Black Sea Trust for Regional Cooperation

March 2013

Summary: In 2012, the chances to find sustainable settlement to prolonged conflicts in the South Caucasus and Moldova did not improved considerably. Talks on the Transnistrian conflict progressed unevenly. The leaders in Tiraspol continued to avoid discussing a political solution to the conflict. Positive momentum bogged down as Russia choked off Transnistrias room to maneuver and Tiraspols hardened its discourse and policy actions toward Moldova. In Georgia, parliamentary elections raised hopes that the new leadership could set in motion a long-term process of untangling the strategic deadlock in relations with Russia, while reviving and expanding links with breakaway regions. In 2012, clashes between Azerbaijan and Armenia on the contact line escalated again. What should we expect in 2013 and what can be done to prepare the ground for settlement?

Untangling Conflicts in the South Caucasus and Moldova: An Agenda for 2013
by Stanislav Secrieru
From the Editor In the five years since the launch of the Black Sea Trust, the Black Sea region has gone through dramatic events and major changes, which affected both individual countries and the region as a whole. The Black Sea Trust has devotedly assisted civic groups in the nine Black Sea countries with reacting or adapting to political and social events, researching the dynamics of the region, promoting stronger relations with international community, and building bridges between societies or groups in conflict. Five years on, the Trust reflects on the current context in the region and the challenges ahead. Introduction1 In 2012, the chances to find sustainable settlement to prolonged conflicts in the South Caucasus and Moldova did not improved considerably. Talks on the Transnistrian conflict, which revolved mainly around procedural issues of negotiations and socio-economic basket of problems, progressed unevenly. The leaders in Tiraspol continued to avoid discussing a political solution to the conflict. Toward the end of the year, positive momentum bogged down as Russia
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The Black Sea Trust for Regional Cooperation B-dul Primaverii nr. 50 Corp 6 Casa Mica Sector 1 Bucharest, Romania T +40 21 314 16 28 F +40 21 319 32 74 E BlackSeaTrust@gmfus.org

choked off Transnistrias room to maneuver and Tiraspols hardened its discourse and policy actions toward Moldova. In Georgia, parliamentary elections raised hopes that the new leadership could set in motion a longterm process of untangling the strategic deadlock in relations with Russia, while reviving and expanding links with breakaway regions. Although potentially rewarding, Georgias new approach will face many obstacles, both domestically and externally, which will test the patience and political will of the government in Tbilisi. In 2012, clashes between Azerbaijan and Armenia on the contact line escalated again. The Safarov case has further strained the atmosphere, triggering reciprocal cyber-attacks against media outlets and governmental websites in Azerbaijan and Armenia. Therefore, diplomatic efforts led by the OSCE Minsk Group to agree on the Madrid Principles by the end of year were in deep freeze. As circumstances around the prolonged conflicts in the South Caucasus and Moldova do not inspire much optimism for rapid resolution, what should we expect in 2013 and what can be done to prepare the ground for settlement? The Promise of Peaceful Power Transition in Georgia The inception of a peaceful transition of power in Georgia in October 2012, which continues to unfold in

This policy brief is based on the concluding chapter of the Neighborhood Policy Paper entitled Protracted Conflicts in the Eastern Neighborhood: Between Averting Wars and Building Trust published by the Center for International and European Studies (CIES), Kadir Has University. The author is grateful to CIES for granting permission to reproduce it with some adjustments and necessary updates to the original text.

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2013 with presidential elections is good news for the region. Nonetheless, the exacerbation of conflict between the opposition and the ruling coalition in 2013 could have a negative impact on the new governments outreach efforts toward Russia and breakaway regions. Having only just taken the helm, the new leadership in Tbilisi has shown the will to amend the previous approach to the longstanding conflicts and relations with Russia. The objective remains the same as under the previous government, namely reintegration of the country, but the current government intends to accomplish this differently than its predecessor. Tbilisi seems to attempt to strike a balance between preventing world-wide recognition of separatist regions and engagement with de facto authorities and population in Abkhazia and South Ossetia. Firstly, there is an obvious change in tone with regard to the separatist authorities. Instead of labeling them puppet regimes that are not worth engaging with, the new Georgian executive announced its intention to talk directly with Sukhumi and Tskhinvali. Secondly, the minister for reintegration called for the amendment of the 2008 Law on Occupied Territories, several provisions of which have been criticized by the Venice Commission and the EU as impeding the exercise of some basic rights and cementing the isolation between Georgia and the breakaway regions. Modifications will probably lift some restrictions on freedom of movement and trade activities between Georgia and its separatist regions. The initiative of the new reintegration minister to recognize the identification documents issued by the separatist authorities and to re-open railway traffic between Georgia and Russia via Abkhazia are in step with the de-isolation approach advocated by the new Georgian leadership. Thirdly, the new government yearns to normalize its relations with Russia within the limits imposed by the imperatives of the countrys reintegration and by the foreign policy Euroatlantic vector. This policy line follows the Georgian public opinion, which, despite perceiving Russia as a main security threat, aspires to have normal economic relations with its northern neighbor. Thus, the prime minister appointed a special envoy for relations with Russia, showing an interest in talking directly with Moscow a full range of bilateral issues. In another accommodating move, PIK TV, the only Georgian public channel broadcast in Russian, which covered the North Caucasus and the European part of Russia, was taken off air, while at the same time, several cable operators in Georgia reintroduced Russian channels whose retransmission was

suspended after the armed conflict in 2008 into their TV packages. While the everything but recognition strategy is still very much in its early stages, it opens new opportunities for the EUs non-recognition and engagement policy toward the breakaway regions of Georgia. The EU still has to encourage Tbilisi to ease its modalities, adopted in 2010, for the engagement of organizations working in the occupied territories, which complicated international organizations activities in Abkhazia and South Ossetia. With the modalities significantly liberalized, the EU could more vigorously support confidence-building measures in the conflict areas and other organizations could follow. The EU should seize the moment and re-energize the Geneva talks (with the next round scheduled for the end of March 2013), transforming it from talking for the sake of talk into a process with concrete and realistic deliverables. For instance, 1) the EU, working closely with the United States, could nudge the sides closer toward the adoption of the declaration of non-use of force, to include Russia. Similarly, 2) the EU should put additional efforts to resume the meetings on Abkhazia incident prevention and response mechanism, suspended by Sukhumi in March 2012. In a larger perspective, 3) the EU and the United States have to reiterate with authorities in Tbilisi the importance of the Georgian governments policy toward Adzharia and ethnic minorities in Georgia, so their conflict resolution efforts remain credible. Given the precarious nature of peace in the region and the potentially destabilizing effect of the 2014 Sochi Olympic Games, 4) the EU has to extend the European Union Monitoring Mission mandate, which is due to expire in September 2013. The task for the Georgian government and the EU to break the vicious circle that hampers the trust-building exercise is not easy. There will not be any miracles overnight. The memories of war are still fresh. The position of the Abkhaz leadership toward Georgia and the EU hardened throughout 2012. Sukhumi regards Georgias attempts to open up Abkhazia as a trap that seeks to undermine its statehood. The Abkhaz leadership decided to enhance control over the activity of international humanitarian organizations by raising bureaucratic obstacles to their work. Nonetheless, albeit with some delay, the Abkhaz leadership expressed readiness to consider proposals to open railway traffic via Abkhazia, leaving thus open room for cautious

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engagement with Tbilisi. Economically depressed South Ossetia, with a substantially shrinking population and a heavy Russian military presence, increasingly resembles a closed military garrison. However, projects to provide potable and irrigation water across the conflict areas financed by the EU indicate some space for the implementation of confidence-building measures as well. It is difficult to gauge to what extent Russia will tolerate Georgias direct outreach toward the separatist enclaves or when it will decide to act in order to escalate tensions, which would make re-rapprochement implausible. In this regard, Russias new foreign policy concept, published in February, signals the Kremlins unchanged hard stance on Abkhazia and South Ossetia. It is equally difficult to predict how the Russian reaction to Georgias reset proposal will continue to unfold. The shoot-out between Georgian forces and North Caucasus rebels on the Russian-Georgian border in the summer of 2012 obviously points to existence of common security threats, which could facilitate the reinstatement of a functional bilateral dialogue. A get-to-know meeting with Georgian envoy in Geneva, contacts on the parliamentary or ecclesiastical level (in Strasbourg and Moscow), the shaking of hands between prime ministers (in Davos), and the promise to consider opening the Russian market to Georgian wine and mineral water demonstrates that apparently the Kremlin is in the mood to play its part, cautiously, in the Russian-Georgian thaw. But there should be no illusions regarding Russias ultimate objective, which is reversal or at least obstruction of Georgias foreign and security policy orientation. Russias attempts to lure back Georgia into the Commonwealth of Independent States since December 2012leave no doubts concerning the foreign policy goals Moscow pursues in the region. To play it safe, Russia will most likely wait for the outcome of the 2013 Georgian presidential elections before authorizing a more intensive engagement on an official level with Georgian counterparts. Regardless of whether Moscow will continue to reciprocate or not, overly enthusiastic expectations about quick and substantial improvements in bilateral relations once the transition of power in Georgia is completed could be proven wrong sooner rather than later. Should the Kremlin choose to continue to engage authorities in Tbilisi, it will do so from a position of strength, approaching Georgia as the party that needs improved relations in order to recover its lost share of the Russian market,

to fend off pressure on its citizens working in Russia, and, to restore to some degree a sense of security in the conflicttorn South Caucasus. Containing the Negative Spillover of the Electoral Season in Armenia and Azerbaijan The presidential elections in Armenia and Azerbaijan in 2013 directly affect the conflict resolution process. Both presidents are constrained by their domestic and international constituency not to compromise on the issue of Nagorno-Karabakh. The legitimacy of both political regimes partially rests on their rhetoric and capacity to defend or to reclaim Nagorno-Karabakh and the territories around it. In the case of Armenias reelected president, a veteran of the conflict in Nagorno-Karabakh, the issue cannot be decoupled from his individual war experience. In both countries, the Nagorno-Karabakh conflict is an important identity marker, which shapes the national discourse and the selfidentification of citizens. Therefore, neither the incumbent presidents nor the opposition candidates could manifest any intention to reach consensus with the rival side, as this would be interpreted as a sign of weakness. Post-electoral protests in Armenia and Azerbaijan against allegedly rigged elections, as it happened before, may push governments to exacerbate external security threat theme, have a negative impact on the situation in the conflict zones. The spiraling tensions on the frontline in 2012 exclude even the slightest hint of a deal on the Madrid Principles in the run up to the elections. Thus, in 2013, the actors will publically revert to more maximalist positions, forcing dialogue behind closed doors. Under these circumstances, the Minsk Group objective should be to keep the dialogue open, which in itself represents a basic confidence-building measure. It will also have to manage to keep the tensions around the possible opening of the airport in Stepanakert from escalating into a dangerous military-diplomatic stand-off, which could sever the bilateral dialogue. The war of declarations in January 2013 between Baku and Yerevan, during which both sides pledged to employ military power to enforce or prevent civilian aircraft from landing in Stepanakert, speaks volumes. In such a charged atmosphere, another push to convince sides to withdraw snipers from the frontline will be of little avail, as they serve as an important contactless tool of the tit-for-tat strategy.

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Russian President Vladimir Putins return to the Kremlin has visibly scaled down his interest in becoming more involved in mediating the talks between the conflicting sides. Since formally reclaiming power in May 2012, Putin has not hosted a single round of talks in the trilateral format, which was extensively used by his predecessor. Having experience in dealing with the Nagorno-Karabakh conflict, Putin is likely to adopt a hands-off approach, increasingly delegating the mediation mission to his foreign minister. He mostly will keep a close eye on maintaining the military balance between Armenia and Azerbaijan. Anticipating no concrete breakthroughs in 2013, Putin will thus keep a low profile in the mediation efforts, ensuring, however, a functional military equilibrium, which will keep the chances of an armed conflict at a minimum ahead of the 2014 Sochi Olympic Games. The agreement concluded in September 2012 between Russia and Armenia on the joint production of small arms with an eye to deepening cooperation in the defense industry field is indicative of the Kremlins approach. Russias status-quo stance will further deepen the irritation of Azerbaijan. Bakus position on renegotiation of the Gabala radar station lease to Russia in 2012 confirms it. Azerbaijan asked for a higher rent ($300 million per year) and adopted an uncompromising attitude. After several rounds of negotiations, Russia refused to accept a rent hike and decided to leave Gabala. In January 2013, President Putin instructed his government to deepen military-technical cooperation with Armenia. Besides Russias status quo stance on Nagorno-Karabakh, the Tbilisi initiative to restore rail-traffic via Abkhazia will raise Bakus concerns as it will provide Armenia another transit link to Russia, undermining Azerbaijans strategy to keep closed as many transportation corridors as possible into or out of Armenia. In spite of the gloomy prospects regarding progress on high politics, namely the Madrid Principles, 2013 should not be a wasted year. It could be exploited to initiate some low politics projects that will prepare the ground on the micro-level for a sustainable peace between societies by addressing the basic needs of communities. A people first approach would aim, in the early phases, to develop and implement a set of military confidence-building measures involving militaries and local authorities along the recognized international border between Azerbaijan and Armenia, a border closed since the early 1990s. These measures will aim to reduce the existing risks and enhance

the security of civilians, drilling holes in the imaginary walls that separate societies. This experience could potentially be transferred to the communities living near the Contact Line. A peaceful interaction at the local level could be a powerful example of how intolerance can be overcome and prove in practice that the advantages generated by cooperation outweigh situations of tense isolation between communities. The border village of Sadakhlo in Georgia, where until 2007 Armenians and Azerbaijanis traded vigorously with each other, serves as a strong reminder that the history between the two societies is not confined to war and hatred only. As EU officials have committed on many occasions to support the negotiation process in order to advance on the path of conflict resolution, the EU Special Representative for the South Caucasus and the crisis in Georgia could play a role in facilitating an agreement regarding basic confidence-building measures between Azerbaijan and Armenia along the official border line. This could compliment what the EU already does at the level of civil societies to support peace-building in the Nagorno-Karabakh conflict. There should be no illusions about a rapid deal. Although stagnation on high politics issues will certainly make progress difficult, the focus on low politics is worth a try. If successful, as experts point out, not only could it be replicated on the frontline, but it would turn on its head the entire logic dominating the process, proving that small achievements at the level of low politics can positively spillover into high politics after Armenia and Azerbaijan leave their respective electoral battles behind. Resurrecting Positive Momentum in the Transnistria Talks Of the four prolonged conflicts in the Eastern neighborhood, the resolution process is the most advanced in Transnistria. Though the sides do not discuss the political status of the region yet, they embarked in the complex trustbuilding exercise that aims to reconstruct the links between societies that were severed over last two decades. However, by the end of 2012, the early enthusiasm shared by international mediators on the possibility of a rapid progress evaporated. Some diplomats see that [Yevgeny] Shevchuks stellar moment has passed and Russia is in full control again.2 Moreover, Tiraspols chief negotiator, who has been
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Interview with an anonymous official, Bucharest, 2012.

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seen by EU officials as a new and promising face of Transnistrian diplomacy, grew less constructive with each visit he made to Russia. The upgraded version of the Transnistrian public diplomacy sought to get rid of the obstructionist image inherited from Igor Smirnov, to be proactive and to subtly redirect the responsibility for the eventual lack of progress on the Moldovan side.3 Since Tiraspol has reverted to a fortress under siege discourse and hardened its position in the talks, it will be difficult in 2013 for Transnistria to defend and extend its public diplomacy gains registered in the first half of 2012. The obstruction of the progress in the talks will probably induce a change of attitudes toward Transnistria internationally. Lately, Transnistria has portrayed itself as a champion of unilateral steps made toward Moldova, which have allegedly not been reciprocated. Any attempts to corner Chisinau in this way is futile. Russias open pressure to bolster Transnistrias position will put Moldova in a more defensive mood. In retrospect, the new leadership in Tiraspol has been undoing the effects of the decisions taken by its predecessors as a reaction to the new customs regime on the border between Ukraine and Moldova. Despite claims of an economic blockade and a humanitarian disaster provoked by the new customs regime, around 700 Transnistrian economic agents were registered as legal persons in Chisinau and penetrated the European market using asymmetric trade preferences awarded to Moldova by the EU. Thus, while Transnistria maintains some discriminatory measures against Moldova introduced in 2006, its economic agents enjoy, without restrictions, the fruits of Moldovas trade regime with the EU. Moldovas constructive approach toward the resumption of the economically important freight railway traffic and proposals to lift the EU travel ban on the Transnistrian leadership expose the emptiness of the unilateral steps narrative promoted by Tiraspol. 2013 will be important in many ways for the quality of the negotiations and the general prospects of the Transnistrian conflict resolution. Firstly, the course of the year will show if the positive momentum in talks can be revived and sustained. Freedom of travel (railway passenger traffic, transportation issues, and the opening of Gura Bacului bridge across the Nistru River) and cooperation in combating crime should be priorities. The last round of talks held in Lviv, which Tranistrian leaders refused to
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attend, failed to energize negotiations. The next round of 5+2 talks (scheduled for May in Odessa) could provide much-needed impetus to negotiation process if Ukraines insistence to bring Moldovan Prime Minister VladimirFilat and Shevchuk together pays off. Despite the inconclusive meeting in Lviv, it is still too soon to write off Ukraines presidency of the OSCE, which could provide a boost to the negotiations in the 5+2 format and direct talks between Chisinau and Tiraspol. Ukraine appointed a special representative to the OSCE for the protracted conflicts, who actively got involved in preparing talks and narrowing down differences between the sides of the conflict. In January, the head of Ukraines diplomacy visited Chisinau and Tiraspol aiming to extend agenda of issues to be discussed in 5+2 format talks. Given the improved bilateral relations with Kyiv, Moldova should use the Ukrainian channel to continue talking to Tiraspol. Secondly, 2013 is the year when Moldova will probably conclude (pending the outcome of a crisis within its ruling coalition) the talks on an Association Agreement and the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU. It also can set the stage for the visa-free regime with EU in 2014. As the negotiation process nears its end, Russia, as a sponsor of an alternative integration design in the post-Soviet region, will be tempted to blunt Moldovas drift toward the EU. The energy lever, combined with the escalation of tensions in Transnistria, could be the instruments the Kremlin will operationalize to force Moldova to cave in. Regardless of Russias spoiler tactics, Moldova has to stick to its EU agenda and reiterate its stance on the need to find a peaceful solution to the conflict. At the same time, the EU has to continue to diplomatically and financially support Moldovas European integration and work together with the United States in order to discourage Russia from the militarization of Transnistria and instead start withdrawing its arms stockpile from the breakaway republic. Finally, Moldovas DCFTA with the EU will eliminate the unilateral trade preferences in 2013. Since Transnistria played the role of the passive observer during the first rounds of negotiations on DCFTA and showed little interest to be covered by the new trade regime with the EU, its export-oriented economy, which is substantially dependent on the EU market, is poised to suffer. It is very unlikely that the Eastern markets could compensate for the exodus from the European one. Moreover, once the DCFTA is in force in

Interview with an an anonymous EU official, Brussels, 2012.

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Moldova and in some foreseeable future in Ukraine, Transnistria will be sandwiched by the EU trade regime, making the Eurasian integration of Transnistria advertised by leadership in Tiraspol a far-fetched idea. Thus, in 2013 the EU has to double its efforts to convince Tiraspol to jump on the last train toward DCFTA, promising assistance to ensure legal harmonization with EU standards. In order to achieve this, the EU has to focus primarily on the new Transnistrian leader, whose agenda and capacity to deliver on electoral promises to improve life of citizens would be undermined by the loss of the European market. The EU should also engage the business community in order to stimulate the Transnistrian leaderships will to stay connected to the European market. At the same time, the EU has to think creatively about a reserve plan in order to minimize the disruptive effects in case Tiraspol definitively declines to take part in the DCFTA. Conclusion Each prolonged conflict in the Eastern neighborhood is going through different phases. These range from smallscale military clashes along the frontline and attempts to initiate basic confidence-building measures (so-called no peace, no war) to more sustainable peace and the promotion of complex measures to foster trust, which could lead to conflict resolution. The escalation of minor incidents into a full scale war in Nagorno-Karabakh cannot be ruled out. Owing to the presence of the European monitors in Georgia, the chances of resumption of violence in Abkhazia and South Ossetia have been significantly reduced. The probability of military conflict in Transnistria, despite attempts to ignite the atmosphere, is also extremely low. Each conflict poses diverse challenges, requiring different types of actions from the international mediators and observers. In some cases, they must focus on preventing war; in other cases, they have to maintain a fragile peace or invest in confidence-building measures aimed at fostering links that were previously suspended by war and preparing the ground for a sustainable settlement of the conflicts. But efforts of international mediators cannot substitute for the lack of political will of the sides involved in the conflicts. Thus, the heaviest burden to find and implement durable solutions to the conflicts lies with the conflicting parties and their societies.

About the Author

Stanislav Secrieru holds a Ph.D. in political sciences. He has conducted research at the NATO Defense College (Rome), the Institute for European Politics (Berlin), and the New Europe College (Bucharest). He has field research experience in post-soviet space (Armenia, Azerbaijan, Georgia, Moldova, Russia and Ukraine). He recently co-authored South Caucasus 20 Years After: Political Regimes, Security, and Energy. He is also a Marshal Memorial Fellow.

About GMF
The German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit of the Marshall Plan. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 as a non-partisan, non-profit organization through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has offices in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, Warsaw, and Tunis. GMF also has smaller representations in Bratislava, Turin, and Stockholm.

About the On Wider Europe Series

This series is designed to focus in on key intellectual and policy debates regarding Western policy toward Wider Europe that otherwise might receive insufficient attention. The views presented in these papers are the personal views of the authors and not those of the institutions they represent or The German Marshall Fund of the United States.