Dr. Souleimanov, assistant professor at the Institute of Political Science at Charles University and at the University of Public Administration and International Relations in Prague, is a Fulbright visiting scholar at the Davis Center for Russian and Eurasian Studies at Harvard University. He is author of An Endless War: The Russian-Chechen Conflict in Perspective (Peter Lang Publishing Group, 2006). Ondrej Ditrych is a research fellow at Prague’s Institute of International Relations and a Ph.D. candidate at the Institute of Political Science, Charles University.
After the fall of the USSR in 1991, there appeared a new player in the South Caucasus whose role in this region used to be of great importance. Iran, once forced to retreat as a consequence of the Russian army’s march to the south, has after more than 160 years received an opportunity to conduct an autonomous policy in the region again and attempt — if the geopolitical constellation permits — to realize its ancient strategic aims. Whether Iran will be successful in its attempt to restore its former influence in the South Caucasus will depend on Azerbaijan and— to a greater extent than conventionally assumed — on oil production and transportation issues. It is therefore suggested that Iranian-Azerbaijani relations have been crucial in the formation of the Islamic Republic’s foreign-policy agenda in the region and will remain so in the future.
Another variable to be taken into account is the wider international context in which Iran finds itself today, particularly in terms of its relationship with the great powers of Russia, China and the West. Iran’s policy may from this perspective be seen as a piece in the mosaic of a Eurasian “grand strategy” of local powers to limit the U.S. presence in the wider region of Central Eurasia. This article is an attempt to analyze Tehran’s complex policies vis-à-vis its northwestern neighbor, focusing on the context of interstate relations.
HISTORICAL AND CULTURAL PERSPECTIVES
Since the eleventh century, the history of Persia has presented a complex set of relationships between incoming Turkic tribes and resident Persians. For centuries, Azerbaijani lands and Persia were united in one political unit, a kind of Turkic-Iranian union whose rulers were alternatively representatives of Oghuz (Western Turkic) tribes — ancestors to present day Azerbaijanis.1 Iranian historians maintain that it was Persian Iran that ruled over vast areas of present-day Azerbaijan, Armenia, South Georgia and Dagestan.2 In contrast, Azerbaijani historiography — a very dynamic one today after having entered its golden age in the late 1980s — claims that the khanates of southern and northern Azerbaijan, and at times also the political units found on the territory of present-day Iran, were Turkic (i.e., Azerbaijani) states as well. For over 800 years of “common state,” so-called Iran was more often ruled by dynasties of Turkic-Oghuz, than Persian, origin. To the list of such dynasties some Azerbaijani historians add not only Seljuks, but also Kara Koyunlu, Ak Koyunlu, Safavi, Afshar and Qajar.3 Even some Persian authors acknowledge this.
For instance, Firouzeh Nahavandi argues that ever since the time of invasions in the Middle Ages, the Turkic or Turkic-speaking population enjoyed a higher social status than the Persians. When the Safavid house ruled the country in the fifteenth and seventeenth centuries, Turkic was the language of the court.4
In an attempt to understand the complex nature of the present-day problems facing both nations, one must know some of the history of the Azerbaijani- Iranian relationship. Following Russia’s victory in the Russo-Persian Wars (1804- 13, 1826-28), the division of the Azerbaijani khanates took place as documented by peace treaties signed in Gülistan (1813) and Türkmanchay (1828). These treaties prescribed that Azerbaijani lands south of the Araxes River would remain in the possession of the royal house of Qajar, where as Azerbaijani khanates northwards, including the territories of today’s Republic of Armenia, would become part of the Romanov empire. In the decades to come, this division would be interpreted as a tragedy by Azerbaijani patriots, a historical trauma to be remedied. The Araxes River became a symbol of separation (Ayriliq in Azerbaijani). Two centuries of separate existence have resulted in different mindsets between Azerbaijanis settled north of the river and their southern brethren.
In the course of modern history, so- called Iranian Azerbaijan has quite often witnessed insurgencies. The most notable unrest in the twentieth century occurred in 1918-19 and 1945-46.5 Both episodes were influenced by the events taking place north of the Araxes River: the foundation of the independent Azerbaijani Democratic Republic (ADR) in 1918 and, the invasion in 1945 by the Soviet army followed by — as developments in Ukraine and Belorussia had foreshadowed — the attachment of South Azerbaijan to the Azerbaijani Soviet Socialist Republic (SSR).6 It is clear that the leaders of both insurgencies, be they Azerbaijani nationalists in 1918, or the Communists in 1945, pursued a single goal: to unite Northern and Southern Azerbaijan. Iranian fears of irredentism by the Azerbaijani population of northwestern Iran caused Tehran to define a policy to address this ethnicity. This, in essence, resembled Russia’s strategy, adopted in Czarist and Communist times, of gradually reducing Azerbaijani ethnic identity and Iranianzing them.7 Immediately after having violently crushed the insurgency in 1946, Tehran divided the territory of South Azerbaijan into two provinces — South Azerbaijan and West Azerbaijan. In January 1993, theIranian Majles passed legislation creating a third province, with its capital city in Ardabil.
The victory of the Islamic Revolution in Iran (1979) put an end to the official propaganda of the Reza Pahlavi era that glorified the “Aryan” Persians to the neglect of the “barbaric” (i.e., Turkic) Azerbaijani tribes. In at least the initial period following the revolution, a decrease in Persian nationalism was evident. Within the Iranian state, a general improvement of Persian-Azerbaijani relations occurred.
Differences of language and ethnic origin ceased to play a key part; both nations came to recognize their shared Shia faith, which replaced Pan-Iranianism as the core of state ideology. Today, numerous senior positions in the Iranian government are filled by Azerbaijanis. In the few years since Iran has become an Islamic republic, the Iranization of Southern Azerbaijan’s ethnic identity has gained momentum, an accomplishment never reached in the long period of Pan-Iranianism. Nonetheless, some traces of political activity by South- ern Azerbaijanis are clearly visible. During the last decade, there has been a renewed strengthening of Persian nationalism, paralleled by a wave of emancipation efforts by a younger generation of Iranian Azerbaijanis who have more intensely identified with their “Turkic brethren” in both the Azerbaijani Republic and Turkey. The most eloquent indication of these developments occurred in some Southern Azerbaijani cities and even in Tehran in May/June 2006, when massive demonstrations broke out spontaneously in response to a caricature published in the state-run newspaper in which the members of the country’s Azerbaijani minority were mocked as cockroaches.8
In light of the still unresolved conflict with Armenia over the Nagorno-Karabakh region, it is clear that the Azerbaijani government chose to play a nationalistic tune to unite the nation, and this has affected the consciousness of Azerbaijanis residing to the south of the Araxes River. Iranian anxiety over its post-Soviet neighbor’s policies coupled with a multitude of other factors is understandable; interestingly, Iranian fears of developments north of the river continue to rise.
Iran’s policies towards Azerbaijan have been considered an important component of a new “Great Game” over influence in the Caspian Sea, a region with huge resources of oil and natural gas. From a geopolitical perspective, the South Caucasus represents an important western flank in such a power struggle. Consequently, strategies and tactics adopted by Iran to reach objectives of its “Azerbaijani policy” will substantially influence the competition’s results.
AFTER 1991: FROM MUTALIBOV TO ALIYEV
The dissolution of the Soviet bloc in the early 1990s contained manifold potential risks to the territorial integrity of Iran.
However, immediately after independent Azerbaijan came into being, nothing indicated that the new “Azerbaijani threat” should be considered a very serious one, certainly not in the short term. There existed a bond — perceived particularly among the Azerbaijani population — of some form of Islamic solidarity. Baku perceived Iran as a country inhabited by millions of Azerbaijanis that, should it not form a natural ally, would at least act as a pro-Azerbaijani mediator in the conflict over Nagorno-Karabakh. Iranian missionaries significantly increased their activity in Azerbaijan, the volume of trade between the two countries reached unprecedented levels and visas were no longer needed for travel.
However, the relationship started to take a very different course after Ayaz Mutalibov, a former Azerbaijani Communist party head and first president of Azerbaijan, was succeeded in the latter position by Abülfaz Elçibey, an orientalist and chief of the National Front of Azerbaijan (NFA). Elçibey was a nationalist who favored secularism and assumed an anti-Iranian stance. Moreover, he displayed a complete lack of diplomatic tact and on many international occasions even betrayed a considerable optimism in the matter of the future unification of both Azerbaijans. In his opinion, such unification was to take place in no more than five years. Although Elçibey’s statements did not fuel nationalist sentiments among the Azerbaijani population of Iran, their impact upon Iranian perceptions of the “Azerbaijani threat” can hardly be questioned.
The consequences of the thirteen- month-long Elçibey government were remarkable and — from an Azerbaijani perspective — quite catastrophic. Iran, a country that had until that time, by statute, backed Islamic movements around the world, started to support Christian Armenia, which found itself at war with Shia Azerbaijan.9
Following the deposition of Elçibey in June 1993 and the ascendance of Haidari Aliyev to the presidency, the Iranian- Azerbaijani relationship entered a period that some analysts have called détente. Aliyev, a born pragmatist, made consider- able effort to normalize relations with Azerbaijan’s southern neighbor. That, of course, involved assuming a certain distance from Turkey and the United States, which maintained a containment policy towards Iran. Aliyev made several personal visits to the country to demonstrate a changed course in Azerbaijani foreign policy and to assert the prominent position of Iran in its calculations. How- ever, Iran’s strategy towards Azerbaijan had already been defined by that time, and Aliyev was unable to influence it.
Then, in April 1995, a dramatic event occured that almost completely spoiled the positive developments in Iranian- Azerbaijani relations. On November 11, 1994, Azerbaijan had signed a treaty with Iran in which it ceded to Iran a 25 percent share in an international consortium for the exploitation and transport of Azerbaijani oil— the Azerbaijan International Operating Company (AIOC) was joined by the National Iranianan Oil Company (NIOC). However, after only a few months (April 6, 1995), NIOC was expelled from the consortium, when the treaty was cancelled due to strong opposition from the U.S. government. A law passed by Congress ruled that no U.S. company may take part in a project with Iran. Richard Kauzlarich, U.S. ambassador to Azerbaijan, openly threatened that, should Baku not accept the American demand to expel the Iranian company from AIOC, U.S. companies — with their almost 40 percent share — would leave the consortium. Azerbaijan thus had no option but to accede to U.S. demands. Iranians, considerably outraged by the turn of events, branded Aliyev a puppet of the “Great Satan.” They also disputed the Azerbaijani claim that the Caspian Sea is divided into national sectors and thereby also the validity of the “con- tract of the century,” signed in September 1994, which had mandated increased cooperation with Russia and Armenia in areas directly related to Azerbaijan’s national security. Iranian-Azerbaijani relations thus reached the freezing point.10
Following this event, Iran took consider- able pains to prevent the construction of a main export pipeline (MEP) from the Caspian Sea at Baku and limit the exploitation of Caspian oil resources. Five days after NIOC had been expelled from AIOC, Iran’s foreign minister, Ali Akbar Velayati, made an illuminating point when he argued that “nullification of the Azerbaijan-Iran treaty concerning Iran’s participation in the consortium contradicts Azerbaijani national interest and its previous statements. The consortium treaty may not come to force… unless the status of the Caspian Sea is decided.” Hasan Hasanov, Azerbaijani’s foreign minister, replied that “it is not legal to draw parallels between the issue of the Caspian Sea’s status and Azerbaijan’s right to exploit its oil resources. Moreover, when Iran was party to debates in the international consortium, it never raised the issue....”11
Tehran then announced that it would not consent to a proposed oil pipeline to the Turkish port of Ceyhan via Iran’s territory, and that it instead preferred the MEP to lead to terminals on the Persian Gulf.12
To appease the categorical rhetoric of Iranian political representation, Heydar Aliyev offered Iran a 10 percent share in the consortium in Shah-Deniz, another prospective field with no U.S. interests. Initially, Tehran called the proposal insincere, but in May 1996 it agreed to sign a treaty for the field’s joint exploitation.13 Furthermore, a year later, another Azerbaijani-Iranian treaty was signed allowing Iranian companies to participate in the exploitation of two more Azerbaijani fields — Lenkoran and Talysh— amounting to a $1.5 billion deal.14
The relationship between the two countries in the area of oil policy, however, remained tense. After the Russian government started becoming less fixated on the legal status of the Caspian Sea, which led it to conclude treaties with Kazakhstan (1998) and Azerbaijan (2001) on sectoral divisions — along with an Azerbaijan- Kazakhstan (2001) agreement and the retreat of Turkmenistan to more defensive positions — Iran gradually found itself isolated. Tehran decided to retaliate by provoking a maritime incident in the Araz-Sharg-Alov area. A British Petroleum prospector craft was forced by the Iranian navy to leave what Tehran termed “Iranian territorial waters,” which led to protests from Baku against violations of its maritime border.15
Moreover, as will be indicated below, Tehran was unable to prevent the construction of the Baku-Tbilisi-Ceyhan (BTC) pipeline, finished in 2005, and thus, along with Russia and Armenia, suffered a major geopolitical defeat. Before these recent events are discussed in detail, a brief history is necessary of Iran’s actions related to the Nagorno-Karabakh conflict and other strategies used to prevent realization of the BTC project.
IRAN’S POLICY IN THE SOUTH CAUCASUS
Iran has had, Svante Cornell argues, special stakes in the Nagorno-Karabakh conflict.16 First, combat operations on several occasions reached the immediate vicinity of Iranian territory and thus were considered a national-security issue.
Second, the conflict has been crucial to the geopolitical constellation in the entire Caspian region, of which Iran is one of the foremost actors.17
This consideration led Iran to offer both parties its assistance in reaching a peaceful resolution of the conflict during the period of escalation up to 1994. These services were particularly needed in 1991- 92; nonetheless, in the opinion of Abdallah Ramezanzade, Iran mobilized its efforts only after Armenian troops reached the Azerbaijani-Iranian border at the Araxes. Their further advance to the east might have caused not only a tremendous flow of refugees across the river, but even the collapse of the Azerbaijani state.18 The latter could have had catastrophic consequences for the security of the Caspian region. These concerns forced Iran and Turkey, in a rather unprecedented act of cooperation, to jointly seek UN Security Council intervention to halt the Armenian military actions.19 That Iran would not tolerate a major power-balance shift in the South Caucasus was again confirmed in the fall of 1993 by Tehran’s (and Ankara’s) resolute stance that eliminated the threat of an invasion of the Azerbaijani exclave of Nakhichevan by Armenian forces.20
If one rules out the cases where there was an objective need for Iran to intervene in order to prevent Armenia from fomenting chaos in the South Caucasus — which would consequently threaten the stability of Iran itself — Tehran used the Nagorno-Karabakh conflict to exert pressure on Azerbaijan and thus pursue its own inter- est.21 It supplied Armenia with raw materials and food when Armenia was blockaded by Azerbaijan and Turkey; the civil war in Georgia seriously impeded the flow of Russian supplies directed through its territory; and the offshoot of a gas pipeline from Georgia to Armenia was constantly subjected to sabotage for which Georgian Azerbaijanis were claimed to be responsible. It has moreover been argued that Iran — following Russia’s example in renouncing any direct military involvement served as a transit country for weapons imports to Armenia from Russia and the diaspora.22
This Iranian policy vis-à-vis Azerbaijan, which at least from historic and cultural perspectives seems rather counterintuitive, may be explained by the following consideration. Tehran’s openly hostile stance was articulated only after Elçibey’s comments relating to “the prospects” of Southern Azerbaijan. In 1992-93, Iran thus started to realize that there existed a threat to its territorial integrity coming from the north. Although there is no universal agreement on this matter, the chain of events in the Nagorno-Karabakh conflict provides ample material for such a conclusion.
Let us consider, for instance, what happened in October 1993. When Armenian troops approached the Iranian- Azerbaijani border and tens of thousands of Azerbaijani IDPs could have at any moment crossed the Araxes and entered Iran’s territory, Tehran found itself facing disaster. Many thousands of Azerbaijanis did, in fact, cross the river to a warm welcome by their brethren. The Iranian government’s reaction was swift; refugee camps were organized, but not on Iranian soil at a safe distance from the combat operations, but in Azerbaijan, close to the battlefield.23 Cornell was correct in pointing out that Iran considered the possibility of numerous refugees exiled to its territory as a threat, since Azerbaijani residents — having heard the stories of atrocities committed against their northern brethren during the Armenian offensive — could be expected to exert pressure on the Iranian government to intervene.24 It was also assumed that Iranian Azerbaijanis — thousands of whom had considerable military experience from the time of the Iran-Iraq War in the 1980s — would express their sympathy by forming volunteer corps to fight in the conflict. Such common experiences would, of course, increase the nationalist spirit among Southern Azerbaijanis, a situation Tehran was eager to avoid.
The Nagorno-Karabakh conflict did, however, resonate to some extent with Iranian public opinion. Some Iranians had since the beginning of the 1990s called for military action in the north to help their Shia brothers.25 The bonds pointed to in this argument were not merely of a religious nature; it was claimed that Azerbaijanis were, in fact, Iranians as well. It is a matter of considerable interest that Iranian nationalists believe that Azerbaijanis residing in Azerbaijan are actually citizens of Iran, since the whole of Azerbaijan is historically and legally part of Iran.26 For instance, the Iranianan newspaper Abrar reported that “tens of thousands” of Northern Azerbaijanis signed a petition for immediate “return” to Iran. “Seventeen cities of the Caucasus” were mentioned, including the capital cities of not only Azerbaijan, but also of Georgia and Armenia.27 It was apparently under the influence of these sentiments that many Iranian newspapers called upon the government to "punish Armenia."
THE ISLAMIC FACTOR
To “punish” Armenia, however, did not seem to be Iran’s intention at all. Quite the contrary. In the early 1990s, there clearly were visible attempts by Iran to incite the secessionist sentiments of the Talysh, an Iranian-speaking ethnic group living in southeastern Azerbaijan.28 Nevertheless, the Azerbaijani regime found the “Islamic factor” in Iranian policy to be much more threatening than these occasional incitements to insurgency. Namik Akhundov, who in 1996 served on the International Committee of the Azerbaijani Parliament, even claimed that, from a certain point of view, “Iran is more an enemy [to Azerbaijan] than Russia.”29 In his opinion, which in Azerbaijan is not exceptional, Iran “exports Islam” in the very same manner that the Soviet Union “used to export communism.” Today’s Azerbaijan is one of the foremost intended recipients of this export. Such a tactic nonetheless seems, in the context of Iranian policy in the South Caucasus, a very risky enterprise.
The method used by Tehran looks simple: to place as many Azerbaijani mosques as possible under the control of Iranian mullahs. In these mosques, radical Islamist ideas undermining the secular statehood of Azerbaijan are being disseminated. In the last decade, the Islamic party of Azerbaijan — heavily funded by Iran — has received growing support from Azerbaijani believers. It may be assumed that it has already succeeded the official Spiritual Committee of Azerbaijan — led by Allahshükür Pashazade, loyal to the Azerbaijani government — as the most influential Muslim body. Particularly among the poor and the IDPs from Nagorno-Karabakh, it has had tremendous success by offering a free hajj to Islamic shrines in Iran and Saudi Arabia and sometimes even by providing direct financial support.30
It should still be considered, however, that these efforts of Tehran are impeded by the predominantly secular character of Azerbaijani society and the government’s nationalist/patriotic campaign. Thus, it can be presumed that, in the short term, the “Islamization” of the local society is likely to fail. In a recent overview of radical Islamic movements in Azerbaijan, Anar Valiyev confirms this point, despite the Azerbaijani government’s attempts to align the occasional arrested Islamist with global terrorist networks, particularly al-Qaeda, such as those from Javaat al-Muvahidun.31
A STRATEGIC PARTNERSHIP
The rapid increase in cooperation among Russia, Iran and Armenia in the 1990s caused many to reflect on the emergence of alliances and their influence upon the geopolitical constellation of the South Caucasus. The existence of an alliance including members with such diverse sociocultural systems demonstrates that geopolitics as a spatial definition and the pursuit of national interests are still important variables in the Caucasian international political arena. However, as will be seen, this alliance is not faultless, and it would be a gross oversimplification to reduce the geopolitical map of the Caucasus to the imagined competition of two camps with impenetrable borders.
In 1997 — at the moment the United States started to press Armenia to concede to a “step-by-step” resolution of the Nagorno-Karabakh conflict — Zbigniew Brzezinski drew the geopolitical map of the South Caucasus since 1991 in the following terms:
The key country and strategic heart of the region is Azerbaijan, the cork to Caspian oil riches. Thus it is Azerbaijan, independent in terms of its politics and oil transport, which should prevent Russia from renewing her geopolitical overlay. However, Azerbaijan remains highly vulnerable to Russian pressure from the north and Iranian pressure from the south. It is not only Russia that pressures Azerbaijan to limit its relationship with the West; it is Iran, afraid of Azerbaijani irredenta, as well.32
In these years, the strategic partner- ship of Iran, Russia and Armenia in the South Caucasus aimed at prevention of a BTC pipeline. It used or considered using several instruments to reach this goal:
- Isolation of Azerbaijan: Questioning Azerbaijani claims of national sectors in the Caspian Sea and by the pursuit of the “common ownership” principle by Moscow and Tehran; but also by using the frozen conflict in Nagorno-Karabakh to exert pressure upon Baku; attempting to incite separatism among ethnic minorities on the Russia-Azerbaijani and Iran-Azerbaijani frontiers; and causing the internal destabilization of the Azerbaijani political regime.
- Containment of Turkey: It seems clear that the most certain way to contain Ankara’s influence in the Caspian region is to install a pro-Russian government in Baku. Turkey is perceived as a historical rival of all three countries, whose interest was that a pipeline run through their territories. However, Russia and Iran were not united in this matter, but pressed for their respective alternatives. It was presumed that Iran might support insurgencies in Kurdistan along the proposed route of the BTC pipeline, following the example of the Russian government, which likely incited unrest in Georgia’s Mingrelia region shortly before the final decision by the countries involved that the BTC project would indeed be realized in 1998.33 Such activities would be designed to discourage Western parties from investing in the pipeline by raising business risks above reasonable levels.
- Destabilization of Georgia: Iran and Georgia do not share an international border and, from an ethnic or religious perspective, there is nothing their populations have in common. However, the southern parts of Georgia are inhabited by some 300,000 ethnic Azerbaijanis, and it is through these areas that the BTC/SCP pipelines are laid. These facts are likely not to have escaped the attention of Iranian policy makers examining the possibilities for exerting pressure on Baku.
Nevertheless, Iran’s policy towards Tbilisi has been far from benign. Despite mutual diplomatic statements of “good relations” and increased international trade between the two countries during the 1990s,34 Tehran has likely incited ethnoreligious conflict in southern parts of Georgia to prevent the construction of the BTC pipeline in the past and leave Iran as the only prospective transit country for Azerbaijani oil. Georgia’s Ministry of Internal Security released information that Iran was active in religious recruitment and dissemination of fundamentalism in these regions, persuading local Azerbaijanis to form an indigenous spiritual committee independent of the above-mentioned
Spiritual Committee of South Caucasus Muslims headed by A. Pashazade. The authors of this paper can themselves testify to the fact that many Iranian mullahs active in Azerbaijani-populated areas of Georgia have been promising the local population support in their struggle for a Borchalin Republic that would separate from Georgia and subsequently be united with Azerbaijan. Materials from Georgia’s Ministry of Internal Security mention similar kinds of propaganda — such as distribution of inflammatory leaflets — in Georgia’s Muslim-populated autonomous republic of Ajaria as well.35
United in their common purpose to realize energy-security projects and limit the influence of Russia and Iran in South Caucasus politics, Baku and Tbilisi have been forced to act to carefully limit ethnic policies and build inter-ethnic relationships. Frequent visits of the Azerbaijani president in the early 2000s, prior to the finalizing of the BTC project, testify to the effort to ensure the peaceful coexistence of ethnic Georgians and Azerbaijanis within the borders of Georgia.
At the time of this writing, BTC has been in operation for almost a year, and a gas pipeline from Baku to Erzurum in Turkey — the South Caucasus Pipeline (SCP) — is under construction. It is thus clear that one main element of Iran’s strategy to contain Azerbaijan in the South Caucasus has failed. What were the causes of this failure, and what are the consequences for Iran?
The BTC pipeline is a 1,760-km pipeline with an initial capacity of 1 million barrels per day (bpd), and a construction cost estimated at $3.4 billion. British Petroleum is the main shareholder with a 30.1 percent share followed by the State
Oil Company of Azerbaijan (SOCAR) at 25 percent.36 After manifold delays, it was finally constructed, an achievement that can be attributed to three main factors.
First, Iran became isolated in its position on the legal status of the Caspian Sea and lost influence over the levels of oil production. Western investors’ concern that there would not be enough oil to fill the pipeline played a considerable role. BP and other investors, first favoring extension of the Baku-Supsa pipeline, found it reasonable to adhere to the U.S. government’s multiple- pipeline strategy, as it would increase not only Western governments’ economic security but also that of the global energy market (for the oil to reach Western markets this way, however, it must be loaded onto tankers and shipped via the Black Sea Straits, a route that presents capacity, security and ecological problems.). The BTC pipeline’s 1 million bpd may represent but 1.3 percent of world production; however, it can still have considerable effect on price stability and limit the bargaining potential of OPEC countries.37 At first, neither Russia nor Iran was able to resist the increased strategic profile of the United States in Central Eurasia after September 11, which in the words of some analysts equaled a true “geopolitical revolution” in this area.38
However, failure to prevent the construction of the BTC pipeline has not resulted in a breach of the alliance among Russia, Iran and Armenia. Of course, the relationship between Russia and Armenia has come to resemble that of lord and vassal in recent years, with the latter in danger of falling into complete dependence upon the former. For instance, as of December 2005, 80 percent of Armenia’s energy market was found to be under the control of Russia’s United Electric Systems and Gazprom. It has also been subject to Moscow’s recent assertive oil policy in its post-Soviet space.39 This partnership may now be considered a piece in the mosaic of a Eurasian “grand strategy” aimed at reversing the unfavorable trend of a recent increase in U.S. influence in the Eurasian heartland, to use the phrase coined by Sir Helford J. Mackinder — a strategy to which not only these countries, but also China adheres. Cornerstones of this strategy are the bonds be- tween Russia and China. These are reflected, for example, in more effective cooperation within the framework of the Shanghai Cooperation Organization, which eventually led in 2005 to the end of the U.S. military presence in Uzbekistan. They are also reflected in the bonds between Iran and China, which have been strengthened over the last several years, particularly as Beijing explores opportunities to reduce its maritime dependency by importing oil and gas overland from Iran.40
The relationship between Russia and Iran, however, is not unambiguous, and this has important consequences for South Caucasus politics. Even before the BTC pipeline was finished, the united front of Russia and Iran had been weakened by factors like the differences over the Caspian Sea’s legal status, described above. The alliance has also been under- mined by rapidly developing Russia-Turkey relations, reflected in the completion of the Blue Stream pipeline on the seabed of the Black Sea in 2005. After Gazprom set new price policies vis-à-vis the countries of the South Caucasus — irrespective of their geopolitical “affiliations” — both Armenia and Azerbaijan turned to Tehran for relief from potential Russian pressure. The National Iranian Gas Company is building a 160-km pipeline from Tabriz to the Iran- Zangezur border, which will be capable of transporting gas to Armenia at $85/m3 — cheaper than the new Gazprom price of $110.41 Needless to say, Moscow fiercely opposed the deal and exerted pressure on Armenia using UES (the government- controlled Russian company). In December 2005, Azerbaijan signed an agreement under which it would pay the same price. At the same time that a new gas pipeline was inaugurated supplying Iranian gas to Nakhichevan, the Azerbaijani government made public its intention to buy another 1 billion cubic meters from Iran.42 Perhaps an even more serious blow to Russia-Iran relations was struck when the former agreed, having been rather hesitant to make such a move, to cede the matter of the Iranian nuclear program to the UN Security Council in 2006. It has been proposed that the reason for this shift in Russia’s policy was a recent disruption of the arms trade between the countries — in other words, a lack of Iranian interest in Russia’s C-300 air-defense systems.43
Russia and Iran may share their interest in an unstable status quo in the South Caucasus, but their efforts are not necessarily in harmony. Tehran, despite the fact that it clearly favors a contained Azerbaijan, does not hesitate to provide assistance to Baku when the Moscow- controlled Russian gas-transport monopoly exerts pressure on the latter and profits from the situation. At present, Tehran’s policy in the South Caucasus thus seems to strive for a certain local balance of power in which Azerbaijan continues to be engaged with Armenia through the Nagorno-Karabakh conflict. However, if the war flares anew — with Azerbaijan now much more powerful than in the early 1990s — the old one-sided Iranian-Armenian alliance, to whose history we now turn, could be revived. The second factor in Iranian policy vis-à-vis Azerbaijan is the concern that Iran could become involved in a military action led by the United States. As was indicated above, the Iranian- Armenian alliance seems, in light of historical-cultural circumstances, counterintuitive. Nonetheless, since it was forged in the early 1990s, it has been a rather stable one.44
In June 1995, Iran and Russia signed a Treaty of Friendship and Mutual Cooperation, representing a cornerstone of the Russia-Iran strategic partnership, in the opinion of many analysts.45 The treaty enabled Tehran and Moscow to escalate diplomatic pressure on Baku, both in the matter of the status of the Caspian Sea and the transit of Azerbaijani oil.46
Ever since, the Russia-Iran partnership has been asserted in their common critical stance towards the expansion of NATO or any other foreign influence in the South Caucasus and the increased profile of their military cooperation. In the Caspian Declaration signed on March 12, 2001, Russia and Iran agreed to act to prevent the establishment of "alien" countries in the Caspian Sea region, and former Iranian President Ali Akbar Rafsanjani went so far as to declare that if Azerbaijan conceded to the basing of NATO troops in the country, it would have to pay a high price.47 How- ever, limited U.S. military presence in Georgia after 9/11 notwithstanding, the military presence of NATO continues to be of low importance. NATO has developed programs of the Euro-Atlantic council and the Partnership for Peace, but the stationing of troops and the establishment of bases — recently proposed in relation to BTC pipeline security concerns — though it would likely contribute to the stabilization of the region, remain rather improbable.
This is not only because of opposition from Russia and Iran, but also due to Azerbaijan’s opposition to stationing any foreign military troops on its territory.
There are two exceptions to this policy: the Russia-operated radar station in Gabala, and two Kavkaznet radar stations, which, although officially labeled a part of the Azerbaijani border-security system, enable the United States to monitor the Caspian Sea and parts of Iran’s territory.48
The situation for Azerbaijan and, more important, for Iran, may change in the case of increased U.S. pressure on Iran.
Azerbaijan and Turkey are Washington’s key allies in the region, and it is clear that in any international crisis that might arise from an unfavorable development of the present disagreement, Baku would have to, not necessarily with enthusiasm, stand by the United States. Tehran is aware of the risk. Ali Larijani, secretary of Iran’s National Security Council, has told Baku that, should Azerbaijani territory be used as a base for military attack against Iran,
Tehran would retaliate by targeting the BTC pipeline and other strategic energy facilities in Azerbaijan.49
The fall of the USSR and the emergence of the newly independent states of the South Caucasus have created a new and, paradoxically, not very favorable situation for Iran. Instead of the formerly predictable Soviet empire, Iran suddenly has to face new threats resulting from ethno political conflicts in close proximity to its northwestern border, conflicts over which Tehran had no control.50 Moreover, a new and ambitious secular, nationalist state of Azerbaijan has emerged north of the Araxes River, which — the hostile stance of most of its neighbors notwithstanding — desires as high a Western and Turkish profile in South Caucasus affairs as possible.
In view of Azerbaijan’s future prosperity as the result of its new oil revenues, the existence of such a strong South Caucasus country is considered by Tehran to be a threat to Iran’s national integrity — and the autonomous state of Azerbaijan need not directly pursue the annexation of South Azerbaijan to present a threat to the internal stability of its multicultural southern neighbor. Iranian analysts believe that “if [Southern] Azerbaijan is lost, [Iran] will lose a rich province,” since it serves as a granary to the rest of the country and is quite industrialized at the same time, with “a considerable number of qualified and educated people. Such a development would have a negative impact on the other provinces of Iran and put the stability of the country at stake.”51 The disintegration of Iran in such a case would not appear to be entirely unrealistic.
Iran does not, however, aim to negate Azerbaijani sovereignty. The Iranian position during the war in Nagorno-Karabakh provides evidence of Tehran’s awareness that the failure of the state of Azerbaijan — brought about by the successful campaign of Armenian troops — would have resulted in a significant deterioration of the internal political situation in Iran. Both the Iranian majority and the Azerbaijani minority would most likely not have tolerated such a development.
Moreover, the Iranian government strove to prevent the more extensive involvement of Russia and Turkey, another reason for staunching the expansionist desires of Armenians. As the annexation of northern Azerbaijan was not a realistic solution to Iranian concerns, Tehran preferred a pro-Russian, rather than a pro-American or pro-Turkish, government in Baku. It is thus the Iranian government’s goal to keep Azerbaijan a sovereign state, but a state that is weak and dependent on outside powers. It strove hard to limit Western presence in the South Caucasus and to block the construction of the BTC pipeline, which enabled the newly independent countries of the South Caucasus to decrease their territorial determination and the influence of Russia and Iran. Their interests being rather harmonious, Iran joined Russia and Armenia to realize this goal.
Today, the situation is rather different. With a stable and liberalizing government and the BTC pipeline revenues, Azerbaijan has become a stronger state asserting its national sovereignty. However, Tehran’s strategists may count on the fact that Baku’s primary international concern has been, and is likely to remain, its conflict with Yerevan. Thus, it strives to maintain a fragile balance of power in the South Caucasus that will, unless the Nagorno-Karabakh conflict is resolved, prevent Azerbaijan from fully drawing on its resources. In this effort, Iran’s interests are in harmony with those of Russia.
However, the practical policies of both countries have recently betrayed a certain dissonance. In the case of the South Caucasus — more particularly, in the developing Iran-Azerbaijan relations — Tehran may be attempting to use its soft- power potential to limit the threat from the north should U.S. pressure increase in the future, even if this policy should conflict with that of Russia.
In connection with the present state of affairs — U.S.-Iranian tension and its implications for Central Eurasia’s geopolitics — it is interesting to note that the containment policy of the United States, exercised towards Tehran ever since 1979, was subjected to severe criticism by some Washington policy makers and analysts in the late 1990s, even by members of the George W. Bush administration. The chief proponent of a redefinition of the Washing- ton-Tehran relationship was Dick Cheney. With his support, the Iran-Libya Sanctions Act was allowed to expire, while prior to September 11, the U.S. vice president had sought to reduce economic sanctions vis-à- vis countries sponsoring international terrorism. In February 1997, in his capacity as CEO of Halliburton, Cheney alleged that the unpredicted results of U.S. policy towards Iran had enabled Russia to profit from the situation in the form of leverage over the states of Central Eurasia.52 A year later, he criticized the ban on U.S. oil companies from participating in Iranian enterprises, which — in his opinion — limited the American ability to reach Caspian oil riches.53 Some of these companies at that time also favored Iranian proposals for a main export line, considering it more reasonable from an economic point of view.54
Iran seems to have been aware of these considerations and made serious diplomatic efforts to prevent the construction of the BTC pipeline. The above-quoted Caspian Declaration states that all resolutions and agreements related to the legal status of the Caspian Sea and exploitation of its oil riches may be enacted only with the consent of all five littoral states.55 In other words, oil agreements and bilateral treaties concerning the production and transport of Caspian oil and gas are not valid unless approved by Moscow and Tehran.
At the same time, Iran intensified its efforts to improve the competitiveness of its infrastructure of oil and gas pipelines, with the aim of transforming the country into a regional hub for the transport of Caspian oil riches. For instance, in December 2000, Tehran significantly decreased its fees for transportation of Turkmen and Kazakh oil to 38 percent.56 However, from the beginning, it was clear that to realize an ambitious plan for connecting the integrated system of Caspian pipelines — such as the IGAT I gas pipeline from Baku to Ardabil — with Persian Gulf transport terminals or the Turkish port of Ceyhan would demand enormous investments.
Iranian taxpayers had spent more than $450 million just for the construction of a pipeline connecting the exploitation sites in the South Caspian Sea with refineries in Tehran.57 The effort to redirect the oil flow from westward to southward has nonetheless failed.
When this became more and more apparent — for example, as Baku concluded agreements with Russia and Kazakhstan on the shape of Caspian Sea national sectors in 2001 — Iran resorted to an assertive action. On July 23, 2001, an Iranian battleship confronted a prospector boat owned by British Petroleum as it was searching for hydrocarbon pools in Azerbaijani territorial waters. Iran, how- ever, contested this interpretation of maritime borders, and its naval crafts escorted the boat out of what it considered its territory.
Through the 1990s and to a limited extent even after the BTC pipeline started operation and the Russian-Iranian front suffered certain breaches, Iran’s defining rationale for its South Caucasus policy has been the containment of Azerbaijan. This has meant preventing Tehran’s northern neighbor from evolving into a strong and stable state that could be lured not only to resolve the conflict in Nagorno-Karabakh by military power, but also — in a wave of revisionism — to attempt reunification with South Azerbaijan, despite the fact that the government seems to be attempting to reduce the revanchism that has been used, particularly by the opposition to the regime. Tehran has been well aware that visions of a united Azerbaijan are still nourished north of its borders. This concern has lain in the heart of the Iranian government’s position on the question of the legal status of the Caspian Sea, its policies towards Baku and Tbilisi, and its partnership with Russia and Armenia. Today, however, Iranian policy in the South Caucasus is becoming integrated with a Eurasian “grand strategy” to limit and prevent the expansion of U.S. influence in the Central Eurasian heartland, the main actors in this strategy being Russia, China and Iran. Tehran’s potential is definitely the most limited, and, unlike the other two, it is directly threatened by the United States. It is not unlikely that the warming relations between Iran and Azerbaijan — welcomed in Baku, as it suits the “multivector strategy” devised by Heydar Aliyev, notwithstanding the immediate relief vis-à-vis Russian pressure — are calculated to enhance Iran’s position in the region, should a real international crisis develop.
1 According to a theory first established in the post-Qajar Iranian monarchy (after 1925), Azerbaijanis were in fact Turkified Iranians.
2 Cf. Kashani Sabet, Frontier Fictions: Shaping the Iranianan Nation: 1804-1946 (Princeton University Press, 2000).
3 Cf. Istoricheskaia Geografia Azerbaijana (1989).
4 Firouzeh Navahandi, “Russia, Iran and Azerbaijan: The Historic Origins of Iranian Foreign Policy,” ed. B. Coppieters, Contested Borders in the Caucasus (1996).
5 Overview of modern Azerbaijani history within Iran and Russia/Soviet Union is presented, for example, by Tadeusz Swietochovski, Russia and Azerbaijan: A Borderland in Transition (1995); T. Atabaki: Azerbaijan: Ethnicity and Autonomy in Twentieth Century Iran (British Academy Press, 1993); Shaffer Brenda, Borders and Brethren. Iran and the Challenge of Azerbaijani Identity (MIT Press 2002).
6 L. Fawcett, Iran and the Cold War: The Azerbaijani Crisis of 1945 (Cambridge University Press, 1992).
7 Cf. for instance N. Nasibzade, “Azeri Question in Iran: A Crucial Issue for Iran's Future,” Caspian Cross- roads Vol. 3, No. 3 (Winter 1998).
8 For an analysis of this event, see Emil Souleimanov, “The Cartoon Crisis in Iranian Azerbaijan: Is Azeri Nationalism Underestimated?” In the Central Asia-Caucasus Analyst, 14 June 2006, online: http:// www.cacianalyst.org/view_article.php?articleid=4283
9 Svante E. Cornell, “Iran and the Caucasus,” Middle East Policy Vol. 5, No. 4 (January 1998).
10 See A. Useinov, “Baku Fears Sanctions from Tehran,” Current Digest of the Post-Soviet Press, May 10, 1995.
11 V. Shorokhov, “Energy Resources of Azerbaijan: Political Stability and Regional Relations,” Caucasus Regional Studies Vol. 1 (1996).
12 Azadliq (in Azeri), May 1, 1995.
13 Azerbaijan International, Autumn 1996.
14 Cf. Olivier Roy, “The Iranianan Foreign Policy Toward Central Asia,” Eurasianet.org, retrievable at <http:// www.eurasianet.org/resource/regional/royoniran.html>.
15 Mustafa Aydin, New Geopolitics of Central Asia and the Caucasus (Ministry of Foreign Affairs, 1999) pp. 48-54; eds. S. Frederick Starr and Svante E. Cornell, Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West (CACI/SRSP, 2005) p. 32.
16 Cornell, op. cit.
17 Cornell, op.cit.
18 “Iran’s Role as Mediator in the Nagorno-Karabakh Crisis,” ed. Bruno Coppieters, Contested Borders in the Caucasus (1996).
19 Suha Bölükbasi, “Ankara’s Baku-Centered Transcaucasia Policy: Has It Failed?” Middle East Journal (January 1997).
20 Ramezanzade, op.cit.
21 Cornell, op.cit.
22 Azadliq, June 29, 1993.
23 Ramezanzade, op.cit.
24 Cornell, op.cit.
25 Ramezanzade, op.cit.
27 David Nissman, “Iran and the Caucasus,” Caspian Crossroads Vol. 2, No. 2 (Fall 1996).
29 Nissman, op.cit.
31 “Al-Qaeda in Azerbaijan: Myths and Realities,” Terrorism Monitor Vol. 4, No. 10 (May 18, 2006), Jamestown Foundation.
32 Zbigniew Brzezinski, The Grand Chessboard (Basic Books, 1997).
33 Svante E. Cornell, Nagorno-Karabakh Conflict, Working Paper No. 46, Department of East European Studies (Uppsala universitet, 1999), p. 55.
34 See Jeyhun Mollazade, “An Interview with Ambassador Japaridze of Georgia,” Caspian Crossroads Vol. 2, No. 2 (Fall 1996).
35 Nissman, op.cit.
36 Starr and Cornell, op.cit.
37 Ibid., pp. 39-48.
38 Vladimir Socor, “Cheek by Jowl in Kyrgyzstan,” The Wall Street Journal, August 8, 2003.
39 Eurasia Daily Monitor 2/227, Jamestown Foundation (December, 7. 2005).
40 Cf. J. Brandon Gentry, “The Dragon and the Magi: Burgeoning Sino-Iranianan Relations in the 21st Century,” The China and Eurasia Forum Quaterly, November 2005, <http://www.silkroadstudies.org/new/ docs/cef/brandon_gentry.pdf>.
41 Eurasia Daily Monitor Vol. 3, No. 14, Jamestown Foundation (January 20, 2006).
42 Eurasia Daily Monitor Vol. 3, No. 28, Jamestown Foundation (February 24, 2006).
43 Kommersant, January 14, 2006.
44 Iranian-Armenian relations are not at the center of the present article. However, as for their roots, the relationship between Yerevan and Tehran was established as early as February 1992 when Armenia's foreign minister for the first time visited Tehran. The talks he held there turned around issues such as the Nagorno- Karabakh conflict, gas supplies to Armenia and economic cooperation. Iran then provided Armenia a credit of $62 million (Roy, op. cit.). It is worth noting that precisely at this moment, the crisis in Nagorno-Karabakh escalated into a full-scale war as the Armenian army supported by the 366th CIS motorized infantry division conquered and ethnically cleansed Karabakh village of Xocali [Khojaly]. For some time after that, Iran- Armenia relations remained more or less limited to the economic sphere. However, when Abülfez Elçibey assumed power in Azerbaijan, these relations became much tighter. Armenia was almost entirely dependent on imports from Iran; and according to some sources, Iran served as a transit country for supplies of weapons and ammunition from Russia. In May 1995, a month after nullification of the agreement regarding Iranian participation in AIOC, Armenia’s prime minister Hrant Bagratian visited Tehran to sign a number of bilateral treaties on mutual economic and regional cooperation. For Armenia, it was significant that Iran consented to supply gas to its neighbor for next twenty years. Interestingly enough, not even a month after this treaty had been concluded, Iran — with no prior consultations with Baku — cut off electricity supplies to the Azerbaijani exclave of Naxçivan. This development seems to confirm that more than economic considerations were at stake in these events.
45 Cf. also R. Freedman, “Russian-Iranian Relations in the 1990s,” MERIA Vol. 4, No. 2 (June 2000).
46 Cf. for instance E. Polukhov, “Contract of the Century: The Problem in a Historical Perspective,” Cauca- sian Regional Studies Vol. 2, No. 1 (1997); Shorokhov, op. cit.
47 United Press International, February 2, 1999.
48 Steven Main, The Bear, the Peacock, the Sturgeon and the Black, Black Oil (Defence Academy, 2005).
49 Eurasia Daily Monitor, Jamestown Foundation (February 27, 2006).
50 Cornell, op.cit.
51 Navahandi, op.cit.
52 David Ignatius, “Dick Cheney and the Great Game,” The New York Times (August 27, 2000).
53 RFE/RL Report, January 19, 2001.
54 Cf. for instance S.M. Berkowitz, U.S. Policy and the Geopolitics of Caspian Oil Exports: Pipeline Dreams and Export Alternatives (University of Texas Press, 2000).
55 RFE/RL Report, March 17, 2001.
56 RFE/RL Report, December 18, 2000.