HARVARD UNIVERSITY JOHN F. KENNEDY SCHOOL OF GOVERNMENT Caspian Studies Program

U.S. POLICY TOWARD THE CASPIAN REGION: RECOMMENDATIONS FOR THE BUSH ADMINISTRATION

By Brenda Shaffer

Caspian Studies Program Policy Brief, No. 5

July 2001

U.S. POLICY TOWARD THE CASPIAN REGION: RECOMMENDATIONS BRENDA SHAFFER

U.S. Policy toward the Caspian Region: Recommendations for the Bush Administration

Brenda Shaffer

Dr. Brenda Shaffer is Research Director of the Caspian Studies Program at Harvard University’s John F. Kennedy School of Government. * * *

EXECUTIVE SUMMARY THE CASPIAN REGION: ADVANCEMENT OF U.S. NATIONAL As the Bush Administration assesses how to INTERESTS best promote U.S. national interests through its policies toward the Caspian region, it could A number of U.S. national interests can be benefit from considering the following policy advanced through the successful articulation proposals and guidelines and taking note of a of policies in the Caspian region, which is few lessons derived from the results of the understood to encompass the Caspian littoral previous Administration’s policies.1 The states (Russia, Iran, , Kazakhstan, resources of the Caspian region can make an and Turkmenistan) as well as neighboring important contribution to energy states that belong to the security and energy security. However, the importance of the transport picture of the sea basin (Georgia, region extends beyond energy; extensive ties Armenia, Turkey, and Uzbekistan). These with the states of the Caspian region can interests are: contribute to improvement of Washington’s relations with the Muslim world and 1. Viability and stability of global energy encourage U.S.-oriented regimes and open supplies and diversification of supply societies. In order to better advance these from areas other than the Persian Gulf. aims, the U.S., first and foremost, needs to As President Bush has noted: “Diversity conduct a comprehensive and coherent policy. is important, not only for energy security but also for national security.”2 Caspian The U.S. should continue to promote the discoveries are at least equal to and may peaceful resolution of the conflicts in the prove larger than those in the North Sea. region (in this area, the Bush Administration The Caspian’s resources are located in should be commended for its efforts to help countries possessing predominately pro- resolve the Nagorno-Karabagh conflict). The Western orientations that are not currently U.S. should continue to conduct a policy that members of OPEC. The addition of is cooperative with Russia and not allow the Caspian oil could weaken the OPEC area to become a zone for U.S.-Russian monopoly, providing greater leverage over rivalry. At the same time, the U.S. should be the pricing policies of Saudi Arabia and firm in its commitment to uphold the other OPEC countries, ultimately independence of the states of the Caspian contributing to lower world oil prices. region and resist potential Russian attempts to compromise that independence. 2. Promotion of the well being of Turkey, an important U.S. ally, now in the midst of a financial crisis. Ankara is trying to 1 The opinions in this brief are those of the author alone. She would like to acknowledge the extensive contributions of Emily Van Buskirk and Melissa Carr, 2Remarks of President George Bush to the Capital City as well as thank Graham Allison, Fiona Hill, Peter Partnership, St. Paul, Minnesota, May 17, 2001, Rutland and C. Maury Devine for their important http://www.whitehouse.gov/news/releases/2001/05/2001 comments, and Seth Jaffe for editorial assistance. 0517-2.html.

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build influence in and derive economic prosperous states with pro-American benefit from cooperation with the Caspian orientations would only serve to enhance region, especially in the energy sphere. U.S. security, removing potential future Turkey’s economy can profit from the trouble spots that could embroil us. transit of Caspian oil and gas through its territory, and from access to this energy HOW TO PROMOTE U.S. NATIONAL source. INTERESTS IN THE CASPIAN REGION

3. Improved relations with the Muslim The Clinton Administration recognized the world. The United States has problematic importance of the Caspian region in the relations with a large portion of states in promotion of America’s national interests and the Muslim world. With the Soviet demise, developed certain key policies targeted at a tremendous opportunity was created for advancing those interests. However, its the U.S.: the establishment of six new policies often compromised the goals they set states whose majority population is out to achieve. For instance, the previous Muslim, most of whom strive for close administration declared its support for the association with the West and increased designation of Baku-Tbilisi-Ceyhan as the cooperation with the U.S. Through strong “Main Export Pipeline” (MEP) for Caspian relations with the Muslim states in the oil, primarily as a means of reinforcing the Caucasus and Central Asia, the U.S. can independence of the states of the region. decisively signal that it is not interested in Unfortunately, maneuvers around the pipeline a conflict with the Muslim world as a and Russian-U.S. rivalry over energy politics whole. Moreover, through strengthening complicated conflict resolution efforts in the the independence of these Muslim states— Caucasus, destabilizing the region and many of which have made progress toward actually endangering the independence of democratization and have a clear certain Caspian states. Moreover, Washington separation between religion and state—the failed to invest sufficient resources in solving U.S. might encourage these trends in the regional conflicts and in developing methods broader Muslim world. to limit Russia’s opposition to the proposed pipeline. Essentially, the manner in which 4. Promotion of U.S. economic interests. Washington implemented its policies was at American companies and U.S.-based times at odds with the goals that Baku-Tbilisi- multi-national companies have invested Ceyhan was originally meant to promote. significant funds in the Caspian region, especially in the development of energy In many instances, Washington failed to resources. Good political relations with the coordinate its disparate policies and states of the region provide important consequently sent mixed signals. For support for American investments and example, the Clinton Administration publicly encourage the growth of these investments. declared the importance it attached to U.S. legislation establishing the relations with the states of the region, transparency and legality of U.S. especially Azerbaijan. Yet, in the sphere of companies’ actions abroad serves as a concrete actions, the previous administration good example for local states and also did little to waive or combat the sanctions helps to promote these practices. imposed by Congress on Azerbaijan in the form of Section 907. Baku is clearly 5. Promotion of the independence of the orientated toward the U.S. and vigorously states in the Caucasus and Central Asia; promotes U.S. policies in the region; but at their successful democratization; and the same time, the country suffers under U.S. general peace, stability and prosperity sanctions, a fact not lost on the Azerbaijani in the region. The emergence of a group people at a grassroots level. Such of independent, democratic, and contradictions create confusion and

JULY 2001 2 U.S. POLICY TOWARD THE CASPIAN REGION: RECOMMENDATIONS BRENDA SHAFFER disappointment for the Caspian states, to bolster the political independence of especially since there is little popular Caspian states. The U.S. government must understanding of the dynamics of the U.S. continue to appreciate the fact that BTC is foreign policy process, the role of Congress, not solely a private economic project; there and the influence of U.S. domestic are geopolitical stakes involved as well. constituencies. Credible commitments are crucial in this region, as they are 2. Promote the establishment of everywhere. It would be better to create no arrangements and infrastructures for the expectations for U.S. involvement than to creation of regional gas supplies in the disappoint local governments and their South Caucasus . Significant new gas peoples. supplies have recently been discovered in the Caspian region, especially in Azerbaijan. RECOMMENDATIONS: With Azerbaijan’s agreement, the U.S. should promote the construction and 1. Increase diplomatic efforts and revitalization of pipelines for the utilization encourage financial investment to of some Caspian gas resources to supply the promote the flow of Caspian energy states in the South Caucasus, potentially as resources along an East-West corridor part of a Nagorno-Karabagh settlement (Baku-Tbilisi-Ceyhan). In order for package. The U.S. should also encourage the Caspian oil to make an effective World Bank to devote resources to this contribution to diversification of energy project and to facilitate investment from sources, it must flow to world markets via other states. Use of local gas supplies can multiple routes, including an east-west enhance regional security and stability by pipeline. The Baku-Tbilisi-Ceyhan pipeline lessening the region’s dependence on Iran will ensure that a large portion of Caspian and Russia for electricity and heating, oil flows through non-OPEC countries and eliminating a source of vulnerability to countries that do not have competing political dictates. interests (Russia and Iran both have extensive oil and gas supplies). As President 3. Attempt to communicate clearly with Bush pointed out, “Over dependence on any Russia about U.S. policies in the region, one source of energy, especially a foreign explaining the target of certain measures source, leaves us vulnerable to price shocks, (such as Iran), and clarifying that the supply interruptions, and, in the worse case, exclusion of Russia is not the objective of blackmail.” President Bush’s task force on American policies. The U.S. is capable of energy security, led by Vice President crafting a comprehensive policy that keeps Cheney, recommended that the U.S. step up the Caspian region from becoming a zone of efforts to develop export routes; it also U.S.-Russian rivalry, decreasing tension in specifically called on the President to direct the region. U.S.-Russian relations in the the Secretaries of Commerce, State and region can be converted from a “win-lose” Energy to “support the BTC oil pipeline as it to a “win-win” situation for both states. For demonstrates its commercial viability,” and example, efforts can be made to encourage to work with companies and countries to Russian corporate involvement in East-West establish the conditions necessary for BTC pipeline projects, increasing the likelihood to materialize.3 of these projects’ becoming actual and providing economic benefits to Russia. It The building of this pipeline serves a should be made clear to Moscow that number of key U.S. strategic goals, foremost pipelines that avoid the Bosphorus, such as energy security, and it additionally promises BTC, actually serve Russian interests; they avoid additional traffic in the straits and thus

avert a potential challenge to the free 3 National Energy Policy, Report of the National Energy Policy Development Group, May 2001. passage regime in place, the preservation of

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which is viewed by Moscow as a vital region—for instance, destabilization through national interest. local forces or even the introduction of military troops—must enter into U.S. 4. Invest diplomatic capital to solve the calculations in assessing Russia’s potential conflicts that afflict the Caspian region, actions in the Caspian. Actions resulting especially the Nagorno-Karabagh conflict. from U.S.-Russian rivalry can be very Secretary of State Powell should be destabilizing to the region and, as a result, applauded for the investment he has made in contrary to U.S. goals. Attempts by the U.S. a peace settlement for Nagorno-Karabagh as to push Russia out of the region would be one of the first major foreign policy equally destabilizing. Russian-U.S. initiatives of the new Administration. As cooperation in the Nagorno-Karabagh peace Secretary Powell pointed out, “A peaceful negotiations contributed to the talks’ settlement is key to the future of the South success. Caucasus and the greater region.”4 These efforts should continue and in full 6. At the same time, fulfill U.S. cooperation with Russia, if possible. commitments to the states of the region to help them preserve their independence, 5. Promote security arrangements in the and simultaneously find ways to Caspian region that Russia perceives as constructively deter Russia from compatible with its interests, and thus has undermining these states’ interests. a stake in preserving rather than Secretary Powell stressed this point when undermining. Washington should strive to referring to the U.S. commitment to the co-sponsor security arrangements and peace independence of the Republic of Georgia efforts in the region with Russia while during his appointment hearing. Moreover, developing structures that Moscow will the U.S. must prevent Moscow from taking perceive as at least minimally beneficial. advantage of the peace process being Much of the instability that has plagued the conducted between Armenia and Azerbaijan region has resulted from the actions of rival as a means of forcing the redeployment of powers: among them, the U.S., Russia, Iran more Russian forces in the Caucasus. The and Turkey. In the early 1990s, Moscow’s U.S. should oppose the use of Russian activities contributed to the escalation of forces for any long-term peacekeeping many local disputes in the region to all-out missions in the Caucasus. Overall, a wars. permanent foreign peacekeeping contingent of any composition should be Overall, Russia is strategically inferior to the avoided in the Caucasus . U.S., but in the Caspian region, Moscow retains levers of influence that the U.S. 7. Make a serious effort to conduct a cannot, or is not, willing to apply: i.e., consistent, clear, and coordinated policy. Russian “relevant” versus American In Congressional hearings, State Department “relative” power. Moreover, some actions representatives have referred to Azerbaijan are available to Russia at much lower costs as one of the “cornerstones of U.S. policy in than they are to the U.S., such as the use of the Caspian region,” while, at the same time, military troops. Certain policies, like the U.S. Congress enacted legislation that obstructing U.S. pipeline plans, cost Russia bars direct government assistance to less to implement than they cost the U.S. to Azerbaijan. One of the important ways to undo or reverse. The applicable resources achieve consistency in policies directed that Russia has at its disposal in the Caspian toward the region would be for the Executive to seek the repeal by Congress of

4 Section 907 of the Freedom Support Act or Remarks by Secretary of State Powell, Key West to seek changes in, waive, or circumvent this Florida, April 3, 2001. U.S. Department of State, Office of the Spokesman.

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legislation as much as legally possible.5 due in part to Russian fears of Iranian- Section 907 is prejudicial towards sponsored Islamist activities. Additionally, Azerbaijan—which has expressed a the U.S. failed to correctly read Iran’s willingness to conduct a pro-American policies in the South Caucasus and foreign policy—and projects an inconsistent Chechnya, wrongly assuming that Tehran U.S. policy toward the region. Moreover, if would back Muslim actors. The U.S. has had the opportunity to often attached too much importance to participate in more U.S.-sponsored training religious identity, and often attaches programs and initiatives, the security of the religious motivations to various national region as a whole (including Armenia) movements: for instance, in Chechnya, the would improve. Mixed signals and the conflict was described as being between corresponding disappointment resulting “Russian” soldiers and “Islamic” rebels. from the lack of consistent support from the U.S. have led to the emergence of the first 9. Changes in Iran that may emerge in the buds of anti-Americanism in Central Asia coming months could allow a more and the Caucasus. The U.S. must work to cooperative relationship to develop curb this development, and preserve its own between Tehran and Washington. In credibility by following through with its efforts to renew cooperation with Iran, commitment to the independence of these Washington should be careful not to states. compromise the interests or independence of states like Azerbaijan and 8. Place less emphasis on religious identity Uzbekistan—which have been very when assessing policies and coalitions in cooperative with Washington on its Iran the Caspian region. Religion is only one policy. Specifically, Washington should not facet of identity in the Caspian region. reshape its pipeline policy with the intent of Ethnic, state, regional and other identities suiting Iran’s preferences. In addition, it are extremely important. Most of the states should discourage European governments of the region are overwhelmingly secular, from adopting policies compromising the and religion need not serve as a divide interests of Azerbaijan and Uzbekistan. As a between the U.S. and these countries. result of U.S. encouragement, some Caspian Overemphasis on the Muslim factor by states have stood up to Iran (e.g. barring American policymakers has led to erroneous Iran’s participation in some energy projects, assessments and poor policy choices over supporting ILSA, and foiling Iranian the last decade. For example, the U.S. proliferation attempts), often at the expense mistakenly assumed that Russia would of aggravating their relations with Tehran. cooperate with Washington in restraining These states received only minimal concrete Iranian efforts to obtain nuclear weapons, rewards from the Clinton Administration despite their pro-U.S. orientation and support for Washington’s policies in the 5 Section 907 prohibits U.S. assistance (with the area. The U.S. should continue to devote exception of humanitarian assistance and assistance for significant efforts to developing its nonproliferation and disarmament programs) to the government of Azerbaijan under the Freedom for Russia cooperation with Azerbaijan and Uzbekistan and Emerging Eurasian Democracies and Open Markets and should assist these states in thwarting Support Act of 1992 (also known as the Freedom subversive efforts by Iran. Support Act) “until the President determines, and so reports to the Congress, that the Government of Azerbaijan is taking demonstrable steps to cease all 10. Work to contain and reduce the blockades and other offensive uses of force against implications of the Afghanistan conflict, Armenia and Nagorno-Karabakh.” The legislation which is a source of actual, and in the imposes sanctions only on Azerbaijan, despite the fact future, potentially increasing instability in that both Armenia and Azerbaijan waged a war over the the Caspian region and the Middle East. territory of Nagorno-Karabagh. The conflict situation allows Afghanistan to

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serve as center of terrorist operations against diminish the threat of environmental U.S. targets and its allies in the region and accidents should be increased. beyond. The Afghan issue provides an opportunity for U.S. cooperation with both 12. Alter the thrust of U.S. democratization Russia and Iran, because the central interests programs in the region to emphasize the of the three states are congruent: checking establishment of open society the threats from the Taliban, halting drug infrastructure (e.g. wide internet access, trafficking, lessening the danger of spillover, independent press and an independent destroying terrorist operation bases and and qualified judiciary), while stemming the flow of refugees. Together, as recognizing that local leadership must a basis for further cooperation, the three guide these democratization efforts. states could conduct activities aimed at Democratization is a long process. improving the situation in Afghanistan. Elections and election monitoring should not be the focal point of the whole 11. Recognize the extensive Turkish democratization policy nor should they be domestic opposition to expanded traffic the only barometer of success. Heavy through the Bosphorus and design emphasis on election monitoring has responsive policies that can reduce contributed to a public cynicism about chances of accidents. Moreover, the elections. Democratization should instead be Administration should identify the geared towards long-term goals. The U.S. Bosphorus question as a potential future must be perceived as a friend in the hot topic and work to prevent it from democratization process, and commend the developing into a source of conflict positive steps in this regard whenever between states in the region. Currently, possible. The previous Administration often opposition is becoming more vociferous in recognized progress by making more Turkey that increased tanker flow in the demands, creating confusion and animosity Bosphorus will lead to accidents that could among the governments in the region. endanger large numbers of people in Moreover, foreign election monitoring Istanbul and cause environmental disaster. created wide resentment in Central Asia and The flow of high volumes of Caspian oil the Caucasus; alternative programs through the Turkish straits would lead to supporting the rule of law and infrastructure increased traffic and a corresponding for information exchange would better increase in the chance of accidents. Turkey promote democratization and produce less cannot legally regulate the flow of traffic in local resentment. the straits or obstruct the “free passage regime” which was established by the 1936 13. Increase people -to-people exchange Montreux Treaty. initiatives, professional development opportunities, and specialized training President Bush’s energy task force programs with each of the countries of recognized the importance of this issue, the region. National Security Advisor stating in its report, “Baku-Tbilisi-Ceyhan Condoleezza Rice explicitly made this will help mitigate maritime risks in the excellent recommendation in her Foreign crowded Bosphorus Straits.” BP Amoco and Affairs article of January 2000. The U.S. Shell have recently expressed recognition of should create opportunities for Americans the potential environmental and safety and the various peoples of the region to hazards of increased tanker traffic in the le arn more about each other and each other’s Bosphorus, and are aware that they cannot countries: opportunities for educational, easily disregard this Turkish concern. cultural, business, and other types of Chevron has made important efforts and partnerships and collaboration. Interactions adopted, on its own accord, regulations that among citizens and civil societies, combined increase the safety of its tankers. Efforts to with strong economic relations, are key

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pillars in good bilateral relationships. These decisively impact the efficacy of future U.S. pillars, or contact points, are critically efforts to mobilize support for, and trust in, important as fall-back relationships in times American polices. Policy officials in the of misunderstandings when formal Caspian region were disturbed to learn government to government contact and/or through the press about some of the U.S. security relationships are strained. reorganization measures in the government bodies and personnel dealing with the 14. The U.S. should support and focus region. Senior U.S. officials prior to some of its resource allocation for the implementation of these changes can easily continued development of local and avoid such damage in the future by provincial zones of trade as well as the providing direct and thorough explanations cross-border cooperation that is on the of proposed changes to the representatives rise despite the many obstacles on the of the states of the region. state-to-state level. Examples of such trade and cooperation can be found between · The U.S. should continue to give careful Armenia and Turkey, Azerbaijan and thought to the names and labels it uses to Armenia (taking place in Georgia), and refer to the states of the Caspian region Azerbaijan and the Azerbaijani-populated and to the structure and names of the provinces in Iran. Establishing these trade divisions within the government agencies and economic ties encourages peace, the that deal with these states. The U.S. flow of ideas, and general cooperation in the should not use names that emphasize the region. The U.S. should also promote regional states’ former status as part of investment to these regions, drawing on the the USSR. In the recent past, the U.S. success stories that already exist, while labeled the Caspian states the “Newly- simultaneously pushing for more Independent States (NIS),” or the “Former cooperation through technical assistance and Sovie t Union,” as if their independence even conferences in the region on cross-border after 10 years is still conditional. trade. Furthermore, in many U.S. government offices, the countries have been dealt with in POLICY GUIDELINES the framework of departments dealing predominately with Russia, signaling that In conducting its policy in the region, the U.S. related to these states through the Washington should consider the following prism of Moscow. factors: The Bush Administration has taken · It is easy to ruin U.S. credibility in the commendable steps in the National Security region and difficult to rebuild it. The Bush Council to change the organization of the Administration should be careful not to department dealing with the Caspian states, make quick or dramatic shifts in what have and placed them in the NSC as part of a been cornerstones of the previous directorate that includes Turkey. There have administration’s policies. If the U.S. been similar efforts in the State Department removes support for ‘cornerstone’ policies, to reassign the departments working on this Washington will only damage its credibility region. Offices for Central Asia and the and find it more difficult to build future Caucasus should be placed within the major partnerships. Major policy shifts will cause U.S. Government agencies responsible for confusion in the region, especially since foreign relations, as part of a single division. local regimes have taken great risks to be In addition, in agencies where these labels good partners with America. Before remain, the U.S. should change the names of Washington makes a major shift on any of the departments dealing with the Caspian its Caspian policies, it must factor in the region, removing the labels “Newly costs to U.S. credibility; credibility will Independent states” or “Former Soviet

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Union” and replacing them with successful, in advancing the peace process alternatives: Central Asia and the Caucasus, between the two sides. At the end of that the Caspian Region, or the Black Sea round of negotiations, the co-chairs Region are potential substitutes. The U.S. announced that a second summit would take could also place the region’s states in place in June, though this date was combinations with other countries in subsequently postponed, presumably due to divisions labeled European, Eastern failure to further advance the peace process. European, or Eurasian. Great expectations are linked to the recent negotiations. Failure to achieve an IMPORTANT UPCOMING EVENTS effective agreement could trigger renewed violence between Azerbaijan and 1. Summer 2001: Potential increased Armenia, perhaps even war. The U.S. social and political turmoil in Iran. Grass should continue and intensify its efforts to roots political activity in Iran is generally promote peace in the region. Successful greater in the summer. Clashes with anti- negotiations will demand increased Western reform elements may emerge as the result of assistance and involvement in the the heightened political activity in implementation of the peace accord, connection with the recent June 8th including efforts (funding, coordination) for presidential elections. Moreover, President refugee resettlement and the construction of Khatami has shown special interest in roads and other infrastructure. The U.S. and foreign policy activity toward the Caspian agencies like the World Bank should prepare region and Russia; encouraged by his newly for immediate action to consolidate the extended mandate, he may initiate policy peace if an agreement is reached. advances toward the region in the near future. 4. Summer 2001: Possible renewed confrontations among the government 2. Summer/Fall 2001: Russian-Iranian forces in Uzbekistan and Kyrgyzstan and cooperation in fields that enhance Iranian subversive elements, such as the IMU. ability to acquire weapons of mass These developments should be monitored destruction and missile production. In closely. recent months, both Russia and Iran have reiterated their commitment to further 5. August 2001/Ongoing: Iran and Libya cooperation in the military sphere. During Sanctions Act of 1996 (ILSA) renewal vote Khatami’s visit (March 2001) to Moscow, in Congress. It is not expected that Congress he expressed explicit interest in further will cancel ILSA this year, especially since collaboration in the field of ballistic missile little change has occurred in regards to development. New developments in Iran’s programs to achieve weapons of mass Russian-Iranian military cooperation may destruction and its support for terror against obligate the U.S. to take more assertive American targets and against its allies. actions, which could lead to heightened tension between Moscow and Washington, While highly unlikely, removal of ILSA straining U.S.-Russian cooperation in the legislation would be interpreted by the states Caspian region and contributing to general of the region as a major U.S. policy shift instability. with strong implications for the depth of relations with the Caspian countries 3. Summer/Fall 2001: Activity in the specifically and for U.S. pipeline policy on peace process on the Nagorno-Karabagh Caspian energy resources more generally. If conflict. In April, the U.S. hosted a changes become imminent, the U.S. should significant and high profile OSCE sponsored update and consult with the states of the summit for the Presidents of Armenia and region on the implications of new Azerbaijan, which was reportedly extremely legislation. Policymakers in the region

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should not be initially informed through the in Abkhazia, Ossetia, and Ajaria, the U.S. press or briefings before the general public. Administration may need to respond. Russia may even use this case as a test of the The National Energy Policy Development new U.S. Administration’s resolve to protect Group recommended that the President the independent interests of the former establish a task force to review sanctions Soviet states. policies. The task force will at some time make recommendations concerning U.S. Our research team at the Caspian Studies sanctions against Iran. Program continues to track these events and developments, and welcomes involvement in 6. Ongoing: If Russia continues to exert the continued debate about the evolution and pressure (through mechanisms such as the articulation of U.S. policy toward this visa regime, or cutting off electricity strategic region. We hope for increasing supplies); or escalates in its aggression cooperation and interaction between the toward Georgia; or increases indirect or policy and academic communities to ensure a begins direct support for the separatist forces broadly successful and effective U.S. policy.

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The Caspian Studies Program seeks to locate the Caspian region on the maps of the American policy-making community as an area in which the U.S. has important national interests and where U.S. policy can make major differences. Through its research and teaching, the Caspian Studies Program raises the profile of the region's opportunities and problems, and utilizes Harvard resources to train new leaders who will shape the future of the region. The Caspian Studies Program is made possible by a generous gift from the United States-Azerbaijan Chamber of Commerce and a consortium of companies led by ExxonMobil, Chevron, Aker-Maritime, CCC, and ETPM.

The Caspian Studies Program Policy Brief Series is directed by Brenda Shaffer. It is edited and produced by the Caspian Studies Program staff. CSP would like to thank Seth Jaffe for providing additional editorial assistance on this brief. The opinions expressed in this paper represent those of the author alone, and are not necessarily endorsed by Harvard University, the Caspian Studies Program or its sponsors.

For more information about the author, the Policy Brief Series, or the Caspian Studies Program, please contact: The Caspian Studies Program The Strengthening Democratic Institutions Project Belfer Center For Science and International Affairs Kennedy School of Government, Harvard University 79 JFK Street Cambridge, Ma 02138 Phone: (617) 496-1565 Fax: (617) 496-8779 Email: [email protected] Web site: www.ksg.harvard.edu/bcsia/sdi

Graham Allison, Chair Melissa Carr, Program Director Brenda Shaffer, Research Director Emily Goodhue, Staff Assistant Emily Van Buskirk, Research Assistant