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Small States, Regional Integration and Globalization at the University of Iceland THE SMALL STATES OF THE SOUTH CAUCASUS: GEORGIA, ARMENIA AND AZERBAIJAN DR. ROBIA CHARLES 1 AGENDA Introduction Political Integration Relations with the EU and NATO Territorial Conflicts Economic Integration 2 INTRODUCTION 3 SOUTH CAUCASUS: AN INTRODUCTION Incorporation into the Russian Empire First Republic Union Republics within the USSR Early 1800s 19181920/1921 19221991 Independence 1991 4 5 QUICK FACTS Religion Language Ethnic groups Population Size comparison Armenia Georgia Azerbaijan 95% Armenian Apostolic 84% Georgian Orthodox, 10% Muslim 60% Shia, 30% Sunni, 3% Orthodox Armenian հայերեն լեզուն Georgian ქართულ ენაზე Azeri Azərbaycan dili 98% Armenian, 1.3% Russian 3 million 83% Georgian, 7% 90% Azeri, Lezgin 2.2%, Azeri, 6% Armenian, 2% Russian 2% Russian 4.5 million 9.5 million 6 Belgium (29,743 km2) Lithuania (69,700 km2) Austria (86,600 km2) GEORGIA Presidential republic Western integration Independence from Russia South Ossetia and Abkhazia Transit Black Sea 7 ARMENIA Presidential republic Landlocked, transportation and economic isolation Military and economic dependence on Russia* Good relations with Iran Nagorno Karabakh Turkey 9 AZERBAIJAN Presidential republic Tenuous alliance with Turkey Energy supplier Nagorno Karabakh Caspian Sea 11 POLITICAL INTEGRATION* The South Caucasus between Russia and the EU (the Near Abroad) Rejoining the world as independent states after 1991 Behind on democratic reform EU European Neighborhood Policy>Eastern Partnership (EaP)* Bilateral association agreements Sectoral cooperation Institution-building programs Civil society organizations NATO* 13 EASTERN PARTNERSHIP (EAP)* 14 RELATIONS WITH THE EU AND NATO Georgia Armenia Azerbaijan Strong desire to join the EU Lower desire to join the EU Lower desire to join the EU Strong desire to join NATO Little desire to join NATO Little desire to join NATO Desire for independence and EU supports opening the to have good relations with Russia border A closed border with Turkey, conflict over Nagorno Karabakh impedes integration into NATO and independence from Russia 15 To what extent would you support your country’s membership in the European Union? (%) (CB 2012) Fully support Rather not support Armenia 26 Azerbaijan 26 Georgia Rather support Don't support at all Equally support and don’t support Don't know 28 22 22 38 23 34 5 6 6 13 6 13 16 2 11 16 To what extent would you support your country’s membership in NATO? (%) (CB 2012) Fully support Rather not support Armenia Azerbaijan Georgia 15 Rather support Don't support at all 18 23 26 11 22 34 Equally support and don’t support Don't know 23 33 12 8 18 7 14 18 3 3 12 17 3 TERRITORIAL CONFLICTS* South Ossetia (population of 55,000) 158,000 displaced Abkhazia (population of 242,862) 133,000 displaced Nagorno Karabakh (population of 46,573) 30,000 killed and 1 million displaced 19 RUSSIA-GEORGIA WAR (2008)* Ongoing disagreement since 1991 May 2008: Russia sends troops to Abkhazia August 2008: Georgia sends troops to South Ossetia Russia sends troops to border and air strikes South Ossetia Russian tanks move into Georgia proper Ceasefire brokered by Sarkozy Russian troops withdraw and recognizes the independence of South Ossetia and Abkhazia Administrative boundary line (ABL) created with Russian troops on one side and EUMM on the other Georgia sees this as Russian occupation (20% of Georgian territory) 20 21 NAGORNO KARABAKH 22 NAGORNO KARABAKH 1921: Stalin NKAO in Azerbaijani SSR with majority Armenian population 1988: NK seeks to be part of Armenian SSR. Ethnic swap begins. Moscow declares martial law in NKAO 1992: NK declares itself an independent republic. Armenian military begin to take villages 1991-1994: 30,000 killed, 350,000 Armenian refugees, 600,000 Azeri IDPs 1994: Ceasefire accord signed (Russian mediation). Minsk Process under the OSCE has failed* 23 THE PASSENGER (SHORT FILM) http://www.youtube.com/watch?v=QReNxbw_62s 24 How likely is it to find a solution to the Nagorno Karabakh conflict within the next 5 years by peaceful negotiation? (%) (CB 2011) Very likely Armenia Azerbaijan Rather likely Rather unlikely 38 26 Very unlikely 23 25 9 22 DK RA 12 17 19 1 7 1 26 How likely is it to find a solution to the Nagorno Karabakh conflict within the next 5 years by force? (%) (CB 2011) Very likely Armenia Azerbaijan 11 Rather likely 10 19 19 23 Rather unlikely Very unlikely DK 36 28 RA 23 19 1 10 1 27 TURKISH-ARMENIAN BORDER (1993) 28 ARMENIA What effect will the opening of borders with Turkey have on...(%) (CB 2011 and 2012) Effect on Armenian economy Effect on internal Effect on national politics security Beneficial 2010 2012 2010 2012 7 No effect Harmful 22 14 58 13 12 Don't know 13 47 27 26 23 44 11 2010 49 2012 49 18 39 26 8 5 32 28 10 18 29 ARMENIA Support of opening the Turkish-Armenian border with no preconditions (%) (CB 2012) 41 35 16 8 30 Support Equally support and oppose Oppose Don't know ECONOMIC INTEGRATION USSR economy vs. market economies* Survival in the international economy is based on local niche economies: Energy in Azerbaijan Energy transport in Georgia Manufacturing in Armenia Commonwealth of Independent States (1991)* Eurasian Economics Union (2015) = alternative to the EU’s neighborhood policy 32 ECONOMIES Georgia Inefficient industrial and agricultural sectors Service sector is 69% of GDP Oil and gas transport GDP $16 billion GDP pc $7,165 WTO member Armenia Azerbaijan Manufacturing Natural gas and oil Outdated industry sector Oil rents is 42% of GDP Scarce natural resources GDP $67 billion GDP $10 billion GDP pc $17,139 GDP pc %7,774 Over $1 billion military Remittances (21% of GDP) WTO member budget WTO consideration 33 GEORGIA* Trade and economic pact with the EU (2014) Poor relations with Russia 34 ARMENIA 3 Stages of economic development since independence Post-transition progress Qualitative stagnation Hopeless stagnation Russia is the largest economic partner and controls the transport and energy sector* 2 million Armenians in Russia, $1 million in remittances annually 2013 intention to join Eurasian Customs Union 35 AZERBAIJAN* No intention to join the Eurasian Customs Union Agricultural sector would be destroyed by cheap products from Russia, Ukraine and Belarus Losing independence over energy policy Nagorno Karabakh Russian dominance 36 GEOPOLITICS* 37 GEOPOLITICS South Caucasus energy is perceived as a threat to Russia Russia supplies Armenia with gas via Georgia Georgia receives power from the Metsamor nuclear power plant Armenia supplied with Russian uranium that is flown over Georgia Georgia, Turkey and Azerbaijan have plans to synchronize their energy grids 38 THANK YOU! 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