A series of trilateral partnerships in the Caspian-Caucuses is reinventing geopolitics and unleashing economic potential in a region eager to outrun its Cold War-era shadows and escape new peripheral tensions. Azerbaijan and Turkey are working with Georgia and other countries through targeted multilateral projects to strengthen regional security, economic and energy development, and improve diplomatic relations between Eurasian states. The trilateral format also helps deepen ties between other Caspian Basin and South Caucuses countries, promote Eurasian-European energy collaboration through these states, and balance external pressures from a newly assertive Russia. The national security of these countries is closely related to energy production as well as balancing relations with external actors.
Azerbaijan, the driving force of these partnerships, has seen the trilateral format as supplementing bilateral and other multilateral mechanisms for promoting Azerbaijan’s national security, economic development, and geopolitical independence. These relationships allow for Azerbaijan to fulfill a number of geopolitical objectives that might otherwise be denied it, either due to lack of capability or the presence of outside political pressure, without the risk of being controlled by larger regional powers. Despite Azerbaijan’s impressive economic performance and religious tolerance, the country is still relatively weak in comparison with its neighbors, primarily due to its relatively small size (86.6 square km, 20% of which is under Armenian occupation, with 9 million inhabitants).
Azerbaijan wants to arrange its relations in such a way that cooperating with one country does not adversely affect its relationship with another. In particular, Azerbaijan must seek to balance its quest for greater Western ties against Russia’s enduring regional influence. Essential to balancing these competing orientations is Azerbaijan’s policy of diplomatic compartmentalization, which is partially advanced through trilateral diplomacy. This practice allows Azerbaijan to manage antagonistic relationships by aligning with different combinations of partners in pursuit of mutually beneficial goals. President Ilham Aliyev has also described the triangles as transcending regional boundaries and having wider international significance, such as contributing to Europe’s energy security.
Turkey plays a vital role in all three of Azerbaijan’s trilateral diplomatic efforts. Ties with Turkey strengthen Azerbaijan’s position in negotiations on regional energy and transit projects. In particular, without Turkey’s participation in the triangles, Azerbaijan has less to offer Georgia, and other partners . Relations between Azerbaijan and Turkey have remained strong for decades as the two countries share ethnic, cultural, and religious ties (A Azerbaijanis are a Turkic people). The official discourse of both countries highlights their special relationship—describing them as “one nation” living in two states due to deep cultural, religious, and ethnic ties. Turkey has supplied arms and other military assistance to Azerbaijan, and dozens of Azerbaijani peacekeeping troops served under Turkish military command in Kosovo. More recently, Azerbaijani and Turkish companies have begun co-producing military equipment. Turkey has a modest military training program in Azerbaijan, which has proven very valuable given that the U.S. and other foreign sanctions have limited the level of defense cooperation Azerbaijan enjoys with the United States and other Western militaries. When Iranian air and navy forces violated Azerbaijan’s borders in 2001, Turkey’s warplanes made a show of force in Baku thatended the Iranian incursions. On numerous occasions, Erdoğan and other Turkish leaders have reiterated that Turkey would not reopen its borders with Armenia until the Nagorno-Karabakh dispute is resolved.
During its past decade under the ruling Justice and Development Party (AKP), Turkey launched a “Zero Problem with Neighbors” policy aimed at resolving the many problems Turkey previously had with surrounding states. For the most part, the initiatives Turkey has launched under this formulation have failed, but the Caspian triangles stand out as partial successes, especially regarding Azerbaijan and Turkmenistan. Through its economic and political cooperation with Azerbaijan, Georgia, and Turkmenistan, Turkey has amplified its regional economic and security influence in the South Caucuses and the Caspian Basin and establishes itself as an essential transit corridor and energy hub between the Caspian countries and Europe, which has become even more important with the Ukraine crisis. Although Turkey’s ties with Tehran have remained troubled, the triangle has helped reduce the prospects of a military confrontation between Iran and Azerbaijan that could easily drag in Turkey and other countries.
From Ankara’s perspective, having a stable source of energy imports from Azerbaijan and the Caspian reduce its dependence on Russia, which has been a leading provider of oil and gas and could dominate Turkey’s emerging nuclear energy sector. Paying for energy imports was a major reason for the country’s $65 billion trade deficit in 2013. In addition to consuming and transporting Azerbaijan oil and gas, Turkey has become a major partner in those projects. In 2013, Turkey became the second largest shareholder after BP of the Shah Deniz-2 gas field. There is also much mutual investment between Azerbaijan and Turkey. At the beginning of 2015, more than 2,600 Turkish companies were operating in Azerbaijan, while nearly 1,600 Azerbaijani companies existed in Turkey. Azerbaijan’s investments in Turkey amount to $5 billion, while Turkish investments in Azerbaijan’s economy exceeded $6 billion. In just a few years, Azerbaijan’s investments in Turkey are projected to exceed $20 billion due to the construction of new energy pipelines. Turkey’s International Cooperation and Development Agency regularly provides substantial economic aid to Georgia and Turkmenistan as well as Azerbaijan.
Ethnic Turks and Azerbaijanis also have contributed heavily to the history of Georgia, and other countries, while peoples from these nations have also had an impact on the history of Azerbaijan and Turkey. In addition to reinforcing these historical, ethnic, and popular ties, Georgia and other countries see developing connections with Azerbaijan and Turkey as a means of escaping from their relative isolation from wider European economic processes.
All these countries would like to move closer to the West and are uncomfortable with Russia’s rising power as well as the possibility for more frozen conflicts to suddenly thaw, to their detriment. One of the consequences of the Russian-Ukraine war has been to highlight the security dilemmas of the countries that find themselves outside of the Washington-led NATO alliance, the Moscow-led Collective Security Treaty Organization (CSTO), or any other regional military alliance. Although none of these governments characterize the Caspian triangles as being directed against Russia or any other country, the partnerships stand to decrease their dependency on Russia through the development of energy transit routes that bypass Russian territory. This structure however, lessens Moscow’s concern by excluding ties with rival great powers like China and the United States.
The most developed of the Caspian trilateral partnerships is that among Azerbaijan, Turkey, and Georgia. These three states have enjoyed positive relations since the breakup of the Soviet Union, overcoming earlier periods of animosity between Turks and Georgians, but they only formalized their trilateral cooperation following the opening of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline in 2006, and solidified it after the shock of the August 2008 Russian-Georgian War, which challenged their mutual economic and security interests. That said, their partnership “is rooted in growing economic and strategic interdependencies” since Turkey needs more energy sources and wants to become a bridge between Europe and Asia, while Azerbaijan seeks to expand its regional energy and security connections, and Georgia, attractive to its partners due to its physical location between them, requires Western-oriented partnerships in pursuit of its Euro-Atlantic integration. The South Caucasus is the gateway between Caspian and the West. They have followed the BTC with a Trans-Anatolian Pipeline (TANAP) project, a Baku-Tbilisi-Kars (BTK) railway, a bilateral working group on defense industrial production, and trilateral military exercises and security drills.
Georgia has long been interested in achieving deeper relations with the West. Tbilisi’s aspiration to move closer to the EU and NATO harmonizes well with Azerbaijan’s interest to increase the importance of its region to the West. Similarly, Georgia’s cooperation with Turkey (a NATO member and party to a customs union with the EU) offers a connection with these Euro-Atlantic institutions. Recent governments in Tbilisi have seen Ankara as a key advocate for Georgia’s ties with NATO. Additionally, the BTC, TANAP, and other energy pipelines and transportation conduits generate jobs and revenue, and make Georgia more important to Europe, as well as strengthen Tbilisi’s ties to Euro-Atlantic structures. Participation in the Turkey-Georgia-Azerbaijan triangle also reduces Georgia’s dependence on Russia. Energy imports from Azerbaijan provide an alternative to Russian gas, so Georgia receives only 10% of its gas imports from Russia, which Moscow supplies free of charge as payment for its use of a pipeline that transits Georgian territory to Armenia. Turkey has become Georgia’s largest trading partner. In 2012, trade volume between the two totaled $1.4 billion. Without such robust bilateral trade, the Georgian economy would have fared much worse in the wake of Russia’s 2006 trade embargo. Meanwhile, Azerbaijan has become a prominent investor in the Georgian economy. In 2011, the State Oil Company of Azerbaijan (SOCAR) became the largest foreign investor in Georgia. Azerbaijan also provided Georgia with electricity and gas during its war with Russia in 2008.
Russia’s decision to use overwhelming force in 2008 to defeat Georgia shocked Turkish policy makers into realizing that their margin for maneuver in Russia’s backyard might be smaller than anticipated due to Moscow’s new assertiveness. To prevent further regional disorders, Ankara sought but failed to establish a multilateral regional security framework that would both dampen Moscow’s assertive impulses, as well as solve frozen regional conflicts, such as one between Azerbaijan and Armenia, which might provide opportunities for further Russian military intervention. Turkey tried but failed to secure an Armenian military withdrawal from the territories it occupies in Azerbaijan in return for Turkish diplomatic and economic concessions. Turkish leaders also limited their open criticism of Moscow’s military intervention and subsequent dismemberment of Georgia, hoping no such scenarios would recur in the future—only to be faced with a new crisis this past year in nearby Crimea and Ukraine.
The foreign ministers of Azerbaijan, Turkey, and Georgia met in the trilateral format in Turkey in 2012, Georgia in 2013, and Azerbaijan in 2014. These meetings have focused on reaffirming the principle of territorial integrity, constructing energy conduits and trade routes to Europe, coordinating investment in each other’s countries, and emphasizing their European orientation. The 2012 meeting culminated in the signing of the Trabzon Declaration in which the parties committed to back each other’s candidacies for membership in international organizations. The Trabzon Declaration also supported the principal of territorial integrity applied specifically to the frozen conflicts in the occupied regions of Georgia and Azerbaijan. At their February 2014 meeting, the foreign ministers extended their collaboration goals to include science, culture, and other underdeveloped sectors as tools for building interstate relations, especially at the popular level. On May 6, 2014, the first presidential summit occurred among the leaders of Azerbaijan, Turkey, and Georgia, which gave high-level approval to their deepening cooperation. President Aliyev recalled the three countries’ historical and cultural links and described their trilateral format as symbolizing how “the three independent states have built modern and equal relations based on mutual understanding, respect and which correspond to the interests of our peoples.”
The trilateral cooperation has been centered on joint energy, transportation, and defense projects. Energy cooperation stems from the geographic location and resource endowments of the three countries: Azerbaijan possesses a wealth of natural energy resources, and supplies Turkey with oil by way of Georgia. The cooperation accomplishes several goals: to improve the economic relationship between Azerbaijan and Turkey; supply Azerbaijani energy to the European market; attracts investment to the region; and contribute to global energy security through the diversification of world export routes. In addition to the already completed Baku-Tbilisi-Ceyhan oil pipeline, which began operating in 2005, they are building two new pipelines, the Trans-Adriatic Pipeline (TAP), and the Trans-Anatolian Natural Gas Pipeline (TANAP), while expanding the existing South Caucasus Pipeline (SCP). Developing pipelines to export hydrocarbons to the West generates jobs, revenue, and other benefits for all three countries. Profits achieved in the energy sector have allowed Azerbaijan, Turkey, and Georgia to implement projects that focus on expanding the non-oil sectors, specifically transportation and infrastructure development. The United States has supported the development of the pipeline, as it provides an alternate route for Caspian oil that bypasses both Russia and Iran. 
The Baku-Tbilisi-Ceyhan pipeline which became operational in 2006, is still integral to the functioning of the triangle. The 1768km pipeline transports oil from Azerbaijan’s Azeri-Chirag-Deepwater Gunashli field as well as from Turkmenistan and, most recently, Kazakhstan’s Tengiz field through the Sangachal terminal and the three countries’ territory (443km in Azerbaijan, 249km in Georgia, and 1,076km in Turkey) to Turkey’s large Mediterranean terminal at Ceyhan. More recent attention has focused on the enormous gas condensate located in the Shah Deniz field, which is being developed by a BP-led consortium. The 980-km SCP began transporting gas produced at Shah Deniz through a parallel pipeline to the BTC that runs through Baku to Tbilisi before turning away to Erzurum. Shah Deniz Stage 1 was completed in 2006 and currently supplies natural gas to Azerbaijan, Turkey, and Georgia. Shah Deniz Stage 2, with a planned completion date sometime in 2018, will increase the annual gas production to 25 billion cubic meters (bcm) per year from the current production of 9 billion bcm each year. In June 2012, Erdogan and Azerbaijani President Ilham Aliyev signed an agreement to build a $7 billion Trans-Anatolian Natural Gas Pipeline (TANAP) that also draws from the Shah Deniz field, connecting with the SCP on the border of Georgia and Turkey and extending to the Turkey-Greece boundary. This is the first time that Azerbaijan and Turkey have partnered as energy transit countries. TANAP is projected to convey initially 16 bcm of gas yearly from Azerbaijan’s Shah Deniz II field, then its capacity is scheduled to grow to 23 bcm by 2023 and to 31 bcm by 2026. About 6 billion of the initial 16 bcm annual supply will be delivered to Turkey, with the rest slated for European consumption. An additional route for Caspian natural gas exports to Europe was solidified in 2013 with the decision to pursue construction of the Trans-Adriatic Pipeline (TAP), a move that will solidify Azerbaijan as a European energy supplier and allow energy exports to extend further west into the EU. The proposed TAP pipeline connects with TANAP near Kipoi on the border of Turkey and Greece, traverses northern Greece and the Adriatic Sea, and ultimately ends in Italy. The TAP has a scheduled completion date in 2018 and will be operational by the time the second stage of the Shah Deniz development is finished. Prospective energy projects might increase the significance of the triangle further. The Azerbaijani State Oil Company (SOCAR) and the French companies Total and Gaz De France Suez are developing a large natural gas field that was discovered in 2011 at Absheron in the Azerbaijani sector of the Caspian Sea.
Building on these energy ties, mutual direct investment among these economies has increased, adding more jobs and enlarging mutual trade. Azerbaijani investment projects in Turkey encompass construction of a port in Izmir, acquisition of retail stores in Istanbul, and the new STAR oil refinery and the “Aegean Gateway Terminal” container port on Turkey’s Aegean coast. Azerbaijan also increased its investments in the Georgian economy by more than $800 million from 2006 through 2011. Azerbaijan, Turkey, and Georgia also cooperated on the construction of the Trans-Asia-Europe fiber-optic communications line, the TAE FOC, which runs from Shanghai to Frankfurt-am-Main. On January 15, 2015, President Aliyev said that Turkish companies have implemented $10 billion worth of projects in Azerbaijan, while Azerbaijani investment in Turkey will reach an estimated $20 billion by 2020.
Efforts to launch a China-Kazakhstan-Caspian-Caucasus-Turkey container train, termed the Silk Wind project, fostered collaboration between Kazakhstan, Azerbaijan, Turkey, and Georgia. The Silk Wind project, initiated under the TRACECA program, aims to “create a multimodal train route (container/RO RO) with a primary information exchange system between customs services and railway operators of the project’s partners” based on a single tariff for cargo transport.” However, after Beijing announced its plans to construct a $242 billion, 7,000 km high-speed railway running from Beijing to Moscow, the future of the Silk Wind project remains unclear. The BTK rail project will connect Azerbaijan and Turkey via Georgia and constitute a key link in a China-to-Europe overland transit system. A transition center in Akhalkalaki to convert European trains to Georgian tracks will facilitate the transportation of 30 million tons of cargo a year via the rail network. Political unrest in Georgia caused delays in completion of the Georgian section of the railway, which is being supported by Azerbaijani loans, and progress has slowed in Turkey, partly as a result of security concerns regarding Syria. However, a test train ran in late January 2015 and the railway is projected to be fully operational by the end of 2015. This new transport line will also accommodate the shipment of oil exports from Kazakhstan’s Kashagan oil field, the discovery of which was the largest of its kind in the last forty years. The BTK railway could rival Russia’s Trans-Siberian Railway. The Turkish Economy Minister projected that the BTK railway would transport 17 million tons of goods and 3 million passengers by 2034.
Meanwhile, security cooperation among Azerbaijan, Turkey, and Georgia has included joint military exercises, defense industrial cooperation, and pipeline security drills. Although Turkey is a member of NATO, Azerbaijan and Georgia find themselves uncomfortably outside both the transatlantic and the Moscow-led Eurasian defense alliances. Both Azerbaijan and Georgia have welcomed Turkey as a security partner in a troubled neighborhood. Although Turkey’s 2008 Caucuses Stability and Cooperation Platform, aimed at decreasing tensions in the South Caucuses following the Russia-Georgia War, failed to develop into an enduring structure, the initiative successfully signaled Ankara’s newfound commitment to enhancing the region’s security. Military exercises involving Azerbaijan, Turkey, and Georgia now regularly occur. For example, the annual ETERNITY drills feature training to protect the oil and gas pipelines that traverse the territory of the three countries. Azerbaijani, Georgian, and Turkish special forces have also conducted a trilateral military exercise, “The Caucasus Eagle.” Georgia requested that Azerbaijani and Turkish forces be included in Georgia’s annual exercises with U.S. forces in 2014. The three countries have also established a joint transit plan to aid the withdrawal of NATO-led troops from Afghanistan that use trilateral transportation and communications networks. The defense ministers of Azerbaijan, Turkey, and Georgia began regular meetings in August 2014 to discuss regional stability and military cooperation.
For all the participants in these triangles, pursuing trilateral partnerships offers an advantage over regional bilateral relationships since members can form strong bonds with neighboring states without requiring the time-consuming negotiation of formal alliances that could compromise their independence, national identity, or pursuit of strategic relationships with other actors. The trilaterals facilitate cooperative projects but do not compromise diplomatic flexibility. They are easy to create but also to dissolve as the goals of each partner naturally evolves.
Nonetheless, the unresolved dispute over the boundaries and usage rights in the Caspian Sea remains a major restraint on realizing the Caspian Triangles’ economic potential. Although described as a “sea,” many geographers consider the Caspian the world’s largest inland lake. International law applies differently to the two types of water bodies, including how to resolve competing national territorial claims. International law does not apply to the delimitation of lakes, leaving the decision to the interested parties, while the division of seas into sectors should be made in accordance with the 1982 UN Convention on the Law of the Sea. Since Iran’s own Caspian shelf has relatively little oil and gas, Tehran has favored the latter approach. Iranian officials still insist on the continued validity of two Soviet-era treaties that describe the Caspian as a “common sea,” pending their replacement by a new convention ratified by all five Caspian states. These treaties, signed in 1921 and 1940, assign Tehran and Moscow joint management of the Caspian beyond territorial zones. But the new post-Soviet republics do not accept the continued validity of these treaties, which in any case cover only navigation and fishing, not undersea mining
Another unresolved dispute concerns potential Trans-Caspian energy pipelines. Iran and Russia insist that all littoral countries must approve each energy pipeline that would traverse any part of the Caspian since they all could suffer from environmental damage to the Caspian Sea. A desire to block east-west energy conduits that bypass Iranian and Russian territory might also explain Moscow’s and Tehran’s demand for veto rights over trans-Caspian pipelines. The Caspian Sea summits that met in Turkmenistan in 2002, Iran in 2007, Azerbaijan in 2010, and the Russian city of Astrakhan in 2014 have failed to resolve these disputes. The five littoral states have signed several joint declarations of principles and adopted concrete environmental cooperation agreements. In other cases, these countries have resorted to bilateral and “mini-lateral” security initiatives that exclude one or more of the other littoral states. For example, in May 2003, Kazakhstan, Azerbaijan, and Russia agreed to split the northern 64% of the Caspian Sea into shares, with Kazakhstan receiving the largest portion. Iran and Turkmenistan, however, refused to endorse this trilateral agreement and restated their claim to an equal share for all five littoral states, which would give them bigger economic zones than the 2003 formula would provide. Azerbaijan and Turkey can try to use their new Caspian diplomatic ties to push their preferences regarding Caspian legal issues—with legally agreed sectorial delineation and rules permitting bilateral projects to not require other states’ consent.
The modest U.S. and European support for trans-Caspian projects has also limited the triangles’ potential. The West has strained relations with all five governments directly involved in the triangles, as well as with many other Eurasian states. Western governments and non-governmental organizations have criticized these governments’ restrictions on political pluralism and deviation from free market principles. For their part, the five governments participating in the Caspian triangles, whose security relations with Moscow are also strained despite sometimes extensive economic cooperation with Russia, have complained about insufficient Western respect and support for their interests and values. Nonetheless, Western governments need to look beyond these differences. There needs to be a more active U.S. policy and better EU-U.S. cooperation to help promote their goals in the Caspian Basin region. They must recognize that these trilateral partnerships can enhance Eurasian-European energy collaboration, discourage Iranian and Russian predatory behavior, and stabilize a region primed for problems.
Dolly Kikon is a senior lecturer at the School of Social and Political Sciences, University of Melbourne.
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