhnogo Vostoka,” in: Islam: problemy ideologii, prava, politiki i ekonomiki, Collection of articles, Nauka Publishers, Main Editorial Office of Oriental Literature, Moscow, 1985, pp. 139-140.

Volume 7 Issue 3-4 2013 99 THE CAUCASUS & GLOBALIZATION Islam in Daghestan: Development Specifics

The Muslim culture has been present in Daghestan since the 8th century; even in the mid-1950s there were people who used Arabic in everyday life. The philosophical ideas of Abu Hamid Al- Ghazali, teacher of philosophy in the Nizamiyya madrasa founded by Nizam al-Mulk in , dominated in Daghestan between the 11th and 18th centuries. Al-Ghazali belonged to the Shafi mad- dhab and vehemently opposed all attempts to develop Muslim philosophy. He himself had numerous philosophical works to his name, the central of them being Ihya’ Ulum al-Din or Ihya’u Ulumiddin (The Revival of Religious Sciences). Between the 11th and 18th centuries, Al-Ghazali or, rather, his works and his religious philo- sophical school dominated the religious scene in Daghestan, even though there was no shortage of famous and highly respected philosophers in the Muslim East. His teaching and the Shafi maddhab are the most orthodox among all the other Islamic trends and maddhabs. Early in the 1990s, it was absolutely clear that his teaching produced the strongest impact on public life and consciousness in Daghestan: practically all the religious figures in the republic pointed to Ihya’ Ulum al-Din or Ihya’u Ulumiddin as the main source of their knowledge. There is no shortage of thinkers and philosophical trends in the Arab world who left their imprint on the Arabic (Syrian, among others) religious and social attitudes. This explains why their variants of Islam are less extreme than that practiced in Daghestan. Today, we cannot live accord- ing to the rules Al-Ghazali formulated for different times and social contexts. Life is changing and philosophy and public consciousness are changing along with it. Later other philosophers said “Yes, we are Muslims and Islam is the main religion of Allah”; they believed that while Muslims should strictly follow the injunctions of their religion, they should not neglect the rational elements of other philosophical trends and other social ideas. They argued that they could point to an error if they detect it in other trends and ideas. As distinct from Al-Ghazali, they preferred a dialectical approach. In this sense we can say that Al-Ghazali is partly responsible for the fact that the Daghestanis knew nothing about other authors. He did a lot to develop Islam and the Shari‘a, yet he never ac- cepted even the slightest deviation from what he wrote and promoted. This explains why, for centuries, the Daghestanis copied and studied the works he had approved of. Today, Islam has acquired a lot of political weight; its impacts are obvious in all sorts of po- litical and national movements. There were and still are no political organizations, movements, or parties, the members of which invariably gather together five times a day at appointed hours to perform certain rites. This is an unrivaled factor. Early in the 21st century, however, when humankind has already made immense progress, we should identify the role of religion in political life and assess what religious organizations and the clergy have done so far. Today, there are no democratic societies in the world dominated by a single ideology and where all the people support the same ideological, theoretical, social, and political ideas. After emerging onto the political arena, Marxism started to actively promote atheism; the sev- enty years of Soviet power, however, show that Islam has survived and become more vigorous. His- tory has taught us that one dominating ideology, either religious or political, invariably ends in to- talitarianism and spiritual dictatorship. The Islamic states serve as a pertinent example: all deviations from the dominant ideology, all attempts at democracy and freedom of consciousness are suppressed by their dictatorial regimes, many of them . One can say that the Gulf countries are the richest in the world. This is true, but it is nothing more than the lacquered surface of a well-fed society with no future within the pinching limits of Islamic monarchism. Oil made them very rich; they acquired a lot of clout, and they impose energy 100 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION prices on the rest of the world. Domination of Islam as the only ideology suppresses the people’s social vigor, fortifies the position of the powers that be, and slows down social, economic, scientific, and technological progress. Religion should not be part of politics, even though it may affect it to a certain extent. Religion, and Islam for that matter, should be limited to the spiritual sphere of human activities. In Soviet Daghestan, there were attempts to develop and promote a culture of a new type—na- tional in form and socialist in content. This was a positive factor, however we should never forget that the economy plays an important role in the revival and development of religious consciousness. If all the economic problems had been resolved on time; if religious policies had been free of excesses and violations, Christians, , and Muslims might have lived in peace and harmony. This is confirmed by the fact that in practically all the Muslim countries they have lived and are living side-by-side. In , Muslims have excellent relations with Christians, who comprise 12% of the total population. Even at the early stages, the Muslims, followers of Islam, a new religion, assured the Christians and people of other faiths that they had no intention of drawing them into a jihad because they would probably be forced to fight their co-religionists; this meant that Christians should not pay with their lives for their service in the army. This makes the fact that anti-Russian and anti-Christian sentiments are fanned in some of the Muslim regions of the post-Soviet space very strange and hard to explain— they contradict the Koran and Islam. Today, the absolute majority of the Daghestani Muslims profess a moderate form of religion and demonstrate no hostility toward secular values. In all likelihood, this fact is bred by the discrep- ancy between religious self-identity and practical priorities on the strength of which people align their relationships with the world. This is not immutable; in the absence of reliable data, it is hard to say how many people are drawn into extremist activities every year. Indirect evidence, however, shows that their number in- creased in the last year. Terrorism destabilizes the situation in the republic, but it cannot determine its development course. Its dynamics are hard to predict, mainly because mass consciousness is re- sponsive to a huge number of negative and positive impacts. It seems that we should look closer at the situation in Daghestan to grasp the meaning and identify the course of the extremely contradic- tory processes unfolding in the republic.

Conclusion

Today, amid the religious revival in Daghestan, it is important to avoid monopolization of Islam and its interpretations; we should point to what is common in all its trends. Many of the new terms (Wahhabism, fundamentalism, etc.) remain enigmatic for most of the local religious com- munity and merely drive its members apart. To downplay disagreements, or avoid them altogether, we should educate the faithful, explain to them the meaning of the main Islamic dogmas and rites, and stress what the various trends have in common. The Islamic spiritual leaders should recognize the simple fact that all Muslims, irrespective of their maddhabs or whether they belong to the Sufi teaching or the movement for pure Islam, should close ranks around the Koran and the Sunna of the Prophet and their profound understanding. This is the only road to revived spirituality and social stability. Volume 7 Issue 3-4 2013 101 THE CAUCASUS & GLOBALIZATION Gulfiya BAZIEVA

Ph.D. (Philos.), Senior Research Associate, Sector of Ethnology, Kabardino-Balkaria Institute of Humanitarian Studies (Nalchik, the Russian Federation).

GLOBALIZATION AND ARTISTIC CULTURE IN KABARDINO-BALKARIA

Abstract

he author analyzes the trends in litera- trends and taking an active part in artistic ture and fine arts of Kabardino-Balkaria, projects in other countries. She does not T the writers and artists of which address look at globalization as an inevitable evil that the republic’s past and folklore traditions; destroys ethnic specifics and artistic mean- they bring together Western and Eastern tra- ing, but argues that it creates a new cultural ditions while following the worldwide art milieu friendly to local and global trends.

KEYWORDS: Fine arts, literature, ethnocultural identity, globalization, Kabardino-Balkaria.

Introduction

Today, it has become especially important to concentrate not only on the socio-normative and everyday transformations of society, but also on the processes going on in artistic culture, an impor- tant sphere of spiritual activities of any ethnicity. Cultural transnationalization, as one of the basic descriptions of cultural globalization and an economic, as well as cultural-civilizational phenomenon, is one of the globalization products. By transnationalization I mean the process of adding new axio- logical meanings to national cultures; the emergence of a new type of transnational culture with uni- fied, mobile, and commercialized features; the expansion of the information and communication space of national cultures (media-spaces and virtualization of cultural milieu); the intensification of inter- national cultural exchange and drawing into it individual national regions (their state, public, and private structures); the widening scope of activities of transnational systems of education and science; and the creation of a new level of individualized culture and new types of identities in the globalized world.1 These changes are obvious in all spheres of human activity: social, economic, and cultural. Globalization creates new transnational borders between the new global communities, the vari- ety and diversity of which are no longer rooted in national identity. This is much more obvious in the 1

The article has been written within the program of fundamental studies of the Presidium of the Russian Academy of Sciences “Traditions, Customs and Rituals in History and Culture” (project: Identity in Search of Tradition: Peoples of Kabardino-Balkaria in State, Political and Sociocultural Transformations). 1 See: O.N. Astafyeva, “Transnatsionalizatsia kulturnogo prostranstva: gosudarstvo i problemy koordinatsii kommunikativnykh strategiy,” in: Chelovek, kultura i obshchestvo v kontekste globalizatsii, International Scientific Conference Papers, Moscow, 2007, pp. 7-11.

102 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION sphere of culture and is described by a recent coinage—glocalization—applied to products and ser- vices equally geared at local interests and global trends. Communication and convergence are the most important functions of artistic culture, which determine its place and importance in society. The phenomenon of artistic culture is interesting from the point of view of its ethnonational and specific historical manifestations, as well as from the per- spective of an analysis of global cultural interactions and mutual influences.

Globalization and Fine Arts in Kabardino-Balkaria

Mobility and commercialization are the two most pronounced trends in the republic’s fine arts. There were several reasons for these developments, the most important of them being a group of highly professional painters who lived and worked under Soviet power within the pinching limits of socialist realism and had no chance of being involved in foreign commercial projects. At the turn of the 21st century, the republic’s painters became inevitable participants of art exhibi- tions in foreign countries; some of them went abroad to live by their art (today Kh. Teppeev and A. Kuliev work in Turkey; A. Pasht- in Germany; Kh. Savkuev in Spain; Kh. Atabieva and A. Zanibekov in Italy; R. Tsrimov in the U.K.; M. Kishev divides his time between Spain and Britain, while A. Kol- kutin travels between Belgium and Denmark). Commercialization did not affect the quality of their artistic endeavors since presence in the world artistic market presupposes competitiveness. In the mid-1990s, exhibition activity in the republic was stirred up; the public was given the opportunity to enjoy works by world famous artists. In 1996, the National Museum of Kabardino- Balkaria exhibited paintings, graphic works, and watercolors of world famous vanguard artist Mikhail Shemyakin, including his Carnivals of St. Petersburg, Angels of Death, and Metaphysical Images series. In March 2006, the same museum exhibited his project Sphere in Art (photos and copies of objects of art spanning the period between the and our days); in October 2008, the Na- tional Museum of Kabardino-Balkaria opened an exhibition of his graphic works called “Dzen.” The privately owned Saralp Gallery contributes to the of national art: in September 2007, it organized the personal exhibition of prominent Adighe jeweler Asya Eutykh in the Hermitage in St. Petersburg. The gallery offers the republic’s lovers of art a glimpse of artistic life abroad: in 2002-2005, it, together with the London Contemporary Art company and the Caucasian Bank for Reconstruction and Development, organized in Nalchik exhibitions of British artists; Akhmed Özal from Turkey, Mersad Berber, a Bosnian artist, and several others. In 2012, A. Saralpov opened an Art Center in Nalchik to exhibit paintings of the republic’s artists, as well as of painters from other Rus- sian regions and foreign countries. In 2007, Balkar Azamat Kuliev, who lives and works in Turkey, exhibited his works in the Museum of Fine Arts in Nalchik and organized exhibitions of Austrian photo collage makers. Kuliev, who graduated from the Repin St. Petersburg State Academic Institute of Painting, Sculpture and Architecture in 1996, combines the West European and Oriental (Muslim) artistic traditions. He has always strived to bring together diverse cultural traditions and grasp their deeply-rooted axiology. Thanks to Oriental meditation and philosophical deliberations, the artist achieves psychologically exact and emotionally touching portraits, which are better described as allegories than anything else (An Old Man, a Tree and a Bird, Old Age, and a series of female portraits). Many of the republic’s painters strive to grasp and comprehend the artistic traditions of the past; they prefer complex metaphorical compositions to bring together Western and Eastern traditions and adjust them to their own cultural insights. This is the gist of the creative endeavors of B. Gudanaev, R. Turaev, Kh. Savkuev, K. Akkizov, Kh. Teppeev, Kh. Atabieva, M. Kishev, Yu. Chechenov, R. Sha- meev, R. Tsrimov, and others. Volume 7 Issue 3-4 2013 103 THE CAUCASUS & GLOBALIZATION The artistic quest of Ruslan Tsrimov led him to transformations of specific images into multi- sided metaphors of a nationally-colored perception of the world, hence his highly decorative colors, ornamentally arranged compositions, and an obvious bias toward symbols—the typical features of so-called Receptualism, a newcomer to the republic’s scene. In November 2007, the National Museum organized three exhibitions (R. Tsrimov, E. Mazloev, and sculptor A. Guchapshev) of Receptualist art. Ruslan Tsrimov relied on Kazimir Malevich’s Black Square to explain his vision of space and time by contrasts between black and white. The Squares by Tsrimov are filled with the energy and dynamism of the 21st century; they are better described as design than artistic efforts; his structural and graphic quest, to which the painter adds colors, cannot but stir up a lot of interest. In his work about Tsrimov, prominent art critic Slava Lohn (Vladislav Epishin) has written: “It is easy to imagine the principle of playing with cultural codes and the principle of inter-text, closely related to it, in the postmodernist or, rather, Receptualist creative work of TS (Ruslan Tsrimov.—G.B.). By combining the primitivist and civilized, Western and Eastern, pagan, Muslim and Orthodox, classical and mod- ernist, modernist and post-modernist cultural codes in his artistic space, the artist, who employs la- conic signs (which remained out of reach until Receptualism came to the fore), achieves rich forms and rich content in his paintings.”2 The artistic interpretations of M. Gorlov, Kh. Savkuev, A. Kolkutin, R. Turaev, and V. March- enko, who are engaged in a quest for a new artistic language, stir up the imagination. In 2004, the republic’s Museum of Fine Arts organized a personal exhibition of Mikhail Gorlov’s paintings and graphic works. His graphic series The Adighe Suite (1992) and Kabardin and Balkar Folk Songs (1993) present the mythopoetic world of the republic’s autochthonous peoples in its natural milieu of diverse artistic symbolism. He perceives any ethnocultural tradition as part of the world cultural space. In 2006, Moscow’s Khodynka Exhibition Center presented his Texts exhibition in which he tried to blend several arts: graphics, poetry, and jazz, in particular. Mikhail Gorlov’s quest for novelty does not stop at the level of style (his style is pretty eclectic); he goes deeper into his attitude toward style in an effort to perceive any range of varied phenomena as a fact of art. In his graphic series called Signs, created under the influence of film director Andrey Tarkovskiy and his creative innovations, the artist tried to comprehend the levels of Christian conscience. Each of the sheets fixes stages of the appearance and development of Christian Orthodoxy in Russia. I. Terekhov has deemed it necessary to point out that Gorlov’s multisided creative work is marked by “a never-ending quest for his ‘ge- netic code’ in the continuum of signs.”3 On the whole, the republic’s artistic context is brimming with styles and quests for new imagery in Receptualism (R. Tsrimov, E. Mazloev, and sculptor A. Guchapshev); photo-realism (V. March- enko), abstractionism (M. Kishev), symbolism (Kh. Savkuev), etc. The powerful global information flows and artistic space filled with diverse axiological meanings add urgency to the problem of choice of artistic means based on free personal reflection rather than on ideology (as in the past). Art as “artistic self-awareness and a cultural code” (M. Kagan) creates a new type of ethnocultural identity that does not reject, but partially transforms and synthesizes the traditional and contemporary prin- ciples of self-identity.

Globalization and Belles Lettres

While globalization has affected the fine arts at the level of forms and meanings, in literature it manifests itself at the level of language, when new imagery structures emerge in literary works writ- ten in different countries.

2 S. Lohn, TS: Retseptualny serial v kontekste postmodernizma, Nalchik, 2005, p. 49. 3 I.N. Terekhov, Vozvrashchenie s kholmov, Nalchik, 2008, p. 58.

104 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Kabardino-Balkaria is no exception: globalization has started stylistic, structural, and axiolog- ical-normative shifts in its literature and has practically eliminated the borders between different types of culture. While before the globalization era, the East-West confrontation looked “transparent” enough, today the borders between them are disappearing despite the different, or even conflicting, understanding of man’s role and place in the environment. Under the impact of global electronic communication, the problem of identity is born anew: virtualization of cultural space leads to “repro- gramming” of cultural principles. The new artistic code in contemporary literature stirred up a veri- table information storm; it stimulated the formation of different stylistic trends of postmodernity. This is especially obvious in the Russian-language prose and poetry by B. Chipchikov, K. Elevterov, V. Ma- mishev, A. Balkarov, M. Khakuashev, A. Makoev, and others. The chaos of feelings and gaps of logic in the works of Balkar writer Boris Chipchikov are not shortcomings, but rather indisputable advantages. In his short story “Bella,” he looks at the fate of the generation born in exile, for whom the word Caucasus was nothing but a strange and cold term. Memories start with an open train carriage where the past and present meet as one. Anticipation of coming home, cozy times reading books, and “monotonous orange-colored Asia” (the place of depor- tation.—Ed.) were part of the past. While the Caucasus greeted those returning with “ragged patches of fog,” “fallen leaves,” and “cliffs all around.” But books, “cozy islands amid endless foul weather,” continued to “bloom.”4 The author places himself in the middle of the carriage—another link in the chain of geographic, historical and literary interconnections: Central Asia and the Caucasus, real and imaginary heroes. Our study of the scope of literary inter-text issues in the context of globalization brings us to the problem of a dialog of cultures. In 2005, Prof. Igor Shaytanov published an extremely interesting article about the triad of contemporary comparative philology in the Voprosy literatury (Problems of Literature) journal.5 The dialog of cultures, in turn, bares the problem of identity at all levels—lin- guistic, confessional, national, and historical—which means that an integral and harmonious ethnic image resistant to globalization, standardization, and uniformity has become the most typical feature of the contemporary literary process. A bias toward ethnic differentiation is a response of the immu- nity system to homogeneity. At the turn of the 1990s, the republic’s authors tried to overcome the one-sided vision of history typical of Soviet times by plunging into subjects never touched upon in Soviet literature—makhajirs (Adighe literature) and deportation (Balkar literature)—in an effort to revive the historical memory of the peoples (Korni by A. Keshokov, Most Sirat by A. Teppeev, Gybzy dostoynye by S. Mafedzev, Goluboy Tipchak by Z. Tolgurov, etc.) and keep their ethnic roots intact. The multidimensional nature of the contemporary cultural space is responsible for its complex, heterogeneous, and even contradictory trends, which dim the perspective. The greater role of the media in the global space pushed literature onto the back burner. To preserve and develop profes- sional literature, the authors should take part in international contests and festivals; cultural diversity and innovations should be supported both financially and organizationally; beginners and well-known writers alike need financial and organizational support to see their works published, while the reading audience can be expanded through meetings with writers, etc. Today, artistic culture as a whole is developing within the synthesis of genres and integration of graphic and expressive means, which makes popularization of national literature and fine arts in the media fairly promising. This explains why plays and performances based on traditional subjects and using national rhythms, music, customs, and rites are highly popular. The same can be said about events dedicated to outstanding Kabardin and Balkar cultural figures: folklore and ethnographic festivals, days of national cultures, folk shows, evenings of music and poetry, literary-musical productions, etc.

4 B.M. Chipchikov, Vozvrashchaysia svobodnym, Nalchik, 1998, p. 95. 5 See: I. Shaytanov, “Triada sovremennoy komparativistiki: globalizatsia-intertext-dialog cultur,” Voprosy literatury, No. 6, 2005.

Volume 7 Issue 3-4 2013 105 THE CAUCASUS & GLOBALIZATION Recent artistic practices have demonstrated that interaction among different arts and literary genres is highly varied and should not only be reduced to translating or re-coding works of art into the language of any other art. Today, the artistic quest breeds a desire to broaden the graphic and expressive scope of types of creative work by enriching them with the artistic potential of other arts.

Conclusion

The contradictory trends in artistic culture—quest for national identity and preservation of ethnic- ity, on the one hand, and spreading beyond the limits of subjective national world perception, on the other, are mutually determined and interconnected sides of a single artistic process. Globalization does not necessarily mean the leveling out of literary, artistic, cultural, and philosophical meanings. Globalization not only erodes, but also extends ethnocultural borders. Today, socio-cultural transformations are helping to create original cultural blends; this is leading to changes in content and axiology and creating a new type of ethnocultural identity.

Lyubov SATUSHIEVA

Ph.D. (Law), Assistant Professor, Chair of Constitutional and Administrative Law, Berbekov State University of Kabardino-Balkaria (Nalchik, the Russian Federation).

RELIGIOUS CULTURE OF THE PEOPLES OF THE NORTHERN CAUCASUS AND THE RUSSIAN AUTHORITIES (FIRST HALF OF THE 19TH CENTURY)

Abstract

he author relies on a vast body of pub- peoples with the rights that its Russian sub- lished and unpublished archival docu- jects enjoyed. On the other hand, it tried to T ments to demonstrate how the Russian create a mechanism that would obligate the Empire gradually built regulatory systems in state structures to observe the law. In other the sphere of religious relations in the Cau- words, it created conditions in which the casus. Russian Muslims could fully enjoy their Her analysis of the specifics of the em- rights. The author supplies an answer to the pire’s legal policy in this sphere demon- central question: Did Russia manage to har- strates that, on the whole, religious relations monize the interests of the Caucasian peo- were regulated by secular laws. The state ples and religious movements in the region was obviously determined to endow all of its through legal means? 106 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

KEYWORDS: Religious culture, the peoples of the Northern Caucasus, the Russian authorities, Christian Orthodoxy, , the Armenian Church, foreign Christian missionaries.

Introduction

The Caucasus, never one of the easiest regions at the best of times, invariably became a focal point during times of radical change. Today, when the Northern Caucasus obviously needs a contem- porary legal regulation strategy, we need to look back at the history of legal regulation of religious relations and the life of the peoples of the Caucasus. The experience that has been accumulated in modernizing the religious sphere in the region is highly specific and, at the same time, very similar to what went on in other regions of what were called the “imperial margins.” In the last few decades, Russian society and the state have been showing a lot of interest in the development of legal regulation in the Caucasus. While the independent states of the Central Cauca- sus deal with their legal systems on their own, the Northern Caucasus is developing as part of the Russian Federation. The far from simple religious problems show that religious life has not yet re- ceived an adequate mechanism of control. The history of the development of contemporary Russian law in the Northern Caucasus is becoming increasingly important in view of the insistent demands of the leaders of radical Islam to replace it with the Shari‘a, the Muslim legal system; they argue that the Shari‘a has been and remains much closer to the North Caucasian peoples and, therefore, much more comprehensible. In the early 19th century, the Russian Empire declared that it was absolutely tolerant of all re- ligious confessions and trends within its borders. Indeed, in many cases, the Russian administration in the Caucasus strictly followed this principle. In 1828, for example, Ivan Paskevich, Commander- in-Chief of the Caucasian Army wrote to the Chief of the Main Staff of the Caucasian Army that the Erivan Regional Administration should “remain absolutely impartial in everything concerning the relations between the Armenians and the Muslims, never show the former preference and, most im- portantly, demonstrate religious tolerance and discontinue, if possible, all disagreements about reli- gion and all reproaches (italics mine.—L.S.).”1 In the very first days of Russia’s presence in the Caucasus, this fundamental principle underwent considerable changes under the pressure of the geo- political circumstances. Confronted with religious diversity, the Russian leading circles, which relied on the and the Holy Synod, had to deal with it as best as they could. In Georgia alone, for example, the had to establish proper contacts with the Georgian Orthodox, Armenian, As- syrian, and Catholic clergy, etc.2

Christian Orthodoxy

The Russian administration, as well as the Holy Synod, in the Caucasus saw promotion of Christian Orthodoxy among the Russian Cossacks and the mountain peoples as their main task. In 1821, President of the Russian Bible Society Prince Alexander Golitsyn opened the Caucasian Depart-

1 Akty, sobrannye Kavkazskoy arkheografichekoy komissiey. Arkhiv Glavnogo upravleniia namestnika Kavkazskogo (Official Documents Gathered by the Caucasian Archeographic Commission. Archives of the Main Administration of the Vicegerent of the Caucasus), ed. by A.D. Berzhe, Vol. 7, Tiflis, 1878, p. 490. 2 See: Ibid., Vol. 1, 1886, pp. 250-285, 536, 550.

Volume 7 Issue 3-4 2013 107 THE CAUCASUS & GLOBALIZATION ment of the Bible Society in Ekaterinodar (now Krasnodar) to promote the Holy Scriptures in the Caucasus.3 Georgia, which adopted even before Russia, was a Christian Orthodox state; this explains why the Russian authorities established close ties with the Georgian clergy. In the Northern Caucasus, the Cossacks were the largest Orthodox group; many of their vil- lages had churches, some of which could be folded up and moved elsewhere to begin functioning again in new places. The religious life of the Cossack Orthodox community was supervised by the , Theodosia, and dioceses. A document entitled “On the Churches and the ” shows that the churches took orders from the military. The State Archives of the Krasnodar Territory contain a request from a colonel of the Black Sea Cossack Host and the regiment judge addressed to the Right Reverend Bishop Iov of Theodosia and Mariupol, in which the Cossacks asked for permission to build a church in Taman on a stone foundation (the old church stood on a wooden foundation) and received it. In 1797, the foundation stone of a church for the Cossacks was laid in Ekaterinodar: Archpriest Father Roman Porokhin decided to lay the foundation of this cathedral in the name of Christ’s Resurrection.4

Support of the Armenian Church

The Russian authorities also engaged in regulating relations with other Christian Churches. The memorandum of 1828 compiled by Senator Dmitry Bludov about the Armenian Church in Russia said in particular: “The H.I.M. decrees granted to several Armenian societies in Russia on 28 October, 1798 confirmed their right to freely perform their faith to build churches in their villages and perform all religious services and liturgical rules.” The document further confirmed their status: “All Armenian societies and their clergy … depend, in religious matters and church rites, on their patriarch.” The Armenians of Russia had their own consistory and administration.5 The Armenian Consistory was set up in Tiflis, the capital of Georgia. In 1843, the report submitted by the main Administration of Transcaucasia said that “besides the Orthodox faith practiced by the peoples of Georgian origin, two main religions of Transcaucasia—the Armenian-Gregorian and Islamic—keep the people of Trans- caucasia separated. It is important to patronize the former because of the considerable size of the Armenian population, which constitutes the core of the industrial and trade class and, even more important, because the First Ejmiadzin Monastery, the seat of the Patriarch-Catholicos of Armenians, is situated in the empire.” In 1843, the election of a new patriarch and the attention that the Russian government gave the process showed the Armenians that “the government was concerned about the arrangements for and continued wellbeing of the Armenian-Gregorian Church.” The Russian au- thorities had to help, as far as they could, overcome the problems inside the church (that is, be involved in its life using, as the document put it, “all the measures at its disposal”).6

Support of Foreign Christian Missionaries

It should be said here that, fully aware that the efforts of the Orthodox clergy were not always effective, the Russian authorities permitted various forms of foreign Christian missionary activity. In 1804, the Scottish missionaries launched Protestant missionary activities in the Northern Caucasus under special permission from the Russian Government. Early in the 19th century, Prince

3 State Archives of the Krasnodar Territory (further GAKK), rec. gr. 249, inv. 1, f. 787. “On Opening the Bible Society in Ekaterinodar. 1821” (all documents are in Russian unless otherwise stated). 4 GAKK, rec. gr. 249, inv. 1, f. 294. “On Churches in the Kuban Cossack Host. 1794,” sheets 6, 58. 5 Akty…, Vol. 7, p. 264. 6 Ibid., Vol. 9, 1884, p. 614.

108 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Pavel Tsitsianov received a rescript from St. Petersburg in which he was instructed to help the mis- sionary activities of two Scots—Henry Brunton and Alexander Paterson.7 The Scots spent a lot of time talking to the local people; some of them were persuaded to be baptized. In 1807, Protestants baptized a local mountain dweller, Sultan-Kat Giray, who later became an officer of a dragoon regi- ment. Those who were baptized went back to the mountains to live in constant fear lest their fellow citizens learned about their apostasy, normally punished with death. Two baptized by Prot- estant missionaries were murdered in their auls; they were buried “without honors or even without common rites.” To protect the newly baptized people, the Protestants asked the Russians to allow these people to settle in their colony. The Russian authorities refused, which made the Scots very doubtful about how successful their missionary activities in the Northern Caucasus would be. Alexander Paterson, one of the missionaries, arrived in Russia with a promise from the Russian government to protect the Scots and support them. In fact, however, Russia did not always success- fully cope with the task; this is fully confirmed when Paterson, as head of the Scottish colony, asked the Russian authorities in 1813 to allow them to move to a safer place: the colony, dangerously close to Kabardin auls, was regularly invaded, while the Most Gracious deed that promised them protection against the mountain peoples did not always prove adequate.8 The Scottish missionaries were most active among the Ingush who, however, stubbornly refused to be baptized. In 1822, the Scots decided to leave the Northern Caucasus.9 General Ermolov was dead set against the Protestant missionaries: contrary to Russia’s interests they taught people to be devoted to Scotland, not Russia. The Russian authorities actively supported the Catholic missionaries, who were much more successful than their Orthodox colleagues: they would prefer to see the North Caucasian mountain dwellers Catholics rather than Muslims. Jesuit missionaries from Europe acquired part of the fortress of Vladikavkaz, which they used for their activities.10 After a while the situation changed: in 1827, the Russian authorities informed the Metropolitan of the Roman-Catholic Church in Russia Kolumna-Cieciszowski in a secret letter that several recent de- crees had prohibited the clergy of the Roman churches from converting to their faith those who belonged to Eastern Christianity and to other faiths. On the strength of these decrees, the Russian authorities de- manded that the Roman Church observe “civil harmony with people of other faiths and … keep away from the flock of others.” The Protestant and the Armenian churches were also warned.11 From the point of view of missionary activities, the Ossetian communities looked more promising. However, two documents dated 1830—“Discussion of the Course of Development of the Spir- itual Ossetian Commissions Existing So Far”12 and “Preliminary Provisions for Establishing a Mis- sionary Society in the Caucasus”13—banned “introduction of other faiths beyond those professed in the Empire.” This meant that from that time on Scottish and other missionary activities were outlawed.

Christian Sects

All sorts of Christian sects (Dukhobors, Sabbatarians, etc.) described as schismatic and very popular among the Cossacks constituted the main problem of spiritual life in the Cossack-populated areas. On the whole, the followers of schismatic sects (Raskolniki) “were not persecuted for the teach-

7 See: Akty…, Vol. 2, 1868, pp. 281, 926. 8 See: Ibid., Vol. 5, 1873, p. 909. 9 See: Ibid., Vol. 6, Part Two, 1875, p. 507. 10 See: Ibid., Vol. 4, 1870, p. 178. 11 See: Ibid., Vol. 7, p. 311. 12 See: Ibid., Vol. 8, 1881, p. 247. 13 Ibid., p. 247.

Volume 7 Issue 3-4 2013 109 THE CAUCASUS & GLOBALIZATION ings of their sects; they may side with the teaching and perform the rites, but not in public. Under no pretext, however, may they avoid following the general rules of behavior established by law.”14 Real- ity, however, was much more complicated. In 1826, Councilor of State Sergey Lanskoy suggested to General Ermolov that the Dukhobor Cossacks of the Don Cossack Host be moved closer to the border and settled along the Caucasian Line. Lanskoy had the Committee of Ministers behind him, which argued that this would be “doubly useful: first, these people, being in immediate contact with the mountain people, will have to defend their property and families with arms; second, others seeing the way the government used the Dukhobors will prefer to keep away from the .” It was believed that since the Dukhobors had a bad influence on others they should be used as “living shield.”15 Sergey Lanskoy further wrote that since there were not enough Dukhobors from the Don Cossack Host to be spread along the Caucasian Line, Dukhobors from other gubernias could be used for this purpose. General Ermolov objected: there were only 86 Dukhobor families in the Don Cossack Host, which meant that, if moved to the borders where the mountain people live, “they will be sacrificed to these people during the first attack.” The General suggested moving the Dukhobor Cossacks to Siberia.16 The issue resurfaced in 1839 when Governor Count Mikhail Vorontsov wrote to Evgeny Golovin, Chief Administrator in the Caucasus, that to wipe out the “plague,” the Dukhobors of the Taurida Gubernia should be moved deep into the Caucasus.17 There were many Sabbatarians among the Cossacks, whom the government did not like. In 1825, in a letter to General Ermolov, Sergey Lanskoy wrote that “the Committee of Ministers is sure that this dissent with the Orthodoxy should not at all be tolerated by the government, which should protect the dominant faith and its members against temptations pernicious to them and to society, and believes that this evil should be cut short and that reliable barriers should be put in place.”18 There was also a sect of Bespopovtsy among the North Caucasian Cossacks.19 In 1836, the Ministry of Internal Affairs asked the governor of the Black Sea Area whether there were Old Believers and Raskolniki in the region. There was a certain Petr Chirikov there, who, in 1830, had joined the sect of castrates (Skoptsy), was punished by flogging, and was living in an area under police supervision. He tried to persuade others to join the sect, but few were tempted. There were dis- senters (2,042 men and 493 women) who did not recognize either priests or icons; they had no church- es. Other dissenters had priests and icons; they had three churches, 15 chapels, and one monastery. There were no Sabbatarians, Dukhobors, Molokans, or Pomors in the area.20 The Jews were banned from the Caucasian and Black Sea areas “because there were Sabbatarians living there (1831).”21 In 1836, Baron Rozen suggested that 20 thousand peasants from the and Kharkov gu- bernias should be moved to the Black Sea Area to improve the arrangements of the Black Sea Host and “to prevent schismatic activities detrimental to society by imposing strict responsibility on the local commanders so that they keep Old Believers, Sabbatarians or Judaizers, Dukhobors, Molokans, and others isolated from the settlers.” Only “people of the Greco-Russian faith” were allowed to re- settle; any Raskolniki wishing to join by deceit “will be exposed and exiled to Siberia.”22 Back in 1830, according to the “Note on Russian Settlers-Raskolnki in the Caspian Area,” Old Believers,

14 Ibid., Vol. 6, Part Two, p. 754. 15 Ibid., p. 464. 16 See: Ibid., p. 465. 17 See: Ibid., Vol. 9, p. 16. 18 Ibid., Vol. 6, Part Two, p. 631. 19 See: Ibid., p. 752. 20 GAKK, rec. gr. 249, inv. 1, f. 1483. “On a Secret Circular Letter of the Ministry of the Interior on the Way the Old Believers and Raskolniki Should be Brought to Oath,” sheets 1-27. 21 GAKK, rec. gr. 249, inv. 1, f. 1224. “On the Ban for the Jews to Live in the Caucasian and Black Sea Areas because There were Sabbatarians Living there and on a Number of Sectarians in the Black Sea Area and on Deporting the Jews from the Black Sea Host.” 22 Akty…, Vol. 8, pp. 839-840.

110 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Dukhobors, Molokans, Skoptsy (Castrated), Judaizers (or Sabbatarians) were moved there.23 Accord- ing to the correspondence of Count Vorontsov, in 1845, the Russian authorities decided to “review the rules of resettlement of dissenters of pernicious sects from the inland gubernias” to the Caucasus to undermine their influence in Russia.24

Islam and Christian Orthodoxy among the Mountain Dwellers of the Northern Caucasus

Formally, Russia demonstrated that it was “tolerant” of the Muslims. A letter Evgeny Golovin wrote to Minister of War Chernyshev in 1839 said, in part, that “to persuade the mountain dwellers who live opposite the left flank of the Caucasian Line that our government is tolerant and looks after the Muslim peoples in the same way as all other loyal peoples,” mullahs from Kazan were sent to Daghes- tan to organize Muslim services.25 In 1846, Count Vorontsov issued an address to the peoples of Chech- nia and Daghestan in which he persuaded them to calm down and accept the rule of Russia: “Your faith, your laws and customs, your wives and children, your property and your lands will remain untouched.”26 In the latter half of the 19th century, Ossetia acquired the Ossetian police, in which Muslims and Orthodox Christians served together; those who distinguished themselves were presented with awards irrespective of their religious affiliation.27 Let us take a look at a case where the traditions and customs of the mountain peoples were raised for the first time. It is called “Demands of the Kabardin Princes to Preserve the Rights and Customs of Their Land” (1827-1833); the Kabardins asked, among other things, for patronage and freedom of religion. The Commander of the Caucasian Army instructed his subordinates to find out whether freedom of religion among the Kabardins was violated. Colonel of Artillery Katsarov, who com- manded a fortress in Nalchik, wrote on 24 July, 1827 to Commander of the Caucasian Troops Gen- eral Emmanuel: “There have been no infringements on the freedom of religion among the Kabardins.” However, this was at a time when pilgrimages to Mecca and Medina were banned because the moun- tain people “brought a pestilence” with them when they returned. The ban was instituted in 1822 under General Ermolov; before that the mountain people visited the holy places with partial financial aid from the local authorities.28 It was as early as the 19th century that the Russian authorities divided the Muslims of the Cau- casus into the Muslims of the Northern Caucasus and Transcaucasia. The former had no special status in the Russian Empire, while efforts were made to create a certain status for the latter. In 1831, a Committee on Arrangements for the Muslim Provinces of Transcaucasia was set up in Tiflis. It con- tained a section called “On the Clergy.”29 The documents said the following about Islam, the religion of a large share of the Transcaucasian population (including Daghestan): “It is very important to keep in check at all times its hostility toward Christianity. This has become especially important today, when we should cut short the religious- political teaching of the murids detrimental to our power here.” It was suggested that “the [Islamic] clergy respected by the people and loyal to the government be supported, dissent among the Muslim

23 See: Akty…, Vol. 10, 1885, p. 281. 24 See: Ibid., p. 117. 25 See: Ibid., Vol. 9, p. 326. 26 Ibid., Vol. 10, p. 361. 27 See: Ibid., p. 227. 28 The Russian State Military-Historical Archives (further RGVIA), rec. gr. 13454, inv. 2, f. 49. “Demands of the Kabardin Princes to Preserve their Rights,” sheets 5-6rev. 29 Akty…, Vol. 7, p. 432.

Volume 7 Issue 3-4 2013 111 THE CAUCASUS & GLOBALIZATION clergy cut short, means of subsistence provided, ill-advised interference of civilian authorities in af- fairs under the competence of the spiritual structures discontinued, and the rights of the Muslim spiritual courts preserved.”30 Back in 1805, Pavel Tsitsianov pointed out that the Russian authorities, which remained loyal to the principle of “religious tolerance in Russia,” were, therefore, concerned about organizing the life of the Muslims. The top Muslim clergy of Transcaucasia received wages.31 In the Northern Cau- casus, the situation was different. General G.A. Emmanuel submitted a “Note on Preserving Folk Rights and Customs” based on explanations received from the Kabardin princes and uzdens (members of the nobility) supplied with his comments. The document had the following sections: “On Encour- aging Religion and Freedom of Religion,” “On Separating Civil and Spiritual Laws,” etc. The author succinctly described what the Russians wanted in the Caucasus in the sphere of religion: “to undermine the power of the Muslim clergy” and offered the following solutions: “proliferation of European education among the Asian peoples is the best and most reliable way to gradually uproot their hatred of Christians and achieve their loyalty to the Russian government.” Dmitry Dashkov, who at that time looked after the foreign religious confessions, made the following comment on the general’s Note: proliferation of enlightened Islam (that is, proliferation of Islam among the ordinary people) among the Kabardins would merely distance them from the Christians since there is a lot of hatred toward Christians, while the Muslim books treat Christians as infidels and preach hatred of them. Dashkov suggested a somewhat different approach to the problem: kadies selected from among the Kabardin clergy should be organized into a corps of pro-Russian Muslim clergy who would help the Russian authorities in the Caucasus to change the judicial customs of the Kabardins.32 In 1834, Rozen gave the head of the Tsebelda community the following instructions: “All Cau- casian tribes that became subjects of the great Emperor of All Russia will preserve their faiths (italics mine.—L.S.). This means that the Tsebelda people will preserve their Muslim faith; no one will force them to change it. Your spiritual leaders … will be always patronized by the Russian government.”33 It was in 1837 that Baron Rozen specified the status of Islam in the Caucasus for the first time in The Statute of the Muslim Rule in Transcaucasia.34 According to a later document of 1863, “Note on Identifying the Personal Rights of the Supreme Estates in the Muslim Areas of Transcaucasia,” the first draft of The Statute on Establishing a Higher or Privileged Estate in the Muslim Population of Transcaucasia appeared in 1845.35 In 1824, the “Instructions to the Chief Holy Person of the Kuban Province” regulated the life of the Muslim clergy and their flock; it dealt with the central issue—the number of clergy members in the auls; there should be no mosques in the auls with fewer than ten households.36 Back in 1744, an Ossetian department was set up at the Georgian Church with the purpose of baptizing the Ossetians (whose ancestors had been Christians). In 1769, it was moved to Mozdok and placed under the control of the Russian Orthodox Church.37 In 1759, Kargok Kanchokin, who owned Smaller Kabarda, was baptized and moved to Mozdok on the banks of the River Terek. In 1762, the Ruling Senate passed a Decree under which those wishing to embrace Christianity should be encour- aged by the permission to settle “on our side” of the River Terek. The same decree ruled that the newly baptized should be encouraged by one-time grants from the “income of Kizlyar”: the uzdeni

30 Ibid., Vol. 9, p. 614. 31 Ibid., Vol. 2, p. 286. 32 See: Ibid., Vol. 7, pp. 864-865. 33 See: Ibid., p. 455. 34 See: Ibid., p. 335. 35 National Archives of Georgia, rec. gr. 5. Chancellery of the head of the Chief Administration of the Head of the Civilian Affairs in the Caucasus, inv. 1, f. 131. “Note on Identifying Personal Rights of the Supreme Estates in the Muslim Areas of Transcaucasia.” 36 See: Akty…, Vol. 6, Part Two, p. 109. 37 See: Ibid., Vol. 1, p. 83.

112 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION could expect 10 ; the ordinary people, 5 rubles, while the unmarried would receive 2.5 rubles.38 According to an apt comment by General von Medem, military commander of the Mozdok Line, made in 1772, “because of the way of life and the places they live the Kabardins were and will remain in future, very much according to the Muslim laws, hostile at heart to our Christian side.”39 The general was convinced that Russia should demonstrate tolerance of the Kabardins and the other North Cau- casian peoples and “deal with them with maximum firmness, benevolence, and fairness” to convince them that it was in their interests to become part of Russia.40 Prince Grigory Potemkin wrote that in 1787 nine Karachai elders had come to him to ask for protection against the Kabardins; they were prepared to be baptized together with their families and all their people. Prince Potemkin invited clergy members from the Ossetian Spiritual Orthodox Com- mission to perform the rite. The Karachais, 120 households in all, moved to the White River; the Russian authorities pledged to protect them against the Kabardins.41 Other peoples were prepared to do the same under the same condition. The Kabardins were brave and very aggressive in their relations with the other North Caucasian peoples. According to a report of 30 April, 1772 submitted by Gen- eral von Medem, the peoples of the Northern Caucasus had nothing against Christianity “from the practical point of view.” The Ingush, for example, preferred to gain Russia’s patronage against the Kabardins, to whom they paid tribute (one ram from each household), therefore, “many of them be- came baptized” to be moved under protection of the Russian troops.42 The general deemed it necessary to stress that “since those who come down from the mountains are driven by mercantilist consider- ations rather than a sincere desire to become Christians, and frequently to avoid punishment,” these people should be baptized only with his permission. “This ended one of the greatest causes of dis- pleasure among the mountain peoples.”43 In 1809, in a leaflet addressed to the trans-Kuban peoples, General Alexander Tormasov wrote that since these people had become resolved to end their inroads, Russia forgave them and was prepared to extend its patronage to them: “The government will do everything it can to improve your wellbeing.” The trans-Kuban peoples acquired the right “to build mosques, if they wanted, and to conduct services according to their faith and law”; they were allowed to be engaged in barter or any other form of trade. “You can see for yourself that Russian patronage will be mild and very charitable for you. You can also see that your faith is not persecuted, but, on the contrary, encouraged… Indeed, the rules of your faith teach you to obey God and the Emperor because all resistance with bring evil to you.” Any viola- tion of the oath to the Emperor given on the Koran was described as evil, as the violation of Islam, while violations of the Koran promised hell to those who violated its commandments.44 In 1810, in his letter to General Sergey Bulgakov, Major General Ivan Delpotso pointed out that the Ingush who had settled in Nazran had adopted Islam. He insisted that they should move to Vladikavkaz, “remain loyal, destroy their mosques, and drive away the Muslim mullahs, preachers, and teachers.”45 In 1810, General Tormasov wrote that the Ingush people “are not yet firm in their Muslim faith and can be baptized.”46 The same year, he wrote to General Bulgakov that it was im- portant “to revive among them the Christian law they have abandoned and forgotten, build a church, on state money, in one of their big villages, and give them a reliable priest of good conduct” and with a good salary.47

38 See: Akty…, Vol. 1, p. 82. 39 Ibid., p. 86. 40 See: Ibid., p. 89. 41 See: Ibid., Vol. 2, p. 1116. 42 See: Ibid., Vol. 1, p. 86. 43 Ibid., p. 90. 44 See: Ibid., Vol. 4, pp. 889-890. 45 Ibid., p. 896. 46 Ibid., p. 898. 47 See: Ibid., p. 897.

Volume 7 Issue 3-4 2013 113 THE CAUCASUS & GLOBALIZATION On 22 August, 1810, General Delpotso and the Ingush people signed an agreement which made them Russian subjects on certain conditions. Under Point 2 of the document, they pledged “we shall regard all enemies of the Russian throne, including our Muslim neighbors, as our enemies” and were no longer obligated to pay tribute to the Kabardins (as they had done earlier). Under Point 11, “from the time of signing the agreement and in perpetuity, we and our descendants promise to object to the preaching and establishment of Muslim law among us, never accept effendis, mullahs and other Is- lamic spiritual figures and never build mosques. If we violate our promise the Russian commanders have the right to treat us as their enemies.”48 The file “Demands of the Kabardin Princes to Preserve the Rights and Customs of Their Land” (1827-1833) contains an interesting comment by a Russian colonel: on the one hand, “the command- ers did not allow the Kabardins to oppress those who want to be Christians,” while on the other, “the Christians should not persuade the mountain people under false pretext to embrace Christianity.”49 Under the secret instructions Prince Tsitsianov issued for the Mozdok military commandant, the Russian authorities should encourage “all people of other faiths wishing to embrace the Greek law and convert all of Kabarda to this faith.” As a rule, however, the Kabardins who fled from their land and settled in Mozdok agreed to be baptized in order to continue stealing, killing, and plundering. Fully aware of this, Pavel Tsitsianov suggested that before baptism the moral qualities of those wish- ing to be converted and their knowledge of Russian should be checked.50 In the first half of the 19th century, the Northern Caucasus was an arena of incessant struggle between Russian-Georgian Orthodoxy and Turkish Islam, the Orthodox clergy being the losing side. Here is what one of the documents sent to the Ruling Senate said in 1830: “The Ossetians are Chris- tians, however Turkish mullahs are preaching Islam among them and succeeding. The Orthodox priests do not have ingenuity and gifts of the mullahs; it is desirable therefore that the Georgian clergy send better priests in future.”51 The Ossetian societies looked more promising from the missionaries’ point of view. This is confirmed by the documents dated 1830: “Discussion of the Course of Development of the Spiritual Ossetian Commissions Existing So Far”52 and “Preliminary Provisions for Establishing a Missionary Society in the Caucasus.”53 The rule “On Ways to Draw the Mountain Peoples and Russians Closer Together” was the centerpiece of the documents: “These ways lie within the responsibility of the civilian authorities; their success will also useful for the Missionary Society because this drawing closer will favorably dispose the people toward the civilian system while the ideas of these peoples will be purified and much more benevolent and, therefore, more responsive to the Word of God.”54 By the mid-19th century, the Russian authorities had to admit that their efforts to spread Christian- ity among the Ossetians had failed. In 1848, Count Vorontsov wrote to Archimandrite Isidore about the decline of Christian feelings among the Ossetians and discussed the reasons.55 He wrote that “the mullahs who arrive from subjugated Chechnia have the right to visit Ossetian villages, in which Muslims live, to talk to them about their faith. Muslim landlords receive these mullahs at home, following the gener- ally accepted rules of hospitality.” He further wrote that if mullahs from the still rioting part of Chechnia come to Ossetia they should be treated “as enemies.” “Organizing mosques in Muslim villages was never banned. They can do this very much like other Muslims living elsewhere in inland Russia. A ban on building mosques would have invited an unpleasant or even pernicious response.”

48 Ibid., p. 900. 49 RGVIA, rec. gr. 13454, inv. 2, f. 49. “Demands of the Kabardin Princes to Preserve the Rights and Customs of Their Land,” sheets 5-6rev. 50 See: Akty…, Vol. 2, p. 970. 51 Ibid., Vol. 7, p. 373. 52 See: Ibid., Vol. 8, p. 247. 53 See: Ibid., p. 253. 54 Ibid., p. 258. 55 See: Ibid., Vol. 10, p. 227.

114 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Count Vorontsov suggested measures designed to weaken the determination of those Ossetians who wanted to leave Christianity to become Muslims and to fortify the position of Christianity among the Ossetians. He dispatched Second Captain of Tolstoy together with an archpriest to the Ossetian districts of Vladikavkaz and Digora to announce that “the government does not interfere and will not interfere in the future with the administration of rites of the Muslim religion; it will remain loyal to religious tolerance, which means that their faith is secure; at the same time under the laws of our Empire and according to the spirit of the Christian religion, it is strictly prohibited to move from Christianity to Islam; those born Christians or once baptized cannot become Mohammedanized (italics mine.—L.S.).”56 Count Vorontsov said the same in his report on the administration of the Caucasian Area for 1846-1848. In the section “Religions,” he wrote that the Russian authorities should work with “half- Christians” to draw them to Christianity, not to Islam.57 He suggested that Provisions for the Muslim Clergy should be drawn up since the drafts created so far “had nothing to do either with the spirit of the people or with the real needs.” With this aim in view, he sent Nikolay Khanykov, who had excellent knowledge of Oriental languages, to study the situation regarding Islam inside the region. He travelled across all the Muslim provinces and set about drafting the Provisions. He warned that “this subject should be treated with the greatest care. The Muslim clergy interprets even the slightest limitations as the government’s intention to suppress the Muslim faith, which might trigger fanaticism very dangerous for the state.” It was decided to set up schools of the Omarov and Aliev Muslim trends to educate pro-Russian mullahs with a good command of Russian. In this way, Russia started using money to control the Muslim clergy; the amount of money al- lotted to each of them depended on the degree of loyalty of their flock. In 1803, for example, Prince Tsitsianov, in his instructions to Count Vorontsov, pointed out that the Tabasaran kadi had asked for an increase in his salary of 1.5 thousand rubles; the authorities were reluctant since his “loyalty was sham.” He died soon after this; his son, who filled his post, demanded more money to be answered, in turn, that “in the absence of any signs or any experience of his loyalty,” he was not entitled to a salary.58 In 1834, Prince Shakhovskoy sent a report to Baron Rozen in which he stressed the need to “al- locate money to building stone mosques; faith should not be restrained by the ban on pilgrimages to Mecca; a mosque and a school should be opened in Nalchik to teach the and Mus- lim law.”59 On the other hand, General Karl Fezi wrote in 1838 to Baron Rozen: “Shamil is stirring up unrest among the mountain peoples against us. His efforts as a private person would have been vain had not religious fanaticism dominated the minds of the Lezghians and forced them to hate Christians.” Therefore, concluded the general, the struggle against the Daghestanis is “a struggle against the religious and social prejudices of these savage tribes.”60 In 1852, Vice Admiral Serebryakov, engaged in naval warfare against the Ottoman Turks off the Black Sea coast, reported to his superiors: “The Caucasian clergy is operating within a wide range of its holy activities to fulfill its divine calling to enlighten the semi-savage tribes with the Word of God… Each private person appointed to administer the region should bear in mind that beside the honor and glory of arms he is duty bound to help the clergy in its works.” He went on to describe the means and methods used to promote Christianity among the mountain peoples and pointed out that Islam had become an instrument of political confrontation between the mountain peoples, who called all Russian “gyaurs” (infidels), and the Russian state.61

56 Akty…, Vol. 10, p. 229. 57 See: Ibid., pp. 856-857. 58 See: Ibid., Vol. 2, pp. 757-758. 59 Ibid., Vol. 8, p. 637. 60 Ibid., Vol. 9, p. 309. 61 See: Ibid., Vol. 10, p. 233.

Volume 7 Issue 3-4 2013 115 THE CAUCASUS & GLOBALIZATION Islam, perceived as an instrument of anti-Russian policy, became a tag attached to the North Caucasian Muslims; from that time on the Russian Empire was no longer talking about the legal status of the Muslims, but was determined to fight Islam and its followers as the “enemies” of the Russian statehood in the region.

Conclusion

The legal regimes St. Petersburg established in the Caucasus in the 18th-early 20th centuries were nothing more than legal constructs ill-adapted to Caucasian reality. The local people could make neither heads nor tails of what the Russian officials and Russian lawyers expected from them. The Russian authorities were fully aware of their failures and, throughout the 18th and the first half of the 19th centuries tried to adjust, at least partly, the regulatory acts and mechanisms of their implementa- tion to the requirements of Caucasian society and the level of its social development. The history of legal regulation of religious relations between the Russian authorities and the so-called “alien peoples” (the peoples whose lands were joined to the Russian Empire in the 17th-19th centuries) shows that the Russian Empire, albeit willing to be a law-governed state in which legal principles prevailed over political expediency, fell short of the aim. Study of specifics of the legal policy regarding religious relations in the Russian Empire revealed that, on the whole, they were regulated by secular laws. Russia wanted to gradually extend the rights its Russian subjects enjoyed to all other peoples; it even tried to create mechanisms that ensured the state’s observance of these rights, that is, mechanisms for realizing the rights of the Russian Muslims.

Leyla MELIKOVA

Ph.D. (Philos.), Senior Research Fellow, History of Religion and Social Thought Department, Academician Buniyatov Institute of Oriental Studies, National Academy of Sciences of Azerbaijan (Baku, Azerbaijan).

HOW BAHA’ISM TRAVELLED FROM THE EAST TO THE WEST (IDEOLOGICAL EVOLUTION OF THE NEO-UNIVERSALIST RELIGIOUS DOCTRINE)

Abstract

he author places the ideological evolu- ogy and globalism. She classifies this reli- tion of the Baha’i faith as a religious gious teaching, born in Iran in the mid-19th T doctrine in the context of the social and century (1844) out of the Shi‘a-Imamite cultural trends of Western neoliberal ideol- messianic doctrine and fully developed by 116 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

1863, as a neo-universalist religious con- in the context of historical conditions and cept, the moral and ethical values of which the factors that made it possible, the Baha’is did not offer sensational revelations, but fol- religious identity, their relations with the en- lowed the religious provisions of other vironment, society, and the state reveals faiths. Her analysis of the phenomenologi- the contradictory and utopian nature of this cal aspects and quintessence of Baha’ism faith.

KEYWORDS: Baha’ism, the Bab, Bahá’u’lláh, Abdu’l-Bahá, Shoghi Effendi, globalism, neo-universalist religions, universalism, cosmopolitism.

Introduction

By the turn of the 20th century, the institution of the church had gradually lost its followers amid the cultural and spiritual crisis in the West, which kindled a wide interest in all sorts of religious and theosophical, mainly Oriental, trends. Later, the new religiosity born of the culture of modernity rebounded as a fairly specific postmodernist, sociocultural phenomenon. An attentive listener, how- ever, can discern a consistent call in the postmodernist cacophony to universalism and unification of mankind for the sake of a new world order coming from the religious movements and associations that fall into the category of “neo-universalist religions.”1 Their ideological content, that is, their neo- spiritualist2 aspect, is very different and, at the same time, very similar: all of them are geared toward the idea of uniform world governance. Baha’ism, a socio-cultural and socio-religious phenomenon, is one of the new religions in which the neo-universalist aspect is an obvious and inseparable part of the doctrine. Its universalism is practically identical to the globalist concept of an omni-human universe. The statements coming from the Baha’i ideologists of the Universal House of Justice (UHJ), the su- preme governing institution of the Baha’i faith in Haifa (Israel), add more sense to everything taking place in the world. They say that mankind should strive for a New World Order, a new world religion according to the followers of the Baha’i faith.3 The teaching of Bahá’u’lláh4 proceeds from the idea of continuity of the Divine Revelation; this means that the founders of all religions were merely prophets drawing their knowledge from a single Divine source. The idea that the Prophet Muhammad was the last prophet for a certain historical period, rather than for the entire stretch of , was cen-

1 The of , the Church of Osho and, conventionally, the movements (there is no religion and no clearly organized structure of this name). 2 Neo-spiritualism, a neologism coined by René Guénon, describes various forms of “new religiosity,” an eclectic combination of fragments of mystical knowledge, subjective ideas, and elements of contemporary scientific-technical ideas about the world that lead humanity to decline. 3 They believe that to unite mankind into a new social entity called the New World Order, it should be accepted that the world religions have a common source of revelations and are, therefore, united, that all believers should seek the truth individually, that mankind should abandon all its prejudices while religion, the human mind, and scientific knowledge should achieve harmony, that education for all is needed, that extreme forms of poverty and wealth should be eliminated, that men and women should be equal, that a common language for international communication should be created and put into circulation, and that a federative form of universal governance with a single administrative center should be set up to supervise the economy, international security, and the judicial system. The Baha’i International Community has a consultative status with ECOSOS and UNICEF (see [http://www.bahai.org/]). 4 Bahá’u’lláh (Arab.: [“Glory of God”]), born Mírzá Ḥusayn-`Alí Núrí (Persian: ), 1817-1892, founder of the Baha’i Faith.

Volume 7 Issue 3-4 2013 117 THE CAUCASUS & GLOBALIZATION tral in the teaching of the Bab.5 The new period would be opened by two prophets, the Bab being one of them; the name of the second remained concealed. Bahá’u’lláh capitalized on the idea of developing his own religious-philosophical concept. The Baha’is are convinced that Bahá’u’lláh is the second and last (for the current cycle) of the two promised prophets predicted by the Bab and that his advent opened an epoch in which all messianic prophecies present in all religions have been fulfilled. To identify the present status of the Baha’i faith, I will trace the evolution of its ideology from the very first day of its existence.

Genetic Links between Baha’ism and Shi‘a Islam

To establish the fact of genetic affinity between Baha’ism and Shi‘a Islam we should look for the sources of the Baha’i faith in Babism and, therefore, in Shi‘a Islam as a whole. In 1848-1852, Babism, a religious-political movement used the extremely unfavorable social and political situation in Iran6 to raise a high wave of riots which swept the country and threatened the ruling . Babism as a religious teaching is rooted in the Shi‘a messianic doctrine, according to which the promised imam, the last of twelve imams, would come to Earth to bring justice. In Shi‘a, the role of a Messiah, an ultimate savior of humankind, belongs to Al-Mahdi (the Guided One) and Al-Qa’im (the Rising One). According to this concept, the twelfth imam was concealed by Allah and for 69 years guided his followers through messengers, all of them titled the Bab (Gate). There were four of them; the death of the last in 940 was the starting point of the Shi‘a Imamite religious-political doctrine, which reached its highest point under the Safavids. Since the concealed imam and his last deputy (Gate) refused to name the successor, the Shi‘a- Imamites are still waiting for the concealed imam Mahdi or Qa’im who will restore justice on Earth. What is important is the fact that in this context Al-Qa’im is expected to come not only as the savior of mankind, but also as the founder of a new religion.7 The Babi-Baha’i religious philosophic concept grew out of the Shi‘a-Imamite doctrine. The Bab, founder of Babism, originated from the Shaykhi environment. The Shaykhi (Arab.: As-Shaykhiya) School in Shi‘a Islam (like many others in Iran) grew out of the traditionally messianic sentiments and existed in in the 19th century; it has survived until our day as a distinctive part of Shi‘a Islam. The Shaykhiya School was founded by Sheikh Ahmad al-Ahsá’í, an Arab from Bahrain (1753- 1826); he and his followers interpreted the Koran allegorically to predict the forthcoming second advent of Imam Mahdi. The Sheikh was born in Al-Ahsa (the eastern part of the Arabian Peninsula). Back in the 10th century, the Qarmatians set up a small utopian state there, which Nasir-i-Khusrau visited and described. It seems that this and many other factors influenced the ideas and spiritual rules of Sheikh Ahmad.8 According to the available information, at no time did he try to set up a school of his own; he never tried to oppose the Shi‘a traditions and always regarded himself as a true follower of the teaching of the Imams of Imami Shīa Islam.9 As could be expected, the ideas and highly spe-

5 The Bab (Arab.: [“Gate”]), Siyyid `Alí Muhammad Shírází (Persian: ), 1819-1850, a merchant from commonly known as the Bab is the founder of Babism and the ideological predecessor and spiritual teacher of Bahá’u’lláh, the founder of the Baha’i faith. 6 “Cities and towns were shaken by riots of the hungry, the majority of them unrelated to the Bab movement” (see: Mirza Kazem Bek, Bab i babidy. Religiozno-politicheskie smuty v Persii v 1844-1852 godakh, Selected Works, Elm, Baku,1985, p. 219; M.S. Ivanov, Antifeodalnye vosstaniia v Irane v seredine XIX veka, Moscow, 1982. 247 pp.). 7 See: “Islam,” in: Entsiklopedichesky slovar, Nauka Publishers, Moscow, 1991, p. 127. 8 In view of the fact that Babism developed from the Shaykhiya School, it is interesting to point out that Vasily Bartold at one time quoted Ignac Goldziher, who wrote that Babism was a “development of the Mahdi idea in the Ismailite sense” (V.V. Bartold, Sochinenia, in 6 vols., Moscow, 1966, p. 391). 9

118 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION cific approaches of Sheikh Ahmad al-Ahsá’í were consistently rejected by the mujtahids.10 Siyyid Kázim Rashtí (1793-1843), one of Sheikh Ahmad’s pupils, an Iranian born in Rasht (on the south- western Caspian coast) who died in Baghdad, became his spiritual successor. A profound meta- physic and mystic, he left a vast written heritage, part of which disappeared together with Sheikh Ahmad’s manuscripts during two inroads that devastated Kerbela but did not cut short the history of the Shaykhiya School; under Sheikh Ahmad’s second successor, the school moved to Kerman (south- eastern Iran) where its members set up a madrasah, a school, and a print shop. The tradition survived and developed under later successors; the school produced over one thousand titles to become one of the most popular and respected philosophical discourses in Iran today. The limited scope of my ar- ticle forces me to go back to the time when the Shaykhiya School gave birth to a new religious move- ment known in scholarly writings as Babism. We should bear in mind that, by the early 19th century, traditional Shi‘a in Iran had lived through cardinal changes caused by shifting ideological accents. The Usulis regained their prevalence over the Akhbaris, which gave the mujtahids a chance to inter- fere in secular life. The Shaykhiya School retained its own position and was, therefore, isolated: unlike the Shi‘a traditionalists, its followers believed that after the deaths of the Prophet Muhammad, , Fatima, and Imams, their holy souls could be reincarnated in chosen people. They also prophesied that a new Messiah, Imam Mahdi, would soon reveal himself and that the world would learn about this from a messenger, the perfect Shi‘a. The followers of the Shaykhiya School not only prepared the public and religious consciousness for the appearance of a messenger (Gate) and a group of people who embodied the spiritual essence of the holiest figures in Shi‘a and were, therefore, an in- disputable authority for the people in all spheres of life. In this way, the Shaykhiya School, deliber- ately or not, tilled the religious soil for Babism. Shortly before his death, Siyyid Kázim Rashtí instructed his pupils to spread out in search of the Qa’im as the messenger and the Gate to the future. One of them, Hossein Boshru’i ended up in Shiraz where he met young Siyyid Alí Muhammad who, on 23 May, 1844, declared himself the Bab, The Gate of God. Mullah Hossein was the first to accept him as the Bab; later followers of Si- yyid Alí Muhammad joined him. By that time, the Shaykhiya community had lost its ideological unity very much obvious under late Sheikh Ahmad. After the death of Siyyid Kázim Rashtí, some of his followers, seeking more political consequence, realized that they needed a less formal and more socially oriented religious teaching and an ideological base or an idea attractive enough to lure new members. The Bab, a 23-year- old young man who has shown an interest in all sorts of religious trends in the tareqat, attended Si- yyid Kázim Rashtí’s classes, and gained respect in the Shaykhiya community while in Kerbela, looked like the best candidate for the role of the messenger.11

10 The 17th century gave rise to different approaches to the problem of tradition in Shi’a thought. On the one hand, there were the Usulis (critical theologians) and the Akhbaris (fundamentalist theologians). When dealing with the collection of Shi’a legends (khabar), the former were guided by the criteria of external authenticity, while the latter insisted on preservation of the collection’s entity. The disagreements were mainly related to the sphere of canonical law (al fiqh), yet the Akhbaris also influenced the approach to traditional Shi’a metaphysics. When it comes to the problems of authenticity of the hadiths (as belonging or not belonging to the Imams), the Akhbaris were guided by their content rather than the authority of the mujtahids (theologians), who had the right to pass judgment, or the authority of those who transferred the tradition. This dialectical intertwining apart, the Shaykhiya School occupied an intermediate position between the two extremes, being closer to the Akhbaris (see: H. Corbin, Histoire de la philosophie islamique, Gallimard, 1986). The followers of the Shaykhiya School, however, disagreed with the Shi’a Akhbari theologians on several conceptual problems; they objected, in particular, to the great number of legends and absence of their criticism. They also favored a unified approach to the interpretations of the Koran and the Shari‘a. The Shi‘a theologians, in turn, condemned their refusal to embrace the idea of man’s physical resurrection—for more details about the religious and philosophic ideas of Sheikh Ahmad al-Ahsá’í and his biography, see:

11 See: Mirza Kazem bek, op. cit., p. 73.

Volume 7 Issue 3-4 2013 119 THE CAUCASUS & GLOBALIZATION He started his new mission by performing hajj to Mecca and Medina. On 20 December, 1844, standing at Kaaba, the most sacred of the Islamic sites, he announced that he was the Bab (the Gate of God) through which the future Imam would reveal himself. This calls for a more detailed discussion. The Bab and the Shaykhiya followers looked at Shi‘a (the Religion of Truth) as resting on four supports: “Briefly, Shí‘ism had heretofore recognized five pillars of belief: tawhíd (unity of God), nubúwa (prophethood), the resurrection, the imamate and justice. The Shaykhiya joined divine unity with justice and prophethood with the resurrection and added the principle of the Perfect She’d or Shí‘í. Thus for the Báb, Shí‘ism or true religion was based upon four supports, not five. His quater- nary discourse no doubt reflects a doctrinal position, particularly as the fourth level, the Fourth Sup- port (al-rukn al-rábi’)…”12 Al-rukn al-rábi’, a very important term for the Babi, was interpreted by the Shaykhiya School as following the injunctions of the Imams of the Shi‘a tradition—to remain in unity with the “friends of God” (Arab.: al-Auliya). Within the Imamite esoteric tradition, this meant strict observation of the mythical hierarchy of cycles, according to which the present period is the period of Occultation (Arab.: Ghaybah). Henry Corbin wrote in his history of Islamic philosophy that Occultation of Imam means occultation of his Threshold (Gate) (Arab.: Al-bab) and the entire hier- archy. This hierarchy is a group of concealed people, their occultation being an indispensable condi- tion. In his last letter, the imam (who alone knew these concealed people) warned that those who would speak in his name were false. The occultation (Ghaybah) should be preserved until his arrival. The author further wrote: “This thesis was consistently repeated by the Shaykhiya teachers, which means that any religious teaching which moves away from Ghaybah also moves away from Shi‘a and Shaykhiya.”13 Elsewhere in his fundamental work, he probed deeper into the quintessence of the Shi‘a Imamite eschatology: “The last message of Imam warns against deceit and fraud of all sorts and against all attempts to cut short the period of eschatological expectation of his inevitable arrival. This was what constitutes the drama of Babism and Baha’i.”14 Igor Bazilenko from St. Petersburg has written: “While accepting a certain degree of conven- tionality of the concept of as applied to Shi‘a, it is possible, however, to identify two main features that speak of the heretical nature of a Shi‘a trend or a Shi‘a community. In all cases, heresy, first, denies consistently and deliberately or avoids fulfilling the main dogmata—the pillars of faith (one or all of them)—and second, sets up a new organizational structure which is detached from the Muslim community to become independent and practically always antagonistic to this community.”15 This means that the Bab, having violated Ghaybah, moved outside the Shaykhiya: he set up a new teaching with distinct elements of bourgeois social reformism. In 1847, the Bab wrote his main work Bayan in Persian, in which he summarized his teaching and prophesied the appearance of “He Whom God shall make manifest.” It was in the same year that, while in Máh-Kú prison (on the border with Northern Azerbaijan), he declared himself Imam Mahdi. This is the main contradiction of his status— a messenger of the new “revelation” that prophesied the advent of the Promised One in his main work (Bayan) and Mahdi, a title which, according to logic, belonged to the still concealed prophet. It is no wonder that the Muslim clergy of Iran was very concerned: indeed, anyone who declared himself a messiah in a traditional Shi‘a country where it was believed that the lives of nations and rulers were at the disposal of a concealed imam who would appear and declare Doomsday was guilty of challeng- ing the and the clergy. The Babi slogans reflected the interests of the Iranian trade bourgeoisie and were related to social and public issues and man’s everyday existence. Many of the important or even fundamental provisions of the Koran were rejected in the just kingdom of the Bab, such as all the Koranic limitations on usury and interest (a sin in Islam); while “complete freedom of trade was

12 T. Lawson, “Dangers of Reading, the Inlibration Communion and Transference in the Qur’an Commentary of the Bab,” in: Scripture and Revelation, Gorge Ronald, London, 1997, pp. 185-186. 13 H. Corbin, op. cit. 14 Ibidem. 15 I.V. Bazilenko, “Osobennosty evoliutsii religiozno-filosofskoy doktriny shiizma v istoriko-kulturnom prostranstve musulmanskogo Vostoka,” Khristianskoe chtenie (St. Petersburg Spiritual Academy), No. 1 (32), 2010, p. 169.

120 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION declared, which was limited, however, to the autochthonous population while foreigners and people of other faiths should be evicted to free the Iranian merchants from foreign competitors.”16 The Babis demanded that certain Islamic customs and rules related to the family and everyday life and the status of women should be changed; they wanted simpler religious practices and suggested that prayer meet- ings, five daily prayers, should be abolished. They also insisted on total elimination of duties and taxes, they wanted men and women to be equal, their property to be common and their shares equal; they also spoke about abolishing hijabs. The Babi slogans contained certain revolutionary bourgeois-democratic elements; the Babis, however, were doomed to military defeat because of their utopian ideas about social changes and absence of adequate material resources. The above explains why Mirza Taghi Khan, chief minister of Nasser al-Din Shah, asked for permission to execute the Bab. The execution took place on 9 July, 1850; the movement was cruelly suppressed. Tuned to the social-bourgeois changes unfolding in Iran, which brought the country close to one of the turning points in its history, the movement lost the battle: the ripe social and political prerequisites, however, were not enough to stir up an armed struggle of adequate scope and character. “The soul of Iran … is constantly being torn apart by reli- gious doubts and quest. An Iranian … is inclined to speculative thinking; nowhere were there as many and religious protests as in Iran.”17

Transformation of Babism—Bahá’u’lláh, A New Religious Leader

The history of the Babi-Baha’i movement can be divided into several periods: (a) the life and activity of the Bab, the founder of Babism; (b) post-Bab transformation into Baha’ism, a religious teaching of Bahá’u’lláh, a new leader; (c) the life and activities of Bahá’u’lláh’s descendants; (d) the rest of the movement’s history up to and including the present time associated with the Universal House of Justice founded in 1963. For obvious reasons, the period connected with Bahá’u’lláh as a new spiritual leader of the Babi community is the key one. The Bab and key figures of Babism had been executed; in 1852, a certain Mirza Husayn ali Nuri was detained on suspicion of plotting against Nasser al-Din Shah. Later, as famous Bahá’u’lláh, he added a new and wider scope to Babism. He spent four months in Siyah-Chal (Black Pit) prison together with other Babis arrested on the same suspicion. Many of them were executed, however Bahá’u’lláh, after being repeatedly interro- gated, was set free due to absence of evidence. Under an edict of the shah, he had to leave the country together with his family and a group of followers. Russian Envoy Prince Dolgorukov never let Bahá’u’lláh out of sight; in 1852, he did a lot to help get him out of prison.18 Bahá’u’lláh could choose between Russia and Turkey as places of exile. He preferred Baghdad (at that time in the territory of the ), where he moved with his family in 1853, set up a small Babi community, which he managed himself, and wrote: one of his important theological works Kitáb-i-Íqán (from Persian: The Book of Certitude, circa 1863), the book Hidden Words, and

16 I.A. Kryvelev, Istoria religiy, Vol. 2, Moscow, 1976, p. 257. 17 N.A. Kuznetsova, Iran v pervoy polovine XIX veka, Nauka Publishers, Moscow, 1983, p. 224 (footnote 60). 18 For more details, see: I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bakhaizma (XIX-XX vv.), St. Petersburg University Press, St. Petersburg, 1998, available at [http://www.abc-globe.com/bahaizm.htm], 2 July, 2008. Appendix I. “Ob uchastii rossiiskogo poslannika kn. D.I. Dolgorukova v sudbe Bakha-Allakha v 1852-1853 gg.”

Volume 7 Issue 3-4 2013 121 THE CAUCASUS & GLOBALIZATION a mythical treatise called Haft Vádí (from Persian: Seven Valleys). The shah of Iran repeatedly de- manded that the Babis should be deported from the Ottoman Empire; the Turks responded by moving them to . On the eve of the move, Bahá’u’lláh gathered his most loyal followers in a garden of Nejb Pasha (Baha’i sources call it the garden of Ridván), where he stayed for twelve days from 21 April to 2 May, 1863. It was in this garden that Bahá’u’lláh revealed to his followers that he was the messianic figure of He whom God shall make manifest, whose coming had been foretold by the Bab. These events are celebrated annually for twelve days during the Festival of Ridván. On 26 July, 1868, Sultan Abdülaziz published a firman under which Bahá’u’lláh, his family, and followers were exiled to Akka in Palestine (now Haifa in Israel). At that time, it was nothing more than a huge prison for condemned criminals from all corners of the vast Ottoman Empire. To be sure that the enemy was put safely out of the way, the Iranians dispatched special supervisors to watch the move. In 1872-1873, when in Akka, Bahá’u’lláh wrote his main book called Kitáb-i-Aqdas (The Most Holy Book), which expounded the laws of worship, societal relations, and administrative organization, or governance, of religion. He continued sending his special letters (tablets) (al lauhul) to rulers, scholars, politicians, and state and public figures on the widest range of questions. In 1877, he moved from Akka to a country house called Mazra‘ih; two years later he left it for a sumptuous mansion Bahjí (Delight) with a garden planted for him and called Ridván. He lived there until his last day with his loving family and his followers, who regarded him as god reincarnated. He continued writing; it was in Bahjí that he authored his famous “Epistle to the Son of the Wolf” addressed to Shaykh Mu- hammad Taqí-i-Najafí in Isfahán, son of powerful cleric Shaykh Muhammad-Báqir, who had sen- tenced two Babis to death. He tried to convince the “son of the wolf” to recognize his wrongdoing and to beg God’s pardon and mercy. This tablet confirmed the main principles of Baha’ism: that all religions “have proceeded from one Source, and are rays of one Light. That they differ one from another is to be attributed to the varying requirements of the ages in which they were promulgated.”19 In May 1892, Bahá’u’lláh caught fever and died at the age of 75. He was buried in the garden of Bahjí, now a sacred place for the Baha’is of the world, the Qibla of Baha’ism. His last tablets contained his Kitab-i –‘Ahdi, Will and Testament (later published by A.G. Tumansky in Russian as Gramota moego Zaveta); the sealed document was opened by his elder son Abdu’l-Baha (1841-1921), his successor and head of the Bahai community. The process of recognition of Bahá’u’lláh by the Babis was not smooth; it abounded in ups and downs, the details of which are better left aside. The fact remains: Bahá’u’lláh was the only one among the Babis, including the Letters of the Living (Ḥurúfu’l-ḥayy), i.e. the survivors among the first eighteen followers of the Bab, who reunited the dispirited followers, rekindled their moral and spiritual fervor, raised the general mood to a higher level, indicated new goals, and set the far from simple mechanism of management into motion. An analysis of his life and activity reveals that it was in Akka that his reformist ideas were fully formed and translated into real deeds. While his Kitáb-i-Íqán was a sort of ideological prepara- tion for the later recognition of Bahá’u’lláh by the Babis predicted by the prophet in Bayan, the Kitáb- i-Aqdas speaks with a great degree of certainty of the future spiritual power of Bahá’u’lláh, whom mankind will recognize sooner or later. Kitáb-i-Aqdas serves as the source of the social aspects of contemporary Baha’ism. Shoghi Effendi20 described it as the “Charter of the future world civilization” where the “Author—at once the Judge, the Lawgiver, the Unifier and Redeemer of mankind—an- nounces to the kings of the Earth the promulgation of the ‘Most Great Law’.”21 In this book, Bahá’u’lláh laid the foundation for the New World Order as seen by the Baha’is; he coined the term the Universal

19 “Epistle to the Son of the Wolf by Bahá’u’lláh.” (C) 1953 NSA of the USA, available at [http://bahairesearch.com/ russian/Бахаи/Бахаи_- Авторитетные_тексты/Бахаулла/Послание_к_Сыну_Волка.aspx], 29 October, 2013 (see Para 18). 20 Shoghi Effendi Rabbani (Arab.: ) (1897-1957), great grandson of Bahá’u’lláh, grandson of his elder son Abdu’l-Baha, appointed Guardian of the Baha’i Faith in his Will and Testament (Arab.-Persian: ), and remained head of the Baha’i community from 1921 until his death in 1957. 21 Kitáb-i-Aqdas by Bahá’u’lláh, Bahá’í World Center, Haifa, 1992, original written in Arabic, available at [http:// bahai-library.com/writings/bahaullah/aqdas/description.html], 29 October, 2013.

122 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION House of Justice (Arab.: Bayt-ul-Adl) leaving the question of the level or levels of the system and structure of this body to his descendants, who completed the task.22 In the Kitáb-i-Aqdas the author spoke about an important instrument called Hukuk Allah (the right of God) very much needed to maintain the financial wellbeing of the Bahai community and its power in the form of property tax of 19 percent paid by all members of the community. During his lifetime, Bahá’u’lláh controlled all finances; after his death this function was transferred to Abdu’l-Baha. In his Will and Testament he wrote that Hukuk should be concentrated in the hands of the Guardian of the Baha’i faith, that is, Shoghi Effendi. Today, in the absence of the Guardian, the money is concentrated in the UHJ to be used for the needs of the Baha’i organization and for charity. This means that at the critical moment Bahá’u’lláh created new tactics and a strategy of behav- ior well adjusted to the new conditions. Later, he spoke from a new position on social-political, reli- gious, dogmatic, moral, and ethical subjects. After revising the teaching of the Bab, Bahá’u’lláh en- riched it with new elements (pacifism, religious tolerance, and cosmopolitism). The antinomy of the situation created by the emergence of the Baha’i faith is rooted in its foundation, i.e., the ideological principles of Babism, which widened the gap between them both and Islam. In 1925, Baha’ism of- ficially and completely detached itself from Islam to become a new teaching in its own right.23

The Ideological Descendants of Bahá’u’lláh

The ideas of Baha’ism, which reached Western Europe and North America early in the 20th century, perfectly fitted the ideology of the financial and economic interests of the West. Western globalists on the lookout for an “accession code” to the social, cultural, and mental fields of the Is- lamic East have tried, and found wanting, all the available routes, keywords, and symbols only to discover that no matter how hard they tried they could not arrive at a genuinely global ideology. They deliberately left out the specifics of the cultural development and history of the Eastern civilizations out of the picture. From the very beginning, the Muslim world remained practically out of reach of post-modernist Western religious and cultural consciousness: the doctrinaire specifics of Islam make it resistant to secularization. The ideologists and theoreticians of globalism refused to be defeated: from the very beginning, “theologization” presupposed “an identity of their own interests and the moral and ethical rules of the universum,” while “the slogan Novus ordo Seculorum, which appears on the reverse of the Great Seal of the United States, that is, the New Order of the Ages, is no longer a mythical task, but a political reality.”24 Arnold J. Toynbee, in turn, said more or less the same: “This concentric attack of the modern West upon the Islamic world has inaugurated the present encounter between the two civilizations… It is also distinctive in being an incident in an attempt by Western man to ‘Westernize’ the world.”25

22 Kitáb-i-Aqdas by Bahá’u’lláh, footnote 42. 23 In 1927, Baha’ism gained official recognition as an independent religious community “thanks to the fact that in 1925 the Muslim Court of Appeals in Beba () declared that the Baha’is were not Muslims” (I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bakhaizma [XIX-XX vv.]). Baha’ism, which from the very beginning was antagonistic toward Shi‘a Islam, always stirred up opposition from the Arab-Muslim world (see: . ). Today, anti-Bahai Internet resources condemn the Baha’i ideology as being close to the document known as “The Protocols of the Learned Elders of Zion,” considered genuine by many of the Arab and Muslim governments and political leaders (see: . , available at [http://www.anti-bahai.com/site/modules.php?name=News& new_topic=28], 30 October, 2013). René Guénon, in turn, wrote: “It should be further noted that, according to the fabrications of the Protocols themselves, the organization responsible for inventing and spreading modern ideas in order to achieve world domination is perfectly aware of the falsity of these ideas” (R. Guénon, “Review of the Italian Publication of ‘The Protocols of the Learned Elders of Zion,’” in: R. Guénon, : History of a Pseudo-Religion, Sophia Perennis, 2004, p. 314). 24 G.P. Khorina, “Globalizm kak ideologia,” Globalizatsia i gumanitarnoe znanie, No. 1, 2005, p. 71. 25 [http://www.alislam.org/egazette/articles/Islam-the-West-and-the-Future-200911.pdf]. A chapter of a book by Arnold J. Toynbee, Civilization on Trial, published by Oxford University Press, 1948.

Volume 7 Issue 3-4 2013 123 THE CAUCASUS & GLOBALIZATION When seeking a definition of Baha’ism, be it from academic or other positions, we should bear in mind the political, financial, and economic realities in which it emerged: “The teaching of Bahá’u’lláh appeared and acquired organizational forms in the latter half of the 19th century when the course of history was pushing the East into the economic and technological progress of the West, which, in its turn, was looking to the East for spiritual and organizational forms adequate to its, often pretty vague, requirements.”26 Baha’ism as a phenomenon owes its appearance to economic and ideological factors closely connected with its roots in Shi‘a Islam, a teaching permeated with the spirit of defiance. The , who tried to modernize the mechanism of power and bring technological novelties into the country, were not very popular with their subjects. Baha’ism can be described as a response of the Iranian Muslim clerics to the bourgeois changes inside the country and the inflow of foreign capital. The Bab, in turn, pointed out, according to Bayan, that he and his followers regarded national trade as one of the important goals. Bahá’u’lláh went even further: he modernized the ideas of his predeces- sor to adjust them to the new historical context; in fact, he acted from the position of comprador bourgeoisie. Analyzed in its historical context, Baha’ism looks absolutely adequate to the principles and rules of the Eastern comprador bourgeoisie closely connected with the political and economic interests of the West. This fact, accepted by all students of Baha’ism, throws the etymology of its basic ideological principles into bolder relief. The universal nature of the teaching of Bahá’u’lláh offered an absolutely new religious-ethical and social-economic approach to the way financial ambi- tions could be realized. Psychologically, cosmopolitism destroyed the obstacles that separated the Western and Eastern types of thinking to facilitate the process of Western financial infiltration. The ideological pillars of Baha’ism were logically developed later, in the early 20th century, by Abdu’l-Baha,27 who travelled in Western Europe and North America to make his cherished dream, a Universal Baha’i Community, a reality. In 1894-1901, the first pilgrims started flocking to Haifa.28 Abdu’l-Baha, destined to develop Baha’ism, the teaching of his father, in the Christian West had no choice but to “fit Baha’ism into a cosmopolitan shell of the values common to all people.”29 In 1911, he set out on the road; during the next twenty-four months he visited the United States, Britain, France, Germany, Switzerland, and -Hungary, where he delivered lectures about Baha’ism and met members of all sorts of social organizations and structures.30 In 1911-1913, newspapers heralded the appearance in Europe and America of a “great fighter for the dawn of a new age of peace,” “Teacher,” “Apostle,” and “Mes- senger of Peace.”31 These trips were summarized in tablets addressed to the Baha’is of America, Canada, and Greenland under the common title of Tablets of the Divine Plan (1916-1917), in which he imposed on them the “supreme mission” of spreading Baha’ism at home and even among the Eskimos. It was much later, in 1937, that his grandson, Shoghi Effendi, began to realize these plans in earnest. Educated in Oxford, Shoghi Effendi translated many of the holy Baha’i texts into English. De- termined to implement all the plans of his ancestors, he authored a multitude of tablets in which he explained to the world the meaning and purpose of the system as a model and basis of the New World Order. His letter of 28 November, 1931 addressed to the Baha’is of the West is entitled “The Goal of a New World Order.”32 In February 1934, he explained in detail the goals and structure of the Admin- istrative System of Baha’i and stressed the theocratic nature of its governance.33 On 4 November,

26 For more details, see: I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bakhaisma (XIX-XX vv.). 27 Abdu’l-Baha— (from Arab.: “Servant of Baha”) born ‘Abbás Effendí (1841-1921), son of Bahá’u’lláh and his ideological successor who did a lot to promote the teaching in the West. 28 See: Materials for the Study of the Bábi Religion, Compiled by E.G. Browne, Cambridge, 1918, p. 258. 29 For more details, see: I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bakhaizma (XIX-XX vv.). 30 See: A. Baha, Mysl mira (Rechi i nastavlenia Abdul Bakha o novoy kulture mira), Transl. from the German, Nauka Publishers, Moscow, 1992, p. 8. 31 See: Ibid., p. 5. 32 See: Shoghi Effendi, “The Goal of a New World Order,” available at [http://bahai- library.com/pdf/t/troxel_world_ order.pdf]. 33 See: Ibidem.

124 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION 1957, his widescale activity and determination to promote the ideas of Baha’ism were suddenly cut short. According to official information, he caught Hong Kong flu in London and died intestate of a heart attack at 60. In 1963, the newly established Universal House of Justice opened a new page in the history of Baha’ism. As a supreme structure, it issues laws (to complete what was done by Bahá’u’lláh) to keep in step with the times.34 This important mechanism of self-regulation supplies Baha’ism with the very much needed freedom of maneuver in all historical and geographic conditions. On the other hand, however, it deprives Baha’ism of its specifics and has made it more formalized. Since Shoghi Effendi’s time, the structure of the presumed New World Order has somewhat changed; today it is seen as a result of the concerted efforts of all governments to integrate with the universal Baha’i community.

The Phenomenological Aspects of Baha’ism

Any attentive reader of the written heritage of Bahá’u’lláh, Abdu’l-Baha, and Shoghi Effendi and, especially, of the writings of the UHJ will not miss the fact that Baha’ism not only offers mankind its own picture of the future world, but fills it with well-substantiated political content. These texts brim with terms far removed from religion and sacral matters and, instead, concentrate on problems that bring to mind sociopolitical teachings. Non-interference in politics and pacifism as two linchpins of the doctrine stem from what Bahá’u’lláh said in Kitáb-i-Aqdas about obedience to the government of the country of residence. Contrary to common sense, yet in tune with the teaching of their religion, his followers say that in case of war,35 they will have to go to the front, but they will never fight. The question is: Does the state or religion (represented by its founding father) doom their loyal subjects/loyal followers to cer- tain death? Correct from a humanistic position, this is a rhetorical question. This brings to mind the more or less recent political scandal in the U.K. “Iraq weapons expert Dr David Kelly was found dead shortly after being exposed as the source of a BBC claim that Tony Blair’s Government had ‘sexed up’ the case for war in Iraq.” He was described as a “recent convert to the Baha’i faith which expressly forbids suicide;”36 it was said elsewhere that “this was undoubt- edly the greatest crisis of his (Tony Blair’s.—L.M.) premiership to date.”37 This tragedy brings to light the internal contradiction in Baha’ism created by the ban on political involvement. Dr Kelly, a con- vinced Baha’i, could not remain outside politics, which cost him his life. Baha’ism as we know it today is pursuing the strategic task of setting up a federatively arranged world. We hail its reluctance to use force to realize its principles and impose its ideas (something of which totalitarian systems are guilty), but we cannot exclude the possibility that under different social conditions its humanitarian principles will be pushed aside by considerations of self-preservation. This was amply confirmed by Paul Tillich, a recognized authority in the philosophy of religion. He used the term “quasi-religion” to describe all ideological phenomena or even “humanitarian quasi- religions” to point to certain phenomenological specifics. “Religions of the Spirit, in the encounter with centralized and legally organized religions, are as fragile as the liberal-humanist quasi-religions; and there is a deep interrelation, in many cases interdependence, between the two… The real danger is not that they are overwhelmed by other less fragile forms of religion or quasi-religion, but that in defending themselves they are led to violate their very nature and shape themselves into the image of

34 See: Shoghi Effendi, op. cit. 35 It should be said here that for many decades Azerbaijan has remained in a state of war with its neighbor that occupied part of its territory. It takes no wisdom to guess how the local Baha’is would have behaved in case of general mobilization. 36 [http://news.bbc.co.uk/2/hi/uk_news/politics/3076869.stm]. 37 [http://www.dailymail.co.uk/news/article-488667/Why-I-know-weapons-expert-Dr-David-Kelly-murdered-MP- spent-year-investigating-death.html].

Volume 7 Issue 3-4 2013 125 THE CAUCASUS & GLOBALIZATION those who attack them. In such a critical moment we are living today … a self-defying radicalization would take place and the loss of that very liberal humanism which is to be defended would be almost unavoidable.”38 It is no wonder that some academics who have recently moved away from Baha’ism point to much stronger “literalism, patriarchy, theocracy, and censorship,” which they describe as “radical reorientation … which resonates with the positions of ‘fundamentalist’ movements elsewhere.”39 In the last four decades of the 20th century, Baha’ism in the United States, for example, and in Haifa “shows a trend in the community toward a strong reaction against the marginalization of religion, selectivity about the tradition and about modernity, moral dualism, absolutism and inerrancy, millen- nialism, an elect membership, sharp boundaries, authoritarian organization, and strict behavioral re- quirements. It also demonstrates that Baha’i fundamentalists see the civil state and academic scholar- ship on religion as their negative counterparts.”40 Agafangel Krymsky, in turn, quite rightly noted that “Baha’ism interprets the teaching about social equality of all people not in the republican or liberal meaning. They say, on the contrary, that a single flock should have one shepherd while political freedom is undesirable from the point of view of higher human interests.”41 In an effort to remain neutral, Baha’ism cannot move to active opposition to murders and violence; its followers are unable to respond on their own to any outstanding social or political event before being instructed by the UHJ. This cannot but discredit, depreciate, narrow down, and devalue the universalism of the Baha’i faith, which is deplorable. Universalism is impossible without the community’s involvement in the world historical process, wars, violence, and expansion being part of the process. So far, the Baha’is are limited in their response by commands from above. Paul Tillich, in turn, pointed to the same thing: “But in such extremes something becomes manifest that, in a moderate way, characterizes all ideologically conscious movements and social groups. It is the consecration of communal self-affirmation, whether this consecration happens in religious or secular symbols.” This “quasi-religious element” can inspire any ideology and, at the same time, “radicalize” it. “The same dialectics is true of Socialism. In it, the expectation of a ‘new state of things’ is the driving religious element whether expressed in the Christian symbols of the end of history or in secular-utopian symbols like ‘classless society’ as the aim of history.” Paul Tillich further specified: “In secular quasi-religions the ultimate concern is directed towards objects like na- tion, science, a particular form or stage of society, or a highest ideal of humanity, which are then considered divine.” In her review of Juan Cole’s42 work quoted above, Barbara Metcalf has written about the uto- pian nature of the tasks and goals formulated by the leaders of Baha’ism. Juan Cole has made an important contribution to the analysis of the genesis of the Baha’i faith in the 19th century in the Middle East: “To explore an interpretation of movements like the Baha’i as utopian, rather than re- actionary and antimodern, is in itself an important contribution of this study.”43 This is another elo- quent comment about what is going on in Baha’ism today.

38 Christianity and the Encounter of the World Religions by Paul Tillich, Chapter 1, “A View of the Present Situation: Religions, Quasi-Religions and Their Encounters,” available at [http://www.religion-online.org/showchapter.asp?title=1557&C= 1389]. 39 B.D. Metcalf, “Review on Research Work by Juan R.I. Cole, Modernity and Millennium: The Genesis of the Bahá’í Faith in the Nineteenth-Century Middle East,” Columbia University Press, New York, 1997, Interdisciplinary History, Vol. 30, Issue 3, 2000, pp. 567-568. 40 [http://www-personal.umich.edu/~jrcole/bahai/2002/fundbhfn.htm]. 41 A.E. Krymsky, Istoria musulmanstva (Ocherki religioznoy zhizni), Part 3, Babism i Bahaitstvo, Krestny kalendar print shop, Moscow, 1912, p. 18. 42 John “Juan” Ricardo I. Cole, American scholar and historian of contemporary Middle East and , professor at the University of Michigan. Converted to Baha’ism early in his academic career, he devoted some of his academic writings to the history of that tradition. In 1996, he officially resigned from the religion and wrote several critical articles about Baha’ism. 43 B.D. Metcalf, op. cit.

126 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION So far this trend can and should be described as “possible” for the simple reason that it has not yet shown us its revolutionary-radical form in motion, similar to what happened to socialism in the course of its transformation into communism. It should be said that Baha’ism transformed the militant trends typical of Babism into their opposites. The experience of Baha’ism, as a touchstone of the sociocultural trends of “globalism” (a prod- uct of the neo-liberal West), could have been interesting in the context of the relations between the Western and Eastern types of social-religious mentality. So far, we can observe only one version of the intercivilizational dialog, which plays a very distinctive role in shaping the worldview of the Modern Time and the prospects for its development. It seems that Baha’ism is, in fact, a failed attempt by the West to “Westernize” Oriental ideas in the hope of coming back to the East using its “Islamic origin” as a password. Islam and Baha’ism have been mutually incompatible from the very beginning; therefore, their final divorce could not be avoided. “Having extracted national ideas from ancient sources and having borrowed foreign ideas freely and widely, the Bab grafted ecstatic Indian concepts, mystic tenderness of Christianity and theories or hypotheses of modern Europe on Iranian Islam.”44 The question is: Did Islam need this? When talking about the “failed relationships” between Baha’ism and Islam, we should bear in mind that the latter is a self-sufficient and genuinely universal religion. This explains why it could not ac- cept the “alien structure” of the Baha’i philosophy and faith. Islam rejected its eclectic nature and syncretism rather than its other features. The Baha’is are never embarrassed by the conceptually dif- ferent or even contradictory foundations of the religions they tried to bring together in their own teaching. , for example, has no single god, Hinduism is a pantheist religion, while Christi- anity, Islam, and Judaism are monotheist. The result is easily predictable and inevitable: an eclectic combination of incompatible elements. Bahaism strives to be a religion for all that is impossible; it strives to replace all religions. This explains the ease with which it builds up its own doctrine and finds its way in all holy texts and pronouncements of the founders of all sorts of religions and faiths. This syncretism looks artificial: “Baha’is will quickly draw upon the scriptures of any religion of their sacred nine to defend the teachings of Baha’u’llah and ’Abdu’l-Baha. In this they have a distinct advantage because not a few of them are well informed concerning the scriptures of the religions of the world, particularly the Old and New Testaments and the Koran. Thus, it is possible for a well trained Baha’i cultist literally to run the gamut of the theological quotations in an eclectic mosaic design to establish his basic thesis, i.e., that all men are part of a great brotherhood revealed in this new era by the manifestation of Baha’u’llah.”45 Only the Baha’is are in absolute agreement when it comes to a definition of Baha’ism as a religious movement; the academic community remains di- vided over it. It was believed for a long time that, having emerged as a reformist teaching in Islam, Baha’ism, which promoted a revision of Islam, helped it to survive and function in social contexts very different from the Arab world. In many respects, it anticipated modernization and reformation in Islam.46 Baha’ism was described as a refined and modernized Islam.47 Bernard Lewis, a prominent Anglo-American Orientalist, has written that though Islam “reacted with something of the hostility” to “post-Islamic faiths” “a similar situation, as it turned out, was much less dangerous from their point of view.”48 For some time, Baha’ism was described in academic writings as an Islamic sect, this definition being very much alive today. Heydar Jemal, founder and chairman of the Islamic Commit- tee of Russia, sees “the only difference between it and Aum Shinrikyo in the fact that the Baha’is spoke about matters that have become U.N. platitudes and which sounded strange in the 19th century

44 V. Berard, Persia i persidskaшa smuta, St. Petersburg, 1912, p. 274 (V. Bérard, Révolutions de la Perse, Paris, 1910). 45 W. Martin, “The Kingdom of the Cults,” available at [http://www.full-proof.org/wp-content/uploads/2010/04/Martin- Walter-Kingdom-of-the-Cults.pdf]. 46 See: L.S. Vasiliev, Istoria religiy Vostoka, Vysshaia shkola, Moscow, 1983, pp. 164-165. 47 See: S.A. Tokarev, Religii v istorii narodov mira, Izdatelstvo politicheskoy literatury, Moscow, 1976, pp. 532-533. 48 B. Lewis, Islam and the West, Oxford University Press, 1993, p. 176.

Volume 7 Issue 3-4 2013 127 THE CAUCASUS & GLOBALIZATION in Iran.”49 This itself sounds strange: in 1925, Islam officially registered its complete detachment from Baha’ism; coming from an Islamic public figure this sounds even stranger. Many of the critics of Baha’ism refused to count it as a religion because social and political aspects in it prevailed over religious aspects proper. These people argued: “The God of Baha’u’llah does not warm the heart; it is primarily a doctrine and an ideology that can hardly penetrate deep into human souls and awaken in them repentance and the hope for forgiveness through confession. The cosmopolitan ideas of the founding fathers of Baha’ism can hardly dampen the thirst for spiritual quest: they are much better suited to serve the interests of political and economic circles of all sorts.”50 “We must build up our Baha’i system and leave the faulty systems of the world to go their way. We cannot change them through becoming involved in them; on the contrary, they will destroy us.”51 “The Baha’i conception of social life is essentially based on the subordination of the individual will to that of society. It neither suppresses the individual nor does it exalt him to the point of making him an anti-social creature, a menace to society… The only way that society can function is for the minority to follow the will of the majority.”52 This stirs up painful recollections of life under “communism”: in some places, the Baha’i leaders sound very much like the . There is nothing new in this: “Atheistic communism, which took shape in Europe, and religious Baha’ism born at the same time in Asia have much in common: both borrowed heavily from traditional religions.”53 Baha’ism rejects these parallels, however the phenomenological parallels are too many to be ignored: “The followers of Baha’ism … believe that their teaching not only meets the needs of the descendants of the cultures of the West, but also of other peoples who have found their place in the community of nations. The same fully applies to the communist (socialist) teaching. Communist philosophy has synthesized everything that predated it at the global scale. Communism is a global teaching … and we should treat it not only as a revolutionary theory, but also as a ‘non-religious religion,’ a moral-ethical teaching worthy of respect to the same extent as religions.”54 This confirms that the Baha’i doctrine is not free from ideological underpinnings.

Relations with the Historical Homeland

We should always bear in mind that, from the very beginning, Baha’ism attracted great powers which discerned its huge political potential. Igor Bazilenko, for example, writes of it as a “cosmo- politan structure of the Masonic type,”55 and further: “The attitude of the Russian and British repre-

49 Z. Ostrovskaia, “Orientatsiia—Islam, ili Nazad v budushchee (Interview s Heydarom Jemalem),” Chelovek, No. 3, 1999, available at [http://www.molites.narod.ru/kausar/orentasiya.htm], 30 October, 2013. 50 I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bahaizma (XIX-XX vv.). 51 Wellspring of Guidance: Messages of the Universal House of Justice 1963-68 by Universal House of Justice, Wilmette, IL: Baha’i Publishing Trust, 1969, p. 135 (quoted from: Bahá’í News, No. 215, January 1949, p. 1), available at [http://bahai- library.com/uhj_wellspring_guidance#n10]. 52 Letter by the Guardian’s secretary on his (Shoghi Effendi.—L.M.) behalf, dated 21 November, 1935, and quoted in Universal House of Justice letter of 9 February, 1967, available at [http://bahai-library.com/nsa_war_governance_ conscience#s11]. 53 V.K. Mamutov, “Kommunisticheskaia vera v torzhestvo sotsialnoy spravedlivosti (essay),” Alternativy, No. 3, 2000, p. 164, available at [http://libelli.ru/magazine/htm/00_3/esse.htm], 30 October, 2013. 54 Ibidem. 55 The Spiritual Assembly (Arab.: ) is a multilayer elected structure of nine members with UNJ as its center in Haifa (Israel). Bazilenko has rightly written that “translated from the Arabic, mehfil means, first, ‘place of a meeting,’ second, ‘a (Masonic) lodge,’ and third, ‘a meeting.’ In the context of activities and structure of the Baha’i community, the second version looks much more adequate and, therefore, preferable” (I.V. Bazilenko, “Bakhaizm v sovremennoy Rossii,” Khristianskoe chtenie, No. 23, 2004, pp. 127-182).

128 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION sentatives in Iran to the attempts to capitalize on the political potential of neo-Babism-Baha’ism wrongly seen as an intermediate stage on the road from Islam to Christianity illustrates the evolution of the assessments of the ideology and organizational structure of the Iranian heretics among the Rus- sians and the British. The latter were faster on the uptake: they fully appreciated the potentials of this movement as an instrument of political games in the Middle East and Russia.”56 In 2011, Iranian Ambassador to Russia Reza Sajjadi explained why Baha’ism was banned in his country: “It is banned because it is not a religion but a colonial political party set up by Great Britain. In an effort to dominate in the Middle East, the strategic importance of which cannot be overesti- mated, the West sows discord among its peoples, new religions of all sorts being one of the weapons. During the Pahlavi times, the Baha’is were, and still remain, an instrument of the U.K. This is why Iran refuses to recognize Baha’ism and keeps it away from its territory.”57 Under the Pahlavi (1925-1979), Baha’is were widely represented among the top bureau- crats and intellectuals. “The financial might of the Iranian Baha’is forced the government in 1972 to introduce a special property tax for them,” which indirectly made the Baha’i community an official structure. “Baha’is belonged to the closest circle of Shah Muhammad Reza (1941-1979), the last Iranian monarch, as his bodyguards and drivers.”58 On many occasions, the Iranians violently responded to appointments of Baha’is to top govern- ment posts. This happened, for example, in 1948, when Prime Minister Ebrahim Hakimi was replaced with Abdolhossein Hajir, pro-American finance minister in the Cabinet of Qavām os-Saltaneh. Two months earlier, Ayatollah Kashani warned about the planned shift and issued a leaflet in which the future prime minister was described as an Anglophile and Baha’i; he called on the people to close their shops and protest against the appointment. This proved enough to raise a wave of protests against the Baha’is in Shiraz, Mahabad, Shahrood, Rezaya, and other cities. The government had to use force to stop the riots. On 17 May, 1955, Minister of the Interior informed the Majilis that Baha’ism would be banned, prayer houses closed, etc. The Shi‘a clergy went even further: they dismissed Baha’is from all official posts. On 23 May, 1955, the last day of the month of Ramadan, fanatics led by Mullah Taqi Falsafi destroyed the Baha’i prayer house in Tehran, which had been standing at this site for a quarter of a century. In Shiraz, the bloody clashes between the Shi‘a, who wanted to destroy the Baha’i prayer house, and the Baha’is, who defended it, ended in the state of martial law.59 Ayatollah Boroujerdi, one of the Shah’s favorites, issued thinly concealed calls to confiscate the money of the Baha’is to restore mosques and madrasahs but specifically warned against violence and bloodshed.60 In his letter of 9 May, 1955, he complained: “The Bahā’īs … had developed good organization and expended vast amounts of money which unknown sources had contributed to them. For the hundred years of their existence, he lamented, the Bahā’īs had tirelessly propagandized against Islam, ‘which, of course, is a cause of the unity of [our] nationalism.’ And now, he charged, they were ‘secretly working against the monar- chy and the state’.”61 Iranian Baha’is complained to the U.N.; the International Baha’i Community asked the U.N. to interfere and protect the Iranian Baha’is (information can be found in Baha’i sourc- es). This was when Baha’is transferred their money ($1.5 billion in all) from the National Bank to other banks, etc. Aware of a mounting international scandal, the Iranian government promptly revised its treatment of the Baha’is and adepts of other religions.62 In 1978-1979, “after the Islamic revolution,

56 I.V. Bazilenko, “Pravoslavnaia Rossia i shiitsky Iran: po stranitsam istorii otnosheniy (XVI-nach. XX vv.),” Khristianskoe chtenie, No. 2 (37), 2011, p. 172. 57 “Religia i religioznye menshinstva v Irane,” available at [http://www.portalostranah.ru/view.php?id=226&page=2], 30 October, 2013. 58 I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bahaisma (XIX-XX vv.). 59 See: E.A. Doroshenko, Shiitskoe dukhovenstvo v sovremennom Irane, Nauka Publishers, Moscow, 1985, p. 99. 60 See: Ibid., p. 79. 61 Sh. Akhavi, Religion and Politics in Contemporary Iran: Clergy-State Relations in the Pehlevi Period, New York, 1980, pp. 77-78. 62 See: E.A. Doroshenko, op. cit., p. 118.

Volume 7 Issue 3-4 2013 129 THE CAUCASUS & GLOBALIZATION the Baha’is lost at least some of their positions; the poorest of them were badly hit. Well-to-do fol- lowers of the Baha’i faith emigrated and transferred their money to foreign banks.”63 The Islamic revolution of 1979, which brought together the government and Islam, marginalized Baha’is in Iran not only because they did not belong to Ahl az-Zimma64 and remained ideological antagonists of Islam. This explanation is too primitive to be accepted at face value. The Baha’i faith was defeated in its historical homeland because of its phenomenological specifics at the level of self- identity. Alexandra Leavy, an American student of Baha’ism, has found the statement “that the Baha’is did not hold an unshakable attachment to their homeland” very convincing and that “the Baha’is pri- oritized the preservation of a strong religious community over nationalist commitments to their home- land. This speaks to the way in which the Baha’is conceive of their own identity—Baha’is first, Irani- ans second … throughout the twentieth century, Muslim Iranians defined themselves first as being a part of a religious community. They did recognize the unique Persian heritage of the Iranian nation- state, but they always placed Islamic values before nationalist ones and often viewed them as one and the same. It was impossible, then, for Baha’is to adopt a complete Iranian identity because there was—and remains—a contradiction inherent in the concept of a distinctly national Iranian heritage.”65

Conclusion

Today, consolidation of people according to the Baha’i principles may become or, rather, has become a fairly successful enterprise in many countries and regions, Azerbaijan being no exception.66 These results of the Baha’i social practice make it hard to imagine what aims and tasks those members of society who remained loyal to Baha’ism can be used for or serve. As a rule, religious traditions, even those that claimed universality, developed in cultural isola- tion, Baha’ism being no exception. Despite its efforts to consolidate mankind under the banner of cosmopolitanism, this faith could not satisfy, to an equal extent, the spiritual needs of its followers from different confessional environments: it was too eclectic to synthesize the elements of alien reli- gious traditions. An attentive student of Baha’ism can follow the process of adjustment and readjustment of its doctrine by its adepts who outwardly managed to remain loyal to the spirit and letter of the laws of Baha’u’llah, the founding father. I have in mind the tool that allowed Baha’u’llah to widely use al- legories both in life and in building the edifice of his religion. The Bab’s allegories and esoteric quest helped Baha’u’llah substantiate and develop his teaching based on texts brimming with Sufi esoteric symbols, the meaning of which remains beyond the comprehension of even the most knowledgeable readers. Anyone seeking a generalized definition of the doctrinal foundation of Baha’ism might come

63 I.V. Bazilenko, Kratkiy ocherk istorii i ideologii bahaizma (XIX-XX vv.). 64 Ahl az-Zimma (Arab.: [“People of the Pact”])—non-Muslim population of Muslim countries who accepted Muslim power and paid jizya (Arab.: [“per capita tax”]) in exchange for protection against external enemies, personal safety, and safety of property on a par with the Muslims; Ahl al-Kitab (Arab.: [“People of the Book or People of Scripture”]) belonged to the same category. The IRI recognized three religions (Christianity, , and Judaism) besides Islam. 65 A. Leavy, “Searching for Baha’i Identity (Baha’i Identity in Islamic Iran),” Journal of Cultural Studies of the Middle East and North Africa (JCSMENA), 22 August, 2009, available at [http://journal.jcsmena.org/2009/08/22/searching-for-bahai- identity/], 30 October, 2013. 66 In Azerbaijan, the Baha’i community first appeared in the 1860s; however, the echo of the stormy events associated with the emergence of Babism reached Azerbaijan much earlier, in 1844. In 1863, there were Baha’i communities in Baku, Ganja, Barda, Salyan, and Geokchai. Until the 1930s, they flourished in the relatively favorable conditions. Today, after a long and involuntary interval, Baha’ism is regaining its position in Azerbaijan (for more details, see: L. Melikova, “Bahaism in Azerbaijan,” The Caucasus & Globalization, Vol. 1 (5), 2007, pp. 93-100, available at [http://www.ca-c.org/c-g/2007/journal_ eng/c-g-4/09.shtml]).

130 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION face to face with ethical problems. We have to admit that the Baha’i Sacred Texts have been com- mented on by Shoghi Effendi and the UHJ and that any further attempts are nothing but optional in- terpretations of the teaching. This does not prevent fairly unexpected or even paradoxical definitions of Baha’ism coming from its opponents. Several years ago, a Muslim theologian, speaking on one of the Turkish TV channels, described Baha’ism as one of the “enneagram”67 theosophical trends, a definition adding mystical depth and meaning to Baha’ism. The roots of this and similar treatment of Baha’ism, mainly by Muslims, are found, strange as it may seem, in the paradoxical processes going on in Baha’ism. After the death of Baha’u’llah, his teaching followed roads different from the ex- pected: to survive amid the threats created by the changing environment and emerging inside it, Baha’ism had to radically shift the accents. It moved away from the flowery and enigmatic style of the earlier period to absolutely clear and precise definitions or even catchwords; from Baha’u’llah’s vague exaltation to clear statements of Abdu’l-Baha addressed to all mankind. As could be expected, the conceptual elements of Baha’ism—religious and sacred found to different degrees in the works of the Bab and Baha’u’llah—were discarded by their descendants as ill-adjusted to the cause of flour- ishing. This is the main paradox: having deliberately rejected the trend that, if developed, would have become the teaching’s main advantage, the Baha’i leaders chose a much easier road. This deprived Baha’ism of its attraction, indispensable to any true religion, and made it one of the numerous religious movements with a hardly distinguishable set of program statements. Unwilling, or afraid, to look for the secret meanings that Baha’ism probably contained, its leaders took it to the other extreme: ba- nalities so loved by the masses that made Baha’ism an instrument of spiritual-religious globalization for translating the aims and tasks of Western globalism into the terms of mass religious consciousness.

67 Enneagram (from Greek: ennea—nine), a symbol in the form of a nine-pointed figure usually inscribed within a circle. This nine-pointed star was borrowed by many theosophical schools and teachings as an emblem. In Baha’ism, it serves as the main symbol of its teaching. In Europe and in the West, it is widely known in “narrow circles” thanks to George Gurdjieff, founder of his own esoteric school, in which he revealed “fragments of an unknown teaching” (the title of the book by P.D. Ouspensky, his friend and comrade-in-arms). The origins of the enneagram, one of the oldest Oriental symbols, are very interesting. Vladimir Eremeev, prominent Orientalist and Sinologist, wrote: “The enneagram in its initial form appeared in ancient China in the Western Zhou period (1122-771 B.C.). By the end of the epoch, the enneagram had been known to Iranian priests and led to the emergence of Zoroastrianism and Zurvanism. In the West, the enneagram borrowed from the Iranians was secretly spread far and wide as part of the Cabala, alchemy, and related teachings. Finally, it became part of the source familiar to Gurdjieff” (V.E. Eremeev, “Ideynye istoki uchenia G.I. Gurdjieva,” in: Sakralnoe, irratsionalnoe i mifologicheskoe. Sbornik materialov konferentsii, Moscow, 2005, p. 62). The humanities regard Gurdjieff as a vehicle of the traditions of the Sufi Naqshbandi order (see: Novaia filosofskaia entsiklopedia, in four volumes, Vol. 4, Moscow, 2001, p. 149). It is interesting to note in the context of the universal nature of the Baha’i doctrines that, within the Gurdjieff teaching, the enneagram was “a universal symbol” and a “fundamental hieroglyph of a universal language.” From time immemorial, it has been used by the “initiated” to register sacral knowledge. In principle, “the enneagram can contain all knowledge and can be used to interpret it” (V.E. Eremeev, op. cit., pp. 61-62). Baha’ism treats the symbol in a superficial manner. For Baha’ism “number nine is very mysterious, and more than any other number, full of special qualities and potencies”; it is a “special number which is the numerical manifestation of the Greatest Name: Bahá” (A.-Q. Faizi, “Explanation of the Symbol of the Greatest Name,” available at [http://bahai-library.com/faizi_symbol_greatest_name]). The presence of this symbol in Baha’ism is not fortuitous; it shows that, at the earlier stages of its development, Baha’ism contained certain esoteric trends, which points to its proximity to the ancient secret traditions and teachings related, at one and the same time, to the system of traditional ancient Iranian ideas and cults. In the Gurdjieff teaching, only the enneagram relates it to the old secret Sufi traditions; in all other respects, his teaching is, likewise, syncretic, albeit in its own way. Volume 7 Issue 3-4 2013 131 THE CAUCASUS & GLOBALIZATION

GEOHISTORY

Zurab PAPASKIRI

D.Sc. (Hist.), Professor, Sukhumi State University (Tbilisi, Georgia).

A QUESTION MARK IN THE HISTORY OF GEORGIAN-SELJUK RELATIONS ON THE EVE OF THE BATTLE OF MANZIKERT

Abstract

he author offers his own explanation of Turks and Byzantium, Sultan an extremely enigmatic piece of infor- transferred the fortress of Gagi to Bagrat IV T mation found in an anonymous Geor- in exchange for the release of Emir Fadlon gian chronicle of the 11th century (Matiane of Ganja. Kartlisa or The Chronicles of ): on the Professor Papaskiri suggests that the eve of the Battle of Manzikert, which occu- great sultan and the king of Georgia allied on pies a special place in the history of the the eve of the Battle of Manzikert, which took global confrontation between the Seljuk place on 19 August, 1071.

KEYWORDS: Matiane Kartlisa, Seljuk-Byzantine relations, Alp Arslan, Bagrat IV, the Battle of Manzikert.

Introduction

The Seljuk Turks, the Seljuk world, and the Seljuk civilization form an important stage in me- dieval history. In the first half of the 11th century, the Oghuz Seljuks, after moving out of their Cen- tral Asian homeland, pressed far into the west and, by the mid-11th century, became the main politi- cal force in the Middle and Near East. From that time on, or to be more exact in the 1040s-1050s, 132 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION when the Seljuk Sultanate1 emerged on the political scene as one of the powers to be reckoned with, the fates of many countries and peoples of this region became closely connected with the Seljuks. Georgia was no exception in this respect; the Seljuk warlords became aware of its existence in the 1030s,2 that is, as soon as the Seljuks reached the southern borders of the Caucasus.3 It is commonly believed that Georgian-Seljuk relations are best described as irreconcilable enmity. This is not true: armed clashes alternated with periods of relative lull; in some cases, the and the Seljuks managed to coordinate their actions to a certain extent on the interna- tional scene. This article deals with one of the cases of cooperation between the Georgian royal court and the Seljuk Sultanate; I rely on Matiane Kartlisa (The Chronicles of Kartli), a highly reliable Georgian source of the 11th century, to hypothesize that Sultan Alp Arslan and King of Georgia Bagrat IV entered into an alliance on the eve of the Battle of Manzikert. I formulated this hypothesis in my monograph published in 19914 and based on Chapter III of my doctoral thesis on it.5 I later developed it in the Russian-language abstract of my thesis published under separate cover.6 I regret to say that despite several publications, the hypothesis has not yet caught the at- tention of even the best experts.7 This has forced me to present my hypothesis supported by fresh arguments and also some of my thoughts about Georgian-Seljuk relations on the eve of the Manzikert epopee to the First International Seljuk Symposium held by Erciyes University and the Research Center of Turkish World in Kayseri (Turkey) on 27-30 September, 2010.8 This article continues the cycle of my studies.

The Riddle of Matiane Kartlisa and Some Questions of Georgian-Seljuk Relations The Battle of Manzikert is rightly described as a turning point “not only in the history of the Middle East, but also, to a certain extent, of world history.”9 According to prominent Russian histo-

1 For more on the emergence of the state of the Seljuks, see: A.Yu. Yakubovsky, “Seldzhukskoe dvizhenie i turkmeny v XI v.,” Izvestia AN SSSR, Department of Social Sciences, No. 4, 1937; B.N. Zakhoder, “Horasan i obrazovanie gosudarstva Seldzhukov,” Voprosy istorii, No. 5-6, 1945; S.G. Agajanov, Ocherki istorii oguzov i turkmen Sredney Azii IX-XIII vv., Ashghabad, 1969, pp. 211-220; T. Hojaniyazov, Denezhnoe obrashchenie v gosudarstve Velikikh Seldzhukov, Ashghabad, 1977, pp. 11-18; T.T. Rice, The Seljuks in Asia Minor, Thames and Hudson, London, 1966; N.N. Shengelia, Seljuks and Georgia in the 11th Century, Tbilisi, 1968, pp. 266-302 (in Georgian). 2 According to one of the Georgian sources (see: F. Jordania, Chronicles and Other Materials on the History of Georgia, I, Tiflis, 1892, p. 169, in Georgian), in 1029, Georgian King Bagrat IV attacked the sultan and his army. Historians tend to doubt this information as improbable. It is commonly believed that the Georgians clashed with scattered Seljuk units no earlier than 1032-1034 (N.N. Shengelia, op. cit., pp. 172-173). 3 According to Armenian historians (Matteos Urhayetsi, Vardan), the Seljuks invaded the Caucasus for the first time in 1016. It was later established that the date was wrong and that the Seljuks had not been able to reach the region until 1032-1034 (see: S.G. Agajanov, K.N. Yuzbashyan, “K istorii turkskikh nabegov na Armeniiu v XI v.,” Palestinskiy sbornik, No. 13/76, 1965, pp. 145-158; N.N. Shengelia, op. cit., pp. 165-170). 4 See: Z.V. Papaskiri, “Medieval Georgia on the International Scene,” in: Foreign Policy Position of Georgia in the 1060-1080s, Metsniereba, Tbilisi, 1991, pp. 20-24 (in Georgian). 5 See: Z.V. Papaskiri, Mezhdunarodnoe polozhenie srednevekovoy Gruzii (70-e gody X—80-e gody XI vv.), Doctoral thesis in the form of an academic paper, Tbilisi, 1991. 6 See: Z.V. Papaskiri, “Ot Davida do Davida,” in: Iz istorii mezhdunarodnykh otnoshenii Gruzii. 70-e gody X-80-e gody XI vv., Tbilisi, 2001, pp. 92-95, available at [https://sites.google.com/site/zpapaskiri/publications-russian]. 7 This has been confirmed by G.G. Alasania’s article, which completely ignored my results (see: G. Alasania, “On the Early Experience of Relations between the Georgians and the Seljuk Turks,” in: Georgian Oriental Studies, XII, Tbilisi, 2010, pp. 33-40, in Georgian). This is regrettable since this hypothesis is presented in a fairly popular summarizing publication about the history of Georgian diplomacy (see: M. Lordkipanidze, Z. Papaskiri, “Foreign Policy and Diplomacy of the Georgian State in the 11th Century,” in: Essays on the History of Georgian Diplomacy, Vol. I, Tbilisi, 1998, p. 251, in Georgian). 8 See: Z. Papaskiri, “Manzikertskoe srazhenie i nekotorye aspekty gruzino-seldzhukskikh vzaimootnosheniy v nachale 70-kh godov XI veka,” in: Uluslar Arası Büyük Selçuklu Sempozyumu, 26-30 Eylül, 2010, Erciyes Üniversitesi, Kayseri, 2010, pp. 227- 228 (abstract in Russian); Z. Papaskiri, “Malazgirt Muharebesi 11. Yüzyılın 70’li yıllarında Selçuklu-Gürcü İlişkileri,” in: Uluslar Arası Büyük Selçuklu Sempozyumu, 26-30 Eylül, 2010, Erciyes Üniversitesi, Kayseri, 2010, p. 228 (abstract in Turkish). 9 Sh.A. Meskhia, Didgorskaia bitva, Tbilisi, 1974, p. 46.

Volume 7 Issue 3-4 2013 133 THE CAUCASUS & GLOBALIZATION rian of Byzantium Alexander Vasiliev, “from that time on Byzantium was no longer a world power of the Middle Ages.”10 According to another outstanding Russian expert in Byzantine studies, the defeat at Manzikert was of “significant importance not only for Byzantium, but also for the entire Christian world.”11 It is commonly believed that “this was when the question of the dominant power in the Middle East was clarified—for a long time the Seljuk Turks remained this power.”12 As the East Christian Empire, Byzantium, “lost forever its name, its prestige, and its significance in Christi- anity and was no longer able to fight the Muslims.”13 This was the turning point: the , too weak to contain the Seljuks, allowed them to reach the Sea of Marmara and the Mediterranean.14 This was when the Armenian territories were conquered, while the Seljuks established their diktat over -Daruband.15 The Georgian Kingdom, the only Christian state in the region, found itself face to face with this huge Muslim power, a situation which did nothing for Georgia’s international status. Logic sug- gested that the Georgian royal court should have extended all possible support to the Byzantine Empire to keep the rising might of the Seljuk Sultanate in check. On the eve of the Battle of Manzik- ert, however, King Bagrat and Sultan Alp Arslan had established quite friendly contacts. According to the anonymous Matiane Kartlisa (The Chronicles of Kartli), “the sultan dispatched his military commander Alkhaz, who persuaded Bagrat, in the name of the sultan, to make peace with Fadlon and let him return to his Ganja domains. The military leader left together with him. Bagrat received the keys to Gagi and the King of the Abkhaz captured Gagi.”16 This means that Alp Arslan not merely refrained from punishing the Georgian king who had captured Emir Fadl II of Ganja,17 his key ally and vassal, but also rewarded the Georgian king with the fortress of Gagi. Why was the sultan unexpectedly lenient toward Bagrat IV and his fairly provocative behavior? The sources offer no direct (or even indirect) explanations of this. Until recently, no one tried to find an explanation for Alp Arslan’s courteous treatment of the headstrong king of the “Abkhaz.” It seems that the powerful sultan of the Seljuks needed Georgian neutrality on the eve of the decisive battle with the Byzantine Empire. This episode should be placed in the wider background of Georgian-Seljuk relations in the 1060s-early 1070s. I have already written that the Seljuks, who burst into world politics, tipped the balance of forces in the Middle East. In the 1040s-1050s, the Seljuk Sultanate (which occupied the present ter- ritory of Iran and the Southern Transcaucasia) was a strong power that long remained an important, if not the decisive, factor in international relations. The Georgian royal court became aware of the newcomers when they started pouring into the Caucasus in 1032-1034. From that time on, the Seljuks became a more or less constant factor of the Georgian state’s political activity. This became clear in

10 A.A. Vasiliev, Lektsii po istorii Vizantiyskoy imperii, Vol. I, Petrograd, 1914, p. 348; S.B. Dashkov, Imperatory Vizantii, Moscow, 1996, available at [http://www.sedmitza.ru/text/434532.html]. 11 F.I. Uspensky, Istoria Krestovykh pokhodov, St. Petersburg, 1900-1901, available at [http://enoth.narod.ru/Crusades/ Crusade_Usp01.htm]. 12 S.A. Meskhia, op. cit., p. 46. 13 P. Willimart, Mythe et réalité de la Guerre Sainte, Paris, 1972. It should be said that unlike the classics of Byzantine studies mentioned above, some academics do not believe that the defeat at Manzikert spelled a catastrophe for Byzantium or destroyed its military might (see: Cl. Cahen, “La campagne de Mantzikert d’apres les sourses musulmanes,” Byzantion, Vol. 9, 1934, pp. 64-67; J.-Cl. Cheynet, “Mantzikert: un desastre militaire?” Byzantion, Vol. 50, 1980, pp. 432-434; A.S. Mokhov, “Vizantiyskaya armia v pravlenie Romana IV Diogena (1068-1071),” Antichnaia drevnost i srednie veka, Iss. 34, 2003, pp. 292-293. 14 See: N.N. Shengelia, op. cit., p. 269. 15 See: Ibid., p. 302; P.A. Topuria, States of the Eastern Transcaucasia in the 11th-12th Centuries, Tbilisi, 1975, p. 132 (in Georgian). 16 Matiane Kartlisa—Kartlis Tskhovreba. Georgian text, Prepared for publication on the basis of all main manuscripts by S.G. Kaukhchishvili, Vol. I, Tbilisi, 1955, pp. 313-314; Letopis Kartli, Translated, introduced, and commented on by G.V. Tsulaya, Tbilisi, 1982, p. 47. 17 See: Emir of Ganja- Al Fadl II bin Abu-l-Asvar Shavur I (1067-1073).

134 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION 1037-1038 when, according to well-known Arab author Ibn al-Athir (the 12th-13th centuries), Bagrat IV, faced with the threat of Turkic invasion, had to retreat from besieged Tbilisi.18 In the 1040s, the Seljuks began gradually developing into a threat to their neighbors; their inroads in Armenia and Azerbaijan became regular, which forced the Georgian royal court to closely follow the situation in the Caucasus and even help others to stand up to the Seljuk aggressors. In 1040, for example, Bagrat IV sent a four-thousand-strong unit to help King of Lori (Tashir-Dzoraget) David I the Landless rebuff Emir of Dvin Abu-l-Asvar and return the occupied lands.19 Leader of the Georgian feudal opposition Liparit Baghvashi, Eristavi of Kldekari, was also involved in the all-out effort against the Seljuk Turks. The eristavi was an active participant in “all the marches of the Byzantines in the East.”20 In 1048- 1049, Bagrat IV fought the Turks together with Byzantium.21 At the turn of the 1050s, the Seljuks became even more active on the southern borders of Geor- gia; they repeatedly plundered the lands of Iberia,22 a Byzantine theme (the southern part of ) populated by Georgian tribes and captured by Basil II after the death of David III Kuropalates. His- torical sources contain information that in the course of this military campaign, some of the Seljuk units invaded the Georgian state proper in Samtskhe and in the vicinities of Manglisi.23At that time, the Seljuks constituted no threat for Georgia: the Seljuk factor stabilized, to a certain extent, the Georgian state’s international position and regulated its relations with Byzantium.24 The situation changed in the early 1060s when Bagrat IV, after defeating the feudal opposition led by Liparit Baghvashi, revived his active involvement in Eastern Georgia. From that time on, his foreign policy moves affected the interests of the Seljuks, who closely followed and responded to practically everything the Georgian king was doing on the foreign policy scene. The first such re-

18 See: P. Zhuze, Materialy po istorii Azerbaidzhana iz Tari al-Kamil (polnogo svoda istorii )Ibn al-Athira, Baku, 1940, p. 147; N.N. Shengelia, op. cit., p. 174. 19 See: R.M. Bartikian, “‘Khronografia’ Matfeya Edesskogo o Gruzii i gruzinakh,” in: Vizantinovedcheskie etyudy, Dedicated to the 80th Anniversary since the Birth of Academician S.G. Kaukhchishvili, Tbilisi, 1978, p. 143; N.N. Shengelia, op. cit., p. 176. 20 I.A. Javakhishvili, History of the Georgian People, Book II of Collected Works in Twelve Volumes, Vol. II, Tbilisi 1983, p. 146 (in Georgian) (for more details, see: N.N. Shengelia, op. cit., pp. 179-195). 21 See: Kartlis Tskhovreba, Vol. I, pp. 313-314; Letopis Kartli, p. 44 (see also: V.U. Kopaliani, Georgian-Byzantine Political Relationships in 970-1070, Tbilisi, 1969, p. 254); P.A. Topuria, op. cit., p. 195; M.D. Lordkipanidze, “Internal and External Political Position of Georgia between the 980s and the1080s,” in: Essays on the History of Georgia, Vol. III, Tbilisi, 1979, p. 145; Z.V. Papaskiri, Emergence of a Unified Georgian Feudal State and Some Questions of Georgia’s Foreign Policy Status, Tbilisi, 1990, p. 202 (all in Georgian). 22 Regrettably, historians sometimes fail to correctly interpret the term “Iberia” used by Byzantine authors (Michael Attaleiates and George Kedrenos) (see: M. Attaleiates, “History,” in: Georgika VI. Information of Byzantine Writers about Georgia, The Greek texts with Georgian translations were published and commented on by S.G. Kaukhchishvili, Tbilisi, 1966, p. 24; G. Kedrenos, “Chronography,” in: Georgika V, The Greek texts with Georgian translations were published and commented on by S.G. Kaukhchishvili, Tbilisi, 1963, p. 82. This term is frequently (and wrongly) associated with Georgia. For example, when commenting on information supplied by Scylitzes-Kedrenos that the Byzantine emperor had disbanded “the approximately 50-thousand-strong Iberian army” (G. Kedrenos, op. cit., p. 820), outstanding Russian Byzantine scholar Academician F. Uspensky rashly wrote that “earlier Georgia maintained a 50-thousand-strong army to protect itself against Asian plunderers” (see: F.I. Uspensky, Istoria Vyzantiyskoy imperii, Vol. 4, Ch. III, available at [http://rikonti-khalsivar.narod. ru/Usp4.3.htm], italics mine.—Z.P.). Non-Georgian historians, who cannot always find their bearings in the state and political changes that went on in Georgia in the early 11th century, can be excused, but it is inexcusable for Georgian historians to identify Iberia as Georgia. I have in mind N. Shengelia’s fundamental and valuable work on Georgian-Seljuk relations, in which the author applied information of Byzantine authors about the Seljuk inroads into “Iberia” to the rest of Georgia (N.N. Shengelia, op. cit., pp. 199-201). By that time, these lands no longer belonged to the Georgian Kingdom, so the developments there should not be used to assess the political status of the Georgian state proper. At the same time, the same author was quite right when he wrote that “these grandiose Seljuk attacks on Georgia’s neighbors” inevitably worsened the situation in the Georgian Kingdom (see: N.N. Shengelia, op. cit., p. 206, italics mine.—Z.P.). 23 See: F.D. Jordania, K materialam po istorii Gruzii XI-XII vv., Moscow, 1895, p. 7; N.N. Shengelia, op. cit., p. 200, 206-207. 24 For more details, see: V.U. Kopaliani, op. cit., pp. 261-266; Z.V. Papaskiri, Emergence of a Unified Georgian Feudal State, pp. 203, 209.

Volume 7 Issue 3-4 2013 135 THE CAUCASUS & GLOBALIZATION sponse took place in 1062 when Bagrat IV once more tried to capture Tbilisi; this time he planned to buy it back, according to Arabic author Ibn al-Faqih, from King of Agsartan.25 The Muslim world did not like the Georgian king’s plans and his possible control of Tbilisi; they liked even less what Ibn al-Faqih wrote about Bagrat IV’s intention to “widen the mountain roads to make it easier for the infidels (Georgian Christians.—Z.P.) to reach the Islamic countries.”26 The rulers of the Sultanate interpreted this, not without reason, as the Georgian king’s preparations for new armed operations. It seems that from that time on Georgia became the main rival of the Seljuks in the Caucasus. In 1064, Sultan Alp Arslan organized the first of his big marches on Georgia; in the process, he plundered several regions in Southern Georgia and captured ,27 yet failed to score the final victory. Puzzled by the Georgians’ unexpected staunchness, he wisely preferred to seek reconciliation with the king. Some Eastern authors, such as Ibn al-Athir and Sadr ad-Din Ali al-Husayni,28 and some con- temporary historians who accepted this information as reliable point out that Bagrat IV recognized the sultan as his sovereign and was prepared to pay “jizya.” Rauf Huseyn-zade, a prominent Azeri specialist in the history of the Seljuks and an ardent supporter of this thesis, has stated peremptorily that “Bagrat IV took an oath of vassal allegiance, promised to pay jizya, and gave his niece’s hand in marriage to Alp Arslan.”29 The author repeated his conclusion about the vassal-sovereign relations between Bagrat and Sultan Alp Arslan elsewhere in the same monograph.30 Those who insist on this should offer their arguments. They proceed from what Sadr ad-Din Ali al-Husayini wrote: “The Georgian sent his ambassadors to the sultan with gifts, knocked at the door of reconciliation, and paved the road to self-justification. Temir al-Hajib and Aybek al-hass traveled together with the Georgian ambassadors from the sultan’s camp. The sultan wrote to the king of Georgians that he should either adopt Islam or pay jizya and the [king] agreed to [pay] jizya”31 (ital-

25 See: R.K. Kiknadze, “History of Tbilisi in the 11th-13th Centuries According to Oriental Sources,” in: Proceedings of the Institute of History, Vol. V, Part I, Tbilisi, 1060, pp. 113-114; Sh.A. Meskhia, “The Urban Community in Medieval Tbilisi,” in: Selected Works, Vol. I, Tbilisi, 1982, p. 240; P.K. Ratiani, “Tbileli Berebi” (Revolt of People of Tbilisi in the 11th Century), Tbilisi, 1989, p. 14 (all in Georgian). 26 R.K. Kiknadze, op. cit., pp. 113-114. 27 See: Kartlis Tskhovreba, Vol. I, p. 306; Letopis Kartli, p. 45 (for more details, see: N.N. Shengelia, op. cit., pp. 219-225). 28 See: Sadr ad-Din Ali al-Husayni, Akhbar ad-daulat as-seljukiya (Soobshchenia o Seldzhukskom gosudartsve. Slivki letopisey, soobshchaiushchikh o seldzhukskikh emirakh i gosudariakh). Publication, translation, introduction, notes and appendices by Z.M. Buniyatov, Moscow, 1980, p. 50; P. Zhuze, op. cit., p. 121; N.N. Shengelia, “Sadr ad-Din Ali al-Husayni about the March of Alp Arslan to Georgia and the Transcaucasian Countries,” in: Studies of the History of Georgia and the Caucasus, Dedicated to the 80th Birth Anniversary of Academician of the Academy of Sciences of the Georgian SSR N.A. Berdzenishvili, Tbilisi, 1976, p. 90 (in Georgian). According to Sadr ad-Din Ali al-Husayni, this happened during the march of the Seljuk sultan to ar-Rum in the third ten-day period of February 1064 (Sadr ad-Din Ali al-Husayni, op. cit., p. 48). There are historians who, for some reason, insist on 1067 as the date of the march (see: R.A. Huseyn-zade, Kavkaz i Seldzhuki, Baku, 2010, p. 166). 29 R.A. Huseyn-zade, op. cit., p. 72. I cannot pass over in silence the far from accurate treatment by my esteemed colleague of information found in . When writing that Bagrat IV had sworn allegiance to the sultan and “promised to pay jizya,” Prof. Huseyn-zade referred to the French translation of Kartlis Tskhovreba and the work of Imad ad-Din al-Isfahani, which created the impression that the Georgian chronicler and the Arab author had written about one and the same fact. The French translation, however, only says that “De cette ville le sultan envoya une ambassade au roi Bagrat, pour solliciter son alliance et demander en mariage la fille de sa sœur” (Histoire de la Géorgie. Depuis l’Antiquité jusqu’au XIXe siècle. Par M. Brosset. 1re partie, S.-Petersbourg, 1849, p. 328), which means: “…the sultan dispatched an envoy from Akhalkalaki to Bagrat to seek an alliance with him and marriage to his niece” (Kartlis Tskhovreba, Vol. I. p. 307; Letopis Kartli, p. 73). The Georgian chronicle says nothing of the oath of vassalage. For more details about this and some other regrettable lapses in the otherwise valuable monograph, see: Z. Papaskiri, “Ob odnoy popytke ignorirovaniia roli i mesta gruzinskogo gosudarstva na mezhdunarodnoy arene v XII veke. Nekotorye zamechaniya na knigu Raufa A. Huseyn-zade Kavkaz i Seldzhuki,” Kavkaz i Mir (Tbilisi), No. 14, 2012, pp. 60-83, available at [http://iberiana2.wordpress.com/caucasus/papaskiri/]. 30 See: R.A. Huseyn-zade, op. cit., pp. 167-168, 229. 31 Sadr ad-Din Ali al-Husayni, op. cit., p. 50.

136 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION ics mine.—Z.P.). All other Oriental sources (Ibn al-Athir’s being the only exception32) that contain information, if any, about the sultan’s first Georgian march do not confirm that the Georgian king swore allegiance to Alp Arslan. Al-Bundari told the story of how “Alp Arslan forced King of the Abkhaz Bagrat, son of Georgi, to ask for peace and to offer him his daughter’s hand in marriage. Having accepted the presents, the sultan rewarded him with an aman. He then gave Nizam al-Mulka the Georgian princess’s hand in marriage,”33 but said nothing about the Georgian king’s vassal status. Another Arab author, Sibt ibn al-Jawzi, merely wrote that “the sultan married a daughter of King of Abkhaz Bagrat’s sister.”34 In fact, this is not the main argument. We should pay more attention to later events; information about them offers no evidence of the Georgian king’s vassal status, it essentially refutes this possibil- ity. This fully applies to an agreement on the marriage between the sultan and the king’s niece35 (not daughter, as al-Bundari wrongly wrote).36 This marriage cannot be described as the sultan’s half- hearted favor; it was King Bagrat’s diplomatic success that consolidated his position in the Caucasus. In the context of the times, this conclusion looks logical. According to Matiane Kartlisa, not everyone in the royal family approved of the arranged mar- riage between the sultan and King Bagrat’s niece (a daughter of his sister)37: her parental uncle, King Kvirike of the Kingdom of Tashir-Dzoraget,38 was dead set against the match. The Georgian king used this disagreement as a pretext to capture the kingdom and enter its capital, . The chronicler said: “The Armenians submitted to Bagrat.”39 This brought the Georgian king closer to his final aim: return of the old Georgian provinces Khunan-Samshvilde to the Georgian state.40 This bold move fortified Georgia’s position in this part of the Caucasus and demonstrated the military might of the Georgian state. By the same token, this kept the Seljuk sultan from using force to punish the audac- ity of Bagrat IV in Tashir-Dzoraget. It is believed that the sultan responded by restoring Emir of Japaride in Tbilisi.41 It seems that Abu-l-Asvar organized a surprise attack on Georgia to cut short any further expansion of the king of the “Abkhaz” and “Kartvelians;”42 this was the same Abu-l-Asvar43 whom the sultan had earlier entrusted with control over the Caucasian political units.44 Bagrat IV responded immediately. According to Sadr ad-Din Ali al-Husayni, in 1067-1068, “the king of the Abkhaz named Bakrat raided al-Barda’a … a city in the country of Muslims (italics mine.—Z.P.).”45 The sultan of the Seljuks could not tolerate this and in 1068 attacked Georgia. I cannot agree with some of my esteemed colleagues who accept without reservations informa- tion of those authors (Sadr ad-Din Ali al-Husayni and Ibn al-Athir) who wrote that Bagrat IV had

32 See: P. Zhuze, op. cit., p. 121. 33 Sadr ad-Din Ali al-Husayni, op. cit., p. 190. 34 Ibidem. 35 See: Kartlis Tskhovreba, Vol. I, pp. 307-308; Letopis Kartli, p. 45. 36 See: Sadr ad-Din Ali al-Husayni, op. cit., p. 190, Chapter 13, Note 32, available at [http://www.vostlit.info/Texts/rus/ Selguk/frames2.htm]. 37 See: Sibt ibn al-Jawzi confirms that the sultan sought the hand of the king’s niece (not daughter) in marriage: “the sultan married a daughter of a sister of Bagrat, King of Abkhaz” (Sadr ad-Din Ali al-Husayni, op. cit., p. 190, Chapter 13, Note 32). According to Bar Hebraeus, another Arabic author, the sultan married a daughter of a sister of the “ruler of Georgia” (N.N. Shengelia, Seljuks and Georgia in the 11th Century, p. 226). 38 According to Armenian author Matteos Urhayetsi, the princess married to the sultan was not a niece of King Kvirike of Tashir-Dzoraget, but his daughter. For some reason, Urhayetsi did not mention the role of King Bagrat IV in the arranged marriage (see: I.A. Javakhishvili, op. cit., pp. 152-153; N.N. Shengelia, Seljuks and Georgia in the 11th Century, p. 226). 39 Kartlis Tskhovreba, Vol. I, pp. 307-308; Letopis Kartli, pp. 72-73. 40 See: T.G. Papuashvili, The Kingdoms of Rans and Kakhs (the 8th-11th Centuries), Tbilisi, 1982, p. 247 (in Georgian). 41 See: Sh.A. Meskhia, “The Urban Community in Medieval Tbilisi,” pp. 241-242., 42 R.K. Kiknadze, op. cit., p. 115. 43 See: Abu-l-Asvar Shavur I bin al-Fadl (1049-1067) was ruler of Ganja-Arran. 44 See: N.N. Shengelia, Seljuks and Georgia in the 11th Century, p. 237. 45 Sadr ad-Din Ali al-Husayni, op. cit., p. 55; N.N. Shengelia, Sadr ad-Din Ali al-Husayni, p. 192; N.N. Shengelia, Seljuks and Georgia in the 11th Century, p. 238.

Volume 7 Issue 3-4 2013 137 THE CAUCASUS & GLOBALIZATION vowed allegiance to the Seljuk sultan and agreed to pay him jizya,46 a sign of the vassal-sovereign relations between them. There is enough information that in 1064-1068, between the first and the second Georgian marches of Alp Arslan, Bagrat IV did nothing to avoid confrontation and never agreed to compromises with the sultan (contrary to what N.N. Shengelia wrote in one of his books47), but pursued a fairly active policy in the Caucasus. In fact, on the eve of one of the Seljuk marches, the Georgian king was busy adding Kakheti-Ereti to his domains.48 The Turkish inroad forced him to cut short his operation and turn back. We cannot exclude the possibility that the Seljuks arrived at the request of Agsartan, King of Kakheti. Confirmation of this surmise can be found in Sadr ad-Din Ali al-Husayni, who wrote that a Seljuk detachment pursued “the robbers of Abkhaz” (King of “the Abkhaz” Bagrat IV.—Z.P.) in the “district of Shaki;”49 moreover, King Agsartan hastened to bring gifts to Alp Arslan and vowed al- legiance.50 On the eve of the march on the king of “the Abkhaz” and “Kartvelians,” Sultan Alp Arslan had Agsartan, as well King Kvirike of Tashir-Dzoraget and emir of Tbilisi on his side.51 This means that the united Georgian state was the only real force able to stand opposed to the Seljuks; this also explains the sultan’s grim determination to punish Bagrat IV. Alp Arslan plundered Kartli for six weeks; then he moved his units into Western Georgia, plun- dered Argveti, and came close to “the fortress of Sveri.”52 The Georgian king asked for a truce; Alp Arslan demanded tribute, but “because of the severe winter left without waiting for an answer”. He nevertheless “laid his hands on Tbilisi and and transferred them to Fadlon, the ruler of Ganja.”53 Some historians think that he did this not because he did not trust their rulers—they were his loyal servants,54 but because he believed that Fadlon was the most reliable and strongest among them with much better possibilities for controlling the captured Georgian lands.55 Bagrat IV, in turn, could not accept the defeat and tolerate Fadlon’s “evil deeds;” he gathered a large army and came to Tbilisi; unable to defend the city, the emir of Ganja fled, was captured, and taken to to King of Kakheti Agsartan. Fearing “persecution by the king of the Abkhaz56,” the

46 See: G.G. Alasania has recently joined those historians who side with the Arabic authors (Sadr ad-Din Ali al-Husayni and Ibn al-Athir). She is not absolutely convinced that the Georgian king fulfilled the conditions of the Agreement, but she has stated that “until 1067/8, the time of the second march of Alp Arslan, peace was ensured, probably by the payment of kharaj, an acceptable condition” (G. Alasania, op. cit., p. 38, italics mine.—Z.P.). 47 See: N.N. Shengelia, Seljuks and Georgia in the 11th Century, p. 390. 48 See: Kartlis Tskhovreba, Vol. I. p. 309; Letopis Kartli, pp. 45-46. 49 Sadr ad-Din Ali al-Husayni, op. cit., p. 55; N.N. Shengelia, Sadr ad-Din Ali al-Husayni, p. 192. 50 See: Kartlis Tskhovreba, Vol. I. pp. 308-309; Letopis Kartli, p. 46; Sadr ad-Din Ali al-Husayni, op. cit., p. 56. 51 See: Kartlis Tskhovreba, Vol. I. p. 310; Letopis Kartli, p. 46. 52 Kartlis Tskhovreba, Vol. I. p. 309; Letopis Kartli, p. 46. 53 Kartlis Tskhovreba, Vol. I. pp. 309-310; Letopis Kartli, p. 46. 54 See: Sh.A. Meskhia, “The Urban Community in Medieval Tbilisi,” p. 242. 55 See: N.N. Shengelia, Seljuks and Georgia in the 11th Century, p. 244. 56 It is widely known that the Arabic, Persian, Byzantine and other sources of the 11th-13th centuries used the terms “Abkhazia” and “Abkhaz” when writing about Georgia and the Georgians (for more details, see: G. Japaridze, “Arab Names for Georgians and Georgia,” in: Foreign and Georgian Terms for Georgia and Georgians, Tbilisi, 1993, pp. 132-134, in Georgian). Despite this, some authors tend to misinterpret information in which Abkhazia and the Abkhaz are mentioned. The following is the best illustration of the above: “In 1068, Fadl, on the sultan’s insistence, undertook a march to Abkhazia; he was defeated and taken prisoner. The Abkhaz handed him over to the Georgian King Bagrat IV, who forced Fadl to renounce his claim to Tbilisi, Rustavi, and other Georgian cities” (see: K.V. Ryzhov, “Shaddadidy,” in: K.V. Ryzhov, Vse monarkhi mira: Musulmansky Vostok. VII-XV vv. Handbook, Moscow, 2004, available at [http://interpretive.ru/dictionary/453/word/ shadadidy], italics mine.—Z.P.). An uninformed reader might think that the ruler of Ganja-Arran invaded Abkhazia and was taken prisoner by the Abkhaz, while Bagrat IV ruled another country (Georgia) and other people (Georgians). In fact he was “the king of the Abkhaz” (“the king of the Abkhaz named Bakrat” as Sadr ad-Din Ali al-Husayni put it (see: Sadr ad-Din Ali al-Husayni, op. cit., p. 55). K. Ryzhov is not quite correct when telling the story. According to the Georgian chronicles, Fadl II was captured by “Isaak Toloshelis-dze aznaur from (an area in Southern Georgia.—Z.P.),” who forgot that he was a subject of the king of the Abkhaz and that after seizing Fadlon, who tried to flee from the king of Abkhaz, he had to take him

138 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION king of Kakheti handed Fadlon over to the Georgian king in exchange for two fortresses (Bochorma and Ujarma) the Georgian king had captured earlier.57 It seems that the king of Kakheti feared not only Bagrat IV, but also Fadlon, who, judging from what is written in Matiane Kartlisa, had already captured some of the border lands (Khornabuji and Aradeti) of the Kingdom of the Kakhs and Rans.58 With Fadlon out of the way, Bagrat IV occupied Tbilisi and appointed a certain Sitle-arab as city administrator. The Georgian king also “captured the fortresses of Rustavi, Partskhisi, Agarani, Grigol-tsmindani, and Kavazini”59 found mainly in Kvemo (Lower) Kartli.60 It was a “borderline area which Alp Arslan had transferred to Fadlon.”61 This meant that Bagrat IV recaptured the lost initiative and began restoring his lost position in Eastern Georgia. This dented Alp Arslan’s authority, something which he could neither ignore nor tolerate. I have already written that instead of a punitive expedition to Georgia, the awesome sultan dispatched to Georgia his envoy “Alkhaz, who together with the sultan persuaded Bagrat to make peace with Fad- lon. He let him return to his domain in Ganja. The military leader left together with him.”62 Bagrat IV was rewarded with “the keys to Gagi, and the king of the Abkhaz took Gagi.”63 The Middle Eastern context of the time suggests why Alp Arslan demonstrated restraint when dealing with the audacious king of the Georgians. Let me explain.

The Military-Political and Diplomatic Reasons of the Sultan’s Extraordinary Decision

In the mid-1060s, the Seljuks increased their pressure on the Byzantine domains in gradually settled by the Turks.64 This forced the Byzantine rulers to concentrate on the situation to the east of their borders. After ascending to the Byzantine throne in 1068, Emperor Romanos Diogenes mobilized all available forces, tightened up discipline in the army, and pushed the Seljuks beyond the Euphrates in several consecutive military operations.65 Alp Arslan, fully aware of his weakening to Bochorma for Bagrat. Instead, he hastened to move Fadlon to Agsartan in Telavi, who, apprehensive of persecution by the king of the Abkhaz, immediately took the prisoner to Khornabuji. After bringing Fadlon to Khornabuji, he surrendered it. Then he was sent to Aradeti, which was also surrendered to Agsartan. Unwilling to miss the opportunity to take Fadlon prisoner, Bagrat let the Kakhs keep Bochorma and Ujarma in exchange for Fadlon” (Kartlis Tskhovreba, Vol. I, pp. 312-313; Letopis Kartli, p. 47, italics mine.—Z.P.). Regrettably, not infrequently, our Azeri colleagues, likewise, misinterpret the terms “Abkhazia” and “the Abkhaz” used in Oriental written sources; this is true of the most respected authors, such as Academician Z. Buniyatov (see: Sadr ad-Din Ali al-Husayni, op. cit., p. 190) and R. Huseyn-zade (see: R.A. Huseyn-zade, op. cit, pp. 57-58, 69, 106, 190) (for more details, see: Z. Papaskiri, “Once More on the Meaning of the Terms ‘Abkhazia’ and ‘the Abkhaz’ in Oriental Written Sources,” in: The Georgian-Abkhazian and Georgian-Ossetian Relations. The Past, Present and Future. Materials on the Inter-University Scientific Conference of Professors, Lecturers, and Students of Gori State University and Sukhumi State University dedicated to Independence Day of Georgia, Tbilisi, 2011, pp. 97-101, in Russian). 57 See: Kartlis Tskhovreba, Vol. I, pp. 311-312; Letopis Kartli, p. 47. 58 See: Ibidem. 59 Ibidem. 60 See: N.A. Berdzenishvili, “On Toponymy of Ancient Tbilisi (Agarani),” in: N.A. Berdzenishvili, Problems of Georgian History, Vol. I, Tbilisi, 1964, p. 308; idem, “The Problems of Historical Geography of ,” in: Problems of Historical Geography of Georgia, Vol. II, Tbilisi, 1964, p. 42 (both in Georgian). 61 P.A. Topuria, op. cit., p. 199. 62 Kartlis Tskhovreba, Vol. I, p. 313; Letopis Kartli, p. 47 63 Kartlis Tskhovreba, Vol. I, p. 314; Letopis Kartli, p. 47. 64 See: G.G. Litavrin, “Vnutripolitichesky krizis v kontse XI v. i vneshnepolitichesky razgrom,” in: Istoria Vizantii, Vol. II, Moscow, 1967, pp. 283-284; N.N. Shengelia, Seljuks and Georgia in the 11th century, p. 248. 65 See: N.N. Shengelia, Seljuks and Georgia in the 11th century, p. 250.

Volume 7 Issue 3-4 2013 139 THE CAUCASUS & GLOBALIZATION position in Anatolia, had no choice but to move once more on Byzantium; the sultan was in haste: one of the sides in the sharp political disagreements in Egypt had asked for his help.66 In 1070, the Seljuks moved their troops to the west; they entered Byzantium from the territory of Azerbaijan and took Manzikert in one day. This was the beginning of a grandiose campaign crowned, on 19 August, 1071, by the Seljuks’ impressive victory at Manzikert.67 This means that in the late 1060s, when Bagrat IV was pressing forward in Eastern Georgia, when he drove Fadlon away from Tbilisi and captured several fortresses, Alp Arslan had much more important concerns, i.e. the decisive attack on Byzantium. It seems that he had no choice but to deal cautiously with Bagrat IV. His previous experience (the first and second marches on Georgia) had taught him that force was not always the best option. This time he had to keep in mind the possibility that Bagrat IV might side with Byzantium in the coming clash. In short, confrontation with the Geor- gian king on the eve of a large-scale military campaign would have been a major diplomatic blunder. At first glance, a joint Georgian-Byzantine march against the Seljuks looked quite possible. By that time, relations with Constantinople had stabilized partly thanks to a dynastic marriage between Michael VII Doukas, son of Emperor Constantine X, and Mariam, daughter of Bagrat IV.68 The sources contain no information about military-political cooperation between the two countries; how- ever, we cannot ignore, together with V. Kopaliani,69 the possibility of their joint actions against their common enemy. The government of Romanos Diogenes might readjust the relations between Bagrat IV and Constantine Doukas. The new emperor had every reason to fear Michael Doukas, whose father- in-law, Sebastos Bagrat, might support his claim to the throne.70 Romanos Diogenes was hardly happy to see how the Georgian king and the Doukas dynasty were establishing dynastic ties. In the context of the mounting Seljuk threat, the Roman emperor had to be more flexible: he did not need complications with the Georgian state, a potential ally of Byzantium in its struggle against the Seljuks. The political situation in Byzantium after the death of Constantine X shaped by the confrontation between new Emperor Romanos IV Diogenes and the relatives of still young Emperor Michael Dou- kas71 (son-in-law of Georgian King Bagrat IV) could have affected the relations between Kutaisi and Constantinople; at least it stirred up concerns among the Georgian political leaders. The fact that belligerent Romanos IV Diogenes faced a fairly strong opposition from the Doukas dynasty raises no doubts. There is another fully justified opinion that when Romanos IV Diogenes was proclaimed em- peror, the position of the Doukas dynasty and its leader, Caesar John Doukas (the younger brother of Emperor Constantine X), weakened to the extent that they were gradually “squeezed out of civilian

66 See: T.T. Rice, op. cit., pp. 31-32; N.N. Shengelia, Seljuks and Georgia in the 11th century, p. 250. 67 For more details, see: N.N. Shengelia, Seljuks and Georgia in the 11th century, pp. 253-265. 68 For more details, see: I.M. Nodia, “Gruzinskie materialy o vizantiyskoy imperatritse Marfe-Mariam,” in: Vizantinovedcheskie etyudy, pp. 146-155. 69 See: V.U. Kopaliani, op. cit., p. 279. 70 For a long time (until Alexios Komnenos), the title of sebastos was limited to the emperors (see: L. Tavadze, “The Title of Sebastos in the Georgian Political Realities,” in: Proceedings of the Institute of Georgian History at the Ivane Javakhishvili Tbilisi State University, Vol. II, Tbilisi, 2011, p. 165, in Georgian); the fact that it was conferred on the Georgian king was extremely important: Constantinople accepted the Georgian state as an equal partner in international relations. 71 Historians have every reason to agree that after the death of Constantine X, his widow Eudokia “managed to preserve the right to the throne for her son Michael and the dignity of co-rulers for her younger sons.” From this it follows that “Diogenes was recognized as an emperor with no legally confirmed advantages over the underage children of Constantine X” (A.S. Mokhov, Vizantiyskaia armiia i pravlenie Romana IV Diogena, p. 277, italics mine.—Z.P.). This means that Michael Doukas was officially accepted as emperor immediately after the death of his father Emperor Constantine X, while Romanos IV Diogenes, the new husband of Eudokia, was a de facto co-ruler. It is surmised (J.-Cl. Cheynet, “Des traces de dictature a l’epoque meso-byzantin,” in: Actes de la Table Roude reunie. Paris, 27-28 September 1984, Paris, 1988, p. 110) that he was elected emperor in line with the “old Byzantine tradition according to which an underage successor to the throne was given an experienced and influential general to fight external enemies.” Nicephorus II Phocas (963-969) and John I Tzimiskes (969-975) can serve as an example (see: A.S. Mokhov, op. cit., p. 277, footnote).

140 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION administration,” although, on the whole, their influence “was not completely destroyed.”72 In fact “Romanos IV had other ill-wishers at the court” who “after a while ... joined forces with the closest circle of Caesar John to set up a party determined to remove Diogenes from the throne (italics mine.— Z.P.).”73 This context makes it absolutely clear that the perfidy of some of the generals (Andronikos Doukas and Nikephoros Bryennios in particular, who “at the height of the battle of Manzikert” pulled out their troops to give “the Seljuk sultan a chance to take the emperor prisoner”) was but one of the links in a long chain of events leading to the dethronement of the unwelcome emperor.74 We cannot exclude the possibility, therefore, that Georgia too wanted Romanos IV Diogenes out of the way to ensure the political future of the crowned spouse of the Georgian king’s daughter.75 This probably pushed Bagrat IV and the new Byzantine emperor apart,76 something which played into the hands of the Seljuk sultan on the eve of the decisive attack on the empire. This explains Alp Arslan’s seem- ingly unexplainable position caused, quite logically, by his firm determination to prevent an anti- Seljuk Georgian-Byzantine military and political alliance. The above suggests that Alp Arslan’s diplomatic favors were intended to keep Bagrat IV out of the future clash with Byzantium. To be more exact: Alp Arslan’s passivity (or even more) in the conflict between Bagrat IV and Fadlon was caused by the political developments in the Middle East and the mounting confrontation with Byzantium. In the early 1070s, Bagrat IV was absolutely free in his military-political moves. Toward the end of his rule, he had to move once more against Fadlon, who “violated his oath and intercession of the great sultan” and captured the fortresses of Kavazini and Agarani.77 Bagrat IV lost no time in responding: he liberated one of the fortresses and organized a large-scale march on Ganja together with “Dorgolel, king of Ovsy, and forty thousand Ovsy and, under the command of his son Giorgi kuropalates, plundered Ganja.”78 The king of the “Abkhaz” and “Kartvelians” consolidated his authority still further while Alp Arslan paid no attention to this operation.79 The fact that King of Ovsy Dorgolel was actively involved in the march against Fadlon means that his kingdom, the most powerful political unit of the Northern Caucasus, belonged to the orbit of the Georgian state’s foreign policy interests. Their joint march on

72 A.S. Mokhov, op. cit., p. 277. 73 Ibid., p. 278. 74 See: Ibid., p. 293. 75 Georgian political circles repeatedly interfered in Byzantine domestic policies. David Kuropalates, a powerful ruler of Tao, sent his troops to the empire twice during his reign, in 979 and 989 (for more details, see: Z.V. Papaskiri, Emergence of a Unified Georgian Feudal State…, pp. 27-37 and Bibliography), as well as during the reign of Giorgi I, who sided with the rioters determined to remove Basil II (for more details, see: ibid, pp. 117-118, 121-123, and Bibliography). 76 Some of the sources pointed out that the Georgians were also involved in the battle of Manzikert, which does not contradict our statement. First, only Michael Attaleiates, out of all Byzantine sources (which are much more reliable when it comes to the ethnic composition of the Byzantine troops fighting at Manzikert), mentioned “Iberian stratioti” (see: A.S. Mokhov, op. cit., p. 294, italics mine.—Z.P.). They cannot be described as Georgian armed units because they belonged to the theme of Iberia, an administrative unit of the Byzantine Empire. Information supplied by Arab author al-Bundari about the “Abkhaz” (without doubt subjects of the King of “the Abkhaz” Bagrat IV), hired by the Byzantine emperor together with Khazaras, Ruses, Kypchaks, Georgians, and others (see: Sadr ad-din Ali al-Huseyni, op. cit., Chapter 18, footnote 16, available at [http://www. vostlit.info/Texts/rus/Selguk/frames3.htm]), disagrees with the general context and contradicts information supplied by other Arab sources, to say nothing of Byzantine sources. It is much more preferable to rely, in this context, on other Arab sources: Sadr ad-Din Ali al-Husayni, who wrote that the Byzantine army consisted of “Armenians, , Pechenegs, , and Franks” (see: Sadr ad-Din Ali al-Husayni, op. cit., Chapter 18, p. 58) and Sibt ibn al-Jawzi, who mentioned “100 thousand Georgians/jurji” (see: Sadr ad-Din Ali al-Husayni, op. cit., Chapter 18, Footnote 16), by whom he meant Georgians from the theme of Iberia and said nothing about “the Abkhaz.” 77 See: Kartlis Tskhovreba, Vol. I, p. 314; Letopis Kartli, p. 47. 78 Kartlis Tskhovreba, Vol. I, p. 315; Letopis Kartli, p. 47. 79 Some think that “after establishing themselves in Transcaucasia, the Seljuks, who no longer needed the and their military support, learned to treat their might with suspicion” and that the blows the Georgian king delivered at Fadl II weakened “the state of the Arranshakhs and played into the hands of the Seljuks (K.V. Ryzhov, op. cit). It seems, however, that this “passiveness” relates much better to the sultan’s Byzantine policy.

Volume 7 Issue 3-4 2013 141 THE CAUCASUS & GLOBALIZATION Ganja showed that the Georgian state played the main role on the anti-Seljuk front in the Caucasus and that, despite the crippling Seljuk inroads, it remained the leading political force in the Caucasus.

Conclusion

My analysis of the sources and historiography, as well as my interpretation of what was hap- pening on the Byzantine-Seljuk front on the eve of the battle of Manzikert, provide a fairly plausible explanation of why the otherwise belligerent sultan retreated from his previously confrontational policy toward the audacious Georgian king. In the late 1060s, when Bagrat IV carried out his offensive operations in Eastern Georgia, which directly infringed on the military and political interests of the Seljuk sultan, the latter was tied down by preparations for the final offensive on the Byzantine Empire. He had to show caution when dealing with Bagrat IV, a potential ally of Byzantium. There is every reason to believe that his unexpectedly friendly gesture, instead of a punitive expedition, was caused by his desire to keep Georgia away from an imminent global clash with Byzantium.

Oleg KUZNETSOV

Ph.D. (Hist.), Deputy Rector for Research, Higher School of Social and Managerial Consulting (Institute) (Moscow, the Russian Federation).

THE TREATY OF GULISTAN: 200 YEARS AFTER (THE RUSSO-PERSIAN WAR OF 1804-1813 AND THE TREATY OF GULISTAN IN THE CONTEXT OF ITS 200TH ANNIVERSARY)

Abstract

he author looks at the causes and some sus, which went down to history as the of the aspects and repercussions of Great Game or the Tournament of Shad- T the Russo-Persian War of 1804-1813 ows. This approach, which blends historical and the Treaty of Gulistan that ended it in and political scientific slants, sheds new the context of the rivalry between the Rus- light on certain aspects of the history of Az- sian and the for geopolitical eri statehood in the early nineteenth cen- domination in Central Asia and the Cauca- tury.

KEYWORDS: The Russo-Persian War of 1804-1813, the Treaty of Gulistan, the Great Game, the Tournament of Shadows, the Treaty of Kurakchay. 142 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Introduction

On 24 October, 2013, we marked the 200th anniversary of the Treaty of Gulistan, which ended the longest war of the nineteenth century between the Russian and Persian empires; it went on for nearly ten years, from 1804 to late 1813. No other open armed conflict of the time was that long: the fifteen years of in Europe and Northern Africa was a string of fairly short and mainly local armed conflicts that cannot be described as the first world war in the history of mankind. Many events and many repercussions of this Russo-Persian war remain unclarified, and many ques- tions are still waiting for direct and honest answers. This war was of fundamental importance for the historical destiny of the Azeri people; it predetermined, for many centuries to come, the directions of its national, intellectual, political, and state development. This means that the historical lacunae left by the previous generations should be filled in good faith. A comprehensive analysis of the military actions, political steps, diplomatic efforts, and other events of the time requires an extensive mono- graphic study. For want of space I will limit myself to those aspects that should be further discussed by Russian, Azeri, and Iranian historians. Pre-Soviet Russian historical tradition (represented by two outstanding historians Perpetual Academician-Secretary of the St. Petersburg Academy of Sciences Lieutenant-General Nikolay Du- brovin and Head of the Department of Military History of the Headquarters of the Caucasian Military District of the Russian Imperial Army Lieutenant-General Vasily Potto) saw Russia’s intention to spread its geopolitical impact far and wide beyond the Greater Caucasus Range (the first step in this direction was taken in 1801 when Georgia became part of the Russian Empire) as the main or, even, the only cause of the 1804-1813 war.1 Soviet historiographic tradition, both Russian and Azeri, pro- ceeded from the ideological postulate of “proletarian internationalism” and, therefore, tacitly ignored the subject or reduced it to realization of the “historically justified” desire of the Azeris to join the Russian Empire.2 In the last twenty years, that is, in the post-Soviet period, Russian and Azeri histo- rians consistently ignored the subject despite the “chronologically favorable” suggestions in the form of the 200th anniversary of its beginning or its end. This shows that the academic community of both countries is not interested in the events and repercussions of the war. In fact, a 28-page leaflet Sovre- mennoe znachenie Gulistanskogo mirnogo dogovora (The Treaty of Gulistan: Its Importance Today),3 a highly tendentious political, rather than historical effort, the International Institute of New States issued in early 2013 was the only response to the 200th anniversary of the end of the Russo-Persian war. This means that this war has been and remains an unknown or “forgotten” war despite its con- tinued pertinence for the Azeri and all the other Caucasian peoples. This article is an attempt to fill the lacuna in the mainstream of contemporary historical science in the post-Soviet expanse. I have not aspired to write a detailed account of the causes, course, and results of this war (this task requires a monograph). I pursued the much humbler task of drawing my colleagues’ attention to facts, events, and processes that have remained outside the field of interest of Russian and Azeri

1 See: N.F. Dubrovin, Istoria voyny i vladychestva russkikh na Kavkaze, in 8 volumes, Print shop of the Department of State Lands, St. Petersburg, 1871-1888, Vol. IV; V.A. Potto, Kavkazskaia voyna v otdelnykh ocherkakh, epizodakh, legendakh i biografiiakh, in 5 volumes, Print shop of E. Evdokimov, St. Petersburg, 1887-1889, Vol. I; Utverzhdenie russkogo vladychestva na Kavkaze: 1801-1901. K stoletiiu prisoedineniia Gruzii k Rossii, in 4 volumes, Vol. I, ed. by N.N. Belyaevsky, V.A. Potto, Print shop of Ya.I. Liberman, Tiflis, 1902. 2 See, for example: Kh.M. Ibragimbeyli, Rossia i Azerbaidzhan v pervoy treti XIX veka (iz voenno-politicheskoy istorii), Nauka Publishers, Main Department of Oriental Literature, Moscow, 1969; J.M. Mustafaev, Severnye khanstva Azerbaidzhana i Rossia (konets XVIII-nachalo XIX v.), Elm, Baku, 1989; I.P. Petrushevsky, “Khanstva Azerbaidzhana i vozniknovenie russkoy orientatsii,” Izvestia AN AzSSR (Department of Social Sciences), Issue II, No. 5, Baku, 1946; Prisoedinenie Azerbaidzhana k Rossii i ego progressivnye posledstviia v oblasti ekonomiki i kultury (XIX-nach. XX v.), ed. by A.S. Sumbatzade, Academy of Sciences of the Azerbaijan S.S.R., Institute of the Peoples of the Middle and Near East, Baku, 1955. 3 See: Sovremennoe znachenie Gulistanskogo mirnogo dogovora, International Institute of the New States, Moscow, 2013.

Volume 7 Issue 3-4 2013 143 THE CAUCASUS & GLOBALIZATION historians, and therefore, escaped scholarly interpretation, even though they are obviously worthy of closer scrutiny. In fact, I intend to formulate here a set of questions in the hope that at some time in the future Azeri historians will answer them (in their own interests) in a straightforward and sincere manner.

Debates on the War’s Causes and Beginning

The geopolitical reasons for the Russo-Persian War of 1804-1813 are obvious. First, the Russian Empire sought a wider presence in the Caucasus by moving into territories that were legally dependent on Persia. The Georgievsk Treaty of 1783, which joined Georgia to Russia, was the first step in this direction. Second, the Persian Empire was obviously unable to protect its Caucasian vassals against the external military and political threat from the north amply confirmed by that fact that neither Fath Ali Shah Qajar nor Crown Prince , who ruled the Persian Caucasian territories popu- lated by Turkic tribes (the ethnic foundation of a single Azeri people and, later, Azeri nation), re- sponded to the Treaty of 1783 and its results. The Russian military in the Caucasus were past masters of using the slightest pretext to extend their imperial domains in the Caucasus and were equal to the task. The patrimonial nature of the relations between the local feudal lords and the administration of Prince Abbas made these territories de facto independent: there were no Persian armed contingents to protect these lands against external aggression. Disunited Northern Azerbaijan, which consisted of thirty feudal states () (close in their state and legal status to European dukedoms), was, there- fore, fairly easy prey for the Russian troops hardened in the wars against the Ottoman Empire. This meant new lands for the Russian Empire and a shower of medals and orders for generals and the of- ficer corps: the logic that moved all empires, Russia being no exception, was death or subjugation for the weak—tertium non datur. There were other, less obvious yet equally important reasons previously either ignored by Rus- sian and Azeri historians or not widely publicized, separatist sentiments among the Azeri khans being one of them. In his Severnye khanstva Azerbaidzhana i Rossia (konets XVIII-nachalo XIX v.) (The Northern Khanates of Azerbaijan and Russia in the Late 18th-Early 19th Centuries), J. Mustafaev has fairly convincingly demonstrated that by the end of the 18th century, Baku, Ganja, Shaki, , and their neighbors had outstripped, economically and socially, the Persian regions of the Persian Empire. For this reason, many of the Caucasian khans dreamed of maximum detachment from and Tehran and even of political sovereignty. The largest of the khanates had already acquired its material prerequisites in the form of financial and fiscal systems, currency, and measures and weights, which differed greatly from those used in Persia. In June 1812, soon after a large chunk of the terri- tory of contemporary Azerbaijan was de facto acceded to Russia, General of Infantry Nikolay Rti- shchev, Chief Commander in Georgia and Chief Manager of the Civilian and Border Affairs in Georgia and the Caucasian and Astrakhan Gubernias (he filled this post from 1811 to 1815), the highest Russian official in the Caucasus, initiated financial auditing of the lands that later became part of Russia under the Treaty of Gulistan. Carried out by the Fiscal Expedition of the Supreme Georgian Government, the auditing revealed that the Caucasian khanates were administratively and economi- cally absolutely independent from the Persian Empire: the local administrations developed fiscal and financial structures based on local monetary systems, mints, and treasuries.4 This confirms that the khans of Karabakh, Ganja, Shirvan, and Shamakhi, sick and tired of their political dependence on the Persians, were eager to end this dependence even by changing the suzerain.

4 See: Akty, sobrannye Kavkazskoy arkheograficheskoy komissiey (Acts Collected by the Caucasian Archeographic Commission), in 13 volumes, Print shop of the Main Department of the Caucasian , Tiflis, 1866-1904, Vol. 5, 1873, pp. 201-207.

144 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION These sentiments were partly born by the domestic instability in the Persian Empire: through- out the 18th century, it was not an empire in the true sense of the word, but a state of shakhinshakhs (kings of kings), their supreme power limited by the administrative sovereignty of the local khans. The supreme power of the rulers of the Zand and later Qajar dynasties stopped at the patrimonial dominants of tribal corporations, which made a centralized state an illusion. In fact, in this respect Persia closely resembled the contemporary German princedoms or Rzeczpospolita, a situation fraught with centralization of the former and several partitions of the latter carried out by neighbors with strong armies or stable state systems. In the political, legal, and culturological respects, Persia differed little from the Holy of the German nation made up of over 350 more or less independent states, the only difference being the number of semi-sovereign subjects. The retrospec- tive political and legal analogies suggest the objective conclusion that the developments in the Caucasus in the early 19th century were absolutely identical to those unfolding in Central Europe. In 1806, Napoleon and his Grande Armée set up the Confederation of the Rhine (Rheinbund) out of numerous German princedoms and cut down the number of sovereign subjects of the German state- hood from 350 to 36, which made it possible to establish the German Empire in 1871. Russia, in turn, fighting in the Caucasus, brought together the disunited Azeri khanates and tribes under the jurisdiction of the Russian Empire; this served as the starting point for the emergence of the Azer- baijan Democratic Republic, which became the Azerbaijan S.S.R., followed by the sovereign state of Azerbaijan as we know it. At the turn of the 19th century, the relations between Persia and Azerbaijan and the Caucasus in general (by this I mean relations with Georgia and Daghestan) had developed into an open con- frontation very much because of the national and religious factor. Under the , the lands of contemporary Azerbaijan were a province, the population of which was oppressed and abused by Persian (Iranian) aristocrats. The tension led, in the 1780s, to a feudal war that brought to power the Azeri (that is, originating from Azeri territory or, to be more exact, from Ganja) Qajar dynasty. This defused the contradictions between the Azeris and the Persians by elevating the former and lowering the status of the latter, as well as exacerbating the contradictions among the Azeris. It is a well-known fact that in 1783-1784 and in 1797-1799, Ibrahim Khalil Khan , a vassal of the Zand dynasty, was engaged in secret talks with the Russian Empire on Russian sover- eignty for his Karabakh . In 1795 and 1797, he stood alone against the Persian inroads under Agha Muhammad Khan Qajar (Shah of Persia since 1796), the founder of the Qajar dynasty in Persia. He plundered and routed Karabakh. According to Mirza Jamal Javanshir, historian of the Karabakh khans, Ibrahim Khalil Khan Javanshir was absolutely independent in his khanate: “After arriving in Karabakh, Ibrahim Khalil Khan became an independent khan and ruler and took commands from no one.” This does not refute the fact that of the Zand dynasty and Tehran of the Qajars re- garded him as their vassal, even if recalcitrant; he inherited this status from his father Panah-Ali Khan Javanshir, who received his title from Adil Shah Afshar of Persia in 1748.5 Very much like the khans of Karabakh, the khans of Shaki had no sympathy for Persia of the Qajars. This was especially true of Mohammad Hasan Khan, grandson of Haji Chalabi Khan (from the Kara-Keshish dynasty), who founded the khanate. (In 1805, Mohammad Hasan Khan transferred his khanate to Russian protector- ate.) In 1795-1797, he fled from his khanate under the pressure of Agha Muhammad Shah Qajar and his army. Mir Mustafa Khan of Talysh was another confirmed opponent of the Qajars; he applied for Russian protectorate in 1795; during the Russo-Persian war, his khanate became a protectorate of Russia, a status destroyed by Abbas Mirza in 1809. On the other hand, there was Jawad Khan Qajar, a member of the junior branch of the Persian dynasty; he ruled Ganja and predictably sided with his Persian relatives during all internecine wars in the Caucasus in the late 18th and early 19th centuries. In short, this period in the history of the Caucasus is better described as a never-ending bellum om-

5 See: M.D. Javanshir, Istoria Karabakha, Publishing House of the AzSSR Academy of Sciences, Baku, 1959, pp. 13, 47.

Volume 7 Issue 3-4 2013 145 THE CAUCASUS & GLOBALIZATION nium contra omnes waged in the territory of contemporary Azerbaijan, a situation typical of Europe of the 12th-16th centuries. This suggests a logical question: why did several vassals of Persia—the rulers of Georgia, Karabakh, , Shaki—all of a sudden enter into negotiations with Commander of the Rus- sian Kuban Corps Sergeant Major General Pavel Potemkin and why did King of Kartli-Kakheti II even express his desire to become vassal of Russia? In the latter case, this led to the signed on 24 July (4 August), 1783. Here is the answer. In1747, the Persian Empire began moving toward internal strife caused by a power struggle between the Persian tribes united around the Zand dynasty and the Turkic tribes of the Caucasus and the Caspian led by the Qajars. The khans of Northern Azerbaijan knew that Agha Muhammad Khan would become their ruler, a cruel tyrant whose name was associated with what is now called “crimes against humanity.” Unable to protect themselves, they had to look for patrons and defenders on the other side of the Greater Caucasus Range, that is, in Russia. This means that, strange as it may seem, the Azeri khans were interested in the Russo-Persian war of 1804-1813; they hoped to use the Russian army to acquire even more rights and privileges than those they enjoyed in the Persian Empire. No matter how unpalatable this might be for contemporary Azeri self-awareness, the above is confirmed by facts. For example, convinced that the Crimean were the only source of the centuries-long confrontation between Russia and the Ottoman Empire, many of the Ottoman statesmen tried to persuade the rulers (sultan and padeshah) to withdraw their state and religious sovereignty from them.6 Just like the corps of Ottoman Janissaries under Serasker Ibrahim Pasha stationed in Theodosia during the Russo-Turkish War of 1768-1774 showed no zeal in defending the interests of the last Crimean khans Devlet IV Giray and Bahadir II Giray,7 the Persian sarbazes (regular infantry) of the Fath Ali Shah Qajar’s army were unwilling to shed blood in the interests of the khans of Adeberdin (Azerbaijan); the shah left his son Abbas Mirza to deal with his fairly fickle Azeri subjects using the means and forces at his disposal. This finally brought Persia to a military and political defeat in 1813. One of the important, though far from obvious, causes of the Russo-Persian War of 1804-1813 should be sought in the level of civilizational development of the North Azeri khanates in the late 18th-early 19th centuries. The economies, handicrafts, and trade of Baku, Ganja, Nukha, Shamakhi, and Shusha were fairly developed; this is confirmed by the fact that they had their own currencies and mints superior to those of the Persian Empire. At the same time, Europe, which had entered the in- dustrial development stage, outstripped the khanates of Northern Azerbaijan by at least two centuries: these ethnicities still lingered at the political development stage, which fell behind the industrial (bourgeois in classical Marxist terms) type of organization of social relations. Within the context of the formational approach to the of human history, we can place Europe and Russia in the Modern Times, leaving Persia and Azerbaijan in the Middle Ages. This made it much easier for Russia to spread its military and political domination in the Caucasus, as well as along the border with the Muslim ecumene—in the Greater Black Sea area, the Balkans, and Central Asia—since by the turn of the 19th century, the Ottoman Empire had fallen far behind the European states in civiliza- tional, economic, and military-technical respects. In other words, the territory of contemporary Azerbaijan was unavoidably engulfed by Russia in the same way as India was doomed to become a British colony. It remained to be seen whether the process was peaceful or not. In the course of history, it became clear that some of the khanates were

6 See: A. Resmi Efendi, The Juice of Truth: On the Causes, Beginning and Most Important Events of the War that Took Place between the Sublime Porte and Russia from 1182 to 1190 year of Hegira: A Story by Resmi Efendi, Foreign Minister of the Ottoman Empire, of Seven Years of Struggle between Turkey and Russia (1769-1776) (in Turkish). Russian translation by O.-Yu.I. Senkovsky was published in Biblioteka dlia chtenia, Vol. 124, St. Petersburg, 1854, pp. 9. 77-78. 7 See: E.-M.-A. Necati Efendi, The Crimean Story: Notes by Muhammed Necati Efendi, Turkish Prisoner-of-War in Russia in 1771-1775 (in Turkish). Russian translation by V.D. Smirnov appeared in Russkaia starina, No. 4, 1894, pp. 190-194.

146 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION willing to join Russia, while others were easily conquered: resistance was feeble, while the local people showed no taste for guerilla warfare. This meant integration cum colonization: force was used to remove disagreements with the elites who refused to negotiate a peaceful transfer to imperial ju- risdiction. The fact that, at the turn of the 19th century, Persia and Azerbaijan were civilizationally lagging behind Europe was responsible for another not obvious yet very important cause of the war. In the latter half of the 18th century, there was no longer any room for unhampered expansion left and right. The spheres of imperial geopolitical domination had to be delineated. By that time, the world had already been divided among the six main empires: the Austrian, British, Ottoman, Persian, Russian, and French, which had moved into all formally independent “buffer zones” in Scandinavia, the Baltic, the German principalities, in the Balkans, North Africa, the Caucasus, and North and Central Amer- ica. In short, the first division of the world was complete, which meant that human civilization had entered a period of permanent geopolitical redivision of the world, which is still going on unabated. For two centuries, each of the local wars was fought in the interests of one of the empires trying to use other states to undermine the position and influence of its geopolitical rival in a particular region. The Russo-Persian War of 1804-1813 was one of the first such wars: France and Great Britain set Persia against Russia in an effort to force it to pull the largest possible number of Russian troops and the greatest possible share of other assets out of . In the early 19th century, neither Fath Ali Shah Qajar, nor Crown Prince Abbas Mirza, nor the Azeri khans were ready to accept the fact that they were pawns on a geopolitical chess-board. The Russo-Persian War was a logical continuation of the global Russian-British confrontation that started in 1799: The two empires could not agree on the status of the Isle of Malta, even though it was far removed from the Caucasus and Azerbaijan. The story is interesting enough to be told here. In 1797, soon after Paul I had become Russian Emperor, he declared himself protector of one of Europe’s oldest Christian military orders—the Sovereign Military Hospitaller Order of Rhodes and of Malta (the Knights of Saint John of Jerusalem), commonly known as the Order of Malta. In the summer of 1798, Napoleon captured the island without much fighting. This left the order without the Grand Master and without its base; the Knights of Malta asked the Russian emperor for help in ex- change for the title of Grand Master. On 16 December, 1798, Paul I was elected Grand Master of the Order of Malta and immediately demanded that Napoleon leave the island, which he had declared a “gubernia of the Russian Empire.” Napoleon refused; Russia joined the First Coalition fighting Na- poleon. In 1799, a Russian corps under Field-Marshall (later Generalissimo) took part in the Italian Campaign, which ended in the legendary crossing of the Alps in the winter of 1799/1800. On 5 September, 1800, the British capitalized on Napoleon’s defeat in Egypt to occupy Valetta, the capital of Malta. The recently elected Grand Master asked the British crown to return the “gubernia of Malta” to Russia’s jurisdiction; predictably, the Brits refused. The two empires sepa- rated by the European continent could not start a war in Europe. The Russian emperor removed the impediment by sending the Don Cossack Host to India on 28 February, 1801 to punish the British. Several days later, in the small hours of 12 March, 1801, the emperor was murdered and the punitive expedition was folded up.8 The planned Indian campaign of the Russian emperor worried London and stirred up rivalry between the two empires for domination in inner Asia, known in Britain as the Great Game and in Russia as the Tournament of Shadows. The British term refers to the struggle of the two empires for geopolitical domination in Central Asia, while the Russian term indicates their rivalry in the Trans-

8 See: V.A. Bezotosny, “Napoleonovskie plany Pavla Petrovicha,” Rodina, No. 7, 2008, pp. 56-62; P.N. Krasnov, “Pokhod v Indiiu,” Russkiy invalid, No. 22-23, 1900; A.A. Mitrofanov, “Russko-frantsuzskie otnoshenia v zerkale bonapartistskoy propagandy. 1800-1801 gg.,” in: Frantsuzskiy ezhegodnik 2006, Nauka Publishers, Moscow, 2006, pp. 184- 190; N.K. Shilder, Imperator Pavel I, Veche, Moscow, 2009, pp. 308-312.

Volume 7 Issue 3-4 2013 147 THE CAUCASUS & GLOBALIZATION caucasus.9 On 12 Shaban the year 1215 of Hegira (29 December, 1800), Great Britain signed military and trade treaties with Persia (commonly dated 4 January, 1801 in British sources) as part of the Great Game. On the British side, the treaties were signed by Captain John Malcolm, and on the Persian side, by First Grand Vizier Haji Ibrahim. It is a well-known fact that the British authorities in India dis- patched John Malcolm to the Persian court to prevent Persia’s possible rapprochement with France and use of Persian territory as a springboard for a French attack on India. (Much earlier, in 1796, the French sent a mission to Persia under Olivier to achieve rapprochement with Fath Ali Shah.) By the same token, the British hoped to protect India against Afghan attacks. Under the military and political treaty, the shah pledged to send troops against Afghanistan if the latter attacked Britain’s Indian do- mains, as well as drive the French away from Persia and never allow them back. In exchange, London promised weapons and armaments in the event of a French or Afghan attack on Persia. Indirectly, the treaty was aimed at Russia, which was regarded as an ally of France after the British seizure of Malta. The military alliance with the United Kingdom made Persia, a hitherto neutral or even friendly state, an opponent of Russia and pushed Tehran into a series of unfriendly actions, the main one being the closure of the Russian trading station on Ashuradeh Island off the Caspian coast of Persia, in the Gorgan Bay (better known as Astrabad in historical writings). The trade treaty with Britain under which Persia was expected to fulfill its obligations was not the only cause of this unfriendly act. The Persians were irritated with their Georgian vassals who had moved under Russia’s jurisdiction, this act being legally confirmed by the Manifesto of Emperor Paul I dated 18 January, 1801. Emperor Alexander I, who ascended to the throne after the murder of his father Paul I during a coup, responded to the closure of the Astrabad trading station with a rescript of 19 December, 1802 ad- dressed to Chief Commander in Georgia Lieutenant-General Pavel Tsitsianov, which established a Russian monopoly on naval trade in the Caspian. The Azeri khans could only use fishing boats, not because “they were entitled to this right, but because of the provinces to which bread was delivered by kirzhims (the local name for big flat-bottomed sea-going boats used for cabotage navigation.— O.K.), which look more like boats rather than ships.”10 The winter of 1800-1801 was of immense importance for the Caucasus: this was when it became a region in which the geopolitical interests of four out of six empires clashed. Persia, incited by Great Britain, and Russia, encouraged by France, were rapidly moving toward a war that would turn, by a whim of fate, the territory of contemporary Azerbaijan into a theater of warfare. Without external impact, or even pressure, the two countries could have avoided an armed conflict and achieved, rela- tively peacefully, without the use of arms deliberately prolonged for ten years, a delimitation of the spheres of influence in the Caucasus by depriving some of the khanates of their political sovereignty and administrative independence. This happened later; in the early 19th century, however, the Russo- Persian War began under the strong pressure of Britain and France. At first, both sides did not con- sider the lands of contemporary Azerbaijan a prize: they were a chess-board used by the participants in the Tournament of Shadows, or the Great Game, which had India in mind, a much richer and, therefore, much more desirable booty. It remains unclear which of the several events should be described as the beginning of the war. There was no clear answer to this question, either in imperial Russia, or in the Soviet Union, even if responsibility was vaguely piled on Tehran. According to this tradition, the date 10 June, 1804 was considered to be the first day of the war. On that day, Persian Shah Fath Ali, who had signed a treaty of alliance with Great Britain, declared war on Russia. It should be said in all justice that Russia was

9 See: M.V. Leontiev, Bolshaia Igra: Britanskaia imperia protiv Rossii i SSSR, Astrel, Moscow; Astrel-SPb, St. Petersburg, 2012; E.Yu. Sergeev, Bolshaia igra, 1856-1907: mify i realii rossiysko-britanskikh otnosheniy v Tsentralnoy i Vostochnoy Azii, Partnership for Scholarly Publications KMK, Moscow, 2012; P. Hopkirk, The Great Game: On Secret Service in High Asia, Oxford University Press, Oxford, 2001. 10 Akty, sobrannye Kavkazskoy arkheograficheskoy komissiey, Vol. 2, 1868, p. 789.

148 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION equally guilty of the war: on 3 January, 1804, the troops of the Georgian Corps took Ganja, the capi- tal of a Persian vassal, by storm. St. Petersburg and Tiflis regarded the capture of the Ganja Khanate as another victory of Russia’s colonial policy in the Caucasus and a logical continuation of Georgia’s accession to Russia in 1801. This was not directly associated with the rapidly worsening relations with Persia for the simple reason that seen from the Russian capital and from Tiflis and very much in line with the European tradition (by analogy with the parts of the of the German Nation), the khanate looked like an independent feudal state. Tehran and Tabriz could hardly agree: they interpreted the capture of Ganja as an act of military aggression against Persia and the Qajar dynasty: the captured khanate was home to the Qajar clan (a demesne in West European terminology). Seen in this light, the war started as a Russo-Qajar war and later developed into the Russo-Persian War. This perfectly fits it into the concept prevalent in the contemporary Azeri history writings: the Russo-Persian War and the Treaty of Gulistan interrupted the development of the Azeri statehood, which potentially could have created a Greater Azerbaijan spreading to the larger part of the Caucasus and the Southern Caspian (Northern Iran). There is one more concealed, yet important, cause of the war, which can be referred to the Marx- ist postulate on the role of the individual in history. I have in mind the subjective ideas about the world rooted in the ethnic origins of Russia’s Chief Manager in Georgia General of the Infantry Paver Tsit- sianov (1754-1806). He belonged to the Georgian princely family of Tsitsishvili (Panaskerteli) from Kartli, the members of which moved to Russia in 1724 together with King Vakhtang VI. On his mother’s side, he belonged to the Georgian royal family and was closely related to Mariam (Maria) Tsitsishvili, the last Georgian queen, the second wife of King Georgi XII and the queen of Kartli- Kakheti. It was a well-known fact that in 1797 Agha Muhammad Shah Qajar and his troops invaded Georgia and plundered the domains of the Tsitsishvili-Tsitsianov princes in the Mzovreti Gorge. This makes the march of the Russian troops on Ganja in 1803-1804, which triggered the war between Rus- sia and Persia, cost Jawad Khan Qajar of Ganja his life, and joined the khanate to Russia, an act of Tsitsishvili revenge. This means that at first this was an anti-Qajar rather than anti-Persian or anti- Azeri war. Whatever the case, until the murder of Prince Tsitsianov on 8 (20) February, 1806 in Ichari Shahar ( of Baku), revenge played a significant part in the actions of the commander- in-chief of the Russian troops in the Caucasus. In the Modern Times (in the European periodization of history), or in the 18th century, many of the peoples living on the periphery of the Muslim ecumene tended to solve the problem of national self-determination by entering alliances with neighbors of different faiths. The Azeris were no excep- tion in this respect. The Arabs relied on the British and French to detach themselves from the Ottoman Turks in the Maghreb; the Greeks, Rumanians, and their Slavic neighbors in the Balkans looked to Russia and the Austrian Empire; the people of the Pamir relied on the British to liberate themselves from Persian and Afghan domination. This explains why today Azeri historical science cannot arrive at a satisfactory assessment of the role, place and importance of the Russo-Persian wars of 1804-1813 and 1826-1828 and the treaties of Gulistan and Turkmanchay in their national history. Here is a graphic example of how hard it is to choose between different approaches to the vol- untary (or practically voluntary) transfer, on the strength of the Kurakchay treaties of 1805, of sev- eral Azeri khanates (Karabakh, Shaki, and Shirvan) and the Shuragel sultanate, to Russian jurisdiction. Azeri historians doubt the legitimacy of the Kurakchay treaties Russia signed with Karabakh and Shaki, as well as the “Requests and Vows of Allegiance of Mustafa Khan of Shirvan;” they allege that the three khans (Ibrahim Khan of Karabakh, Mustafa of Shaki, and Mustafa Khan of Shirvan) signed the documents under threat of the use of force. This, however, contradicts the fact that even before the treaty of transfer to Russia’s protectorate was signed, Ibrahim Khan rebelled against Prince Abbas Mirza and the Qajars and in 1804, unaided by Russian infantry and artillery, crushed the Persian troops sent to pacify him. In the first decade of the 19th century, the Azeri na- tional elite chose Russia’s patronage as the lesser of the two evils (the other being Persia and its rulers). Volume 7 Issue 3-4 2013 149 THE CAUCASUS & GLOBALIZATION The War in the Geopolitical Context

The military aspects of the Russo-Persian War are fairly well known not only from Russian, Persian, and Azeri sources, but also from British and French sources and literature, which means that the military aspects and course of the fighting have been exhausted. Few authors, however, put the war into the context of geopolitics; Russian and Soviet historiography made no such attempts (at least in the works available). This lacuna should be filled before we start assessing the war’s impact on the historical destiny of the Caucasus and the Eurasian continent. From the military point of view, it was a fairly strange war: hostilities were resumed and discon- tinued; truces were entered; and the fighting flared up and died down without obvious reasons. It looked very much like a camp fire that continues burning while there is wood, only to die down and then flare up again when a new supply of wood is placed on the coals by some hand invisible in the dark beyond the circle of light created by the fire. It seems that the sides had no intention initially to become bogged down in a large-scale war; it was a local border conflict into which the sides were drawn against their will. The numerical strength of the Georgian Corps of the Russian Imperial Army on both sides of the Greater Caucasus Range (10 thousand men) hardly permitted wide-scale hostilities. Historical sources have supplied us with exact numbers: on 1 May, 1805, the Russian troops stationed in the Caucasus had 42 field officers, 286 subaltern officers,755 warrant officers, 326 musicians, 6,055 privates, and 883 low-ranking noncombatants; the cavalry had 4 field officers, 25 subaltern officers, 57 warrant of- ficers, 15 musicians, 485 privates, and 59 noncombatants; and there were 4 field officers, 29 subaltern officers, 19 sergeants, 5 clerks, and 840 Cossacks in the Cossack regiments and detachments.11 This constituted a total of 9,888, not counting the generals, obviously not enough to invade a country with a multi-million population. No matter how unwilling the sides were, the war went on and on for ten years. This means that it was a way of protecting the interests of third countries. To reach a better understanding, let us take a look at the arrangement of the Russian troops in the Caucasus. In 1804, they were united into the Caucasian Inspection set up as part of the military administrative reform realized by Paul I in 1796. It was a military-territorial administration respon- sible for all aspects of military life: from quartering and supplies to military training. At the time of the war, the troops were organized into an acting army (armies) divided into line corps, as well as infantry and cavalry divisions strengthened by units and formations registered with different inspec- tions (the troops of the Caucasian, Orenburg, and Siberian inspections were never sent to the active army, they were used for garrison service and guarding the borders). This means that the units of the Caucasian Inspection designed to protect and defend rather than to invade were drawn into the war with Persia. It was their lot to carry the burden of fighting at the first stage of the war. They fought in Karabakh and in the Erivan direction from the very first day right up until the Uzun-Kilis truce. Signed early in 1807, it allowed Russia to reorganize, in February 1807, the troops of the Caucasian Inspec- tion into the 19th and 20th infantry divisions with the 19th and 20th artillery brigades attached to them in order to adjust the military command and supply to meet the needs of an offensive, rather than defensive, war.12 This marked the beginning of Russia’s organized and consistent military expansion in the Caucasus. Before that, Russian rule beyond the Greater Caucasus Range went on according to the will of Chief Administrator in the Caucasus Prince Pavel Tsitsianov. It followed the natural course of the region’s policies: Karabakh, Shaki, Shamakhi, and Shuragel, which sought Russia’s protector- ate and received it. This went on until 1808, when the Persians, under French and then British pressure, dissolved the truce, leaving the Russian military commanders with only one option: consistent con- quests in the Caucasus in order to inflict the biggest possible military and technical damage on the Qajars and their allies from among the khans of Northern Azerbaijan.

11 See: N.F. Dubrovin, op. cit., p. 437. 12 See: A.A. Kersnovsky, Istoria Russkoy armii, in 4 volumes, Vol. 1, Golos, Moscow, 1992, p. 184.

150 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Chronologically, the Russo-Persian War is divided into two periods: before and after the Uzun- Kilis truce. During the first period of the war associated with Prince Tsitsianov, Russia sought to bring the greatest damage to the Qajars, their relatives, and allies and drew all the enemies of this new dynasty into the orbit of Russia’s geopolitics. Between the summer of 1804 and late 1806, the Russian military administration in the Caucasus distinguished between the Azeri khanates siding with Russia and supporting the Qajars. Those rulers of Northern Azerbaijan who remained undecided were sub- jected to various methods of coercion up to and including murder. This fate befell Ibrahim Halil Khan Jawanshir of Karabakh. This was very much in line with the practices of the time: earlier, in 1801, Russian Emperor Paul I was assassinated in a palace coup paid for by British Ambassador in St. Pe- tersburg Sir Charles Whitworth. The first stage of the Russo-Persian War of 1804-1813 can be de- scribed as anti-Qajar; the second (after 1808) can be described as anti-Persian. At this stage, Russia was consistently seeking military-strategic and military-technical defeat of Persia; it was determined to destroy or capture the weapons and equipment supplied by Tehran’s European allies—first Great Britain, then France, and later Great Britain. European politics directly affected the war dynamics. For ten years, Fath Ali Shah and his son Abbas Mirza had been consistently protecting the geopolitical interests of the main European rivals of Russia’s (Britain and France) in the Caucasus. When moving into the war in June 1804, both ex- pected that Britain would continue its military and technical support delivered from India, one of the British colonies, under the political and trade treaty of 4 January, 1801. The treaty envisaged supply- ing weapons and ammunition to allow the Persian army to rebuff a possible Afghan inroad into Britain’s domains in India. Fath Ali Shah and his son used the British weapons and ammunition against Russia. After exhausting what was delivered by Britain, the Persians, in anticipation of further sup- plies, concluded the Uzun-Kilis truce. This time, however, London, unwilling to waste its material resources on the actions unrelated to India’s safety, refused to comply. Fath Ali Shah turned to Napoleon with the same request and sent Mirza Riza to negotiate and conclude a Franco-Persian alliance in the shortest time possible. A treaty on a defensive and offensive alliance signed on 4 May, 1807 at Finckenstein (East ) was followed by a French mission of 70 members under General Claude-Matthieu Gardane. As soon as he arrived, the Shah ratified the treaty and extended considerable trade and other privileges to the French. However, the cooperation between France and Persia was short-lived: on 9 July, 1807, Napoleon and Russian Emperor Alex- ander I signed the Treaty of Tilsit. The French pulled out of the treaty with the Persians in their war with Russia and called back the mission. The British colonial administration, in turn, in an effort to trim French influence in Persia resumed the talks on military and technical cooperation between the two countries. In this way, the Franco-Persian treaty produced no results. The short-lived (not more than two months) Franco-Persian rapprochement cut short the Uzun-Kilis truce. The Persian army defeated at Karababa lost Nakhchivan to the Russians. The 1808 campaign demonstrated once more that in the military and technical respect the Persian Empire was too weak to rely on its own forces and resources in a war. After the defeat at Karababa, the Persians stopped fighting. Hostilities resumed a year and a half later when Fath Ali Shah and his son Abbas Mirza found a new-old source of weap- onry and ammunition—Great Britain. The Treaty of Tilsit presupposed the joint offensive and defensive actions of France and Russia against external enemies, Britain and Persia among others. The treaty was potentially dangerous for British domination in India (since 1798, Napoleon had been planning a march on India); this forced London to resume deliveries of money, weapons, and ammunition to Persia to revive the hostilities against Russia, an ally of France at the time. Military and technical aid was to be extended under a preliminary treaty on alliance and friendship signed in Tehran on 12 March, 1809 by Grand Vizier Mirza Mohammad Shafi Mazanderani and Envoy Plenipotentiary of Britain Sir Harford Jones. The treaty demanded that the shah rupture its relations with France and other enemies of Britain. The Brits, in turn, pledged to pay the Persians 160 thousand tomans every year, resume weapons supplies, and Volume 7 Issue 3-4 2013 151 THE CAUCASUS & GLOBALIZATION send British military instructors. In June 1812, Brigadier-General Sir John Malcolm accompanied by 350 British officers and warrant officers arrived in Persia on ships that also carried 30 thousand rifles, 12 cannons, and woolen cloth for uniforms of the sarbazes.13 It was these British servicemen, weapons, and assets that allowed Abbas Mirza to organize the last march of the war. In August 1812, the Persians captured Lenkoran and Arkivan; in October, they were crushed at Aslanduz. A large group of British supporting officers was taken prisoner; one was killed. The Russian side learned their names and ranks. This means that at the first and second stages of the war—before and after the Uzun-Kilis truce—the Persian army used British weapons and British money to get all it needed. This makes Great Britain one of the sides in the war. The Russo-Persian War of 1804-1813 was Britain’s first “long-distance” colonial war: London carefully avoided direct armed clashes with the Russian Empire, one of its main geopolitical rivals in Europe. Instead, the Brits were waging a “proxy war” using the army of another state to weaken Russia’s military might. Later, in 1904-1905 London returned to the methods of “soft” interference in the colonial war of another state, using them against Russia. It sup- plied the Japanese Navy with intelligence and latest artillery fire control systems. Persia, in fact, was not fighting for its interests and the interests of the Azeris: it was protecting the northern approaches to India, the Jewel in the British Crown (an expression attributed to Disraeli, British prime minister from 1874 to 1881). At first glance this supposition sounds strange, however there is some grain of truth in it. Today, very much like in the Soviet Union textbooks on history (even those intended for higher educa- tional establishments), the fact that the Russo-French Treaty of Tilsit created a state of war between Russia and Great Britain is passed over in silence, probably because it did not lead to large-scale confrontations on land. Between November 1807 and July 1812, however, there were several naval battles in the Atlantic, Mediterranean, Adriatic, Barents, and Baltic seas. On 3 May, 1808, the Brit- ish detained Russian sloop Diana under Vasily Golovnin, which was headed to the northern Pacific, in Simon’s Town in South Africa. On 26 August of the same year, the British sank 74-gun liner Vsevolod in Ragerswik Bay (in the territorial waters of contemporary Estonia), as well as three gunboats; on 17 May, 1809, an English squadron (consisting of three liners, four frigates, and one brig) attacked the Russian detachment of five liners, one frigate and two corvettes under Captain 1st rank Ivan Bychevsky in Trieste and had to retreat under counter-pressure from the Russians. A month later, on 12 June, 44-gun British frigate Salset overtook Lieutenant Gavril Nevelskoy’s 14-gun small ship Opyt off Nargen Island. Nevelskoy surrendered only after losing thirteen crew members and all of the ship’s guns. The list of similar incidents at sea goes on. The Russian-British naval war stirred up a war between Russia and Sweden on land, which ended in 1809 when Russia joined Finland and the Åland Islands in the Baltics to its domains under the Treaty of Fredrikshamn. Speaking of the Persian-British Tehran Treaty of 12 March, 1809, we have every reason to say that it established a land front of the Russo-British War of 1807-1812 in the Caucasus functioning with British organi- zational assistance and material aid to Persia. The consequences of the Russo-Swedish War of 1808- 1809 and the Russo-Persian War of 1804-1813 have a lot in common: Sweden, fighting for British interests, on the land front lost Finland; Persia in similar circumstances lost Azerbaijan. It should be said that after signing the Uzun-Kilis truce Russia no longer needed the war in the Caucasus: it had acquired more than it expected to get. By late 1806, it had spread its jurisdiction (either legitimate or comparatively legitimate) to Karabakh, Shamakhi, Shaki, Shuragel, Baku, and Talysh, to say nothing of Ganja. This was more than enough to declare the war victorious. The po- litical, military, and strategic situation in Europe demanded Russia’s complete attention, which meant that the war in the Caucasus had to be promptly discontinued. After the Uzun-Kilis truce, there were

13 See: J.W. Kaye, The Life and Correspondence of Major-General Sir John Malcolm, from Unpublished Letters and Journals, in 2 volumes, Vol. 2, Smith, Elder and Co., London, 1856, p. 625.

152 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION five (!) consecutive attempts to arrive at a peace treaty; the talks started in 1810 and restarted twice in 1812 and 1813. Certain forces behind the scene obviously wanted the war to go on. External influence is confirmed by the way the Persian army was fighting in the second period of the war (after 1808): Prince Abbas did not push forward to capture the khanates in what is today Northern Azerbaijan; he limited himself to marches and inroads to keep the Russians riveted to the Caucasian front for the longest time possible. It seems that Fath Ali Shah and Abbas Mirza merely wanted to knock together another army of volunteers, give them arms, and push them to fight without bothering about the possible results. They treated the war as a game or a process in which the final aim was unimportant. The Persian rulers were indifferent to the quality of training and battle-worthi- ness of their armed forces, which was very much inferior to that of the Russians. Fath Ali Shah and Abbas Mirza wanted no changes: they counted on numerical superiority. The Persians, satisfied with the fairly extensive British military and technical aid they were receiving in 1809-1812, saw no reason to modernize their army or warfare tactics: they remained in the Middle Ages with their inroads, plunder, and capture of slaves. The Russian troops hardened by many years of rebuffing similar tac- tics of the Crimean khans, the Ottoman Empire, and the North Caucasian mountain people coped without much trouble. Plunder of peaceful people required no tactics, no concerted actions or disci- pline of the sarbazes—no wonder they stood little chance against Russia’s Georgian Corps. An analysis of the attack on Lenkoran of a unit under Major General Pyotr Kotlyarevsky un- dertook in the small hours of 1 (13) January, 1813 is the best proof of the above. Normally, the losses of the attacking side are three times higher than those of the defenders. The Russian unit at Lenkoran was 1,761 strong: 6 field officers; 57 subaltern offices, 131 warrant officers, 37 musicians, and 1,530 rank-and-file servicemen; the city was defended by 4,000 sarbazes. The Russian side lost 341 killed and 609 wounded; the Persian losses were 3,737 killed, not counting those who drowned while retreating and civilian losses.14 Simple calculations show that the attackers lost 12 times fewer people than the Persians behind the city walls, which means that the battle-worthiness of the Russian troops was 36 (!) times higher than of the Persian units. The above suggests that at the second stage, the Qajars systematically exterminated the adult males of the Persian Empire by pushing them into the war for the sake of their ambitions or to fulfill the obligations assumed under treaties with the British and French sponsors. Today, some Azeri historians extol Mirza Khan as nothing short of a national hero fighting for the national interests of his people. Is this true? A negative answer is confirmed by the economic conditions of the treaties Persia entered, with his direct involvement, with Britain and France and their negative repercussions for the Empire’s population. Under the Finckenstein Treaty between Persia and France of 4 May, 1807 (also known as Traktat Kamieniecki), the shah pledged to end all political and trade relations with Britain, declare a war on it, persuade the Afghans to do the same, move his army into Britain’s Indian domains, allow French troops to cross Persia to India, and supply them with food. According to the secret clause added to the Treaty later, when General Gardane’s mission reached Tehran on 24 December, 1807, the Persians transferred the Isle of Karek to Napoleon and gave the French the right to set up military posts in Gombrun and Bushehr. In other words, for the first time in history, Fath Ali Shah and Abbas Mirza allowed a foreign state to set up its extra-territorial military bases in Persian territory. This created a diplomatic and legal precedent used by European colonialists and imperialists to spread their influence far and wide on other countries and peoples without establishing their legal dominance over them. I doubt that what the Qajars did can be described as protection of the national interests of the Persians and Azeri. The British-Persian agreement was even less adjusted to the interests of Persian sovereignty in the international context. The Tehran Trade Treaty signed by two countries on 29 December, 1800 recon- firmed the privileges bestowed on the Indian and British merchants by members of the Zand dynasty

14 V.A. Sollogub, Biografia generala Kotlyarevskogo, 2nd edition, K. Kray Print shop, St. Petersburg, 1855, pp. 230-233.

Volume 7 Issue 3-4 2013 153 THE CAUCASUS & GLOBALIZATION under the 1763 British-Persian Agreement in the form of the firman of Karim Khan Zand issued on 2 July in Shiraz, which gave the Ost-Indian Company several important rights. These included the right to own land and set up fortified trading stations in Gulf ports (in Bandar-e Bushehr, in particular) and elsewhere in Persia and the right of duty-free trade on the condition that the gold and silver thus earned would remain in Iran to be used to buy Iranian goods. The company received the monopoly right to import woolen fabrics and exempted the people employed by the British trading stations from paying all sorts of taxes and duties, etc. This made Persia the main market for British goods; it also permitted foreign military bases and trading stations to be set up inside the country in free economic areas. In fact, Fath Ali Shah and Abbas Mirza laid the foundations of economic concessions and al- lowed enterprising foreigners to exploit the natural riches of their country. This policy survived until 1925, the year the Qajars were deposed by Reza Pahlavi amid internal unrest stirred up by foreign domination and foreign intervention. The Revolution of 1357 (the Islamic Revolution of 1978-1979) removed the remnants of the policy started by Fath Ali Shah and Abbas Mirza: foreign commercial property was nationalized, concessions liquidated, and natural riches took Islamic state jurisdiction. It took the people of Persia/Iran 170 years to become aware of the negative effects of the economic dependence on foreign capital established by Fath Ali Shah and Abbas Mirza Qajars, while it also took thousands of deaths to cast off the yoke. I wonder what contemporary Azerbaijan would look like if the short-sighted Qajars rather than the brave Russian troops had won the war of 1804-1813?

Behind the Scenes of the Treaty of Gulistan

The Treaty of Gulistan, which ended the mutual enmity of Russia and Persia, was not an act of their free will. To a great extent, it was imposed from the outside, by the British Empire in particular; its role in the war cannot be underestimated. The treaty was brokered by Sir Gore Ouseley, Ambas- sador of Great Britain and Minister Plenipotentiary at the Persian court, who in June 1812 met Crown Prince Abbas Mirza in Tabriz to persuade him to start another round of peace talks with Russia. London did not want the war to go on, since peace talks between Britain and Russia were going on at full speed in Örebro in Sweden. The treaty was finally signed on 18 July, 1812. Acting under pressure, Abbas Mirza entered into negotiations and hastened to recall his peace initiatives as soon as Napoleon had invaded Russia and captured Moscow. The Russian troops in the Caucasus resumed fighting and routed the Persians at Aslanduz on 19-20 October, 1812; the Persians had no choice but to return to the negotiation table. Late in December, a detachment of Major General Pyotr Kotlyarevsky was sent against the Talysh Khanate across the Mugan steppe to push the Persians toward a peace treaty. In the small hours of 1 January, 1813, the Russians, having destroyed an enemy three times superior in numbers to it, took Lenkoran by storm. On 30 March, 1813, Colonel of the Tiflis Infantry Regiment Andrey Pestel routed a unit led by Hosein Qoli Khan Sardar Qajar, the last battle-worthy Persian unit in the Caucasus, in Karabük, on the border between Nakhchivan and Erivan. This proved to be the final straw: Abbas Mirza sent his representatives supervised by Sir Gore Ouseley to start preliminary talks on the peace treaty. The British diplomat wrote the text of the treaty. He was probably the best expert in Persia among his British colleagues: for several years he had served as interpreter for the Persian Ambassador to London Mirza Abul Hasan Khan; on 10 March, 1810 he was appointed Ambassador Extraordinary and Minister Plenipotentiary of Britain at the Persian court. On 18 June, he left for Persia accompanied by his wife and brother William. He travelled together with the British diplomatic mission and Mirza Abul Hasan Khan. In April 1911, he reached Shiraz. In November 1811, Sir Gore Ouseley arrived in Tehran and was given audience with Fath Ali Shah. On 14 March, 1812, after prolonged and vehement 154 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION discussions, he finally persuaded the shah to sign a treaty with Britain, his efforts rewarded with an Order of the Lion and Sun set in diamonds.15 In 1812, Caucasian Governor General Nikolay Rtishchev twice, in August and September, invited the Persians through his representatives (first Major Popov and Court Councilor Freygang and later Commander of the 19th Infantry Division Major General F. Akhverdov) to resume the peace talks. Both times, the British-Persian team—Mirza Abdul Qasim, Sir Gore Ouseley, and Robert Gordon—refused; they wanted Russia to leave the Transcaucasus without preliminary conditions.16 By that time, however, the news about the Örebro Peace Treaty between Russia and Great Britain had reached Tabriz, transforming Sir Gore Ouseley from a Rus- sophobe into a Russophile. A typical Brit, he continued to insist on a peace treaty with the same ardor he had wanted the war to continue. He passionately wanted Persia to lose the talks in the same way as he had passionately wanted Russia to lose the war. He went to Tiflis to discuss the conditions to be imposed on the Persian court with Rtishchev. Much later, on 1 March, 1848, Prime Minister of Britain Palmerstone clarified the British tactics before the House of Commons: “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual.” The honor of formulating the main principles of the Treaty of Gulistan, the central of them be- ing status quo ad praesentem (which drew new borders along the borders of the lands occupied by Russia) belongs to Sir Gore Ouseley. Persia had to reconcile itself to the loss to Russia of Daghestan, Kartli, Kakheti, Megrelia, Imeretia, , Abkhazia, and parts of contemporary Azerbaijan: the Baku, Karabakh, Ganja, Shirvan, Shaki, , and Quba khanates, as well as part of the territory of the Talysh Khanate. In the summer of 1814, Sir Gore Ouseley’s diplomatic services to Russia (he had prepared the text of the peace treaty) were rewarded with an audience with Emperor Alexander I, as well as an Order of St. Alexander of Neva and a gold snuff-box set in diamonds and embellished with a portrait of the Russian emperor. He was elected Honorary Member of the St. Petersburg Academy of Sciences and received thanks from the State Collegium of the Foreign Ministry.17 In 1825, a book by William Price, secretary and interpreter at the Persian embassy of Sir Gore, called Journal of the British Embassy to Persia, embellished with numerous views taken in India and Persia, also, a Dis- sertation upon the Antiquates of Persepolis was published in London, in which he revealed the twists and turns of the diplomatic games played during the Russo-Persian War of 1804-1813 and the intrigues of Great Britain to fan and, later, quench the fire of war. Unlike Russia, Britain made no secrets about its diplomatic victories. Despite his exceptionally important role in signing the Gulistan Treaty, Sir Gore was mainly acting on orders from Sir Robert Stewart, Lord Castlereagh, Marquess of Londonderry, the true ar- chitect of British foreign policy in Hither Asia, who filled the post of Secretary of State for War and the Colonies in 1807-1812 and Foreign Secretary in 1812-1822. It was his idea to wage “proxy wars” against Napoleon and his allies, pushing third countries into the fighting while preserving the British troops and developing Great Britain’s military industry. He was not alien to military provocations and started wars without announcement (the war against Denmark that started on 14 August and ended on 21 September, 1807 is the best known among them). The Ouseley mission was an initiative of the Secretary for War and the Colonies; he kept the supplies of British weapons to the Qajars under con- trol; he was behind the U-turn in the way Russia was treated in the Caucasus after the Örebro Peace Treaty was signed in July 1812. Sir Robert Stewart and Sir Gore Ouseley were true British diplomats: the preliminary text of the Gulistan Treaty allowed a revision of the results of the Russo-Persian War of 1804-1813. Art 4 of the Treaty related the final decision on the borderline between Russia and Persia in the Caucasus to a bilateral commission on border delimitation, but said nothing of its members and set no dates. Lieu-

15 See: W. Price, Journal of the British Embassy to Persia, embellished with numerous views taken in India and Persia, also, a Dissertation upon the Antiquates of Persepolis, London, 1825, pp. 84-86. 16 Utverzhdenie Russkogo vladychestva na Kavkaze: 1801-1901, Vol. 2, pp. 426, 428. 17 See: W. Price, op. cit., pp. 112, 114.

Volume 7 Issue 3-4 2013 155 THE CAUCASUS & GLOBALIZATION tenant General Nikolay Rtishchev, head of the Russian Caucasian Administration and promoted to Infantry General in reward for his services related to the peace treaty, could not have failed to notice this “delayed action mine,” but was not in a position to defuse it. By that time, Russia did not have enough battleworthy troops to continue fighting—in 1813, each of the Russian infantry regiments stationed in the Caucasus had 200 to 250 bayonets and 10-15 officers. Persia, deprived of British military and technical support because of the war in Europe, was equally powerless to go on with the war. It had to accept the provisions, which nurtured the hope that the border disagreements might develop into casus belli. The Treaty of Gulistan suspended rather than stopped the war in the Cauca- sus. It never brought peace there. The Russian-Persian demarcation commission completed its mission in 1818 thanks to the Ta- briz mission of Commander of the Caucasian Corps General of Artillery Alexey Ermolov. The official text of the treaty was published shortly afterwards. Persia, supported and encouraged by Great Britain, spent the four years that separated the treaty from the final demarcation in a frantic effort to revise its conditions and restore the 1801 borders. In other words, Fath Ali Shah and Abbas Mirza were prepared to exchange the territory of contemporary Georgia for restored Persian jurisdiction over the territory of contemporary Azerbaijan. Alexey Ermolov, a general whose name became known during the wars with Napoleon, proved to be a valiant defender of Russia’s interests in the Caucasus: it was thanks to him that the borders of the Russian occupation zone were not pushed northward. The former Talysh Khanate, divided between Persia and Russia, was affected more than the other lands: its northern part, together with Lenkoran, became part of the Russian Empire, while its southern part, together with Astara, remained in Persia.18 London profited from the mutual territorial claims and disagreements over borders to gain a tighter grip on the Qajars. On 25 November, 1814, Britain and Persia signed another treaty, this time “on perpetual peace” based on the preliminary treaty of 12 March, 1809. Under its conditions, Fath Ali Shah and Abbas Mirza pledged to annul all the treaties and alliances Persia had with European countries hostile to Britain; they promised not to allow the European powers to cross Persian terri- tory into India and to force the rulers of Khorezm, Bukhara, and Samarkand to do the same. Moreover, the treaty obliged the Qajars to send Persian troops to help the Brits in the event of a war between Afghanistan and British India and to invite military instructors from Britain or its allies. Great Britain, in turn, promised its support to Persia if it was attacked by a European country (for geographic reasons the choice was limited to Russia) either by sending troops or extending financial support of 200 thou- sand tomans every year. London promised to insist on a revision of the Russo-Persian border legalized by the Treaty of Gulistan, not to interfere in the domestic affairs of Persia or its possible war with Afghanistan, and not to occupy any part of it territory. The treaty on “perpetual peace” of 1814 was spearheaded at Russia; it was prompted by the desire of Foreign Secretary Sir Robert Stewart to keep Russia as far away from British India as possible. In fact, in the first quarter of the 19th century, the British establishment was indifferent either to contradictions between Russia and Persia or to the future of the khanates of Northern Azerbaijan: it was solely concerned about the safety of its rich Indian colonies, which it was determined to exploit for the sake of world domination of the British crown. This is what the Treaty of Gulistan was about.

Conclusion

The 200th anniversary of the Treaty of Gulistan provides us with a good opportunity to reassess its place and the events that predated it in the historical destiny of the contemporary Azeri nation. I

18 See: Obozrenie rossiyskikh vladeniy za Kavkazom v statisticheskom, etnograficheskom, topograficheskom i finansovom otnosheniiakh, in 3 volumes, Vol. 3, Print shop of the Department of State-owned Lands, St. Petersburg, 1836, pp. 175-176.

156 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION will not engage in primitive deliberations about whether the Qajars were Azeri or autochthonous Persian rulers of contemporary Iran. Likewise, it is useless (or even stupid) to talk about alternative variants of regional and world history. It is useless to try to imagine what would have happened if back in 1812 Persia, supported by Britain, had defeated Russia and moved closer to the Greater Cau- casus Range. History tolerates no “ifs.” Today, Russian and Azeri historians should join their British, French, and Iranian colleagues to write a true history of the Russo-Persian War of 1804-1813. The following facts should be accepted as a starting point. The Russo-Persian war of 1804-1813 was a logical product of the processes and trends of European geopolitics of the early 19th century fed, to a great extent, by Britain’s colonial policy in India and neighboring Central Asian states. In fact, for ten years, Persia fought Russia not for its Azeri domains in the Caucasus, but for Britain’s interests in India. The Russian and British empires were not interested in Azerbaijan and its people: the former wanted to destroy and the latter to pre- serve its monopoly over use of the riches of India. Persia was nothing but the shortest overland route to India and a door that Britain wanted to keep closed, while Russia wanted it open. St. Petersburg took advantage of the discontent of the majority of the Azeri khans (Karabakh, Shirvan, and Talysh) with the policies of Crown Prince Abbas in the Azeri lands. He did not live long enough to become the shah, a status he wanted more than anything else in order to step out of the shadow of his royal father. Abbas Mirza was one of the tragic figures of the time: with no significance and no power he wanted to prove to himself and others that he had both. Hence his readiness to “play at war” with Russia in defiance of common sense, morality, and Persia’s national interests. He did not stop at set- ting up (for the first time in world history) exterritorial foreign military bases and transferring the management rights of the most profitable economic and trade branches to the British or the French. The senseless war with Russia destroyed the country’s economy to the extent that it was left without money, weapons, and even cloth for uniforms. Persia found itself in the trap of European (mainly British) concessions, from which it was unable to free itself for another 150 years. The Iranian people had to carry out the Islamic Revolution of 1978-1979 to finally rid themselves of the poisoned heritage of the Qajars. Fath Ali Shah and Abbas Mirza are personally responsible for the loss of Northern Azerbaijan and economic independence. It was Great Britain that profited most from the Russo- Persian war of 1804-1813 formally won by the Russian Empire. Azerbaijan was a chess-board on which the grand-masters of the time, indifferent to the moods and fates of the local peoples, played their geopolitical gambits and end-games. The Azeri people became a divided people, but the responsibility should not be heaped on Russia alone. It should be shared among Moscow and St. Petersburg, Tehran and Tabriz, London and , as well as Shusha, Shamakhi, Nukha, and Lenkoran.

P.S.

There is another aspect of the Treaty of Gulistan, named after the place where it was signed back in 1813. Today, the village of this name is found in the Goranboy District of Azerbaijan, danger- ously close to the line that separates the armed forces of the Azerbaijan Republic and the separatists of Nagorno-Karabakh. Therefore, the 200th anniversary of this treaty cannot be celebrated at the place where it was signed. So the Treaty of Gulistan is related to two armed conflicts: the war that ended 200 years ago and the conflict that has been going on for 20 years now. Volume 7 Issue 3-4 2013 157 THE CAUCASUS & GLOBALIZATION Fazil BAKHSHALIEV

Ph.D. (Hist.), Associate Professor, Baku State University (Baku, Azerbaijan).

THE RUSSIAN EMPIRE IN TRANSCAUCASIA: AGRARIAN POLICY OF THE LATE 19TH-EARLY 20TH CENTURIES

Abstract

he author analyzes the Russian Em- examines the factors that made peasant re- pire’s agrarian policy in Transcaucasia form and the new rules of land allotment in- T at the turn of the 20th century and also evitable.

KEYWORDS: The Russian Empire, Transcaucasia, agrarian policy, village, reform, landlords, redemption payments, land allotments, peace mediators.

Introduction

Peasant reform in the Caucasus started later than elsewhere in the Russian Empire and did not do much to make landowners out of peasants: the huge redemption payments were beyond their earn- ing power. Instead, the reform made them “temporarily obligatory peasants”; by the turn of the 20th cen- tury, their vague status could no longer be tolerated: the government had to act fast to avoid further complications.

Private Ownership of Land after the Peasant Reform of 14 May, 1870

By 1864, peasant reform finally reached Transcaucasia; serfdom was abolished in the Tiflis and Kutaisi provinces. In the Muslim provinces, the process went on for seven years, from 14 May, 1870, when the Regulations concerning settlers (poselyane)1 were published, until 1877. The reform, however, did nothing to improve the life of peasants: they paid for the allotted land with labor service. The conditions of labor service proved to be much more favorable for the settlers in the eastern part of Transcaucasia: they acquired their household plots for free. In the Baku and

1 See: Polnoe sobranie zakonov Rossiyskoy Imperii. Sobranie vtoroe, Vol. 45, Nos. 47862-48529, St. Petersburg, 1874, Law No. 48357, pp. 631-646.

158 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Elizavetpol provinces (with the exception of the Qazakh district), they paid 30 kopeks per 1 desya- tina (1.09 hectares.—Ed.), a regulation limited to estates in which the peasants were burdened with labor duties.2 The land allotments were too small: in some places, and not infrequently, they were 0.9-0.6 de- syatina per male peasant.3 In Transcaucasia, peasants leased land to increase their plots. In the late 1880s, 33 percent of the peasant population worked on leased plots; by the early 20th century, this number had nearly doubled.4 From the very beginning, leasing was very expensive, the price of plough land and even hay land steadily climbed. In the Baku and Elizavetpol provinces, leasing was usually paid in kind (a certain share of the yield) and, rarely, in cash. The colonial powers tried hard to preserve the old order of things in the agrarian sector. This explains why the Regulations of 14 May, 1870 (in the parts related to the above-mentioned prov- inces) tied land redemption (the main point of the reform) to several conditions, which made redemp- tion too expensive for the local peasants. The situation in Transcaucasia remained vague even when the reform based on the Regulations of 14 May, 1870 began; the local official structures and top bureaucrats spared no effort to assure the peasants that as soon as they redeemed their land they would no longer be tied to their landlords.5 The uncertainty (which had persisted far too long) was discontinued on 20 December, 1912 when Czar Nicholas II signed a new agrarian law.6 After peasant reform, the fast changes in commodity-money relations, private property on land, and the methods of private land use in Northern Azerbaijan made readjustment of Russia’s agrarian policy in Transcaucasia inevitable.7 As time went on, the economic and, later, political shifts in the Caucasus on the eve and during the first convinced the colonial powers that the category of “temporary obligatory peasants” could no longer be tolerated. It was decided that peasants should redeem their land. This first evidence of attention, albeit involuntary, to the situation in Transcaucasia produced several agrar- ian laws and a transfer to prompt and obligatory land redemption.8 The first Russian revolution slowed down the process: the draft laws discussed for a long time remained suspended; after the revolution, however, the process accelerated.9

The Need for a Changed Agrarian Policy in Transcaucasia Recognized

The new agrarian laws of the early 20th century (1 May, 1900 and 21 April, 1903) related to the state peasants of Transcaucasia (who constituted the absolute majority) specified their legal status, but did not improve their life.10

2 See: S.L. Avaliani, Krestyanskiy vopros v Zakavkazie, Vol. IV, Tbilisi State University Press, Tiflis, 1920, p. 8. 3 See: Ibid., p. 11. 4 See: Ibid., p. 12. 5 State Archives of the Azerbaijan Republic (GA AR), rec. gr. 387, inv. 1, f. 300, sheet 4 (Azərbaycan Respublikası Dövlət Arxivi. f. 387, siy.1, iş 300, vər. 4). 6 GA AR, rec. gr. 278, inv. 1, f. 71, sheet 33 (Azərbaycan Respublikası Dövlət Arxivi. f. 278, siy.1, iş 71, vər. 33); Polnoe sobranie zakonov Rossiyskoy Imperii. Sobranie tretie, Vol. 32, Nos. 36391-38603, Petrograd, 1915, Law no. 48357, pp. 1688-1696. 7 See: S.L. Avalianin, op. cit., p. 14. 8 See: Ibid., p. 15. 9 See: Ibid., p. 33. 10 See: Polnoe sobranie zakonov Rossiyskoy Imperii. Sobranie tretie, Vol. 20, Nos. 17968-19504, St. Petersburg, 1902, Law No. 18509, pp. 389-391; ibid., Vol. 23, Nos. 22360-23838, St. Petersburg, 1905, Law No. 22822, pp. 405-417.

Volume 7 Issue 3-4 2013 159 THE CAUCASUS & GLOBALIZATION This meant that the status of “temporarily obligatory peasants” survived in two provinces of Northern Azerbaijan and the Caucasian Territory until 20 December, 191211 and 7 June, 191312 when the settlers of the eastern part of Transcaucasia were obliged to redeem their land with the financial support of the state. While the peasants of central Russia were exempt from redemption payments on 1 January, 1906, the peasants of Transcaucasia had to carry the burden much longer, despite the two laws. It should be said that the Russian colonial authorities in the Caucasus procrastinated far too long: St. Petersburg distinguished between the peasant question in central Russia and in Transcaucasia, hence the hardly justified ambiguous policies in the region. On the other hand, continued temporary obligations turned out to be a hindrance for the agrar- ian economy, of which the local power structures in Transcaucasia were fully aware. Count Illarion Vorontsov-Dashkov, appointed Viceroy of the Caucasus in 1905, played an instru- mental part in drafting and adopting a new law. On 22 November, 1905, he published his draft law Notes on Regulating the Peasant Question in the Caucasus, a very much needed and long overdue step toward lightening the burden of redemption payments.13 In his letter dated 22 November, 1905 addressed to Minister of Internal Affairs Pyotr Durnovo, the count pointed out that “starting in 1873, the Caucasian administration has been working on all sorts of measures designed to discontinue the status of ‘temporar- ily obligatory’ peasants and introduce obligatory redemption of land allotments; none of them were of any importance for the peasants. In the last forty years, none of the laws have improved the situation.”14

Preparations for a New Agrarian Law in Transcaucasia

In June 1904, the Council of the Caucasian High Commissioner drew up and adopted Draft Provisions for the Redemption of Land Allotments by Peasants and State Settlers Still in Temporary Obligatory Relations with Landlords and Landowners.15 Approved by Prince Grigory Golitsyn, Chief Authority of the Civil Administration of the Caucasus, on 17 December, 1904, the draft was pre- sented to the Ministry of Internal Affairs, which approved it.16 On 2 March, 1905, the Minister of Internal Affairs asked the Minister of Justice to give his opinion on the document, which recom- mended discontinuing the existing obligations by asking the government to help the peasants with redemption payments. The Minister of Internal Affairs pointed out that he agreed with the Council’s decision and, in turn, was ready to support the planned measures and prevent possible opposition. He discussed in detail what might be said to justify the government’s refusal to help the local people redeem their land allotments, in particular, because the peasants did not have enough money for re- demption payments, which meant that the loans would not be repaid on time.17 By 1904, the Ministry of Internal Affairs had drafted (or compiled, according to certain sources) a law on the need to promptly discontinue “temporary obligatory” relations; it was suggested that the peasants be simultaneously made landowners through obligatory redemption. In 1905, the Caucasus became a viceroyalty; the project was never implemented.

11 See: Ibid., Vol. 32, Nos. 36391-38603, Petrograd, 1915, Law No. 48357, pp. 1688-1696. 12 See: Ibid., Vol. 33, Nos. 38604-40846, Petrograd, 1916, Law No. 39754, pp. 733-736. 13 See: O. Semin, Velikaya godovshchina. Agrarny vopros i krestianskaya (krepostnaia) reforma na Kavkaze. Istorichesky ocherk, Vsya Rossia Publishers, Kiev, 1911, p. 124. 14 S.L. Avaliani, op. cit., p. 41. 15 Russian State Historical Archives in St. Petersburg (RGIA in St. Petersburg), rec. gr. 396, inv. 3, f. 560, sheet 4. 16 Ibid., sheet 230. 17 See: S.L. Avaliani, op. cit., p. 28.

160 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Addenda and Amendments to a New Version of the Draft Law

Count Vorontsov-Dashkov, the newly appointed Viceroy, admitted that the political situation in the recently restored viceroyalty in Transcaucasia was very complicated. He had no choice but to support the prompt elimination of temporary obligatory relations. In his letter to Pyotr Durnovo of 22 November, 1905, he pointed out that the Manifesto of 3 November, 1905, which cut dues in kind by half as of 1 January, 1906, and discontinued them as of 1 January, 1907, should be extended to state settlers in the Caucasus. The Viceroy was convinced that the emperor should go further; in particular, peasants and state settlers still dependent or in obligatory relations with landlords and the khizans of the Tiflis and Kutaisi provinces should acquire property rights to the land they were using within the borders registered in corresponding documents and khizan protocols.18 The Notes on Regulating the Peasant Question in the Caucasus the Viceroy presented as a draft law on 22 November, 1905 was a necessary step toward improving the position of the peasants. It was suggested that the peasants who had agreed to redemption payments should be freed from interest payment in 1906-1907.19 The Notes enumerated the necessary introductory steps, such as loans from the Transcaucasian Branch of the State Peasant Bank to be opened on 1 January, 1906. The Document specified that vacant state land and forests, and also other servitudes (lands used communally) could be used in favor of peasants with little or no land.20 The Viceroy suggested that the redemption payments from the peasants of Transcaucasia should be cut by half as of 1 January, 1906; on 1 January, 1907, they should be abolished altogether; from that time on, the owners of the redeemed land should start paying state and local taxes on a par with the owners of other types of landed property.21 The Council of Ministers gathered three times to discuss the Notes submitted on 22 November, 1905, which outlined the conditions on which the relations of dependence and temporary obligations could be discontinued by making the peasants owners of land without redemption payments and by shifting to the state treasury the burden of redemption payment to the landlords. In 1906, the Council of Ministers pointed out to the Viceroy that there were plans to transfer the peasants from dues in kind to monetary and much lower dues based on the price of agricultural prod- ucts that existed at the time when the Regulations that discontinued personal dependence and estab- lished the status of temporary obligation were published. The Council of Ministers was convinced that this was a step toward complete discontinuation of temporary obligatory relations and the com- plete redemption of land allotments. The Council invited the Viceroy to submit a detailed draft law on elimination of dependent and obligatory relations in the Caucasian Territory to the legislatures in the shortest time possible.22 The Viceroy at first suggested that in the Caucasus land allotments should be transferred to the peasants free of charge; the Council of Ministers disagreed.23 The second draft was amended accordingly. In fact, before the second draft was submitted, the Viceroy and the Ministry of Internal Affairs had agreed that the land should not be transferred to the peasants free of charge: this looked like a flagrant violation of the right of ownership; this explains the second (less radical) draft. The first draft emerged amid the storms of the first Russian revolution,

18 RGIA in St. Petersburg, rec. gr. 1405, inv. 107, f. 20573, sheets 4-5. 19 See: O. Semin, op. cit. 20 RGIA in St. Petersburg, rec. gr. 821, inv. 139, f. 65, sheet 31. 21 Ibid., rec. gr. 1291, inv. 73, f. 719, sheet 18. 22 Ibid., rec. gr. 783, inv. 66, f. 37, sheet 1. 23 See: S.L. Avaliani, op. cit., p. 39.

Volume 7 Issue 3-4 2013 161 THE CAUCASUS & GLOBALIZATION while the second was written after the bourgeois-democratic revolution had been suppressed. In these conditions, the government no longer needed extreme measures to detach the peasants from the work- ing class to rout the revolutionary forces. All extreme measures, therefore, were declined under vari- ous pretexts as the revolutionary fervor abated and finally died out.24 On 15 December, 1908, one more draft On Elimination of Obligatory Relations between Peas- ants and Landlords in the Transcaucasian Territory25 signed by 34 members of the State Duma was offered for discussion. It differed greatly from what the Viceroy had suggested and contained the following points: (1) dependent and temporary obligatory relations in Transcaucasia should be discontinued im- mediately without new sacrifices in favor of landlords; (2) all duties of temporarily obligatory and dependent settlers to the landlords should be abol- ished, while the land allotments these peasants were using should become their property within the factual borders or the borders registered in documents; (3) the right to use servitudes (grazing land, forests, water, etc.) should be granted to the peas- ants of the above categories on the conditions accepted in the northwestern provinces of Russia (under the Rules of 26 March, 1869, Points IV and V) until legally settled. (4) the right to the earth’s subsurface should be settled according to the general rules until le- gally formulated. The balance of political forces in the State Duma gave the project no chance: it was declined like all its predecessors.26 In 1908, after his first draft had been declined, the Viceroy revived the problem of discontinu- ation of “temporary obligatory” relations in the Transcaucasian Territory and, early in 1909, submit- ted his draft to the Council of the Viceroy.27 The Council discussed the draft in late April and early May 1909 and also on 22 May, 1910; in October-December 1910, it was discussed by the interdepartmental meeting chaired by the deputy Minister of Internal Affairs.28 Still later, the Viceroy took into account certain debatable issues, including the redemption prices, to improve his draft. While the landlords in Northern Azerbaijan insisted that the prices should be geared toward the agricultural prices of the early 20th century, their opponents wanted to use the prices of 1870 (when the Regulations were adopted) as the starting point. In 1909-1910, the Council under the Viceroy twice returned to the draft amended by the Viceroy.29 The discussion of the redemption prices went on and on. Members of the top Muslim social groups rejected the suggested prices; they sent their messengers to St. Petersburg to the interdepart- mental meeting,30 which declined their objections; it was decided that the peasants who belonged to private owners should use cash for redemption payments and not cheques or bonds, as was allowed in central Russia.31

24 See: O. Semin, op. cit., p. 125. 25 See: S.L. Avaliani, op. cit., p. 39; P.V. Gugushvili, Agrarnye otnoshenia v Zakavkazie na rubezhe XIX-XX vv., Nauka Publishers, Tbilisi, 1955, pp. 34-35. 26 RGIA in St. Petersburg, rec. gr. 1291, inv. 73, f. 719, sheet 115. 27 Ibid., f. 583A, sheet 316. 28 See: S.L. Avaliani, op. cit., p. 69. 29 RGIA in St. Petersburg, rec. gr. 1291, inv. 66, f. 37, sheet 43. 30 See: G.A. Orujev, “Ob agrarnoy politike tsarizma v Azerbaidzhane v period Stolypinskoy reaktsii,” Uchenye zapiski AGU, Social Sciences Series, No. 1, 1958, p. 114. 31 Scientific Archives of the Institute of of the National Academy of Sciences of the Azerbaijan republic, inv. 1270, p. 91.

162 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION It should be said that the latest draft that reached the Council of Ministers on 20 December, 1910 differed from the version of 22 November, 1905: while the earlier version included the Zakatali Dis- trict and the state peasants in the scope of the law, the later one left them outside it.

New Agrarian Law for Transcaucasia Adopted

After being endorsed by the Council of Ministers on 17 March, 1911, the draft law was passed to the State Duma of Russia on 24 September. It caused little disagreement (except Point 9, which presupposed free transfer of marshes and other land little suited for agriculture to peasants free of charge) and was passed by a majority.32 On 19 December, 1912, the State Council approved the draft with no considerable changes; on 20 December it was signed by Emperor Nicholas II and became a law. On the one hand, it presupposed that the czarist government would insist on its agrarian policy started when the region was united with Russia. On the other, it ushered in a new and equally trying period in the life of peasants. The law, the instructions for its application, and the table of land prices regarding the first desyatina of land were published on 25 December, 1912 in a special 260th issue of the laws and bylaws of the Russian Empire.33 Acting according to the law, the Viceroy prepared and the ministries of internal affairs and fi- nance approved two instructions—on implementation of the reform34 and on the rules of calculation of redemption payments.35 Under the Rules, the privately owned peasants in five provinces of Transcaucasia were relieved from their temporary obligations in favor of their landlords as of 1 January, 1913 and had to pay a certain amount of money to make their land allotments their property.36 Under the new law, the peasants could use the servitudes only if landlords and other landowners allowed them; water resources remained the property of landlords. Under the new law, all temporarily obligatory and other dependent peasants in five Transcau- casian provinces were transferred to obligatory redemption payments as of 1 January, 1913 and had to pay annual interest to the treasury.37 The Rules stressed that redemption and other procedures should be limited to the boundaries of former land allotments of dependent peasants. If the borders outlined in the documents and the actual borders did not coincide, the procedures should be applied to the actual borders of land al- lotments. The Rules relating to the repayment procedure indicated the deadlines for each zone and each village within the span of 28, 41, and 56 years.38 The tables that supplemented the Law established all redemption prices for the first desyatina of land of each type of plough and other land. For each of the five provinces, the prices were arranged by districts and zones within districts. The state struc- tures used the document to establish the size of the redemption payments to the landlords and other landowners and to assess the total volume of money to be paid.

32 See: S.L. Avaliani, op. cit., p. 106. 33 GA AR, rec. gr. 278, inv. 1, f. 71, sheet 63. 34 Ibid., sheet 79. 35 Ibid., sheet 88. 36 Ibid., sheet 84. 37 See: S.L. Avaliani, op. cit., p. 117. 38 GA AR, rec. gr. 278, inv. 1, f. 71, sheet 83.

Volume 7 Issue 3-4 2013 163 THE CAUCASUS & GLOBALIZATION The New Reform Started

On 2 November, 1913, the ministries of internal affairs and finance agreed on instructions for those officials who would be implementing the reform and indicated the source of money to pay for the operations.39 The Law of 12 December, 1912 regarded the “temporarily obligatory peasants” as owners; they, however, were not completely relieved from the very heavy tax and other payments for the use of land allotments they had received from their former owners. It was expected that from 1 January, 1913 they would annually pay huge redemption sums for the next 28, 41, or 56 years. This did not lighten the burden of the former serfs, even though their status of free people and the fact that land allotments became their partial property slightly improved their living and working conditions. The agrarian law opened a new stage in the evolution of the forms of land property in the gen- eral context of the bourgeois transformations going on in the region. On the other hand, the law did not completely defuse tension, which caused clashes between the top Muslim social groups, who deliberately interfered with the implementation of the reform, and their former serfs. While the Law of 20 December, 1912 presupposed immediate and complete discontinuation of the temporary obligatory relations in five provinces of Transcaucasia (to which Northern Azerbaijan also belonged), the process was often very slow: it took too much time to transfer peasants to redemp- tion payments, draw the necessary documents, etc. The annual reports of the commissions on peasant affairs operating in different provinces con- firm this. For example, between early 1913 and 1 January, 1917, the five provinces drew up 2,795 redemption acts (or 45% of the needed), which caused discontent among the peasants.40 Point One of the Rules that supplemented the Law was related to the peasants and settlers of the Tiflis and Kutaisi provinces, who lived on the land of the highest Muslim clergy, and other landown- ers of the Baku and Elizavetpol provinces. As of 1 January, 1913, it discontinued their status of “temporarily obligatory peasants” to make them landowners with all the corresponding rights.41 The Law specified the forms of redemption payments in detail. Starting on 1 January, 1913, land- lords and other landowners could expect 4.5% of the total redemption payment for the lands transferred to the peasants. This meant that the Law retreated from the previous figure of 5% cited in the draft.42 The size of the redemption payments was established with the help of peace mediators (mirovye posredniki). They had to receive copies of corresponding documents or a land-survey map from each peasant. If this proved impossible, they had to go to the provincial committee for peasant affairs for copies; peace mediators could rely on tax inspectors; together they gathered all the necessary informa- tion and, after calculating the cost of peasant labor service on the land of landlords, arrived at a final figure for the redemption payments. The mediators were given a month to complete their jobs, both sides of the results, and announce the sizes of payments and deadlines to peasant gatherings. After defining the size of the redemption payments, the mediator drew up a corresponding document and a list of peasant households expected to pay the money; it was his duty to regularly inform the provincial commission about his progress. Two other documents, Orders and Instructions, were drawn up to stress that the redemption payments could not and should not be increased; the peasants were allowed to pay higher annual inter- est, if they so wished, which was, by all means, to be subtracted from the total.43

39 Ibid., sheet 88. 40 See: S.L. Avaliani, op. cit., p. 139. 41 GA AR, rec. gr. 278, inv. 1, f. 71, sheet 83. 42 RGIA in St. Petersburg, rec. gr. 1291, inv. 66, f. 37, sheet 91. 43 GA AR, rec. gr. 278, inv. 1, f. 71, sheet 80.

164 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION Land surveyors of the Tiflis Judicial Chamber were invited to establish the amount of land to be redeemed as established by the peace mediators. The final document was drawn up in the presence of two peasant representatives; if the village community failed to appoint its representatives, other people could be invited as witnesses. The landlord was also expected to witness the procedure; if he failed to attend, it was the duty of the mediator to deliver him a copy of the repayment documents; the absence of any of the sides from the procedure could not slow down the process. An assessment of the price of one desyatina of land was based on the agricultural prices of 1870 (when the Regulations had been published). In all provinces, the prices were geared at the type, fertil- ity, location of land allotments, and other factors. Local lands were primarily assessed according to two categories or zones. This explains the different prices in different districts: in the Sharur-Daral- agez District of the Irevan Province, irrigated plough land was assessed in five categories, while in the Irevan District, in four.44

Conclusion

Until the early 20th century, that is, in the last three decades of the 19th century, the agrarian policy of the Russian Empire in Transcaucasia remained more or less consistent; in the first few years of the 20th century, however, it became much more erratic. To a certain extent, implementation of peasant reform in Transcaucasia differed little from its course in central Russia; in many respects however, there were great differences. While in Russia the “temporary obligations” were discontinued in 1881, in the Caucasian Territory they survived for 42 years. Half-hearted methods and means of agrarian policy in Transcaucasia helped the central govern- ment to consolidate its position in the region; in the early 20th century, however, social and eco- nomic developments forced the rulers to readjust domestic policy and, accordingly, their colonial agrarian policy in the region. The agrarian laws of 1912-1913 moved away from the old principles of colonial agrarian poli- cy pursued in Transcaucasia. The czarist authorities, however, did their best to protect the interests of landlords and their higher status.

44 GA AR, rec. gr. 278, inv. 1, f. 71, sheet 77. Volume 7 Issue 3-4 2013 165 THE CAUCASUS & GLOBALIZATION

Index THE CAUCASUS & GLOBALIZATION Vol. 7, 2013

Author Article No. Pp.

GEOPOLITICS

Leyla THE EUROPEAN UNION AND CONFLICT ALIEVA SETTLEMENT IN THE CENTRAL CAUCASUS: NEW PROSPECTS AND LIMITS 1-2 7

Khaladdin THE IDEA OF A CAUCASIAN HOME AND IBRAHIMLI THE PROBLEM OF INTEGRATION IN THE CENTRAL CAUCASUS 1-2 16

Evgenia TURKEY AND THE UNITED STATES GABER IN THE CAUCASUS: PROSPECTS FOR COOPERATION IN CONFLICT SETTLEMENT 1-2 26

Taleh SOME ASPECTS OF APPLYING ZIYADOV THE SWEDISH-FINNISH MODEL TO SETTLEMENT OF THE ARMENIAN-AZERBAIJANI NAGORNO-KARABAKH CONFLICT 1-2 40

Kenan THE CAUCASIAN PENTAGRAM: ALLAHVERDIEV A CURSE OR A LUCKY CHANCE? 3-4 7

Parvin ASYMMETRIC WARFARE: DARABADI WHERE THE WEAK ARE STRONG AND THE STRONG ARE WEAK 3-4 26

Alexander THE NAGORNO-KARABAKH ISSUE DUDNIK IN UKRAINIAN FOREIGN POLICY (1992-2012) (Part One) 3-4 32 166 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

Author Article No. Pp.

GEO-ECONOMICS

Vakhtang SECTORAL, TECHNOLOGICAL AND BURDULI, INSTITUTIONAL-ORGANIZATIONAL Ramaz STRUCTURES OF THE GEORGIAN ECONOMY: ABESADZE DEVELOPMENT ISSUES IN THE CONTEXT OF GLOBALIZATION 1-2 48

Alexander THE BAKU-TBILISI-KARS (BTK) DUDNIK RAILROAD PROJECT IN THE GEOPOLITICS OF THE CENTRAL CAUCASIAN COUNTRIES, TURKEY, AND RUSSIA 1-2 65

Zurab GARAKANIDZE, INFLUENCE OF Nata THE MIDDLE EAST TENSION GARAKANIDZE ON THE EU’S 1-2 74

Vladimir THE FINANCIAL ECONOMY LUKYANOV IN A GLOBALIZING WORLD 3-4 44

Ramaz REGIONAL PROBLEMS OF ABESADZE, ACCELERATING ECONOMIC Vakhtang DEVELOPMENT RATES BURDULI IN THE CONTEXT OF GLOBALIZATION (A GEORGIAN CASE-STUDY) 3-4 50

Igor LIUTY, SMALL AND MEDIUM BUSINESSES Rufat KULIEV IN A GLOBALIZING WORLD 3-4 64

Avtandil SILAGADZE, Mikhail GENESIS OF POST-COMMUNIST TOKMAZISHVILI, ECONOMIC DEVELOPMENT: Tamar OBSTACLES AND PROSPECTS ATANELISHVILI (A GEORGIAN CASE-STUDY) 3-4 72

Giorgi TAX POLICY AND KUPARADZE FOREIGN DIRECT INVESTMENTS (A GEORGIAN CASE-STUDY) 3-4 82

GEOCULTURE

Oleg THE CONFLICT IN NAGORNO-KARABAKH: KUZNETSOV IS IT A “CLASH OF CIVILIZATIONS”? How Samuel Huntington’s Theory Explains Its Culturological Dimension 1-2 82 Volume 7 Issue 3-4 2013 167 THE CAUCASUS & GLOBALIZATION

Author Article No. Pp.

Ruslan REVIVAL OF THE NORTH CAUCASIAN UMMA KURBANOV IN THE LIGHT OF RUSSIA’S FOREIGN POLICY FLAWS IN THE ISLAMIC WORLD 1-2 94

Ansgar RELIGIOUS EDUCATION JÖDICKE IN STATE SCHOOLS IN AZERBAIJAN, GEORGIA, AND ARMENIA. DEMOCRATIC POLITICS OF RELIGION AND THE PLURALITY OF RELIGIOUS REPRESENTATIONS 1-2 102

Farman THE RELIGIOUS FACTOR KULIEV IN THE GEOPOLITICS OF RUSSIA AND TURKEY IN THE NORTHERN CAUCASUS 1-2 110

Akushali SHAFI JALAL, ISLAM AND THE SOCIOPOLITICAL Rajab DEVELOPMENT OF SHAKHABASOV NORTH CAUCASIAN SOCIETY (A DAGHESTAN CASE-STUDY) 3-4 96

Gulfiya GLOBALIZATION AND ARTISTIC CULTURE BAZIEVA IN KABARDINO-BALKARIA 3-4 101

Lyubov RELIGIOUS CULTURE OF THE PEOPLES OF SATUSHIEVA THE NORTHERN CAUCASUS AND THE RUSSIAN AUTHORITIES (FIRST HALF OF THE 19TH CENTURY) 3-4 105

Leyla HOW BAHA’ISM TRAVELLED FROM THE EAST MELIKOVA TO THE WEST (IDEOLOGICAL EVOLUTION OF THE NEO-UNIVERSALIST RELIGIOUS DOCTRINE) 3-4 115

GEOHISTORY

Jamil ALI MARDAN BEK TOPCHIBASHEV: LIFE, HASANLI EPOCH, COMRADES-IN-ARMS (THE 150TH ANNIVERSARY OF HIS BIRTH) 1-2 120

Sudaba ETHNOCULTURAL ASPECTS OF ZEINALOVA THE FORMATION OF EUROPEAN COMMUNITIES IN THE CAUCASUS (19TH-BEGINNING OF THE 20TH CENTURIES) 1-2 147

Zurab A QUESTION MARK IN THE HISTORY OF PAPASKIRI GEORGIAN-SELJUK RELATIONS ON THE EVE OF THE BATTLE OF MANZIKERT 3-4 131 168 Volume 7 Issue 3-4 2013 THE CAUCASUS & GLOBALIZATION

Author Article No. Pp.

Oleg THE TREATY OF GULISTAN: 200 YEARS AFTER KUZNETSOV (THE RUSSO-PERSIAN WAR OF 1804-1813 AND THE TREATY OF GULISTAN IN THE CONTEXT OF ITS 200TH ANNIVERSARY) 3-4 141

Fazil THE RUSSIAN EMPIRE IN TRANSCAUCASIA: BAKHSHALIEV AGRARIAN POLICY OF THE LATE 19TH-EARLY 20TH CENTURIES 3-4 157