The Caspian Project .012

absolute Power at home anD abroaD

ThE fsB and siGinTBRuCE adRianCE

a PerfeCt Cyber storm

Russia and China TEaMinG TOGEThERlauRa GaRRidO

Cyber Cousins but not Cyber brothers

China and RussiadR. MaTThEW CROssTOn

Confronting the Double-eDgeD sworD

TuRkMEnisTan’s COllECTivE sECuRiTy dilEMMaJEssiCa REEd

why an iranian new Deal was neCessary

an anTi-ThEORy Of sanCTiOnsdiannE valdEz

the “global sPiral” of CasPian environmental PolitiCs

andy dEahn

KazaKhstan steering through troubleD waters

JEanETTE “JJ” haRPER

the rise of south-south DeveloPment

Evan ThOMsEn

russia: faCilitating traDe with afriCa

inTERviEW WiTh MaxiM ChEREshnEv

the Persian lion still roars

RC

why the JCPoa won’t turn iran into the next sauDi arabia

GREGORy BREW

untying the Knot

divORCE and WOMEn’s RiGhTs in islaMalyssa BEnOisT

Contents

12

Dimitris GiannakopoulosModern Diplomacy, Editor-in-chief

Dr. matthew CrosstonThe Caspian Project, Director

proJeCt team

petra poseGateJa palko

luisa monteironina lavrenteva

Gabriela pasCholati Do amaralbruCe aDrianCeGreGory brewstaCey Cottone

anDy DeahnJareD s. eastonlaura GarriDo

amy hanlonJeanette "JJ" harperJonathan hartner

brian huGhespaula malott

meGan munoztaylor morse

Joshua pattersonJessiCa reeD

evan thomsenDianne a. valDez

Christopher white

the CasPian ProJeCtbi-weeKly Digital eDition

www.moderndiplomacy.eu [email protected]

ontinuing in the tradition of previous Caspian Project is-sues, an overarching theme has emerged with No.12: thegeopolitical impact of development and political econ-

omy. While economics is understandably a subject that oftenforces people’s eyes to glaze over, this issue I believe is a stellarexample of how fascinatingly important and increasingly essen-tial knowledge of the global economic system is for those whowish to know the ways of war and peace in the 21st century.

This issue challenges readers to understand the theoretical flawsbehind sanctions, offers an alternative consideration of the Irannuclear deal, and explains how South-South development rela-tions might be an actual challenge to long-accepted Westerneconomic dominance. Additionally, the delicate and problem-atic investment climate in Kazakhstan, Turkmenistan’s uniquedevelopment security dilemma, and the ‘Global Spiral’ theory ofCaspian environmental politics are all investigated in-depthwithin this issue. Finally, there are a couple of interesting analy-ses of the China-Russia cyber partnership and an important andthought-provoking piece dissecting the complex world of Is-lamic marriage and divorce and how it may impact 80% of theCaspian region.

In short, this international political economy issue isn’t justabout the crisis of cash or the conundrum of capitalism, but alsoconsiders important cascade effects to the world Caspian citi-zens actually live in and the social challenges these economicdilemmas create. For that is where IPE separates itself from stan-dard discussions of money: it is more than anything else abouthow money and politics and social reality all intersect, interact,and engage one another. One thing is certain: after reading thisissue cover to cover it is highly doubtful our readers will ever seeeconomics in a boring or eye-glazing way again.

Prof. Dr. Matthew Crosston

Senior Editor, Director, The Caspian Project

C

CRisis, Cash, and CaPiTalisM

aBSoluTE PowEraT HomE

and aBroadTHE FSB and SIGInT

he Russian Federal Security Service (FSB)should easily be considered one of themost influential and powerful intelligenceorganizations in the world today. Its pri-mary functions and roles include: law en-

forcement, counterintelligence, domesticsurveillance, and internal intelligence functions atthe national level. These roles mirror many of thefunctions assigned to the Federal Bureau of Investi-gation in the US (FBI). However, while many of thesefunctions would put the FSB squarely in the realmof law enforcement instead of security or intelli-gence, the FSB also has mission responsibilities thatorganizations such as the FBI do not. The most sig-nificant being the mission of signals exploitation(SIGINT). This article focuses on the SIGINT capabilityof the FSB and its threat to US political, economic,and diplomatic policies as well as the threat in thenew environment of cyber espionage.

T

THE CASPIAN PROJECT | ISSUE 12

BRUCE ADRIANCE

Bruce Adriance is a graduate of the Master of Science programin International Security and Intelligence Studiesat Bellevue University in Omaha, Nebraska, USA.

Initially an internally focused organization,the FSB threat profile changed in 2003 when,under Presidential Edict No. 314, the mis-sions and authorities of the Federal Agencyfor Government Communications and Infor-mation (FAPSI) were transferred to the FSB.This meant the FSB would now have boththe resources and authorities for SIGINT col-lection against its adversaries and informa-tion assurance for all Russian governmentinformation systems.

This transition established the FSB as a muchlarger player in the intelligence exploitationcommunity and a larger threat to US inter-ests. Most Western intelligence services sep-arate the responsibilities and missions ofSIGINT to a single intelligence organization,like the National Security Agency (NSA) inthe US, which has only that authority. Otherintelligence services handle matters such ascounterintelligence and military-related in-telligence. This is not the case with the FSB,which after Presidential Edict No. 314 con-trols elements of all major aspects and disci-plines of intelligence, essentially giving itboth unfettered access to collected intelli-gence as well as the ability to potentially re-strict other Russian organizations fromaccessing the collected data. What exists isa single intelligence service with the capabil-ities to conduct human intelligence, counter-intelligence, law enforcement, bordersecurity, counter-surveillance, and signalscollections.

This represents a significant amount of au-thority and global reach that cannot be com-pared to any one intelligence service withinthe US or most other modern developedstates. With the transition of SIGINT respon-sibilities, increased authority on border se-curity, and cryptographic responsibilities tothe FSB, the comparison of it to the US Intel-ligence Community also transitioned. Its do-mestic protection roles still most closelyalign with the FBI, but its SIGINT responsibil-ities mirror that of the National SecurityAgency (NSA), while the border securityfunctions are more akin to the US Customsand Border Patrol (CBP) or even Immigrationand Customs Enforcement (ICE).

On top of all of this, the FSB has become in-creasingly connected to all issues cyber aswell. The world continues to become moreinterconnected. The internet has become anintegral part of our daily lives and, for some,even a necessity. It supports everything from e-commerce tosensitive governmental correspondence. Sowhen a country’s intelligence service insertsitself into business transactions, there be-comes an increased risk that sensitive datacould be syphoned off and used to supportboth commercial and national intelligenceinterests at home and abroad.

Even though the Russian IT registration re-quirement is only for private companies op-erating within Russia, this means little in theinterconnected world of the internet wheredata crosses many geographical boundariesbetween transmitter and receiver.The inter-net is a medium susceptible to signals col-lection just like any other and whencountries or intelligence services have accessto all internet-based traffic that falls withintheir borders, then that threat is not onlyvery real but actually amplified.

a SInGlE InTEllIGEncE SErvIcE wITHTHE caPaBIlITIES To conducT Human

InTEllIGEncE, counTEr-InTEllIGEncE,law EnForcEmEnT, BordEr SEcurITy,

counTEr-SurvEIllancE,and SIGnalS collEcTIonS


One example of this threat is the RussianSORM program. SORM, or System for Ensur-ing Investigated Activity, is a mechanismthat permits the FSB to monitor all phoneand internet traffic coming in and out of theRussian Federation. While arguments arethat this program is a law enforcement andinternal security tool, the FSB still remains anintelligence service with a mission set thatgoes beyond internal security and law en-forcement. It is worth noting that until aRussian Supreme Court ruling was handeddown in late 2000, the FSB was under no ob-ligation to inform Internet Service Providers(ISPs) that agents were accessing the system.The work undertaken by the FSB to supportsignals exploitation is not just limited toRussian companies, therefore, but extends tointernational entities with a presence in theRussian Federation.

On 11 April 2011, for example, a governmentsource told the Interfax news agency thatthe FSB was not proposing a ban on Gmail,Skype or Hotmail in Russia. The FSB expertspeaking at this meeting only expressedconcerns that a number of those servers pro-vide services outside of the national legalframework. The inferred concern was thatbecause these companies utilize encryptionfor securing the communications of users,and none of them are directly based in Rus-sia, the FSB requirement under SORM maynot be implemented properly.

It is interesting that the FSB would take thetime for an interview to highlight its effort tofind a solution to make the functioning ofthese services on Russian territory ‘comply’with national laws.

This statement, while perhaps innocuous onthe surface, speaks to the potential level ofpenetration the FSB can gain into all aspectsof communications, both traditional andemerging. On 8 June 2011 Microsoft Russia made astatement with respect to the FSB and theon-line communications service Skype. In astatement carried by the Russian Federal Se-curity Service-owned but supposedly edito-rially-independent Russian news agencyEkho Moskvy, Microsoft denied claims it hadprovided the FSB with encryption algorithmsfor the internet service. It did, however,admit that the source code for the programwas provided. With its charter to protect andmonitor cryptographic systems for the Russ-ian government, the FSB has access to thoseindividuals who both create and deciphercryptographic algorithms as part of thenewly transferred FAPSI functions.

With these vast resources, it is not a giantleap of logic to think the FSB will be sorelytempted to conduct eavesdropping on anyentity it wishes, without the support of saidcompany, as long as a suitable connection to‘national security’ is found.

These two examples are a sample of howcyber seems to be a new focus of FSB SIGINTcollection efforts. And while, for now, theyfocus solely on what has occurred withinRussian territory, it is important to note theFSB has recognized links in over 80 countriesand formal offices in at least 18 of them. Thislevel of global reach and interaction meansits SIGINT mission can be transferred any-where the FSB maintains a presence. Asthese capabilities are deployed, they providethe FSB with a larger SIGINT capability thanmost intelligence agencies around theworld. The FSB of course formally declaresthat it honors all international treaties andpursues only legitimate inquiries that holdpotential harm to the sovereign interestsand national security of the Russian Federa-tion. The problem, of course, is just how fun-gible those sovereign interests might beover time and how relevant the old adageabout absolute power corrupting absolutelymight become.

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a PeRfeCTCybeR sToRm

Russia and China Teaming TogeTheR

nited States intelligence agencies have listedcyber-attacks as the top threat to Americannational security, ahead of terrorism. Thesethreats are increasing in sophistication, scale,frequency, and severity of impact. Also, the

range of actors, attack methods, targeted systems, andvictims are expanding. In February 2015, James Clapper,the Director of National Intelligence in the UnitedStates, announced that the estimation of the Russiancyber threat had been elevated, pushing Russia to thenumber one spot on the list of countries which pose thegreatest danger to the United States. Since the collapse of the Soviet Union, Russia has facedpolitical, military, and economic challenges which itworried could mean that its national interests could beignored by other powers. In order to protect their inter-ests defensively, and free up their offensive capabilitiesfor deployment elsewhere, Russia and China signed anagreement in April 2015 vowing not to attack eachother, while also agreeing to share intelligence and soft-ware and cooperate in law enforcement and investiga-tions.

u


LAURA GARRIDO

Laura Garrido is currently finishing her Master’s degreein the International Security and Intelligence Studies Program

at Bellevue University in Omaha, Nebraska, USA. Her primary researchinterests cover the post-Soviet space and the fight against radical Islamism.

This is a direct challenge to the United Statesbecause not only are Russia and China work-ing together to get ahead in the energy racebut this agreement meant they were nowtrying to combine their capacities in the dig-ital world.

China and Russia, by far, have the most so-phisticated cyber capabilities in the world.The offensive cyber capabilities of each indi-vidual country was a threat already to theUnited States but if they now work togetherin earnest the United States could be facingan unprecedented cyber danger. Accordingto senior military officials, Russia’s Ministry ofDefense is establishing its own cyber com-mand that will be responsible for conductingoffensive cyber activities such as propa-ganda operations and inserting malwareinto enemy command and control systems.A specialized branch for computer networkoperations is also being established by Rus-sia’s armed forces. Computer security studiesclaim that unspecified Russian cyber actorsare developing ways to access industrial con-trol systems remotely. Industrial control sys-tems manage critical infrastructures such aselectrical power grids, urban mass-transitsystems, air-traffic control, and oil and gasdistribution networks. “These unspecifiedRussian actors have successfully compro-mised the product supply chains of three ICSvendors so that customers download ex-ploitative malware directly from the vendors’websites along with routine software up-dates.”

Russia was one of the first nations to moveassertively into the cyber sphere. In 1998,long before most nations even began think-ing about cyber-security, the Kremlin-backed “Directorate K”, a governmentagency, began operations to monitor anddefend against hackers and spammers. How-ever, in recent years Directorate K has takenon a more offensive role in the digital sphere.Russia has been cyber-probing the UnitedStates for many years. In 1999, it was discov-ered that the Moonlight Maze virus hadbeen stealing information from the Depart-ment of Defense, Department of Energy,NASA, and military contractors for two years.

In early 2015, Russian hackers were able toaccess an unclassified server belonging tothe United States Department of State.Through this they were able to penetratesensitive areas of the White House computersystem and access information such as thereal-time non-public details of PresidentBarack Obama’s schedule. The FBI, SecretService, and other United States intelligenceagencies were all involved in investigatingthe breach and said that it was the most so-phisticated attack ever launched against anAmerican governmental system. The breachwas pinpointed to hackers working for theRussian government based on “tell-talecodes and other markers,” even though theintrusion was routed through computers allaround the globe. The attack was believed tohave begun with a phishing email launchedusing a State Department email account thatthe hackers had previously stolen.

China has also recently increased theamount of time, manpower, resources andmoney spent on cyber espionage. China’sPeople’s Liberation Army (PLA) includes aspecial bureau within its intelligence com-munity specifically managed for cyber espi-onage.

iT is esTimaTed ThaT in The lasTfew yeaRs, Chinese haCkeRs have

aTTemPTed aTTaCks on 2,000ComPanies, univeRsiTies, and

goveRnmenT agenCies in The u.s.


The PLA, according to recent intelligence re-ports, is not only capable of advanced sur-veillance and collection but also possessesmalware that could take down foreign elec-tricity and water grids. However, it seems that China so far has onlybeen motivated to commit financial andeconomic espionage, rather than any out-right physical infrastructure attacks. Never-theless, the United States has been gettingcompromised by China for many years. “It isestimated that in the last few years, Chinesehackers have attempted attacks on 2,000companies, universities, and governmentagencies in the United States.” In 2003, Chinalaunched Titan Rain against United Statesmilitary and government agencies. TitanRain targeted US defense networks in an at-tempt to obtain confidential national secu-rity information. While no information was reported as stolen,it was considered to be one of the largest at-tacks in cyber espionage history. Titan Rainis particularly unnerving because the attackwas meant to be completed in as little as 20minutes and was able to target high-profileagencies such as NASA, the US Army Infor-mation Systems Engineering Command, theDefense Information Systems Agency, theNaval Ocean Systems Center, and the USArmy Space and Strategic Defense Installa-tion simultaneously in one day.

These cyber threats from Russia and Chinawere always a major concern for the UnitedStates because they undermined Americaneconomic competitiveness and at least triedto compromise national security interests. Asof now, a “cyber armageddon” may not be ahigh risk but low to moderate-level attacksover time could pose serious financial andsecurity risks to the United States.

Especially if this supposed cyber allianceever truly takes root and begins to createnew innovative cyber strategies for attacks.“In the United States alone, the value of theinformation that is compromised due to in-ternational hacking is somewhere between25 billion to 100 billion dollars annually.”With Russia’s tactics of using cyber-attacks toblock any and all communications fromwithin a nation-state and China’s habit ofeconomic and financial cyber-attacks, thetwo countries combining could be a perfectstorm of political and economic havoc thatmay not yet have the United States’ properattention and deterrence capacity.

CybeR Cousins but not CybeR bRotheRs

China and Russia

here seems to be a strong divergence in perception behind China'sdesire to command cyberspace offensively. On the one hand, there isthe assumption that this is a natural manifestation of its growing desireto achieve global superpower status. On the other hand, there is thecounter-argument that emphasizes China's own perception to be un-

able to operate effectively against the United States in a conventional militaryconfrontation. (Hjortdal 2011) Indeed, many Chinese writings suggest cyberwarfare is considered an obvious asymmetric instrument for balancing over-whelming US power. (Hjortdal 2011) This latter argument is more compellingbased on the stark military realities:

t


Dr. Matthew Crosston

Senior Editor, Caspian Project Director

Matthew Crosston is Professor of Political Science,Director of the International Security and Intelligence Studies Program,

and the Miller Chair at Bellevue University

In overall spending, the United States puts between fiveand 10 times as much money into the military per year asdoes China.Chinese forces are only now beginning to be brought upto speed. Just one-quarter of its naval surface fleet is con-sidered modern in electronics, engines, and weaponry.In certain categories of weaponry, the Chinese do notcompete. For instance, the U.S. Navy has 11 nuclear-pow-ered aircraft-carrier battle groups. The Chinese navy isonly now moving toward the complete construction ofits very first carrier.In terms of military effectiveness, i.e. logistics, training,readiness, the difference between Chinese and Americanstandards is not a gap but a chasm. The Chinese militarytook days to reach survivors after the devastating Sichuanearthquake in May of 2008, because it had so few helicop-ters and emergency vehicles. (Fallows 2010)

Given this state of military affairs, a Chineseperception of insecurity is not surprising.Even more logical is the Chinese resolve toevolve its asymmetric cyber capabilities:such attacks are usually inexpensive and ex-ceedingly difficult to properly attribute,meaning the victim is unlikely to know whowas directly responsible for initiating the at-tack. It is even more complex for states,where cyber-attacks can be ‘launched’ frominside of neutral or allied countries. (Ollman2011)

Given an authoritarian state’s capacity forparanoia, it is illogical for China to not de-velop its offensive cyber capabilities. In thiscase the weakness - conventional militarystrength - is quite real. To that end, the Peo-ple's Republic of China has endeavored tocreate its own set of lopsided military advan-tages in the cyber domain:

The Pentagon's annual assessment of Chi-nese military strength determined in 2009that the People's Liberation Army had estab-lished information warfare units to developviruses to attack enemy computer systemsand networks.

The PLA has created a number of uniformedcyber warfare units, including the Technol-ogy Reconnaissance Department and theElectronic Countermeasures and Radar De-partment. These cyber units are engaged ona daily basis in the development and deploy-ment of a range of offensive cyber and infor-mation weapons.

China is believed to be engaged in lacing theUnited States’ network-dependent infra-structure with malicious code known as‘logic bombs.’ (Manson 2011)The official newspaper of the PRC, the Liber-ation Army Daily, confirmed China's insecu-rity about potential confrontation with theUnited States in June 2011. In it, the Chinesegovernment proclaimed that, "the US mili-tary is hastening to seize the commandingmilitary heights on the Internet…Their ac-tions remind us that to protect the nation'sInternet security we must accelerate Internetdefense development and accelerate stepsto make a strong Internet Army." (Reisinger2011) Clearly, the Chinese have sought tomaximize their technological capacity in re-sponse to kinetic realities. This is not to saythe United States is therefore guaranteed tobe in an inferior position (information aboutAmerican virtual capabilities at the momentremains largely classified), but the overt in-vestment, recruitment, and development ofChinese virtual capabilities presents oppor-tunities that the US should also be willing toentertain. How does all of this compare and contrastwith the Russian approach to the cyber do-main? Anyone studying cyber conflict overthe last five years is well aware of Russia's ap-parent willingness to engage in cyber offen-sives. The 2007 incident in which theEstonian government was attacked and the2008 war with Georgia are universally con-sidered examples of Russia using cyber tech-nology as the tip of their military spear.

Russia's CybeR mindsetis dominated by shoRt-teRm

thinking, laRgely motivatedby the puRsuit of massive pRofit

and wielding inequitablepolitiCal poweR


While it is true that Russia actively encour-ages what has come to be known as ‘hack-tivism’ and lauds ‘patriotic nationalist’ cybervigilantism as part of one's ‘civic duty,’ thereare still distinct differences with China. Much of Russia’s cyber activity, when not inan open conflict, seems to be of the criminalvariety and not necessarily tied directly intothe state. Indeed, Russia seems to utilize or-ganized crime groups as a cyber conduitwhen necessary and then backs away, allow-ing said groups continued commercial dom-ination. Russia, therefore, almost acts as arentier state with criminal groups: cyberweapons are the ‘natural resource’ and theRussian government is the number one con-sumer.

This produces a different structure, style, andgovernance model when compared toChina.

PurposeChina's purpose in developing its cyber ca-pability seems motivated by protectionist in-stincts, based largely on the perception thatit is not able to defend itself against theUnited States in a straight conventional mil-itary conflict. Russia's purpose seems utterlypredatory. This is no doubt influenced by thefact that most of the power dominatingcyber capability in the Russian Federation isorganized and controlled by criminal groups,sometimes independently and sometimes inconjunction with governmental oversight.

Category Breakdown China russia

PurPose ProteCtionist Predatory

PsyChoLogy Long-term/rationaL short-term/CyniCaL

styLe strategiC anarChiC

goVernanCe modeL state-CentriC Crimino-BureauCratiC

PsychologyThe operational mindset of China seems tobe both long-term and rational. It developsits strategies based on future strategic objec-tives and its position within the global com-munity. Most if not all of China's goals in thecyber domain can be clearly understood ifrational self-interest is taken into considera-tion. Russia's cyber mindset is dominated byshort-term thinking, largely motivated bythe pursuit of massive profit and wielding in-equitable political power. When analyzingjust how much of Russian cyber activity is infact controlled by the desire for wealth it ishard to not have an overall impression akinto state cynicism.

styleThe atmospheric style in which Chinesecyber activity takes place is strategic. Thestate strives to control the cyber environ-ment and maintain influence over all groupsin the interest of the state. The Russian cyber atmosphere unfortu-nately resembles nothing if not anarchy. Thestate engages criminal groups whereby therelationship’s authority structure is blurred ifnot non-existent. As a result, there is littleconfidence that the government of Russiaexclusively controls its cyber environment.

Governance ModelIt is clear that China's cyber governancemodel is state-centric. This may not be mostideal for democracy, but it shows how Chinadoes not allow competing authorities orshadow power structures to interfere with itsown national interests. Russia's cyber gover-nance model is crimino-bureaucratic. It is notso much that the state is completely absentfrom the cyber domain in Russia: it is ratherthe ambiguity of power and authority thatdefines the cyber domain. Russia may enjoyclaiming the allegiance of its patriotic na-tionalist hackers, but it does not in facttightly control its own cyber netizens, at leastnot in comparison to China.

While both Russia and China are not afraidto use offensive cyber weapons, there aredramatic structural, motivational, strategic,and philosophical differences. Russia seemsto embody a criminal-governmental fusionthat has permeated the entire state appara-tus. The cyber domain there is used for tem-porary forays to achieve state objectives andthen returns to more permanent criminalprojects

As such, the domain is not truly state-con-trolled, is relatively anarchic, and cannot es-tablish any deterring equilibrium. China, onthe other hand, may be the first state to trulyembrace the importance of tech-war: it hasrealistically assessed its own kinetic short-comings and looked to cyber for compensa-tion. In short, it has fused Sun Tzu withMachiavelli: better to quietly overcome anadversary's plans than to try to loudly over-come his armies. This analysis paints Russia in a relatively starkstrategic light. While these differences do notgive rise to a trusted alliance with China, themanner in which China approaches its cyberdomain presents interesting new ideasabout how the US or the West should ap-proach the global cyber commons. Russiahas room to improve still on the cyber frontif its interests are in greater cooperation in-ternationally with the world’s other greatpowers. If it prefers its current ‘lone wolf’ ap-proach, then it is doubtful the cyber com-mons will ever see any organized or honoredregime of rules and proper behavior.


ConfronTingThe Double-eDgeD

sworD

TurkmenisTan’s ColleCTive seCuriTy Dilemma

n early July, naval delegations from Russia,Azerbaijan, Iran and Kazakhstan met in St. Pe-tersburg to discuss the idea of a collective se-curity system among the Caspian Sea States,alongside other important security issues. The

proposed collective security system would includethe creation of “a council of naval commanders” and“a five-sided agreement on preventing incidents onthe Caspian and the airspace above it,” Russian De-fense Minister Sergei Shoigu described. In addition,the joint security initiative will include emergency re-sponse exercises likely to be carried out in 2016. Al-though the proposal of such a collective securitysystem has been hailed as a major move forward forthe Caspian Five, interestingly, Turkmenistan was notrepresented among the delegations at the meeting.Such an absence may reflect a larger dilemma forTurkmenistan in this collective security proposition.

i


JESSICA REED

Jessica Reed is a graduate student pursuing her Master’s degreein the International Security and Intelligence Studies Program

at Bellevue University in Omaha, Nebraska, USA.Her research interests include the security dilemma

and combating radical Islamic terrorism.

In particular, the proposed collective securitysystem has been perceived by some as aRussian attempt to limit Western influence inthe Caspian Sea region. This likely stemsfrom tensions mounting as a result of the cri-sis in Ukraine which has undoubtedly putRussia at odds with the West, threateningboth Russia’s economic viability and its mili-tary influence in the region.

However, a collective security system wouldeliminate virtually all outside military pres-ence on the Caspian, allowing Russia tomaintain a monopoly of military power. Con-sidering Russia has built up its Navy on theCaspian, to include adding stealth frigates toits collection, and the fact that the former So-viet states Turkmenistan, Kazakhstan, andAzerbaijan only began building their naviesafter the collapse of the Soviet Union, a mo-nopoly of military power on the sea is not in-conceivable. In addition, the Trans-CaspianGas pipeline is meant to transport gas fromTurkmenistan to Azerbaijan, and finally toeager European nations looking to circum-vent Russia’s dominance as Europe’s largestexternal gas supplier. Naturally, Russia is op-posed to the pipeline which would divertconsiderable profits from Russia’s state-con-trolled gas company, Gazprom.

Therefore, a Caspian Five collective securitysystem can be seen as a Russian attempt toreorient Turkmenistan from the West,enough to discourage the creation of thepipeline. Needless to say, Russia has a lot atstake in the formulation of a collective secu-rity agreement. Russia is not the only Caspian Sea state bank-ing on a collective security system, however.Iran also maintains a significant military pres-ence in the region, particularly through itsnaval force comprised of 90 vessels, whichcertainly exceeds that of Kazakhstan andTurkmenistan. Consequently, isolating theCaspian Sea from any potential outside in-terference will only strengthen Iran’s militaryclout on the sea. Although Iran very recentlystruck a UN Security Council-endorsedagreement with major world powers its less-than-perfect reputation for honoring pastagreements makes more violations possible.Thus, increasing the gap between Iran andthe Western sphere of influence will onlybenefit the defiant state.

All of these competing interests stand to cre-ate a major dilemma for Turkmenistan.Firstly, Turkmenistan maintains considerableties to Western nations, particularly the U.S.The strategically located nation has acted asa valuable transportation hub for Americanforces in Afghanistan, notably by supportingrefueling operations and supplying a sub-stantial amount of fuel for the war effort.Moreover, the U.S. has been helping Turk-menistan build up its naval capabilities onthe Caspian, namely by providing equip-ment and technical assistance. Turkmenistanhas also acquired naval equipment fromTurkey, including two patrol boats. Turk-menistan’s relationship with Europe is ar-guably even more consequential than itsrelationship with the U.S., considering thehigh hopes for the Trans-Caspian GasPipeline.

however, Due To The faCTThaT The Caspian five harbor

serious misTrusT issueswiTh eaCh oTher,

ColleCTive Defensewill prove highly DiffiCulT

anD likely ineffeCTive


The Central Asian nation holds the fourthlargest gas reserves in the world, making it aprime candidate for a long-term supply rela-tionship with Europe and thus a prime recip-ient of billions of dollars’ worth of revenue.For better or worse, these competinggeostrategic interests make Turkmenistan’srole in the Caspian Sea region highly compli-cated. Ultimately, it seems Turkmenistan has founditself facing a double-edged sword in theCaspian Sea. More specifically, getting onboard with a Caspian Sea collective securitysystem could severely compromise Turk-menistan’s ties to the West. A Russian mo-nopoly of military power coupled with asecurity system that blocks all possibilities ofoutside intervention could leave Turk-menistan highly vulnerable to Russian influ-ence and coercion. At a minimum, Russiacould use military dominance in a CaspianFive collective security agreement to

influence the outcome of any future pipelineprojects. Such an outcome would provedetrimental to Turkmenistan’s future eco-nomic prosperity. Additionally, completelyeliminating the possibility of a foreign mili-tary presence, including NATO or U.S. mili-tary bases, as well as the use of airspace overthe Caspian Sea would leave Turkmenistanvirtually exclusively dependent on itsCaspian neighbors for defense. However,due to the fact that the Caspian Five harborserious mistrust issues with each other, col-lective defense will prove highly difficult andlikely ineffective. This may become a serious issue when con-fronting regional security threats like terror-ism, as dangers such as the Islamic State ofIraq and Syria (DAESH in Arabic) undoubt-edly require international cooperation andinformation-sharing which these nations atthe moment simply do not have.

Further still, Turkmenistan’s staunch princi-ple of neutrality may prove challenging in acollective security system in which Iran is amember state. Iran’s aggressive stances onnumerous issues with the West may dragmembers of the Caspian security system, in-cluding Turkmenistan, into a conflict inwhich they must choose between their col-lective security arrangement and majorWestern powers. While this scenario is diffi-cult to determine considering the fact thatthe terms of the collective security systemhave not yet been clearly outlined, it is ap-parent Turkmenistan’s firm principle of neu-trality may soon be tested.

Turkmenistan’s dilemma does not end withits reasons to not endorse the Caspian col-lective security system. The Russo-Turkmenrelationship is complicated, characterized byempire and linguistic ties.

Turkmenistan’s considerably limited experi-ence in self-governance, combined with acultural inclination towards Russia, makesmaintaining close security ties with theworld power a reasonable option for theweak Turkmen diplomatic corps. Turk-menistan has received naval equipmentfrom Russia as well, including several militaryships which the underdeveloped Turkmennavy undoubtedly needs. Finally, Turk-menistan’s close proximity to Russia and Iranincentivizes it to ensure security becomes acollective obligation in the Caspian. Essen-tially, rejecting a collective Caspian securitysystem could see Turkmenistan facing ahighly formidable and potentially resentfulRussian neighbor. Without a doubt, Turk-menistan has some serious options to weighin considering these future defense paths.Hopefully, it finds one that does not result init being impaled on an extremely sharp, dou-ble-edged geopolitical sword.

Why an IranIan neW Deal Wasnecessary

hile the debate over the wisdom of con-cluding the Iran nuclear deal continues,this article takes a slightly more involvedintellectual approach to explain why an al-ternative to the long-standing sanctions

was likely inevitable. This is especially the case if thereis a sincere desire to see Iran incorporated long-terminto the global community and not simply continueto punish it as a pariah into political perpetuity. Sev-eral conceptual and theoretical explanations havebeen used to highlight key indicators that counteractthe effectiveness of sanctions within the Middle Eastand how the spread of certain ideologies and socialpractices have impacted the success of internationalmediations. This microcosm analysis of the various so-cial variables, mostly stemming from historical andpolitical events, supports the need to judge moreharshly the long-term efficacy of sanctions.It providesan analysis concerning weapons proliferation withinIran and will question the overall potential success ofsanctions against such targeted states.

W

DIANNE VALDEZ

Dianne Valdez just completed her Master’s degreein the International Security and Intelligence Studies Program

at Bellevue University in Omaha, NE, USA and continues her interestsin the geopolitics of this important region, along with political strife in Africa.

In an effort to provide a clearer scope of im-posing sanctions against independentstates, it is required to assess the overall po-litical stratagem.

According to many political theorists, the ap-plication of sanctions against various stateshas become the most popular alternative tomilitary force that may otherwise lead to war.Past war efforts, however, have provided amisguided concept of the efficacy of sanc-tions, implying that a one-size fits all ap-proach will produce identical results.“Sanctions — either bilateral, in conjunctionwith informal coalitions of like-mindedcountries, or through international organiza-tions like the UN — have long been a stapleof U.S. foreign policy. Their appeal is obvious: sanctions provide anintermediate step, between normal negoti-ations and outright hostilities, in our at-tempts to a) alter the behavior of foreignstates or even b) force the removal of theirgovernments. There is a voluminous and dis-putatious literature on the effectiveness ofsanctions.” (Baker) Put another way, the over-popularity of sanctions as a policy refugedemonstrates a lack of awareness within theinternational political spectrum, implyingthat all political arenas are the same andgeneral applications can bring about similarchange. This is simply false.

Unfortunately, it was not until the recent fail-ures of multiple Western-imposed sanction-ing projects that security theorists began tosee key variables that have contributed tothe lack of effectiveness within such meas-ures. Such factors have included: consideringthe targeted state’s form of government; lev-els of state patriotism; and unilateral control.To begin with, assessing the form of govern-ment of the subjected state has proven cru-cial in generating success of applyingsanctions. “Because of different institutionalincentives, economically punishing sanc-tions are less likely to succeed against a non-democratic target than against a democratictarget. Sanctions increase rents. This benefitsnondemocratic leaders more than demo-cratic ones. Also, nondemocratic leaders have smallerwinning coalitions, so their core constituentssuffer less from sanctions than democraticleaders.” (Souva) This certainly was the casewith Iran, and other targeted states with au-thoritarian-led regimes, in that democraticsocieties are human rights driven and tendto focus on the overall well-being of their so-cieties. Democratic states in general main-tain multiple parties. Majority-led parties canthen petition their views by vote which canin turn push sanction compliance. On theother hand, authoritarian-led regimes likeIran lack this outlet, resulting in the authorityof the government being the only and finaldetermination of sanction negotiations, re-gardless of differing views, isolation, or gen-eral populace suffering.

In terms of considering state nationalismand the successful outcomes of sanctions,research has proven that applying sanctionsto countries with strong nationalist perspec-tives will most likely fail. This mitigating con-text is widely seen throughout countrieswith strong anti-Western perspectives andcan definitely be applied to the case of Iran.

In terms of consIDerIng statenatIonalIsm anD the successful

outcomes of sanctIons, researchhas proven that applyIng sanctIons

to countrIes WIth strong natIonalIstperspectIves WIll most lIkely faIl


“Nationalism is as strong among Iranians asit is among Americans. And it is easy to imag-ine a similar ‘rally round the flag’ effect werethe United States to face foreign pressureaimed at altering our policies. It is one of thecuriosities of our foreign policy that Ameri-cans often assume that foreigners will act inways that we ourselves never would.” (Baker)As seen with Iran, the original premise of in-stitutionalizing sanctions was to negativelyimpact the country’s economy, hoping toturn the people against its own government.The reality is that the Iranian state, alongwith many other authoritarian countries,maintains strong anti-Western perspectivesthat often engender a counter-reaction tosanctioning efforts. Such countries often ef-fectively lay blame on Western leaders for in-creasing levels of poverty that thencontribute to the growth of stronger nation-alist perspectives and thus increase the long-term resistance against Western sanctions.

Multilateralism, also explained as the con-cept of international control, has been iden-tified as a contributing variable to the overalleffectiveness of state-centered sanctions.Due to many economic interdictions ofteninvolving the international cooperation ofsurrounding states, individual compliance byother countries is required. “Multilateralism,according to Ruggie’s definition and quotedby Martin, ‘requires that states sacrifice sub-stantial levels of flexibility in decision-mak-ing and resist short-term personaltemptations in favor of long-term universalbenefits.’ Effectively, international coopera-tion is often described as a product of na-tional self-interest in an increasinglyinterdependent world.” (Golliard) Thus, mul-tilateralism holds that independent statesmust not only be aware of their individualcontributions but also that they sacrifice thepossible individual benefits of pursuing theirown interests.

This is quite indicative of one of the ways theIranian case went wrong, as some nationscontributed to Iran’s resistance simply by notdismissing their own international personalbenefits in order to ensure sanctioning suc-cess.Thus, the form of government, levels of na-tionalism, and multilateralism are all factorsto be considered when looking at the poten-tial success (or lack thereof ) of sanctions asa general phenomenon. The presence ofthese elements, as well as their intertwiningrelationships, can often undermine the over-all efficacy of employing sanctions to coercechange within a subjected state like Iran. In“Thinking Strategically about Sanctions,” theauthor Olivier Schmitt discussed the onset offactors in deciding to introduce sanctionsagainst a country. This especially consideredthe overall environment of the subjectedstate and how that might produce primalbehaviors that would ultimately lead to fu-ture violent conflict. “And once the processis launched, studies of potential radicaliza-tion of the actors are needed.

I am not here talking about a ‘path-depen-dency’ phenomenon. Rather, using the ‘riseto the extremes’ theory, I suggest that thebeginning of sanctions imposition can havea radicalizing effect on the targeted country.”(Schmitt) Therefore prior to enforcing sanc-tions on such poorly-positioned states likeIran, someone should have acknowledgedthese negative characteristics independentlyand how they can lead to negative resultsand further disastrous outcomes.After reviewing the conceptual shortcom-ings of instituting sanctions and assessingtheoretical flaws, it is clear for many reasonsthat UN-led sanctions were arguably alwaysgoing to fail majorly in pushing Iran to ceaseits nuclear enrichment program or soften itsgeneral anti-Western stances. In spite of mul-tiple efforts at coercion by the U.S. and fac-ing heavy declines in Iran’s economy, thenuclear enrichment program not only con-tinued to exist, but the authority of the theo-cratic regime was able to fairly easily handlethe largest public resistance against it backin 2009 with the Green Revolution. Thereforeit was arguably always imperative to the fu-ture of international security that policymak-ers and diplomats alike began to consideralternative approaches to the subject of de-terring Iran’s nuclear weapons capabilities.This alternative would have to be somethingnot exclusively based on punishment andisolation but rather inclusiveness and mutualaccountability and responsibility. For thesereasons the new Iranian deal, even with mis-givings and far from perfect, is a step ofprogress compared to the old long-standingsanction regime.

the PersiaN lioN still roars

hy does Iran still harbor such distrust andanimosity towards the United States? Thisquestion is a key factor for understandingthe continuous failures of negotiations,even after the concluded nuclear accord.

Much of Iran’s bitterness and mistrust towards theUnited States can be traced back to the Iran-Iraq War.Iranians refer to the war as the “Imposed War” becauseIranians believe the United States orchestrated andfunded Iraq’s war efforts against Iran (Riedel, 2013). InJuly 1988, a U.S. Navy ship shot down Iran Air flight655 killing all 290 people aboard. Iran still marks theanniversary of the incident, alleging the U.S. intention-ally destroyed the civilian aircraft. Since the U.S. mili-tary maneuvers near Abu Musa Island in 1994, theIranian government is suspicious of any U.S. militarypresence in the region. This was further compoundedby rhetoric such as President Bush’s declaration of Iranas part of the Axis of Evil and Senator McCain’s call forthe U.S. to support regime change in Iran. Cyber-at-tacks like the Stuxnet virus against Iran’s nuclear facil-ities further increased animosity and suspicion of U.S.policies and goals.

W

R.C

“RC” is pursuing his Master of Science degreein International Security and Intelligence Studiesat Bellevue University in Omaha, Nebraska, USA.

He is currently employed by the United States governmentin a capacity that deals with Iranian issues.

Why the Nuclear Deal Does Not solve all Problems

Understanding the Iranian mindset requiresan insight into the foundation of their na-tional identity and national security interests.Shia Islam and nationalism are inextricableelements of Iranian culture.

Neglecting this knowledge will lead to moreexclusionary policies devoid of the culturalaspects that make negotiations more palat-able to Iranians. There are two distinct facetsof Iranian culture that form the foundationof all relations: Iranian nationalism and Shiiteparticularism. According to Bar (2004), Irani-ans have a strong self-image dating back toan ancient civilization. Persian pride per-vades every cultural, political, and economicfacet in Iranian affairs. Iranian national iden-tity is birthed from a lineage of Persian his-tory, mythology, kings, and a massiveempire. Conversely, this self-image drivestheir discrimination against Arabs and othernon-Farsi groups. A successful policy mustaddress the Persian and Iranian nationalismfactors. Ignoring the cultural aspect will likelybe seen as more exploitation of Iran’s affairsand so-called rightful hegemonic influencein the region.

Iran’s Security InterestsThe first security strategy is regime survival.The foundation of the Islamic Republic is theconcept of velayat-e fagih, which is rule ofthe jurist. The Supreme Leader exercisescomplete governing authority under theguardianship of velayat-e fagih.

The constitution was later amended to givethe Leader extrajudicial powers to correctany “flaw” in the judiciary. He enjoys the fullsupport of the Islamic Revolutionary GuardsCorps (IRGC), which refer to him as “Imam” orSource of Enlightenment. The IRGC are theprotectors of the revolution and view them-selves as the continuity and security of theregime’s ideals. The second national security interest is de-fending the country against all adversaries.Initially, this meant defense against militarythreats from other nation-states but hassince evolved to include soft power as well.The Supreme Leader, the IRGC, and the Basijcontinue emphasizing Iran’s efforts in thesoft war supposedly being waged by theWest against them. The soft war entails all as-pects of soft power against Iran’s Islamic andcultural values.

The third national security interest is ex-panding Iran’s regional influence. Morespecifically, this includes all efforts to exportIran’s Shia ideology throughout the region,support Shia uprisings, and become the Shiaauthority in the region. Davis, Martini, andAlireza further assert, “This involves increas-ing military support for its allies in the re-gion, especially Hezbollah, Hamas, Syria, and,increasingly, Iraq. Iran sees not only Israel butalso Sunni Arab states (such as Egypt) andTurkey and Pakistan as geopolitical rivals”(2011).Considering the Iranian perspective is notjust tallying up prior injustices, identifyingthe cultural and geopolitical causes of con-flict provide insight into the state’s mindset.Hunter writes, “Indeed, both sides have be-come prisoners of the past; both have a longlist of grievances. To be limited by the past inanalysis, perceptions and policy flexibility isa natural human trait, but in today’s circum-stances it would be self-indulgent and self-defeating.”

to be limiteD by the Past iN aNalysis,PercePtioNs aND Policy flexibility

is a Natural humaN trait, but iNtoDay’s circumstaNces it WoulD be

self-iNDulgeNt aND self-DefeatiNg


Parasility adds, “After three decades of mu-tual hostility and infrequent direct diplo-matic contacts, differences in politicalculture and diplomatic style, disproportion-ate involvement of intermediaries and mes-sage carriers, and sometimes confusing andmixed signals from those presumed to bespeaking for those in authority, such claritycannot be assumed.” The recently concludeddeal does not, of course, eliminate theseconcerns or these complex relationships. Infact, engagement with Iran doesn’t onlymake the nuclear fear not go away, it maymake the problem in some ways moredaunting and challenging.

Complex ProblemThe most significant continued concern isIran’s nuclear aspirations. Additionally, otherproblems include: Iran’s support for terroristgroups; the regime’s hostility towards Israel;the expansion of Shia theology throughoutthe region; Iranian threats to close the Straitsof Hormuz; Iran’s proliferation of instabilitythrough proxy groups; and the theologicalcontention between the Qom and NajafHowza. Iran’s strategic objectives clash withU.S. goals for the region. Robb and Wald(2012) write, “Tehran’s strategic objectives toexpand its influence, export revolution andundercut the Middle East peace processhave threatened longstanding U.S. efforts tomaintain a regional balance of power, de-fend key allies and support Arab-Israelipeace”. Moreover, Iran’s strategic objectivesadversely affect other nations.

IsraelIsrael views Iran as the biggest threat to theirnational security. Israel contends that Iran iswill never try to build a peaceful nuclear pro-gram but rather that Iran is enriching ura-nium to build nuclear weapons to usespecifically against the Jewish homeland. OnOctober 1, 2013, Israeli Prime Minister Ben-jamin Netanyahu addressed the United Na-tions General Assembly (UNGA). In hisremarks, Netanyahu (2013) stated, “Israel willnever acquiesce to nuclear arms in the handsof a rogue regime that repeatedly promisesto wipe us off the map. Against such a threat,Israel will have no choice but to defend itself.”Israel does not consent to any negotiationsthat allow Iran to pursue a nuclear program,regardless of the enrichment levels. Israeldoes not accept containment. This is why Is-rael still does not accept or consider the newdeal as a positive step or one to secure a newkind of Iran for the future.

TurkeyTurkey supports Iran’s pursuit of a peacefulnuclear program and has occasionally actedas a mediator to support Tehran’s efforts. De-spite Turkey’s assistance, Iran and Turkey areregional rivals with diametrically opposedworldviews. According to Barkey, “Turkey isa constitutionally secular state where themilitary is the self-appointed guardian ofsecularism. Iran is a theocracy in which Is-lamic law rules and clerics play decisive roles,including control over the military.” (2012).Like its neighbors, Turkey opposes any Iran-ian efforts to build a nuclear weapon, whichTurkey views as a destabilizing, regional fac-tor.

The Gulf StatesIran maintains strained relationships with itsregional neighbors. The Gulf States or theGulf Cooperation Council (GCC), which con-sists of Bahrain, Kuwait, Oman, Qatar, SaudiArabia, and the United Arab Emirates (UAE),collectively oppose the prospect of a nuclearIran building a nuclear weapon. The GCCwarns that a nuclear Iran would threaten thestability of the region well into the PersianGulf. This would also change the balance ofpower by enhancing Iran’s persistent effortsto export its ideology and influence the in-ternal affairs of Gulf Coast states. Some of themost notable examples are the violent, Iran-ian-supported Shia protests occurring inBahrain and Yemen and the continued dis-pute over the islands of Abu Musa and theGreater and Lesser Tunbs (Fulton & Farrar-Wellman, 2011).

iN fact,eNgagemeNt

With iraNDoesN’t oNly make

the Nuclear fearNot go aWay,

it may makethe Problem

iN some Waysmore DauNtiNg

aND challeNgiNg

Russian and Chinese Interests in IranRussia and China have a unique and some-what symbiotic relationship with Iran. TheIranian government has been steadily in-creasing exports to both countries despiteinternational sanctions. Russia and Chinaopenly state their opposition to any Iranianefforts to build nuclear weapons, but alsobelieved in alternative approaches beyondpunitive and extreme sanctions. Both coun-tries have conceded to international sanc-tions against Iran but also violate thesanctions when it is opportunistic for themboth. Russia and Iran continue to bolster theIranian government through military armsshipments, dual-use technology, oil pur-chases, and financial transactions. Iran is astrategic partner for them both and servesto limit Western influences in the region in away that benefits both Chinese and Russiangeopolitical interests.

No Easy FixIran’s new accord could and hopefully willsignal a new engagement that builds newchannels of trust and interaction with rivals,both regional and global. Even if this mostoptimal outcome does occur, however, thenational, cultural, historical, and geopoliticaltensions that caused issues to begin with willnot completely disappear. Iran not having anuclear weapon will of course be good newsto Europe, the United States, and Israel, justto name a few. But that will by no meansstop Iran from pursuing its long-held beliefin being an important global player and un-questioned regional hegemon. As the sayinggoes, the game has only just begun!


Why the JCPOAWOn’t turn IrAn

IntO the nextSAudI ArAbIA

f all the anxieties surrounding this sum-mer’s groundbreaking accord between theUnited States and the Islamic Republic ofIran, concern over oil has been among themost prevalent. Once the terms of the

Joint Comprehensive Plan of Action (JCPOA) arefirmly in place, sanctions on Iran’s economy, includ-ing a set of rigorous restrictions on its oil industry,will begin to recede.This could unleash a potentially-gargantuan supplyof Iranian oil onto an already-saturated world oilmarket and augment the abilities of the Islamic Re-public to influence regional politics. The WashingtonInstitute has warned that a “post-sanctions windfall”will allow Iran to “rescue the Syrian regime, reshapeIraq's political environment, expand its terroristproxy activities in various theaters, and otherwiseamplify the effects of its destabilizing regional pos-ture.”

O


GREGORY BREW

PhD Student, Georgetown UniversityDepartment of History

There is fuel for such speculation. Iran hasthe fourth-highest proven oil reserves in theworld, and the second-largest gas reserves.If it gains the ability to tap these enormousresources, Iran could potentially become amajor world oil and gas producer, rivalingSaudi Arabia, its major regional competitor.Yet it is far from certain that the JCPOA willhave anything like the cataclysmic effectsome have predicted. Moreover, it is ques-tionable how far Iran will push its newly-freed oil economy once sanctions are lifted,with a host of infrastructural challenges, aswell as some compelling historical experi-ence, potentially foiling the country’s riseinto major petro-state status.

Before the U.S. began pressuring it to give upits nuclear ambitions, Iran was a major oil ex-porter, second only to Saudi Arabia amongthe OPEC member-states. Productionreached 4 million barrels per-day (bpd) in2007 before dropping to 3.6 million bpd in2011; sanctions took that down to 2.85 mil-lion bpd by July of 2015, with exports drop-ping from 2.6 million bpd to 1.4 million bpd.Expectations for Iran to immediately in-crease its production one sanctions begin totaper off are high. Iran’s oil minister BijanZhanganeh boasted in July that Iran wouldincrease its national production by 1 millionbpd within one month of sanctions beinglifted.

While more moderate analysts debate thisfigure, most agree that Iranian productionwill increase by the end of 2015, droppingthe anticipated price of crude by $10-12 perbarrel.While the impact of greater Iranian produc-tion could further depress oil prices whichhave struggled for over a year, Iran will likelyexperience a sudden economic stimulus. TheWorld Bank estimates that Iran’s economicgrowth forecast for 2016 could increase from3% to a robust 5% if the JCPOA is approved,signaling a real end to the economic stagna-tion that set in with the sanctions regime.

Commentators and skeptics of the Iran dealhave suggested that Iran’s aspirations to re-gional hegemony will finally become attain-able once oil revenues are freed fromsanctions limitations. There is the immediateimpact of $150 billion in frozen assets to con-sider, money Iran will potentially be able toaccess once sanctions are lifted. This enor-mous windfall along with greater oil rev-enues will lead to a more strident Iranianpolicy, challenging Saudi and Gulf interestsand ratcheting up support for Bashar al-Assad’s regime in Syria.But considerable debate surrounds the pre-cise amount of capital Iran has locked awayin overseas accounts: $150 billion is the oft-quoted sum, but the Obama Administrationhas dropped its estimate from $100 billion to$50 billion, and one analysis in Fortunebased on information from Iran’s CentralBank suggests that only $29 billion will beimmediately available.Depressed world oil prices will likely increaseIran’s oil revenues by a relatively smallamount, from $50 billion to about $65 bil-lion, roughly what it was earning in 2013 be-fore prices fell. Rather than a sudden,tremendous surge in new assets, Iran will seea modest and gradual financial windfall overthe course of 2016 and 2017.

WhIle the ImPACt Of greAterIrAnIAn PrOduCtIOn COuldfurther dePreSS OIl PrICeSWhICh hAve Struggled fOr

Over A yeAr, IrAn WIll lIkelyexPerIenCe A SuddeneCOnOmIC StImuluS


How that new income will affect Iran’s for-eign policy is difficult to say with any preci-sion. The regime spends an estimated $10billion per year on foreign “adventures” likethe wars in Syria and Yemen, yet this amountdropped in 2014 in light of lower oil pricesand seems trifling when compared to theamounts spent by Riyadh on similar endeav-ors. Saudi Arabia military spending surpassesthat of Iran by five times and the UAE’s smallforce spends 50% more than Tehran on newweapon systems and arms. It is unlikely thatany increase in oil revenues will upset thisbalance.

Support for Iran’s regional allies, proxies andclients will likely be overshadowed by invest-ment that Iran will direct towards is domesticoil industry.Some of Iran’s most important oilfields are 70 years old and after a decade of

sanctions the country’s infrastructure, fromthe wellhead to the refinery, has sufferedconsiderable degradation for want of invest-ment. Even the CIA, in a recent intelligenceanalysis, predicts that Iran’s economy willtake precedence over support for regional al-lies.An estimate from Iran’s oil ministry puts thetotal cost of industry upgrades at $200 bil-lion, roughly half of Iran’s gross domesticproduct. Iran will have to pump a consider-able amount of its new revenues into re-building its industry, and while externalagents (including the massive Western oilfirms like Royal Dutch-Shell, ENI and Total)have shown considerable interest in invest-ing, the Obama Administration continues towarn off American companies, arguing thatIran’s aging infrastructure makes it a poorcandidate for increased investment.

Even if its production reaches former levels,Iran must fight to win back market sharefrom Saudi Arabia, which has increased itsown production to record levels in order toforce out new producers and bring the priceback up. Saudi Arabia dominates the oil mar-ket and will likely continue to do so, as itsproduction level (nearly 10 mbd) dwarfs thatof Iran. Iran must effectively triple its currentproduction level in order to compete, a featthat could take decades to accomplish.Finally, a strong historical argument existsthat might very well deter Iran from aggres-sively embracing increased oil production.Oil revenues largely funded the 1960s and1970s regime of Mohammed Reza ShahPahlavi, who pumped most of the country’searnings into its military and expansive mod-ernization programs. The Shah’s policiesmade Iran a regional power but over-heatedthe economy, created powerful inflationaryeffects and so destabilized his regime that itcollapsed in the 1978-79 Islamic Revolution.Ayatalloh Ruhollah Khomeini, Iran’s SupremeLeader, cut Iran’s oil production in half after1980, causing it to fall from 6.6 million bpdto 3 million bpd. He believed Iran needed a“revolutionary economy” separate from thewider capitalist world.

Khomeini may have been driven by ideolog-ical concerns more than hard economics, buthis reasoning was largely validated by post-1970s scholarship. Influential texts by TerryLynn Karl, Hossein Mahdavy and RichardAuty point to a “resource curse” that affectscountry’s overly dependent on export earn-ings and rents from oil production. Today,oil-rich economies like Venezuela and Russiaare struggling with such dependence.

If history is any guide, Iran will likely steerclear of such a policy, using its new oil rev-enues to bolster domestic economic growthand infrastructural development, shoring upthe political support for its hardline regime(which has staked a considerable amount onreducing sanctions) while continuing its sup-port for regional proxies and allies. The effectof a sanctions-free Iranian oil industry maytake some years to reveal itself, but it is un-likely to be as dramatic as some have specu-lated. After all, the world oil market remainsglutted; the Middle East remains a regionriven by conflict; and neither the U.S. nor Iranhave indicated that they plan to alter the na-ture of their postures towards one another.Iran’s oil may alter this situation, but it prob-ably won’t upend it completely.

Untying the KnotDivorce anD WoMen’s rights in islaM

any religions have their own guidelines re-garding marriage and what it entails. Thisinformation, found in religious texts anddocuments, tends to cover a wide range ofmarriage-related topics. Such topics might

include dowries, treatment of spouses, the roles ofhusbands and wives, polygamy, and even divorce.Islam, the second largest religion in the world, coversthe concept of marriage and its dissolution in detail.Under Islamic law, otherwise known as sharia law, di-vorce is permitted, but there are separate rules regard-ing divorce for men and women. For a man, themanner of obtaining a divorce from his wife can be assimple as a phrase and a waiting period. For a woman,divorce from her husband is a far more complicatedordeal that tends to involve reimbursement to herhusband, or sacrificing child custody and financialsupport.

M

ALYSSA BENOIST

Alyssa Benoist is the America’s Region Intelligence Analyst for a Silicon Valley Fortune500 tech company. She graduated with her Master's degree in International Security and

Intelligence Studies from Bellevue University in Omaha, Nebraska, USA.

The infringement on women’s rights regard-ing divorce has been an issue in recent years,particularly as a result of modernization inMuslim countries and the backlash fromconservative members of the public who aretrying to maintain tradition. In several of themore conservative Muslim countries, therehave been cases of women facing discrimi-nation in the divorce process in the form ofoutrageous requirements or outright denialof divorce.

This paper will discuss the subject ofwomen’s rights regarding divorce within thecontext of Islamic tradition and modern so-ciety, as well as explain the current threat towomen’s rights that arises from discrimina-tory divorce practices. This is an importantissue in the Caspian region, as fully four ofthe five littoral nations are Islamic, with a di-verse range in terms of secularism.

Divorce existed long before Islam, but ac-cording to Jaafar-Mohammad and Lehmann(2011), “The advent of Islam made the di-vorce process much more favorable towomen” (np). This is because Islamic law al-lowed women to retain their property andearnings, as well as entitled a woman to sup-port and maintenance from her former hus-band if she required it.

Islam recognizes marriage as a contract andbecause marriage is a contract it can be dis-solved through certain procedures. Islamiclaw recognizes three types of divorce: talaaq, khula, and tafriq. Mohammed, editedby Greenberg (2008), explains the differ-ences between the three. The first, ta laaq, isa form of divorce that can only be initiatedby the husband. To invoke a divorce, the husband can use averbal pronouncement to state his intentionof divorce. However, the husband must un-dergo a waiting period based off of his wife’smenstrual cycles – typically three cycles –before the divorce can be considered final-ized. The second form of divorce, khula (alsospelled khul’), is also known as no-fault di-vorce. A khula divorce can be initiated by thewife, or by mutual consent of the husbandand wife. No-fault divorce means that theperson asking for a divorce does not need toprove martial misconduct in order to receivethe divorce. Merely being unhappy with themarriage is sufficient grounds for ending themarriage. Through the process of khula, the wife “se-cures the divorce by paying an agreed sumof money, or by repayment of the dowry orpart thereof.” The third form of divorce rec-ognized by Islamic law is tafriq. Tafriq relieson the court to order the divorce “either inthe absence of the husband, or upon his re-fusal to consider the wife’s petition.” Only talaaq and tafriq entitle the woman to any sortof compensation or maintenance from herformer husband.

Khula is referenced in both the Quran andHadith. One of the famous cases in Islam re-garding khula was the story of the wife ofThabit bin Qais. The wife of Thabit bin Oaistold the Prophet that she did not like herhusband and the Prophet asked her if shewould return the garden that he gave her asa dowry.

UnDer islaMic laW,otherWise KnoWn

as sharia laW, Divorceis perMitteD, bUt there areseparate rUles regarDing

Divorce for Men anD WoMen


When she replied yes, the Prophet hadThabit take back the garden and divorce hiswife (Sahih Bukhari Volume 7, Book 063, Ha-dith 197). This example of khula revealedthat women did not need to show any obvi-ous fault or reason for wanting a divorce. Thewoman only had to compensate her hus-band for what he had given her. However, aswith most religious teachings, modern inter-pretations of what khula entails and how itis carried out tend to vary by region andstate. In more traditional societies, khula is viewedas having a negative impact and there are

several members of these societies thatwould prefer to see khula laws repealed.Ghalwash (2011) explains the stance of op-position to khula in Egyptian society, writing,“Islamists particularly single out the khul’law….They argue that this law does not re-flect the values and customs of Egypt’s verytraditional society….they agree on the factthat the khul’ law is bad for society and mustbe repealed” (np). Khula tends to be awoman’s last resort for divorce and societiesattempting to repeal khula will undoubtedlycreate dangerous infringements on women’srights.

Another reason cited as to why academicsbelieve that women face inequality in the di-vorce process stems from the financial situ-ation of women. Many women in Muslimcountries cannot rely on the court for a tafriqdivorce, which would grant them financialcompensation from their husband. The rea-son women cannot rely on tafriq divorce canresult from any number of factors, such asthey do not meet the criteria for obtaining adivorce, they do not wish to wait the lengthyperiod it takes to obtain the court-based di-vorce, or they are unfairly denied a divorcebased on a conservative or discriminatoryruling from the judge. Women who cannotobtain a tafriq divorce through the courthave the option of filing for a no-fault khuladivorce in order to end an unhappy mar-riage.

Khula divorce requires the relinquishment orcompensation of funds from the woman andthis can oftentimes serve as a deterrent forwomen wishing to obtain a divorce. In astudy of divorced women in Pakistan, Critelli(2012) found “loss of valuable assets was afrequent consequence for the women, leav-ing them more vulnerable and with few re-sources to support themselves…. Severalrespondents lost inheritances of land andother property from their marriages. Otherswere embroiled in protracted legal chal-lenges because of their husband's efforts todeny them child support and maintenance.”

Women in Muslim countries are oftentimesfinancially dependent on their husband andtherefore do not have the necessary funds topay back their dowries as required by thekhula process. Furthermore, women who areunable to financially support themselvesafter a divorce because they have relin-quished financial support from their hus-band through khula must instead rely ontheir family members for financial support.Many women are reluctant or unable to relyon family members because they do notwant to be a burden or they do not havetheir family’s support after going against thesocial norm in the first place.

Islamic law is often criticized as being toobackwards where women’s rights are con-cerned. In the case of divorce, Islamic law isactually much more liberal in some regardsthan the Western audience gives it credit for.Divorce is both allowed and acceptableunder Islamic law and either the husband orwife can individually initiate the separation.What is far less liberal is the modern-day in-terpretation regarding divorce found in anumber of conservative Muslim societies.But even then there are non-Muslim coun-tries that are just as bad – if not worse – inmatters regarding unfair divorce policies.While no divorce system in the world couldbe considered a perfect system, it is impor-tant to alter policies that are unfair against acertain population group. Ignoring the prob-lem not only undermines the institution ofmarriage, but can also infringe on aspects ofhuman rights. Ultimately, this may be one ofthe fundamental social issues that four of thefive Caspian states need to make improve-ment on as they all integrate deeper intomodern global society.

of CaSpian environmenTal poliTiCS

The “Global Spiral”

ANDY DEAHN

Andy Deahn is a 2015 graduate with a Bachelor of Science degree fromBellevue University’s International Security and Intelligence Studies program.

He is currently employed as a Field Service Engineer at the Sierra NevadaCorporation (SNC) providing aerial surveillance and intelligence analysis for the

Department of Defense throughout various worldwide locations. He had previouslyworked as Special Tactics-Tactical Air Control Party member in the U.S. Air Force

supporting Army Special Forces ground teams as a Joint Terminal Attack Controller.

he Energy Information Administration (EIA)estimates that the Caspian Basin holds morethan 48 billion barrels of oil and more than292 trillion cubic feet of natural gas. In ad-dition, the sea itself is home to over 400

wildlife species native to Caspian waters and has re-mained the largest producer—over 90 percent—ofthe world’s sturgeon and caviar outputs. However,this abundance of resources and their economicallydeveloping properties have come with a price in theform of severe contamination. Russia, the largest su-perpower in the region, is also the region’s largestcontributor to pollution, with the second biggest con-tributor being Azerbaijan. Furthermore, some activistgroups such as Greenpeace have went even further,labeling Russia as the world's worst oil polluter, claim-ing that its extraction and refinement activities haveexpanded past its own homeland and the CaspianSea, having caused environmental damage through-out the Arctic Ocean. Russia is undoubtedly the dom-inant geopolitical player in both landmass andcharisma in the Caspian Region and its ambitions forenergy extraction are unmatched compared to theother regional states.

T

However, while Russian extraction and re-finement of oil and natural gas outpaces theother littoral Caspian nations, it has alsodamaged relations with those states in re-gards to energy and pollution.

Russia’s pollutant contributions in theCaspian Sea come in the form of wastewaterfrom coastal industrialization and massiveamounts of sewage waste directed into theVolga River. This river, which is native to Rus-sia, is the most significant river responsiblefor supplying the sea’s water supply, makingit the greatest contributing pollutant source.To put it into perspective, pollution fromAzerbaijan comes in the form of oil by-prod-ucts, waste, and spills. The impact of Azer-baijan’s energy pollution has become sogreat that the Caspian Environmental Infor-mation Center considers the ApsheronPeninsula—which includes the Capital cityof Baku—and the waters that surround it tobe the most ecologically devastated geo-graphical area in the world. This title isspecifically awarded to the Azeri peninsuladue to the severe air, soil, and water pollu-tion from oil extraction, refinement, andtransportation of oil resources. Moreover,this severe pollution is exacerbated by Rus-sia's contributions, which as an upstream na-tion is also responsible for the destruction ofthe Apsheron Peninsula.

The ratification of the Tehran Convention byall littoral nations was based upon four pro-tocols: biodiversity conservation; preventingland-based sources of pollution; prepared-ness, response and cooperation in combat-ing oil pollution incidents; and producingenvironmental impact assessments in atrans-boundary context. However, as de-scribed above, despite the geostrategic sig-nificance of the Caspian Sea’s resources, weobserve that geopolitics can hinder at-tempts to manage the pollution severely in-fecting the waters. For example, in 2013 Iranthreatened to sue oil giant British Petroleum(BP) for allegedly discharging waste directlyinto the Caspian Sea and for not followingthe Tehran Convention covenants. These accusations were aimed at Azerbaijanin reality, which permits BP to operate theAzeri-Chirag-Gunashli oil field and Sha Deniznatural gas field off of the nation’s coast. Fur-thermore, Iran claimed that due to theseflawed practices there have been severe eco-nomic, health, and environmental damages,mainly from contaminated water decreasingfisheries and poisoning soil and groundwa-ter. In the late 1990s BP also bought a 50percent stake in the Russian TNK (Tyumen-skaya Neftyanaya Kompaniya) oil company,to form the oil giant known as TNK-BP. To goeven further, remember that BP was also re-sponsible for a catastrophe in the US—the2010 Deep Water Horizon oil-rig that ex-ploded in the Gulf of Mexico. The commonlink of giant oil ambitions and extraction isresulting in environmental and economicimpacts that prove the relevance of the“Global Spiral” theory and the increased im-portance of protecting the world’s environ-ment. “The Global Spiral” theory describes the ef-fects increasing populations and consump-tion rates of resources hold against theavailability and abundance of those respec-tive resources.

“The Global Spiral” TheorydeSCribeS The effeCTS inCreaSinG

populaTionS and ConSumpTionraTeS of reSourCeS hold aGainST

The availabiliTy and abundanCeof ThoSe reSpeCTive reSourCeS


Utilizing this spiral model and applying itspecifically to the nations of the Caspian Re-gion, we can conclude that when the popu-lations of the Caspian states continue toexpand (in both population size and indus-try), each nation will unilaterally attempt tosecure and exploit the various natural re-sources found both on and underneath theCaspian Sea. This “resource race” has alreadyescalated inter-state tensions, with the po-tential end-result being inter-state conflict asthe other nations respond to unilateral ac-tions with similar measures to best secureand exploit resources for themselves. Whilethis is a typical model for energy conflicts,pipeline politics, and/or resource warsthroughout the globe, I do not think themeans have met the ends in the Caspian sce-nario. This is because as the race for re-sources continues to escalate in the CaspianRegion the impact of severely damaging pol-lution and new shifting geopolitical dynam-ics will destabilize energy and resourcesecurity overall. The Global Spiral also de-termines that the strain on those resourcesand the resulting pollution from their ex-ploitation will become so great that preven-tative measures put in place to regulateavailability and pollution will become un-controllable - hence, the term the “GlobalSpiral” and its ability to lead to global catas-trophe.

The question that needs to be asked now isthat if each of the five Caspian nations canbarely enforce or follow an endorsed inter-state agreement, does the internationalcommunity have a role to intervene in thesovereign affairs of states in order to secureenergy resources and ensure that any agree-ments and standards are honored? Interna-tional interventions would only fuel Russiansuspicions, however, and could aggravateinter-state relations between all regionalplayers.

Russia as the leading superpower in the re-gion holds both the obligation and the ca-pacity to live up to the agreed-uponstandards outlined in the Tehran Conven-tion. International cooperation is a funda-mental necessity for ensuring that theCaspian states do not escalate inter-statetensions into inter-state conflicts that haveglobal cascade effects. However, futurestrategies for preventing a “Global Spiral” inthe Caspian region will only be accom-plished by improving relations between rad-ical regimes, recalcitrant presidents, anddivisive autocrats. This is no easy task wheneach believes the best strategy is likely ex-tracting the resources provided to the nationfor economic advancement, rather than fo-cusing on the collective responsibility of en-vironmental protection and economiclimitation.

KazaKhstan steeringthrough troubledWaters

arlier this year, the Central Asian nation ofKazakhstan announced a new campaigncalled “Invest in Kazakhstan,” which was de-signed to attract foreign investors. Through-out the campaign it released new

commercials that enticed potential investors with ex-emptions from corporate income tax, land taxes,property taxes, and customs duties for up to ten years.To lure new stockholders, the commercials promisedstate-in-kind grants (like goods, services and expert-ise), stability of investment legislation (drawing on the2003 Kazakh Law of Investments which virtually guar-anteed the stability of assets), strong protection of in-vestors’ rights, no work permits for foreign labor, andvisa-free entry for citizens of many countries. As ifthese benefits weren’t enough, Kazakhstan went evenfurther, offering thirty percent cash back on invest-ments.

e


JEANETTE “JJ” HARPER

Jeanette “JJ” Harper is a graduate studentin the International Security and Intelligence Studies program

at Bellevue University in Omaha, NE, USA.

One would think that with this kind of eco-nomic bait – and the fact that Kazakhstanhad very low debt – foreign investors wouldbe jumping at the opportunities. So whyhasn’t the country been able to draw moreforeign investment?

Perhaps, with the exception of multinationaloil companies, potential investors are turnedoff by the many disadvantages there are toinvesting in Kazakhstan. In addition to beingquasi-democratic and geographically land-locked, Kazakhstan’s private sector lacks ex-perience, still has to develop a largereducated workforce, and suffers from globaldoubt as to its financial ability to followthrough on the aforementioned promises. Italso doesn’t help that Kazakhstan acts like anautocracy at times in that its government isknown for its lack of transparency and hashigh levels of corruption. It maintains tightcontrols over the press, lacks diversity, andhas an unimpressive civil rights record. Deal-ing with these political complications wouldbe an inevitable headache for investors. Perhaps most importantly, Kazakhstan is cur-rently dealing with a currency crisis wherecapital is hemorrhaging at an alarming rate.The tenge, Kazakhstan’s native currency, wastightly controlled for years until the govern-ment decided to switch to a floating ex-change rate.

This decision, due to falling crude pricesaround the globe, caused the tenge to losealmost a quarter of its value. However, as thedominoes have fallen in reaction to cheap oilfrom China to South Africa, Kazakhstan’sgovernment still does not appear too con-cerned. In fact, while everyone else is callingit a crisis, Kazakh leadership is calling it a nor-mal “transition.”

Even though Kazakhstan has recoveredsome of its losses (ten percent), there is stilla very good possibility it will drop again inthe next few weeks. This is because of thetremendous pressure on Kazakhstan by itsneighbors. Like other emerging markets inthe region, Kazakhstan – a country that issandwiched between Russia and China – iseconomically dependent on both regionalsuperpowers. Its economy is linked to Rus-sia’s and has been negatively impacted bythe Russian sanctions caused by the crisis inUkraine. This impacts Kazakhstan on twofronts: the Russian ruble has become soweak that Russians can hardly afford Kazakhgoods and, at the same time, Russian im-ports are threatening to flood Kazakhstan’smarket with low-cost imports. To make mat-ters worse, there is a weaker demand forKazakhstan’s exports by China, the second-largest economy in the world. China’s recentmove to devalue its currency – the Yuan –may have been done to boost the country’sexporters in an attempt to make their prod-ucts cheaper and easier to sell. This couldvery well spark a currency war in the regionand further damage susceptible currenciesin emerging markets, including Kazakhstan.In sum, China’s devalued currency, Russia’splummeting ruble and crushing sanctions,and the likely increased supply of oil fromIran after the new nuclear accord – all exac-erbate the problem in Astana and may beputting Kazakhstan’s long-term economicfuture on shaky ground.

it appears that KazaKhstanstill resolute to integrate

into the global marKet community,has an ambitious plan to useits Wto and eeu memberships

to boost its image and attractneW investments


It appears that Kazakhstan, still resolute tointegrate into the global market community,has an ambitious plan to use its WTO andEEU memberships to boost its image and at-tract new investments. Furthermore, theAsian Development Bank (ADB) just an-nounced it will loan Kazakhstan one billiondollars so it can resume governmental pro-grams designed to stimulate the country’seconomy. This loan presents Kazakhstanwith an opportunity to diversify, create newjobs, provide continued support and serv-ices to its disadvantaged citizens, grow itsprivate sector, and build up smaller busi-nesses. Unfortunately, making substantialdomestic policy changes pertaining to civilliberties and democratic freedoms do notappear to be a part of the strategy at the mo-ment.

While it is difficult to know exactly how thiscomplex economic strategizing will play outin Kazakhstan, there is one thing we doknow. Kazakhstan’s President NursultanNazarbayev – the only leader the former So-viet Republic has had since its independencein the early 90s – has great energy and en-thusiasm for the future of his country. Hisgrand geopolitical ambitions strive to takethe country to new heights of economic, po-litical and industrial growth. While Kaza-khstan is considered authoritarian byinternational standards, by regional stan-dards it is regarded as a much “softer” versionthan its Asian counterparts. This may give itan important edge as it strives to stay inno-vative and relevant while expanding its po-litical, military, diplomatic, and economicreach.

Another important demographic factor isjust how young the country is, in both pop-ulation and geopolitical terms. For one, Kaza-khstan has managed to utilize its resourcesand the productive capacity of citizens tonot only break away from its domineeringprogenitor but also set itself up for long-term sustainability. It transformed itselfmostly into a market economy that, underthe right conditions and strategies, coulddramatically transform and deepen from in-ternational trade and investment. While itwould certainly be a stretch to describeKazakhstan as a wealthy nation, it most defi-nitely is not a poor one. Post-Soviet Kaza-khstan has been remarkably responsiblewith its fiscal, industrial, trade and macroeco-nomic policies. Plus, it has worked very hardto carefully cultivate relationships with othercountries so that Kazakhstan is largely re-garded within the region as a stable and ra-tional geopolitical voice.

While Kazakhstan still needs to diversify itsoverconcentration on natural resources, thecountry still has time, opportunities, impor-tant economic alliances, and room to grow.Kazakhstan’s economy and political ties donot necessarily have to remain constrainedby corruption and political controls either.For the country to overcome the challengesit currently faces and to attract foreign in-vestors, it needs to continue to embrace in-novation that can accommodate social unityand a more balanced policy geared towardsdiversification and development. Perhapsthe greatest challenge of all, but also providedefinitive proof to the global community(and its foreign investors), is the willingnessof the country to venture more boldly withdemocratic freedoms and civil liberties ex-periments that will accentuate and reinforceits sound economic strategies. Being able todevelop both economically and democrati-cally, to show the world that unlike so manyemerging economies Kazakhstan is notafraid to give its people and its system moreindependence and freedom, might be theone element of harmony that will distinguishthe country from all other competitors and,ironically, provide it with the stability to rideout the cyclical nature of economic crisis.

The RIse ofsouTh-souTh DevelopmenT

EVAN THOMSEN

Evan Thomsen is a graduate of the International Security and IntelligenceStudies Program at Bellevue University in Omaha, NE and is currently

a Master’s student at the world-renown Elliott School of International Affairsat The George Washington University in Washington, DC. He has just joined

with the Eastern Congo Initiative as Strategic Partnerships Officer.

n an era when we all seek an alternative, fromfoods to music to lifestyle, it should come as nosurprise that the international order of donorand recipient states has also sought (or supplied)an alternative: South-South development part-

nerships. This emerging order, which is effectively ledby China but commonly features a supporting cast ofthe BRICS (Brazil, Russia, India, China, South Africa)and the MINT (Mexico, Indonesia, Nigeria, Turkey) na-tions, is presenting serious challenges to what somewould call the post-historical world. While competi-tion between donors could offer substantial benefitsto recipients, in practice this is more the exceptionrather than the rule. Competition in developmentoften favors expediency over long-term effectiveness.This is different from competition in markets, wherethe better product for the better price wins out (atleast in theory). Furthermore, state competition overwho develops increasingly involves strategic consid-erations, as in, it is not so much about the quality ofthe partnership but the mere existence of the part-nership that matters.

I

The concern is that competition is positivelycorrelated to expediency and strategy. Thisarticle contextualizes the rise of South-Southdevelopment partnerships and assesses itsimpact on the future of international devel-opment.

While I hesitate to espouse the proverbialcause of international phenomena in a sim-plified form, there are two prominent fea-tures that make up the recent rise ofSouth-South commitments - the end of thebipolar geostrategic order with the fall of theSoviet Union and relative gains made withinthe global South vis-a-vis the Western world.These features, while far from exhaustive, arecritical towards contextualizing the shiftingparadigm.

The Catch-all For Foreign Policy WoesThe fall of the Soviet Union is still the Inter-national Relations bogey man when it comesto complicating the once, and at timeslonged for, bipolar status quo. All at oncenew strategic opportunities arose, newthreats and intelligence blind spots weredrawn from the shadows, and organizationalrigidity was exposed as new expertise andflexibility was demanded of state and inter-national actors. These challenges were aspresent and dramatic in economic develop-ment as they were in defense and diplo-macy.

In what could have been a Marshall Plan 2.0,the past two decades have exposed frailtiesin the designs of liberal institutionalism.Whether this is a structural flaw or a lack ofapplicability towards its object, one thing isclear - the Western order has manifested asubversive order or has at least seededground for alternatives in the expandingeconomic bubble. Defining the South-Southarrangement, at least in terms as clear asmainstream Western-led donor states andinstitutions, presents difficulties. Two pointsof analysis are useful in understanding thenature of their rise to significance. It remainsto be seen whether the South-Southarrangement is strategic opportunism in theface of relative Western decline or a looseconfederacy of states offering an alternativeto a general lull in Western engagement. TheSouth-South arrangement does have onepoint of clear unity and distinction, however,and that is language - they are not donors,they are partners. And these partnerships, atleast in rhetoric, come with relatively nostrings attached.

Everyone is RisingToday it is easy to find common headlinesalong the lines of Africa Rising, The Rise ofChina, and even a ‘meta-alternative’ relativeto this article - Caspian Energy: A Viable Al-ternative to The Persian Gulf. Apparentlyeveryone is rising. This is of course from aWestern perspective and is thus viewed asrising relative to the Western world. It is notjust raw economic data that supports thesehopes and fears, but the very fact of South-South development. On the lower end of de-velopment, many States are graduating upthe World Bank scale of economic distinc-tion. From the World Bank’s perspective thisis not just a token of prestige, but a substan-tive policy category that sets parameters forloans, grants, investments, and most impor-tantly, interest rates.

The fall of The sovIeT unIonIs sTIll The InTeRnaTIonal RelaTIons

bogey man when IT comesTo complIcaTIng The once,

anD aT TImes longeD foR,bIpolaR sTaTus quo


On the higher rungs of the South-Southmovement are many former recipient na-tions who have become donors. In somecase, many States are operating both as re-cipients and donors. This apparent paradox not only complicatesfinancial flows (with so many States both re-questing economic assistance and exertingeconomic influence), but it complicates thegeopolitical landscape with layers and knotsof complicated, competitive, and interde-pendent arrangements. Nowhere are theseconditions more apparent, and more com-plicated, than in the Caspian, where theglobal need for energy resources, marketshare, and projected long-term demandshave sought to make this regional alterna-tive a critical strategic chess piece.

A Critique of the NewSouth-South development, namely theBRICS, has earned the ire of many Westerndevelopment professionals. The object ofWestern condemnation is not exclusive tothe emerging order, however, as mainstreamdonors are criticized for currently tying aidto strategic objects, while the rising South-South framework is criticized for altogetherdropping standards of governance in devel-opment. This, upon analysis, strongly suggests thatpoor governance not only negates long-term development but sublimates positiveeconomic conditions (read: resources). I be-lieve that this vocal duality, which frames thefuture debate and sets parameters for the di-vide, is a red herring. This debate, which is ef-fectively about tactics on the ground, missesthe broader geostrategic point - South-South development is not an experiment, anew trend, or a deviation from our most re-cent version of relative economic barbarism.It is a strategic consortium set to challengethe West on the world stage.

I am not belittling the importance of under-standing governance as it pertains to longterm development or the debate surround-ing bilateral and multilateral investment ini-tiatives. I believe it necessary to improvingour collective engagement in the develop-ing world. My concern is that the frame ofthe debate has been created and sustainedby a singularly liberal institutionalist order -one that often excludes grand and strategicanalysis. In this sense, South-South develop-ment is less an alternative in development/donor options and more an alternative orchallenge to power relations. To think other-wise would be delusional. Great powers arestill at play: their tactics may be temporaryand fluid but their interests are eternal.

This analysis has significant applications forthe developing world, especially the Caspianregion. The most critical question is how canthe Caspian states tie their clear strategic im-portance to the international communityinto a deal that balances this importancewith their own sovereign needs? Elite bar-gains have been occurring, and will continueto occur, in this energy rich region. Ensuringthat such deals do not come at the expenseof Caspian sovereignty or at the expense ofits people is the real challenge moving for-ward into the future. This is where I believedevelopment experts and practitionersshould focus their attention on influencingthese elite bargains. Without understandingthe strategic concerns of great powers anddeveloping states this influence will be mis-placed and strategically critical regions likethe Caspian and beyond will suffer.

russIaFaCIlItatIng trade

wIth aFrICa

IntervIew wIth MaxIM Chereshnev

ussian Export and Investment Fair (REIF) tobe held on 19-20 November 2015, for thefirst time, will gather high level partici-pants from more than 50 countries and 80regions in Russia. The purpose of the REIF

is to create an international platform for professionaldialogue of the business community. The REIF is designed to help government leaders,representatives of ministries, departments, businesscorporations and industries from across the world tomeet new partners. It will also offer participants theopportunity to receive up-to-date information onthe current trends, challenges and prospects of de-velopment of export and investment activities ofworld-class professionals as well as to expand thecircle of business contacts.

r


Kester Kenn Klomegah

Kester Kenn Klomegah is an independentresearcher and writer on African affairs in

the EurAsian regionand former Soviet republics.

In this exclusive interview, Maxim Cheresh-nev, the Chairman of the Board of the Coun-cil for the Development of Foreign Trade andInternational Economic Relations, explains toKester Kenn Klomegah about the signifi-cance of the forthcoming corporate businessevent.

Q:What are the key objectives of theforthcoming russian export and Invest-ment Fair scheduled for november inmoscow?

Russian trade and economic developmentcouncil jointly with Agency of Strategic Ini-tiatives have initiated this Fair as the firstplatform in Russia for direct business com-munity international dialogue. After exam-ining the experience in events organizationsin other part of the world, particularly inChina, Hong Kong, Korea and Singapore, thedecision was made to adopt the best prac-tices in Russia. Indeed, REIF is aimed at pro-viding business with opportunities formeetings and the beginning of cooperationbetween Russian and foreign companies.Within REIF it will be possible to present ex-port and import possibilities of Russian andforeign companies, their investment proj-ects, to attend training courses and semi-nars, to arrange b2b sessions as a way ofsharing views and so forth.

Q:Is this an effort directed at promotingrussian export products and services asVladimir Putin has urged businesses todo?

As President Vladimir Putin noted in his mes-sage to the Federal Assembly, raising busi-ness development, diversification ofeconomy and non-resource export are keypriorities for economic prosperity of Russia.RTEDC as a trade promotion organization isexactly aimed at global communication

development and mutually beneficial busi-ness relations strengthening in compliancewith the governmental politics. RTEDC activ-ity and REIF initiative definitely suit invest-ment promotion, trade facilitation andexport support of Russian companies as in-struments for new opportunities creating forsmall and medium enterprises.

Q:Do you think that the Fair can help stim-ulate export transactions and the flow ofcorporate business deals abroad?

REIF is a result of long and hard work onstrengthening b2b communication betweenRussian and foreign companies. RTEDC hasa range of 20 priority countries for collabo-ration. RTEDC special representatives andchairmen of profile RTEDC committees forcooperation with these countries assist todifferent business cases realization whichRTEDC deals with. These are examples of pri-vate business interest. Without doubts, REIFwill lead to growth of general mutual inter-est, demonstrate facilities of Russian compa-nies and highlight favorable conditions foractive business interaction. Prearrangedmeetings and business matching will allowto find partners and investors for projects re -alization both abroad and in Russia. REIF isnot just fair but also the platform where par-ticipants will get opportunity to negotiateand to make agreements with new partners.After REIF, RTEDC will provide companieswith full assistance in all communications.


Q: as it shows, so who should attend thisrussian export and Investment Fair? Canwe expect something new in terms of for-eign participation?

Foreign manufactures and companies whichare interested in localization in Russia or injoint production, companies which searchfor projects and investment to Russia orthose business representatives that are look-ing for export from Russia or would like topresent their own products and technolo-gies as well as Russian export companies,Russian regional representatives are invitedfor participation in this business event. Wesuppose that matchmaking and workingsessions will be really useful for mutual ben-efits of REIF exponents and guests. REIFwould specially welcome companies fromAsian and African countries as participantsand visitors. Thus, nowadays perspectives ofbusiness contacts between Russian andAfrican business are actually underesti-mated, however, there are a huge number ofopportunities for technology exchange,trade promotions, mutual investment be-tween Russia and South Africa, Morocco,Zimbabwe, Namibia, Egypt, Kenya and otherAfrican countries.

Q:how important is this corporate busi-ness event for africa?

Import substitution policy in Russia and gen-eral course on economic diversification arefavorable for other countries to export/im-port relations development and investmentwith Russian companies. It includes interestsof African countries within their economicdevelopment and independence from tradi-tional and new monopolists in African mar-kets. At present African continent with itstotal economic growth rate 5-5,5% per yearon average attracts attention of internationalbusiness community.

It puts Africa on the second place in theworld growth rates. According to forecasts by 2033 African GDPwill reach to East Europe figures, includingRussia, and by 2039 – to Latin America rate.It’s pleasure to note that Russia and Africanstates have a long story of relations. Importof coffee, cacao, tea, citrus, sea productsfrom African states is important for Russia. Atthe same time Russia is interested in Africanmarket for joint production and export oftechnical, military, industrial equipment andservices in satellite communications, geolog-ical survey and power engineering.

Some Russian companies such as Gazprom,ALROS, RusAl, Norilsk Nickel and others arealready operating in Africa. Moving on, Rus-sia is the 5th country in total volume of in-vestment among all states in Africa. What isvery important today is the fact that new op-portunities are arising for small and mediumenterprises of Russia and Africa for their col-laboration. For instance, agricultural, high-tech, medicine, energy-saving technologies,logistics and infrastructure projects are reallyperspective for strengthening Russia-Africaneconomic cooperation. That’s why we inviteparticipants from Africa for establishingcloser contacts and continue cooperating inkey sectors of the economy. We call on all in-terested companies and organizations toregister on REIF website (www.rusfair.com)and provide us with information about theirneeds and requests from this first Russian Ex-port and Investment Fair.

Documents

The Caspian Project .012