Washington Report on Middle East Affairs, September 1999, pages 27, 151

Central Asia

Reports of Israeli-Iranian Contracts Cause Caspian Countries, Oil Companies to Reassess Possibilities

By Gordon Feller

Reports that Iran has been trying to establish contacts with Israel are likely to be followed closely in the Transcaucasus and Central Asia, as well as in the oil industry. On June 28, an Iranian government spokesman quickly denied such reports by the Israeli newspaper Ha’aretz and London’s Financial Times. But it may be too late to stop speculation and strategic calculations in neighboring countries with vital interests in the possibility of a change between Israel and Iran.

Newspapers report that Iran asked British diplomats to serve as intermediaries with Israel in an effort to ease tensions. The Financial Times pointed toward Iranian interests in arms control agreements and the resumption of oil trade. The British government has officially denied that it is playing a role.

The reports are especially curious in light of Iran’s arrest in June of 13 Iranian Jews in Isfahan and Shiraz on charges of spying for Israel. The reports also come at a time when the new government of Israeli Prime Minister Ehud Barak has taken office. The recent visit of Iranian President Mohammad Khatami to Saudi Arabia and another by Foreign Minister Kamal Kharazi to Jordan have both broken new ground.

The countries of the Caspian may now have to take particular care with their policies in case the reports turn out to be true. Many will remember that U.S. officials also strenuously denied a similar effort to mend ties with Iran before Secretary of State Madeleine Albright called for a “road map” to better relations in June 1998. Caspian countries such as Azerbaijan have largely followed the U.S. and Israeli policies on Iran, although with varying degrees of enthusiasm.

Azerbaijan has closely coordinated its pipeline policy with the United States to avoid Iranian territory, in keeping with Israeli political interests. Constant tensions between Azerbaijan and Iran have kept trade at a minimal level, although both countries have tried to ease the strains.

Turkmenistan has maintained its neutrality, but its position has been particularly tricky. Foreign business in the country has been dominated by Israel’s Merhav Group, although Turkmenistan’s only gas exports are to Iran. Merhav’s president, Yosef Maiman, who also serves as a special ambassador to President Saparmurat Niyazov, has said in interviews that he would have no objection to dealing with Iranian interests, when and if Israeli policy allows it.

Kazakhstan, at a greater distance from the Iranian border, has not faced the same degree of conflict. Nevertheless, it, too, enjoys Israeli investment while resisting U.S. pressure to stop oil swaps with Iran.

While these contradictions have caused tensions for the Caspian countries, the oil industry may be faced with the most troublesome problem of potential change. Companies have remained under pressure to invest in east-west pipelines to export oil from the Caspian, although most voice preferences for cheaper north-south pipelines through Iran.

Industry officials and financial institutions may now find a new reason to delay investments in the Baku-Ceyhan oil pipeline and the trans-Caspian pipeline for gas, reasoning that an eventual end to Israeli hostilities with Tehran could open up Iranian routes. As with the Caspian countries, the oil industry may have to respond to the reports on Israel and Iran, whether they prove to be true or not.

U.S. officials have said privately for over a year that an Iranian pipeline route would be possible, as long as it is not the first route from the Caspian. The administration of President Bill Clinton continues to be concerned that Iran could gain too much control over Caspian exports.

In the short run, the suggestions of overtures between the Iranians and the Israelis could slow any progress on pipeline decisions that are based on political alignments. The situation will be sensitive for Turkey, which has allied itself with Israel. Turkey is the destination for both the U.S.-backed oil and gas routes, as well as a separate gas pipeline from Iran.

Nevertheless, if improvements in relations materialize, there could still be at least two possible outcomes for the Caspian region. The first is that east-west routes may be abandoned in favor of Iranian alternatives. The second is that the way may finally be cleared for east-west lines, with an understanding that north-south Iranian routes would follow. The second solution may be possible as part of an overall regional development plan.

Even in case of an Iranian-Israeli détente, such developments would probably be many years away. In the immediate future, it may be possible that the purely political dimension of Caspian policy could be diminished, making the region’s oil more of a prize and less of a game.

Uzbekistan’s President Charges Turkish Role in Bomb Attacks

The Uzbek government’s ongoing campaign against domestic secular and Muslim opposition movements has made the leap onto the international arena by precipitating a crisis in Uzbek-Turkish relations. President Karimov and his administration have apparently come to believe that Turkey bears some responsibility for the Feb. 16 bomb attacks in Tashkent, which Uzbek authorities view primarily as an attempt to assassinate the Uzbek president.

The main facts that led Uzbek officials to draw this conclusion appear to be the Turkish government’s initial hesitation in granting Uzbekistan’s extradition request for two Uzbek citizens suspected of involvement in the bombings; Turkey’s refusal to extradite a third suspect in the bombings, on the grounds that he is a Turkish citizen (Turkish law prohibits the extradition of Turkish citizens to foreign countries’ judicial and investigative authorities); and the Turkish government’s willingness to grant asylum to Muhammad Solih, chairman of Uzbekistan’s Erk Party (an outlawed opposition party), for a number of years.

After Uzbek authorities accused Mr. Solih of being one of the main organizers of the bomb attacks, Turkey requested that he leave the country. However, this action apparently did little to appease the Uzbek government.

Turkey recalled its ambassador to Uzbekistan, Umur Apaydin, on June 15, after the Uzbek government began closing Turkish schools and madrasas (religious schools) in Uzbekistan and ordered all Uzbek students studying at Turkish universities to return home, ostensibly to protect them from Turkish Muslim extremist influences. A number of Turkish businessmen working in Uzbekistan have also been accused of supporting the Uzbek opposition movements which allegedly carried out the bombings in Tashkent.

Despite repeated assurances by the Turkish Foreign Ministry and Prime Minister Ecevit himself that Turkey is eager to re-establish good relations with the Uzbek government, President Karimov’s administration has persisted in portraying Turkey as a propagator of Muslim extremism in Uzbekistan. Uzbek authorities allege that both Turkish government officials and private entrepreneurs are seeking to indoctrinate Uzbekistan’s youth with Muslim fundamentalist ideology.

Uzbek officials’ latest claim is that former Turkish Prime Minister Necmettin Erbakan (leader of the now-disbanded Muslim Welfare Party) was an accessory to the Feb. 16 events. Erbakan is accused of donating $100,000 to Tohir Yoldoshev, the leader of the Islamic Movement of Uzbekistan, in order to help carry out the bomb attacks and the assassination of President Karimov. The Ankara prosecutor’s office has launched an investigation into these accusations against Erbakan and plans to ask Uzbek authorities to hand over all evidence supporting their claims.

The Uzbek government’s recent belligerence toward Turkey and its vilification of Turkish businessmen and school administrators who work in Uzbekistan are not easy to explain. For the most part, the two countries have enjoyed cordial relations, and Turkey has assisted in the creation of numerous joint ventures in Uzbekistan. At the same time, however, the Turkish government has permitted Uzbek opposition members from both Birlik and Erk (the two main secular opposition movements, both of which have been banned) to seek at least temporary refuge in Turkey. This brought about a short-term chill in Uzbek-Turkish relations in 1994.

The current situation is considerably worse, with the Uzbek government so far having rejected all of Turkey’s attempts at reconciliation.

President Karimov’s steadfast refusal to mitigate his anti-Turkish rhetoric is beginning to seem somewhat irrational, perhaps even bordering on the paranoid. Of all the Middle Eastern Muslim countries, Turkey is the most secularized; both the Turkish government and military are known for their deep suspicion of Muslim political movements, moderate or otherwise. Furthermore, Turkey has only allowed members of Uzbekistan’s secular opposition to seek asylum within its borders, and after Muhammad Solih became implicated in the Tashkent bomb attacks, he was asked to leave the country. Both Prime Minister Ecevit and President Suleiman Demirel have issued repeated assurances that Turkey will not permit the members of any groups that pose a threat to Uzbekistan to reside on Turkish soil or receive any support whatsoever from the Turkish government.

Thus, at this point, there seems to be little else that the Turkish government can do but wait for President Karimov’s administration to re-establish normal bilateral relations.

That the Uzbek Foreign Ministry has not yet responded to Turkey’s numerous attempts to resolve the conflict is mystifying. It is clearly the Uzbek government that stands to lose the most in economic benefits if the two countries permanently break off relations. Turkey has also often acted as an important link between Uzbekistan and the West. With Uzbekistan’s recent entry into the GUAM (Georgia, Ukraine, Azerbaijan and Moldova) alliance (now GUUAM), which had been able to form a very cordial relationship with Turkey, friction between the Uzbek and Turkish governments has become even less desirable.

If Uzbekistan’s hostility toward Turkey continues, Turkish leaders’ support for the GUUAM alliance may begin to waver. Perhaps it is time for President Karimov to temper his rhetoric on anti-Uzbek conspiracies and to consider the costs of accusing both his allies and his enemies of hatching plots against his government before he antagonizes his remaining supporters both at home and abroad.

Gordon Feller is president of Integrated Strategies of San Rafael, CA, and publisher of Russian Business News, a monthly intelligence report for government and industry.