CAUCASIAN REVIEW OF INTERNATIONAL AFFAIRS Vol. 3 (3) Summer 2009 GEORGIA & RUSSIA : CONTRADICTORY MEDIA COVERAGE OF THE AUGUST WAR HANS -GEORG HEINRICH & KIRILL TANAEV GEORGIA AND THE SYSTEMIC IMPACT OF THE FINANCIAL CRISIS MARCO GIULI RUSSIA , EU, NATO AND THE STRENGTHENING OF THE CSTO IN CENTRAL ASIA IRINA IONELA POP TURKEY : REGIONAL ELECTIONS AND THE KURDISH QUESTION EDDY EKREM GÜZELDERE POVERTY REDUCTION THROUGH PRIVATE SECTOR DEVELOPMENT IN GEORGIA : POLICY , PRACTICE AND PERSPECTIVES VLADIMER PAPAVA THE MERGING OF RUSSIA ’S REGIONS AS APPLIED NATIONALITY POLICY : A SUGGESTED RATIONALE MATTHEW DERRICK ISSN: 1865-6773 www.cria -online.org EDITOR-IN-CHIEF: Nasimi Aghayev, LL.M.Eur. EDITORIAL BOARD: Dr. Tracey German (King’s College London, Dr. Robin van der Hout (Europa-Institute, United Kingdom) University of Saarland, Germany) Dr. Andrew Liaropoulos (Institute for Dr. Jason Strakes (Analyst, Research European and American Studies, Greece) Reachback Center East, USA) Dr. Martin Malek (National Defence Dr. Cory Welt (Georgetown University, USA) Academy, Austria) INTERNATIONAL ADVISORY BOARD: Prof. Hüseyin Bagci , Middle East Technical Prof. Elkhan Nuriyev , Head of the Centre for University, Ankara, Turkey Strategic Studies under the auspices of the President of the Republic of Azerbaijan Prof. Hans-Georg Heinrich, University of Vienna, Austria Dr. Roy Allison, London School of Economics and Political Science, London, UK Prof. Edmund Herzig , Oxford University, UK Dr. Michael Emerson , Centre for European Prof. Rüdiger Kipke , University of Siegen, Policy Studies, Brussels, Belgium Germany Dr. Abbas Maleki , Former Deputy Foreign Prof. Robert Legvold , Columbia University, Minister of Iran. Currently, Director of USA International Institute for Caspian Studies and Chairman of Sharif Research Centre on Public Prof. Werner Münch , former Prime Minister Policy, Tehran, Iran of Saxony-Anhalt, former Member of the European Parliament, Germany MANAGING DIRECTOR: Farhad K. Rustamov The Caucasian Review of International Affairs (CRIA) is a quarterly peer-reviewed free, non- profit and online academic journal registered in Germany. The Review is committed to promote a better understanding of the regional affairs by providing relevant background information and analysis, as far as the Caucasus in general, and the South Caucasus in particular are concerned. CRIA also welcomes lucid, well-documented papers on other countries and regions including especially Turkey, Iran, Central Asia, Russia, Ukraine, Eastern Europe as well as on all aspects of international affairs, from all political viewpoints. CRIA’s primary goal is to produce an efficient dialogue and exchange of ideas on the Caucasus and beyond among practitioners, researchers and theorists from the region itself and abroad. 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VOL. 3 (3) - SUMMER 2009 TABLE OF CONTENTS Note from the Editor-In-Chief (p. 242-243) Nasimi Aghayev RESEARCH PAPERS Georgia & Russia: Contradictory Media Coverage of the August War (pp. 244-260) by Hans-Georg Heinrich & Kirill Tanaev Georgia and the Systemic Impact of the Financial Crisis (pp. 261-277) by Marco Giuli Russia, EU, NATO and the Strengthening of the CSTO in Central Asia (pp. 278-290) by Irina Ionela Pop Turkey: Regional Elections and the Kurdish Question (pp. 291-306) by Eddy Ekrem Güzeldere Poverty Reduction Through Private Sector Development in Georgia: Policy, Practice and Perspectives (pp. 307-316) by Vladimer Papava COMMENT The Merging of Russia’s Regions as Applied Nationality Policy: A Suggested Rationale (pp. 317-323) by Matthew Derrick BOOK REVIEW “China’s Energy Geopolitics: The Shanghai Cooperation Organization and Central Asia” by Thrassy N. Marketos (pp. 324-325) Review by Jan Künzl INTERVIEW “Widespread discontent in Russia may well lead to further resentment towards groups of Caucasian origin” (pp. 326-330) Interview with Katerina Strani, Researcher, Greek Parliament NOTE FROM THE EDITOR -IN -CHIEF Nasimi Aghayev August 2009 has arrived, and events in the Caucasus continue to move quickly, with some notable developments to mention. Negotiations on the Nagorno-Karabakh conflict between Armenia and Azerbaijan intensified, which has ramifications for not only the two countries but also for the attempts to normalise relations between Turkey and Armenia. Both issues are fraught with complications: despite the initial activation phase in May and June, the latest Moscow meeting between both presidents did not manage to produce a framework agreement, much hoped for and hyped by the Minsk Group in advance. The talks seem to get stuck primarily on the modalities of an eventual “legally binding expression of will” on the final legal status of the region and its interim status. Also, the phased withdrawal of Armenian forces from the seven occupied districts surrounding Nagorno-Karabakh according to the 5+2 scheme appears to be a topic of contention. Meanwhile, the Minsk Group has worked out an updated version of the so-called Basic Principles which is expected to be discussed at the Autumn meeting between both presidents. Whether it will be possible to come to terms on the contentious issues and sign a framework agreement before the end of 2009 remains to be seen. If no progress is achieved in the current year, 2010 will be much more difficult due to the fact that there will be parliamentary elections in Azerbaijan. As the long history of negotiations indicates, it is usually impossible to produce any tangible results in negotiations in election years. As regards the Turkey-Armenia relationship, Azerbaijan indirectly plays a key role, wishing to ensure that normalised relations ensue and do not precede the final resolution of the Nagorno-Karabakh conflict in order to avoid any toughening of Armenia’s negotiating positions. Meanwhile, Georgia continues to be in the spotlight, receiving a high-profile visit by Vice- President Biden, who reiterated US support for Georgia and explicitly acknowledged its NATO aspirations in a positive light. This may have appeared rather contradictory for Russia, especially after Obama’s “reset” visit to Moscow in which sparks of hope for improved relations were kindled. And concerning the Georgian-Russian conflict, Moscow in the meantime has failed to garner any international support for the recognition of Abkhazia and South Ossetia – even from such traditional allies as Belarus and Armenia, which demonstrates the fiasco of Russia’s plans for repeating the Kosovo scenario and presages the continuation of the international isolation of both breakaway regions even after their recognition by Russia. The intergovernmental agreement on Nabucco signed in Ankara raised hopes for the gas pipeline’s prospects. However, Turkmenistan’s recent renewal of its claims to two oil fields already developed by Azerbaijan in the Caspian Sea (and the unexploited one located on the borderline between the sectors of both countries), and its plans to sue Azerbaijan again shadow this problematic energy project, so essential for Europe’s long-term energy security. After successful mutual top level visits during the last years both countries seemed to have smoothed their dissonance stemming from the 1990s. Hopefully, it will be possible to reach a settlement, thus avoiding placing additional stones on an already rugged path for the project. In addition to these and other happenings, such as tensions mounting in the North Caucasus after a new spate of attacks launched by insurgents, and political upheaval in Iran (all of Note from the Editor-in-Chief 242 CAUCASIAN REVIEW OF INTERNATIONAL AFFAIRS VOL . 3 (3) – SUMMER 2009 © CRIA 2009 which are presented weekly and in critical detail by our Caucasus Update ), now more than ever is the time for in-depth analysis of Caucasian affairs – and the Summer 2009 edition provides a wealth of it. A meticulous assessment of the international media coverage of the Georgian-Russian war of August 2008 is presented alongside scientifically