Insights Into Collaboration Of Five Caspian States – Analysis

At the first waving blush, the Caspian forum concluded early December 2023 portrays huge untapped business and geopolitical implications. With evolving geopolitical situation steadily rising to new heights and undergoing paradigm shifts, the forum has some strong blissful political colouration. But its historical roots and geographical inter-connectedness give the five littoral states the original layers and, at the same time, offer an overwhelming opportunity for forging formidable cooperation. As known, the Caspian Five, created in August 2019, includes Russia, Azerbaijan, Iran, Kazakhstan and Turkmenistan.

The Caspian region is one of the world’s key economic zones. Home to more than 270 million people, the region accounts for 12.6% of global energy exports and 7% of global exports in commodities. Recognizing these resources, Russia has been making major contributions to stability and prosperity in the Caspian region, to preserving its biological diversity and high environmental standards, to upgrading its ports and coastal infrastructure and to modernizing its fleets.

According to tourism experts, the Caspian seacoast receives, at least, more than one million tourists annually. Beautiful nature, the richest history and culture — all these make it possible for the Caspian Region to take a decent place among the most popular tourist destinations. It has the potential for nursing further large-scale tourism, and other cutting-edge beneficial recreational projects. 

Since the Caspian forum was established, nine meetings between foreign ministers have already been held. That format is increasingly becoming popular. This can be explained by the fact that the work in this format makes it possible to find key solutions to regional cooperation problems. In practical terms, the Caspian region is an intersection of diverse cultures, civilizations and religions, a place where people of different nationalities and faiths have always treated each other with respect and kindness. But the most important question concerning region is that it offers necessary conditions to boost cooperation.

Historically the previous large-scale gatherings were strategic, mostly aimed at forging much-needed cooperation. For instance, ‘The Caspian Sea – the sea of peace and friendship’ conference was held in the city of Turkmenbashi in Turkmenistan that coincided with the International Day of the Caspian Sea, marked on August 12. The forum brought together diplomats from the five Caspian littoral states, delegates from UN, European Union, the Organization for Security and Cooperation in Europe (OSCE) and Turkmen officials to discuss cooperation in politics, economy, science, environmental protection and other areas.

Within the context of changing global situation, the presidents and heads of state of the five Caspian nations meet to discuss pertinent questions. According reports, for example, cooperation was given a considerable boost during the 6th Caspian Summit, held in Ashgabat in June 2022 and the 2nd Caspian Economic Forum, in Moscow, in October 2022. It is however hoped that tracking  issued would, in practical terms, be implemented.

The December forum reviewed progress since its establishment, discussed long-standing corporate business issues as well as fresh strategies for cooperation, trade facilitation and market access to the Caspian region. Considered as an active platform for multilateral economic dialogue and giving boost to cooperation between member states, this year discussions focussed on multiple problems of regional interaction territorially connected to the Caspian Sea. 

“It is important to note that the Caspian issue is a priority for all of us, as it is regularly discussed by the presidents and heads of government of the Caspian Five. A serious impetus for cooperation in this format was given during the Sixth Caspian Summit in Ashgabat last June and the Second Caspian Economic Forum in Moscow last October,” Russian Foreign Minister Sergey Lavrov said at a meeting with the foreign ministers of the Caspian states: Azerbaijan, Iran, Kazakhstan and Turkmenistan. “We expect further strengthening of this course on the basis of the results of the Third Caspian Economic Forum to be held in Tehran.”

According to Lavrov, efforts made within the framework of the “Caspian issue” would help solve problems of regional interaction. “Today’s meeting is special, because we are actually launching a new ministerial dialogue, which will work within the framework of the mandate agreed at the Ashgabat summit,” the minister added. In particular, the mandate provides for developing five-party cooperation and streamlining procedures therein, as well as moving forward with implementing decisions made at the summits and preparing their agenda and final documents, Lavrov emphasized.

Reports monitored also showed similar positions. Russian Deputy Foreign Minister Andrey Rudenko was outspoken and emphasized, at the 8th Caspian Media Forum in Astrakhan, the importance to maintain peace and security without external meddling in the Caspian region. “The Caspian, with its geographic location, enormous resource potential and the intertwining civilizations that reside there, has a great significance for the Russian Federation. Under the current complex geopolitical conditions, we are attaching key significance to jointly maintaining peace, stability and security in the Caspian Region without outside interference. We are interested in its stable development and the full-fledged implementation of its economic and transport and logistics potential to benefit all littoral countries,” the senior diplomat stressed.

Russia has had, for several years, historical Soviet and post-Soviet ties with Azerbaijan, Kazakhstan and Turkmenistan. Therefore, as a first primary step, the four could still broaden and strengthen relations in the Caspian region. Azerbaijan is a transcontinental country located at the boundary of Eastern Europe and West Asia, and on the east bounded by the Caspian Sea. With a population of 10.5 million, Azerbaijan has placed a particular emphasis on its special relationship with Turkey, but also with Iran as they are connected with the sea. Two-thirds of Azerbaijan is rich in oil and natural gas.

Kazakhstan and Turkmenistan,  both former Soviet republics with a huge economic potentials, also share borders to the Caspian. Following the exit of Nursultan Nazarbayev, the first President after the collapse of the Soviet era, and now was replaced by Kassym-Jomart Tokayev, Kazakhstan has embarked on several initiatives to diversify its economy, systematically adopting western-oriented models of management and development. Turkmenistan’s model share a bit of similarities with Kazakhstan, both adopt independent political approach, distinctive from Russia. In practical terms, the three – Russia, Kazakhstan and Turkmenistan, have made economic and business as their common priority spheres, ready to develop strategic cooperation by joining the Caspian Economic Forum.

Since the Russia-Ukraine crisis began in late February 2022, those two central Asian republics, Kazakhstan and Turkmenistan, have kept their neutral positions and are pursuing their own geopolitics without much ties to the dictates of Moscow. Despite that however, Kazakhstan has welcomed tens of thousands of young Russians fleeing from the military call-up (mobilization) since last year. In simple comparision, Turkmenistan’s politics is still farther than that of Kazakhstan with relations to the Russian Federation.

Russia and Kazakhstan are members of the Eurasian Economic Union (EAEU) created by treaty that entered into force on January 1, 2015. Its key objectives include increasing cooperation and economic competitiveness for the member states, and the promotion of stable development in order to raise the standard of living in member states. 

But for Iran, the only non-Soviet republic, forms part of the Caspian interconnection. Understandably, Russia and Iran have good diplomatic relations, as it has the world’s second largest proved gas reserves, and besides that it posses leading manufacturing industries. Population is estimated at 87.5 million. Within the Caspian framework, Russia and Iran plans the development of the North-South transport corridor, logistics and other integrated network of business. 

The intergovernmental agreement for the creation of a multimodal North-South transport corridor was signed by Russia, India and Iran in 2000. The goal of the project is to direct flows of Europe-bound cargo traffic originating in India, Iran and the Persian Gulf states through Russian territory to markets in Europe. Compared to the maritime route through the Suez Canal, the North-South corridor cuts the overall distance by more than half, thus reducing the time and cost of transportation. Currently, the project combines several different transport systems of various participating countries.

“One of the projects that we’re going to discuss now with our guest, who has just arrived in Moscow, the Iranian president, Mr. Ebrahim Raisi, is the North-South corridor, among other things,” Russian President Vladimir Putin said at 14th VTB’s Russia Calling investment forum held 7 December 2023. The conversation, which  lasted for more than five hours, focused on bilateral and international issues, including the situation in the Israeli-Palestinian conflict zone.

The trade turnover between Moscow and Tehran climbed to almost US$5 bln. Cooperation between the two countries is developing in different areas, from the energy sector to education. “We have large infrastructural projects. We are discussing for a long time and initiated at present practical implementation of North – South railway construction. Certainly, we are traditionally working in the energy sphere,” the Russian leader added.

Russian-Iranian cooperation “still has room for development” in addition to the two countries’ partnership within the Eurasian Economic Union (EAEU), Shanghai Cooperation Organization (SCO) and BRICS. Iran is billed to ascend unto BRICS in 2024 under Russia’s chairmanship.

Negotiations on the agreement were completed  implied the significance of relations between the two parties. Signing of the free trade agreement between the Eurasian Economic Union (EAEU) and Iran will create further opportunities to expand interaction. The preferential regime in trade is now in place between the EAEU countries and Iran on the basis of the temporary agreement of May 17, 2018.

Deepening practical cooperation between the Caspian states is prominently relevant in a broader sense: in the context of forming a multipolar world order and strengthening the positions of new centres of world development. The joint work of the Caspian countries makes a significant contribution to ensuring security, stability and sustainable development in the Eurasian continent.

Long ago, in the Turkmen capital of Ashgabat, Putin with the ex-President of Turkmenistan Gurbanguly Berdimuhamedov, mentioned the key tasks as building up regional trade and investment ties, deepening mutually beneficial industrial and high-tech cooperation. There are such promising areas as strengthening cultural ties, contacts between people, creating new tourist routes, expanding interaction along coastal regions, as well as infrastructure projects are very important. At the same time, there also serious common challenges such as environmental safety, shallowing of the Caspian Sea, and preservation of its biological resources. The Caspian states can solve these issues by harmonizing and taking collective actions and unlock new opportunities for development.

As far back in August 2019, Foreign Minister Sergey Lavrov said, in an interview with Foreign Policy and Diplomacy of Turkmenistan journal, highlighted the on the Legal Status of the Caspian Sea was signed in August 2018. “It is obvious that this document meets the interests of all the Caspian littoral states not solely due to the fact that its clauses clearly define the mutual rights and obligations on the use of the given basin, including the measures on strengthening trust and security in this world region in general. The value of this international agreement, from diverse perspectives, provides  the necessary legal conditions for boosting cooperation in trade, investment and transport spheres,” Lavrov stated.

According to the 2018 Convention on the Legal Status of the Caspian Sea, only five countries have exclusive competence in solving problems related to the Caspian Sea. Undoubtedly, this will be the cornerstone of the emerging Caspian community, a guarantee of participation in the development of the region, and take full-fledged responsibility for the evolving processes toward improving the quality of five-party interaction and to strengthen its international legal foundations. In conclusion, creating a Caspian Council, a form of cooperation and dialogue without any bureaucratic schemes will tremendously contribute to promoting the position of the region as a zone of peace, harmony and fruitful interstate cooperation.