This paper is aimed at motivating and informing discussion within the EU institutions and Member States on the nature of their engagement in the South Caucasus.It suggests priority areas for political dialogue and external assistance programming under the upcoming EC Country and Regional Strategy Papers. It argues that unless authorities and civil society in the region, supported by the international community, genuinely address the root causes of violent conflict, societal instability and distrust, then broad-based development and prosperity will remain beyond reach.
The finalisation of the European Neighbourhood Policy Action Plans in 2006, the elaboration of subsequent assistance plans and the continuation of political and economic dialogue offer a number of opportunities. For the authorities and people of the region, there is the potential to start to lay stronger foundations for sustainable socio-economic development and create better livelihood opportunities for more people. They can seize the chance to build on the benefits of the partnership in the European Neighbourhood. For the European Union, dialogue and monitoring on governance, security and economy issues, accompanied by welltargeted assistance, can help motivate greater interest in regional peace and co-operation, thus increasing the EU’s own prosperity and security.
There are signs of progress
Measured on the basis of official declarations, some progress is discernable in the way that governments are seeking to engage with the international community over issues of governance and economic reform. EU Action Plan negotiations with Armenia advanced quite rapidly on the basis of a mutual interest in approximating legislation. The Government of Azerbaijan proposed that Azerbaijan add a ninth Millennium Development Goal (MDG) to ‘establish and strengthen good governance’. In Georgia, a progressive vision was articulated by Prime Minister Nogaideli when he told the Directors of the US Millennium Challenge Corporation that the country had ‘embarked upon the path of society-wide democratic transformation’. One part of this vision, as President Saakashvili put it in his summit speech in Vilnius on 4 May 2006, is that ‘Georgia strives towards European values’.
…but building peace still needs to be embedded as the focus of a long-term strategy
The primary goal that still needs to be shared by the regions’ leaders and its international partners is to establish a long-term peacebuilding vision. Peacebuilding is a continuing process – one which encourages the attitudes, the behaviours, and the structural conditions in society that lay the foundations for peaceful, stable and ultimately prosperous social and economic development. This means that all parties need to come to be convinced that they have shared interests in regional peace, co-operation and integration.
How might this happen? Above all, it requires building a full awareness of the costs of continued instability and conflict and a realisation of the opportunities that will emerge if peace can take root. The process takes time and it requires patience and determination on the part of those who govern, as well as those who seek to contribute from outside. In terms of outside involvement, the nature and direction of political dialogue with the region’s leaders, and above all the explicit and implicit approaches adopted by Russia and the United States, will be the most important determinants of the success or failure of peacebuilding efforts. For Georgia in the second half of 2006, for example, it will begin negotiations in NATO over its membership prospects that will impact most substantially on the government’s motivation to take meaningful steps to improve governance. The EU Member States (old and new) will, therefore, have to be alive to the need for a coherent message as delivered by their NATO and their EU representatives. Decisions on NATO membership prospects, for example, must be based on meaningful governance reform and not political expediency.
Ultimately, peacebuilding needs to be demanded and driven by the region’s people. It is the only sustainable force that can ensure and sustain the national will necessary to combat poverty, drive equitable development and protect fundamental rights and freedoms. It is a point that Javier Solana, EU High Representative for the Common Foreign and Security Policy, underlined at the 2006 Vilnius mini-summit when he emphasised that, ‘When it comes to the future of the new democracies, the need to address frozen conflicts, or the efforts of building a meaningful partnership [with] the European Union, the mantra is always the same: success starts at home. The lead must come from the new democracies’.
Why is peacebuilding in the South Caucasus so important?
Poverty reduction in the region and the access of its people to globalised economic opportunities depend on whether they can drive a durable exit from instability and weak or poor governance. There are four types of costs if they cannot motivate change or are prevented from doing so by those with a vested interest in the status quo. The flip side of these costs would be the substantial economic and social benefits that would arise from progress with peace. While it varies who pays the costs and who is sensitive to them, their inter-relationship is key.
a) Markets: The conflict divisions (geographically and socially) lead to fragmentation of markets, meaning that they function on a smaller scale and are less dynamic than their potential. Income from customs and business taxes, and thus overall government revenue, are accordingly reduced due to a lower volume of activity.
b) Infrastructure: Regional infrastructure is distorted where tensions and hostilities result in missed opportunities and sub-optimal or duplicated measures to establish transport links and energy routes.
c) Foreign exchange: Income of this kind is foregone due to the negative impacts on tourist numbers and foreign direct investment. Actual and perceived instability, corruption and violence prevent the full exploitation of the region’s tourist potential
d) Unproductive spending: In anticipation of worsening tensions, military spending increases. A heavy economic burden on budgets and a motivation to retain untransparent extrabudgetary funds, the primary effect of such spending is to absorb investment capacity. This risks slowing economic growth and diverting resources away from social sectors where they are desperately needed.
a) Corruption: As recent research by International Alert has shown, the pervasive extent of corruption at all levels has profound negative effects on the way that divided communities perceive each other.The tendency of people to perceive governing elites as corrupt undermines the legitimacy of each of the governments/authorities vis-à-vis its people, thus diminishing the prospects for public support for any future peace agreement. Entrenched in the system of politics and the provision of goods and services, it undermines the development of a vibrant private sector and profoundly weakens the (potential) role that local businesses can play in building peace.
b) Democratisation inhibited: The real and perceived nefarious activities of neighbours and rivals can be used to justify or provide a rationale for oppression and/or limitations on democratic participation in political life and on the opening up of the media sector. Anti-democratic currents are most evident during elections but are consistently visible, to varying degrees, on all sides of conflict divides across the whole region.
c) Key issues avoided: The conflicts function as political alibis for governments to avoid addressing important issues of governance and socio-economic development. Not only can tensions be used and/or manipulated to deflect attention from failings in government in core areas of government responsibility (such as education, health and law and order) but they can obscure their involvement in corruption and links with other forms of criminality.
d) Radicalisation of some social groups: Where groups remain marginalised from participation in political decision making and fair access to economic opportunity, this can lead to their radicalisation. A more general danger of populism exists in the region due to susceptibilities to appeals based on a sense of victimisation or other grievances.
3. Regional security in the European Neighbourhood
a) Spill-over: The South Caucasus region is one of the most prominent venues in the world for the playing out of the geo-strategic interests of the great powers. These are principally driven by traditional and evolving Russian sensibilities, greatly increased American interest driven by upheavals in the Middle East, Central Asia and Afghanistan, as well as rising demand for hydrocarbons from Asian markets (particularly Chinese) and European markets.
b) Turkey: The opening of negotiations on Turkey’s membership of the EU has significant implications for the wider region. Not only is prosperity (and political capital) being foregone by the continued closure of the border with Armenia, but the Armenia- Azerbaijan conflict helps maintain tension in the Armenia-Turkey dimension in regional relations. This has possible knock-on effects for Turkey’s EU dialogue and for South Caucasian access to European markets. In addition, the activities of diasporas and businesses in Turkey have the potential to influence economic and political prospects in the Black Sea basin.
c) Energy supplies: The willingness of the EU to negotiate energy deals with Turkmenistan is symptomatic of Europe’s dilemma when seeking to secure sources of energy for its markets and diminish reliance on Russia. This need, aggravated by tensions with Iran and the insurgency in Iraq, increases the temptation for Azerbaijan to use its leverage over oil and gas as a counter to democratisation pressure from the West. The bilateral relationship between Baku and Moscow can be pushed and pulled by either side to protect their respective politico-business interests from Western interference.
a) Casualties and fear: Continuing sporadic outbursts of low-level violence lead to widespread human suffering, population displacement and civilian casualties and trauma. This is accompanied by a fear of a worsening situation. The inability of pluralism and tolerance to take root is exacerbated through economic costs and overflows into other areas of life and politics. There is an added potential of reversing or undermining the benefits of development assistance.
b) Image: The damage done by conflict and instability is reinforced by negative perceptions that drive both dynamic individuals and capital away from the region, as well as deterring investment from the outside. The perceptions aggravate already adverse effects on production, investment, infrastructure, the environment and, therefore, livelihoods across the region.
Recommended steps for the EU
As is the case for all international actors, the EU cannot by itself put an end to instability and conflict in the Caucasus. It can, however, do more to orientate its engagement to help build capable, accountable governance which ensures the delivery of basic services and the protection of fundamental rights and freedoms for citizens. Taking a long-term vision, the primary focus of the EU’s engagement should be to promote meaningful participation by citizens in political and economic life, focussing on the ‘social contract’ between authorities and the citizens that they serve. The implications for the EU are that:
- There must be coherence among the EU’s political dialogue, trade and economic incentives and development assistance under the European Neighbourhood Policy. They must together focus on helping to advance structural stability in the region.This means:
– deepening dialogue with international partners, particularly Russia and the US, including the Millennium Challenge Corporation. Disbursements under Millennium Challenge Compacts in Georgia and, pending entry into force, Armenia, will significantly outstrip EU assistance over the coming four or five years;
– ensuring a coherent message is delivered in EU and NATO which makes it clear that standards of governance (such as transparency and democratic oversight) will not be compromised on and will need to arise out of structural, and not superficial, change;
– combining bilateral and thematic programmes in such a way as to balance government-defined assistance with support to civil society, the private sector and the legislature. This balance is needed to redress the current low level of citizen participation and empowerment.
- Political dialogue, incentives, as well assistance programmes should together be orientated towards ensuring the effective implementation of commitments made under the Action Plans and in international conventions already in place. The right kinds of areas for engagement (such as democratisation and the rule of law) have been identified and the ongoing negotiations should continue to clearly communicate the priority that will be given to implementation. The tone of the EU’s political dialogue with authorities in the region should depend on whether the mechanisms for rigorous monitoring and assessment are robust and whether they are revealing the achievement of genuine progress. The EU must be clear that financial assistance will not be forthcoming where insufficient political commitment is preventing progress in the areas agreed under the Action Plans.
- To ensure the effective implementation of these commitments, local civil society will need to be motivated and empowered to play a meaningful role in the monitoring and assessment. This monitoring process should not be limited to government circles and the EU should clearly communicate that its attention is focussed on the freedom of civil society (including the media) to fulfil this role. While it is necessary also to pay close attention to the political interests of the diffuse range of civil society groups, it should be a priority to promote and sustain civil society monitoring processes in the short, medium and long term.
- Genuine progress will depend on how well reforms tackle deeply entrenched interests that attach to property, tradition, social and economic advantage and prestige. EU spending should be targeted to ensure a meaningful separation of powers and a functioning system of checks and balances, where the executive and associated state agencies (such as the office of a Public Defender/Ombudsman), the legislature, judiciaryand civil society each can effectively fulfil its role. This will help underpin the second imperative for peace – equitable access to economic opportunity. Greater transparency, more legal certainty and an improved system of taxation would dramatically improve the economic climate and possibilities for trade and economic interaction across borders and conflict divides.
- Laying the foundations for peaceful and stable development in the region will require more engagement with the non-recognised entities, expanding efforts to reduce their isolation. Without implying sovereignty, more should be done to promote genuinely responsive and accountable governance in provincial districts, strengthen civil society and enhance meaningful interactions across divides.
- Levels of staffing in Brussels and in the Delegations must correspond to the scale and complexity of the challenges faced. Putting the fragility of the region, and the issue of poor or weak governance, at the heart of its engagement is an expert-labour intensive venture. Internal capacity to understand and tackle the complex and opaque forces at work in the region will be a key determinant of the EU’s ability to better identify and promote positive forces in society and to monitor change.