South Caucasus rail revival will bring uneven benefits

Significance The two-month conflict between Azerbaijani and Armenian forces has produced a breakthrough in an unexpected area: rail routes providing the South Caucasus with new connectivity with their neighbours. Impacts Funding substantial infrastructure work will challenge state finances during post-COVID-19 recovery. If the prospective economic benefits look one-sided, Armenia's prime minister will come under further domestic pressure. For Abkhazia's leadership, discussing a renewed rail connection offers a way of rebuilding economic ties with Tbilisi.

Subject Armenian foreign policy under new management. Significance On coming to power in May 2018, Prime Minister Nikol Pashinyan promised sweeping domestic change and reform, but foreign policy continuity. Foreign policy is nevertheless evolving because the new government has a greater popular mandate than its predecessors and draws on a younger generation of politicians. Previous leaders spoke of a 'multi-vector', balanced foreign policy; this may now be more attainable. Impacts Armenia has one enduring advantage: Russia's relations are poor with Georgia and uncertain with Azerbaijan. Ties with Moscow are good enough to allow Pashinyan's government to order advanced Sukhoi Su-30SM fighters at a discount price. Current US foreign policy appears singularly unsuited to engaging with the multidimensional issues of the South Caucasus.


Author(s):  
Beatrix Futák-Campbell

This chapter is about collective identity and how practitioners define this highly complex topic. Two main patterns emerge from the corpus. Practitioners’ main concerns while discussing the concept of ‘European’ identity are as follows: to differentiate between European neighbours and the neighbours of Europe, and to account for the European credentials of the South Caucasus or Kazakhstan. In addressing differentiation between the neighbours, practitioners draw on geography, culture, history and economic ties to distinguish between countries which are in Europe and those which are not. At the same time practitioners make explicit distinctions between the key EU policies: the European Neighbourhood Policy and the enlargement policy. They also build up the category of the ‘European’. When they offer accounts of the South Caucasus and Kazakhstan, one practitioner relies on a heredity account of the European civilization, while others seek to justify, in different ways, the European-ness of the Caucasus and potentially Kazakhstan.


Significance The deal was one of a number of key agreements that Prime Minister Narendra Modi signed during his visit to Tehran on May 23. The visit aimed to advance relations following the lifting of sanctions on Iran in January, and a decade of missed opportunities and rising suspicion in relations between Tehran and Delhi. Impacts Expanding energy and trade ties will support Iran's efforts to diversify its economy and trade relationships. Building economic ties with India will help the normalisation of Tehran's international relations. India will limit security and defence cooperation with Iran in order to avoid alienating Israel, Gulf states and the United States.


Significance As Russia expands military operations in Syria and escalates the crisis with Turkey, it has also bolstered its forces at its base in Armenia, the sole Russian military facility in the South Caucasus. The expanded Russian force in Armenia not only enhances its operational capabilities, but also endangers an already delicate regional balance of power in the region. It can be seen as a response both to the shooting down of a Russian military warplane by Turkey in November, and to two separate incursions into Armenian airspace by Turkish army helicopters in early October. Impacts Neighbouring Turkey will see the expansion of Russian forces in Armenia as a provocative move, aimed against both Turkey and NATO. Azerbaijan may expand its own operations, amid a wider escalation of hostilities over Nagorno-Karabakh. By being drawn into supporting Russia's Syrian operations, Armenia's relations with the West become more complicated.


Subject Pakistan's ties with Saudi Arabia. Significance Prime Minister Nawaz Sharif visited Saudi Arabia last week -- for the second time in two months. Much attention focused on Pakistan's potential role in the Riyadh-led counterterrorism alliance, with the kingdom looking for a concrete commitment. With Iranian President Hassan Rouhani due in Pakistan at the end of March, Sharif sought to calm Saudi concerns about deepening Pakistan-Iran economic ties. Both relationships are bound to be complex balancing acts. Impacts Pakistan's army is unlikely to send troops for Riyadh's overseas military campaigns for fear of stoking sectarian tensions within Pakistan. An excessively pro-Iran attitude by Sharif's government would annoy Pakistan's military. Sharif will avoid this, in large part to ensure his own administration lasts its full term to mid-2018. Pakistan's reluctance to join Saudi-led military operations will increase Saudi dependence on other Sunni military allies, eg, Egypt, Sudan.


Subject The outlook for deepening defence links between Japan and Malaysia. Significance Chinese Politburo member Yu Zhengsheng warned visiting Japanese lawmakers on June 29 that the South China Sea maritime disputes have "nothing to do with Japan". This comes amid new developments in South-east Asian governments' efforts to strengthen security cooperation with Japan. Among them is the agreement between Malaysian Prime Minister Najib Razak and Japanese Prime Minister Shinzo Abe on May 25 to elevate bilateral ties to the level of 'Strategic Partnership'. This reflects Malaysia's growing concern over China's actions in the South China Sea, which are increasingly expanding southwards, affecting Malaysian-claimed territorial waters. Malaysian officials on June 9 announced a complaint to China over a Chinese coast guard vessel near Luconia Shoals. Impacts The Philippines's armed forces are less powerful than Malaysia's, implying more scope to develop Japan-Philippines defence ties. Vietnam, and perhaps Indonesia, may be the next ASEAN countries to seek deeper defence ties with Japan. Malaysian criticism of China over the South China Sea could see a more assertive ASEAN over disputed maritime claims.


Subject Chinese and Indian interest in Nepal. Significance China’s Belt and Road Initiative (BRI) is dominating Nepal’s agenda. Until a decade ago, Nepal was clearly within India’s sphere of influence. Nepali Prime Minister KP Oli in April made a three-day state visit to Delhi and in June made a six-day state visit to Beijing. Impacts The governing Nepal Communist Party will be at risk of a split, especially during negotiations over a new chair in two years’ time. Campaigning in nearby Bhutan’s elections later this year is likely to be dominated by debate over the country's ties with India and China. India and China may seek mutual easing of trade barriers as part of efforts to improve bilateral economic ties.


Subject Outook for Sri Lanka's opposition ahead of a parliamentary election. Significance President Gotabaya Rajapaksa on March 2 dissolved parliament and called a parliamentary election for April 25. Interim Prime Minister Mahinda Rajapaksa, Gotabaya’s brother, will be aiming to return to power. The main challenge to the pro-Rajapaksa alliance, the Sri Lanka Nidahas Podujana Sandanaya (SLNPS), is set to come from an alliance formed by members of the opposition United National Party (UNP), the Samagi Jana Balawegaya (SJB). Impacts Concerns over COVID-19 are unlikely to disrupt the election. The SJB will likely win more votes in the north and east, where ethnic Tamil voters are concentrated, than in the south and west. Elections for provincial councils will probably be held after the parliamentary poll.


Subject Economic turmoil in the South Caucasus. Significance Economic performance has been affected by two major external factors: turmoil in Russia, which remains a significant economic partner, and declining oil prices. While lower imported fuel bills are positive for Armenia and Georgia, there are second-round negative implications, through the impact on economic activity in Russia. Impacts Lower oil prices will lead to some cuts on infrastructure spending in Azerbaijan but these will be limited. Armenia will suffer the most from the Russian turmoil, but the positive impact of domestic factors will prevail in 2015. Georgia's more diversified economic links make it more resilient to Russian shocks.


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