Political, ethnic, religious, economic, and other problems abound in Europe’s southeast. Wars and violence have been too frequent since the collapse of the Soviet Union and Yugoslavia. European integration may hold out hopes of a better future, but the prospects for closer relationships with Europe and its institutions are, at best, very mixed. Where do key conflicts stand, and why and how have some negotiations proved successful while others have not? How can pan-European institutions help? To what extent is the prospect of closer ties with the European Union and/or NATO an effective magnate and driver of positive change? What role can more pan-European institutions play and how might they be encouraged?

CHAIR: Dr. F. Stephen Larrabee, Corporate Chair in European Security, RAND Corporation


  • H.E. Giorgi Baramidze, Vice Prime Minister and State Minister on European and Euro-Atlantic Integration, Georgia
  • H.E. Mevlüt Çavuşoğlu, President, Parliamentary Assembly of the Council of Europe


  • H.E. Besim Beqaj, Minister of Economic Development, Republic of Kosovo
  • H.E. Titus Corlăţean, Chairman of the Committee for Foreign Affairs, Republic of Romania
  • H.E. Hafiz Pashayev, Deputy Foreign Minister, Republic of Azerbaijan


Location: Istanbul, Turkey

Time: 12:20 p.m.
Date: Friday, November 18, 2011

Transcript by
Federal News Service
Washington, D.C.

STEPHEN LARRABEE: Well, good afternoon or good morning, however it’s – whichever it is for you. I’m Steve Larrabee from the RAND Corporation, where I hold the chair – corporate chair in European security. We’re here now in this session to focus on Southeastern Europe broadly defined, which means Southeastern Europe means the Western Balkans, but also the Caucasus as well. And we’ll – both of these areas face major economic and political challenges. Energy and ethnic conflict are both endemic in both areas. And I will ask the speakers to focus in general on four questions.

First of all, what are the key obstacles to peace and stability in their region? How can these obstacles be overcome? Third, what role do questions related to energy play in providing economic progress and security in the area? And finally, fourth, what role can and should the international community play? What role does soft power and values play?

We have two opening speakers, His Excellency Giorgi Baramidze, who is vice premier – prime minister and minister of state for European and European integrations in Georgia; His Excellency Mevlüt Çavuşoğlu, president of the Parliamentary Assembly of the Council of Europe; His Excellency Besim Beqaj, minister of economic development in the Republic of Kosovo; His Excellency Titus Corlăţean, chairman of the Committee for Foreign Affairs in the Republic of Romania; and His Excellency Hafiz Pashayev, deputy foreign minister from the Republic of Azerbaijan.

So with that, let me turn to Mr. Baramidze for ask him to make his opening remarks. I would ask the speakers to limit themselves to eight or nine minutes, and the rest of the participants to five minutes, and then we’ll open it up. Thank you very much.

GIORGI BARAMIDZE: Thank you, Mr. Larrabee. Good afternoon, ladies and gentlemen, excellencies. It’s a pleasure to be here in this great city and great country. And thank you for great hospitality.

I would like to first thank organizers who invited me for this very important event and giving me opportunity to express our view on all those issues that had been discussed here and these are very, indeed, interesting questions.

As far as the region is concerned, actually because of European Union’s Eastern Initiative, Georgia has been recognized as a Eastern Europe – Eastern European region together with other five countries, like Azerbaijan, Armenia, Ukraine, Moldova, and Belarus. So therefore we consider ourselves as a part of this region, which is united by many common interests, as well as have many differences.

And Georgia is one of the most active part of the partnership with the European Union within the framework of the Eastern Partnership. And Georgia has started negotiations on association, and we are going to start negotiations on deep and comprehensive free trade agreements. We have already introduced the visa – the agreements on visa facilitation and readmission with European Union, as well as, as you know, Georgia is very much advancing toward NATO membership. We have annual national program and NATO Georgia Commission that are the sufficient instruments for preparing Georgia for membership. And Georgia is indeed moving forward, despite of many problems.

Unfortunately, not everybody is happy with this kind of development. What are the challenges in our region? Unfortunately, challenges are kind of traditional. We still are facing imperialistic mentality from Kremlin. No secret that most of the countries of Eastern Europe suffer because of different conflicts, mostly instigated and supported by Russian Federation.

It’s very unfortunate that in Kremlin leadership still are very much enthusiastic about the idea of the restoration of some kind of Soviet Union; this new idea of the Eurasian Union is the manifestation of this. And they are very much sentimental about Soviet legacy, and instead of building liberal democracy, they invent new notion of so-called the sovereign democracy which has nothing to do with liberal democracy. And they still exercise the idea of the sphere of influence, which is completely unacceptable for entire civilized world, but nevertheless, this is the fact. Russia continues its occupation of the 20 percent of Georgia’s territories. It remains in the breach of the ceasefire agreement, so-called the Six-Point Ceasefire Agreement, not allowing European Union observers cross the occupation line and enter occupied territories, keeping 80 percent, eight-zero percent of population, victims of the ethnic cleansing outside of these regions, and are very much reluctant to be constructive during the Geneva talks, blocking any – and vetoing any international mission on the ground.

So what are the remedies for this? We are – get used to, unfortunately, to this type of policy of Russia, so we have no time to whine and no time to be victims of the paradigm of confrontation with Russia.

We are absolutely sure. The best answer to the occupation and to this kind of aggressive 19th century policy should be normal development, to continue build normal democratic Georgian, therefore European state based on liberal democratic principles and advance all our reforms that already demonstrated that democracy can deliver.

Indeed, Georgia, in spite of all difficulties and constant attempt of Russia to destabilize country from – internally and even organize different terroristic acts which were confirmed by our colleagues from different intelligence agencies, we are moving forward. Because of our liberal economic reforms, Georgia been declared by the World Bank as the world’s number one reform for five years period of time.

Georgia is the number one in Central and Eastern Europe in the rating of the World Bank of doing business. Overall in the world, number 16. Georgia has one of the most liberal tax and custom system, one of the easiest and liberal labor code, so therefore it has attracted lots of investment in many different fields, including energy. Georgia is very much enthusiastic to provide energy alternative for European Union. Together with Azerbaijan and Turkey, Georgia is going to be even more important in this regard.

Projects like Nabucco are very much important, we believe, for European Union security, and we are working on projects like AGRI, together with Romania, Hungary, Azerbaijan, and hopefully other countries like Ukraine and Bulgaria can join this projects to liquefy Azerbaijani gas and make it a commodity and ship it across the Black Sea, the projects like South Stream, and existing projects like Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum pipelines are vital for energy security and diversification.

We very much value support of our friends in making these projects reality. Georgia is very much keen to develop its infrastructure and develop stronger links with neighboring countries. We built together with Azerbaijan new railway connecting Georgia and Turkey, and in few years, after Turkey accomplishing its part of the job in building railway under the Bosporus, one can travel from Baku and Tbilisi and Istanbul to Paris and London by train or definitely it will be more important for cargo, and it will certainly reduce costs of the goods. We have – we enjoy free trade relationship with all our neighbors, including Turkey. We have GSP plus with European Union, with United States, Norway, Switzerland. And Georgia is one of the most open country in terms of trade, in terms of travel, with 100, over 100 countries free visa travel regime, and we are moving forward.

We are attracting more and more investors in energy field. Georgia has enormous hydropower potential and there are lots of Turkish investors and investors from many other countries are coming and exploring genuine business opportunities because we have utilized our hydropower resources only 17 percent, but we’ve become already the country of the exporting electricity, after being country of importing electricity just five years ago. And we have 87 percent of hydropower in our electricity generation component.

So there is a huge resources and huge potential to generate electricity in Georgia and sell it abroad. We have sell electricity already to all our neighbors, including Russia, even during the war time, honoring contracts. We never stopped selling electricity to Russia during these five days. We are, of course, selling electricity to Turkey. We build now second power line, electricity power line with Turkey, which will make our system much more stable and the export opportunities much more wide. We exported electricity to Serbia via Turkey. So that gives us enormous opportunity to attract investors in this field.

Georgia is very attractive in terms of investment because of its fight against corruption. According the Transparency International Global Survey, Georgia is again number one in terms of – in the world, in terms of speed of reducing level of corruption. And because of literally non-corrupt police and very effective police, according the European Union study, Georgia is one of the safest country in European continent, and capital Tbilisi is safest capital in European continent.

So all this makes Georgia really moving forward with our goals to becoming a member of NATO. You know how much we are contributing to the common security, and we are determined to go to this path and close the gap with – on EU membership issues. We – we will start negotiations on visa liberalization next year. so we are very much determined to move forward and while becoming stronger and more reliable and predictable and important partner for international community and member of international community, it will be much more difficult for anybody to continue and exercise this 19th century policies, and this will be best stimulus for Russia to start constructive relationship with Georgia, and we need to stimulate Russia, and we need to help Russia to understand that this is 21st century and Russia must benefit of the win-win policy, rather than zero-sum game.

So we are thankful for our neighbors, especially Turkey, for its continuous support of the peaceful policy in Eastern Europe and in South Caucasus particularly, supporting all our positive initiatives, and we are determined to build this partnership with Turkey, Azerbaijan, Armenia, and all our partners, and eventually with Russia as well. So we do believe that membership in NATO and European Union is one of the way to solve these problems, even our way toward these organizations is a way to solve these problems. Building democratic state is the way to address these problems and really convince everybody, all the players that win-win policies are better – they’re making better of us and are certainly more effective for all of us.

So these are the – very, very briefly the answers to all these questions. Thank you very much for your attention.

MR. LARRABEE: Thank you very much. (Applause.)

I would now like to ask Mr. Çavuşoğlu to take the floor and respond.

MEVLÜT ÇAVUŞOĞLU: Thank you very much, Chairman. Distinguished guests, ladies and gentlemen, I’m very honored to address you today and I would like to thank organizers for this possibility to share the idea of the aspirations of the Parliamentary Assembly and the Council of Europe on the subject that we are going to discuss today.

Peace and stability, democratic development in Southeast Europe and the Black Sea region are priorities of the Council of Europe and of our Parliamentary Assembly, which I represent here today.

Ladies and gentlemen, dear friends, Southeast Europe and Black Sea is an extremely diverse region, yet there is one thing that all countries of this region have in common. This is the European perspective. All the countries of the region are member of the Council of Europe, and they are all engaged with the European Union. Some are members already and others will be joining sooner or later. Therefore the role of the pan-European institutions, as our moderator stressed in his presentation opening remarks, the role of the pan-European institutions is to support the European aspirations of the countries of the region by promoting political stability, fostering economic growth, and supporting social cohesion.

In the past 15 years, the countries of the region have achieved a lot in implementing democratic reforms, yet the pace of these reforms was not always even, and in some countries further progress is required – still required.

Of course, the situation in each country is specific and I do not aim to making comparisons, therefore let me highlight a couple of common challenges.

In a number of countries, insufficient political pluralism, shortcomings in the electoral process, as well as violations of the freedom of expression and assembly do not always provide for an inclusive political environment. Moreover, the lack of dialogue between the majority and opposition has triggered political deadlocks in several countries. These crisis situations can only be resolved by political means. But constitution and legal reforms are also needed to prevent the repetition of similar deadlocks in future.

Rural law related reforms are urgently needed. Independence of the judiciary and fight against corruption must be strengthened. Effective domestic remedies against human rights violations should be also established. And these are just domestic challenges. We shouldn’t forget about the frozen conflicts in the region, as well as about the need for reconciliation, confidence building, and dialogue, following the conflicts after the fall of the Soviet Union and the former Yugoslavia.

What could be the pan-European response for these challenges? Of course, the international organizations cannot impose universal solutions. Our – (inaudible) – can only complement domestic actions by the governments and parliaments concerned.

Over the years, the Council of Europe has adopted a huge number of conventions and recommendations which now form the core of a common European legal space. The enforcement of these standards is ensured by independent monitoring bodies under the political authority of the Committee of Ministers of the Council of Europe and of the Parliamentary Assembly, actually quite a unique case in Europe and in the world.

Our assembly has its own monitoring mechanisms which covers all the countries of the region. We do not duplicate the work of the experts, but make political assessments of the reforms in order to support democratic changes in the region.

Moreover, we provide support in the organization of free and fair elections through election observation in cooperation with our international partners. But in fact, in the first place, the Council of Europe and our assembly provide a platform for political dialogue and cooperation between members. By working together, parliamentarians from the region share their experiences and mutually support each others’ efforts on the path to the European integration.

Moreover, through parliamentary diplomacy, our assembly supports international efforts to resolve frozen conflicts in the region. And we have set up ad-hoc committees to promote dialogue between the parliamentarians from Azerbaijan and Armenia, as well as from Georgia and Russia.

Through our monitoring procedures, our rapporteurs follow closely the negotiations on the Transnistrian settlement within the framework of five plus two format. And we invite the members of Kosovo assembly to the meetings of the committees, the Parliamentary Assembly committees whenever we discuss issues which directly concern them in order to ensure that our standards and democracy, rule of law and human rights are implemented there as well.

We actively support the process of dialogue and reconciliation in the Balkans in our recent resolutions which was adopted during the October past session on this issue provides a lot of recommendation in this respect.

Dear friends, ladies and gentlemen, let me finish a wider international note. The winds of the democratic change that are blowing the neighborhoods represent a great opportunity for Europe. The Council of Europe and our assembly were among the first to offer support to ongoing democratic changes in the region, including through the new status of partnership for democracy with the assembly which have already granted to the parliament of Morocco and to the Palestinian National Council. And now, we are working with our partners in Tunisia, Algeria, and Egypt to promote this status.

Moreover, interest in the partnership status is also growing in Central Asia and last week we received an official request from the parliament of the Kirgiz Republic. And I also hope that our Kazakh colleagues, as well as other parliaments from the region will apply when they feel ready.

In this context, I believe that the countries of Southeast Europe and the Black Sea region should play an active role in sharing their own experiences of democratic transformations with our neighbors, thus building the bridge between Europe and the wider European and Euro-Mediterranean region.

By sharing their own good practices, as well as by learning from our neighbors’ experiences, they could make a concrete contribution to making our region even more politically stable and prosperous.

Once again, thank you very much for this opportunity and I’m looking forward to have the interesting exchange of views with you. Thank you very much. (Applause.)

MR. LARRABEE: Thank you very much. We’ll now proceed for – to hear three other perspectives from the two regions, beginning with His Excellency Besim Beqaj, minister of economic development in the Republic of Kosovo.

BESIM BEQAJ: Thank you, Mr. Chairman. Distinguished panelists, ladies and gentlemen, we are here today to talk on this day about cooperation, about the way ahead and the way which will establish much better cooperation among ourselves.

It was discussed a lot of times about the regionalism and cooperation. And if we want to address the issue of key obstacles, which was raised as an issue here, I would say that is a issue of institutions, understanding about the regionalism itself.

Some countries are understanding regionalism, which used to be before with a political background, where politics are ahead of the economies, but basically in the region, we in the Republic of Kosovo, we are expecting and we are working toward regionalism with economic background, regionalism which European Union has been based off as its European and pan-European value, where people going through conflicts and problems, they face but they see the common way to go ahead on economic cooperation.

So in this respect, after the war, Kosovo has experienced very, very bad situation. Our economy was for many years during ’90s mismanaged intentionally by Serbian regime, by the Milosevic regime to be continued with a huge destruction of whole economy by the war. So after the war, we were facing the poor performance of local institutions low level of productivity, low level of investments, poor road infrastructure, and different issue which have been linked with this.

We lost markets and we were facing now the challenge to go ahead and to deal with the whole recovery. And the recovery we were doing it was with the support of EU member states, by a lot of institutions and support which have been given to Republic of Kosovo, U.S. and all international institutions and organizations.

So basically, how we can overcome this situation is that we should look into the trade creation. We should look into the economic relations creation, not diverting because when we speak about the CEFTA Agreement, which Kosovo is part of it, we are looking to use as (school ?) – proximity school for economic relations and fight with the current economic and financial crisis of the world.

So we are doing a lot of reforms at these days in Republic of Kosovo. We are reforming our economy very heavily. I am very glad to have here a colleague from Georgia. We are using as a model in the World Doing Business Report, where we have created a set of structures to make big changes, which will make our economy competitive in the market.

In this – in this sense, our reforms, our economical reforms are going ahead with the structural changes, the structural changes which will make the shift from socially owned companies into the private companies to empower private sector to reduce as much as possible economic barriers for creating and doing business. And we set in front of us a very ambitious platform for economic growth for 7 to 8 percent in the midterm. Currently, we are having 5.3 percent economic growth according to the IMF and whole internationalization, but as well from our side. And we are aiming in next midterm, which is three to five years, to reduce unemployment by 8 to 10 percent from the registered people.

How we can overcome? We need to have credible perspectives, credible perspectives from EU, credible corporation in the region. And we are facing a lot of challenges in that respect with our neighbor in the north, with Republic of Serbia, where still the mentality of barricades is into function, while we are performing very, very conservatively as a West-oriented European country, which is putting in the front of everything dialogue.

How the energy can be a benefit for regional cooperation? We are understanding the energy challenge over the world is big. In the region, these days are being discussed a lot of regional initiatives and the energy production, energy developments cannot be a matter of one country of one place, but it should be the regional based, and Kosovo is offering their vast possibilities for energy production. In this manner, we are now in the process of privatizing distribution and building the new power plant, coal-fired power plant according to the highest European standards, which is something which we lack and need.

Recently, we have built a 400 kV line with Albania, which is based completely on the hydro and we are basing on lignite power, the 400 kV line which will make us two systems to be interconnected and compatible with each other. The same thing we are doing with Macedonia, which Montenegro, and in the future, as the infrastructure is being developed, as well with our northern neighbor.

We do think that infrastructure is opening the doors for economy and for energy. In this respect, we have done a huge investment as well in infrastructure. Recently, we have started use of 38 kilometers very, very high standard, international standard road with Albania, which will continue by the end of the year to Pristina, and if we have a correspondence from Republic of Serbia, we will continue as well to Serbia because we do think that economy and cooperation goes hand in hand and this road can be the shortest road for Central European countries – for Southeastern European countries toward Europe and toward the hot waters where the cost of transportation will be of reduction as possible.

At this stage, I would like again to thank the organizer inviting and giving me opportunity to speak here. Thank you. (Applause.)

MR. LARRABEE: Thank you very much.

I’d like to now call on Mr. Corlăţean to express his views. Please try to limit yourself to five minutes so we can have a discussion.

TITUS CORLĂŢEAN: Thank you, Steve. Being the chair of the Foreign Affairs Committee of the Romanian Senate, I can confirm you from the beginning the fact that the perspectives of Southeast Europe represents a key topic not only for the Romanian parliament, but also for the Romanian foreign policy, a country which is a member of both European Union and the NATO.

And I will start underlining the fact that we consider, and this is according to our view of the fact, that European Union, for instance, the political and economic project of European Union is not complete without Southeast Europe. You can understand our position having in mind also our experience, being a country close to the region, close to the Balkans, knowing very well the very complicated past, the very complicated history why we are advocating in favor of such a position because we are considering that the only solution for guaranteeing stability, peace, democracy, and prosperity in the region is the continuing process of European and Euro-Atlantic structures process – the enlargement of European Union and Euro-Atlantic structures in the region.

This is our clear position from this point of view. And because we have the pleasure to have among Giorgi Baramidze, I will say that looking a little bit in a broader spirit in the region, not only on the Balkans, in a broader Southeast European perspective, we are also supportive – very supportive for the European aspirations of the eastern countries, and not only referring to the eastern partnership, a tool that – which is promoted by European Union, but looking a little bit more than this and respecting the European identity, the European vocation and interests of those countries which have this European identity and that are proving progress. I’m referring to the Republic of Moldova. I’m referring to Georgia, to Ukraine of course.

It’s true, on the other side that – now, coming back a little bit to the Balkans regions – it’s true that there are different individual cases. There are different speeds, different statutes of those countries. Croatia is almost there, will sign in December the treaty for accession to EU, and I hope that – I will do my best, in any case, that the Romanian parliament will be among the first national EU – national parliaments which will ratify the treaty for Croatia.

Serbia probably will obtain the status of candidate in December that the European Council. The other countries are on different stages on their demarches, European demarches. And of course, we have the final example and case of Kosovo, which was recognized by a number – a majority within the European Union, which was not recognized by a number of EU member states, including Romania, not for political reasons, but for reasons related to public international law. But looking in a broader manner to the Balkans as a whole, Romania’s view is once again the following. This region must and will be part of the European Union. Of course, the manner, the speeds, the steps, and the modalities, we will see in the future. But this is our main position from this point of view.

The fundamental question which remains speaking about this topic is how mutual, how sincere, how honest is the commitment for the European perspective of the region. And I will tackle directly the weaknesses within our family, within our European Union speaking about this topic because, on one hand, putting in practice the principle of conditionality during the integration process was a correct one. It proved to be a successful principle, but it doesn’t mean that putting and – putting once again in practice in the future – and it will happen, this principle – it doesn’t mean that we accept and Romania accepts a European Union which double speeds and a European Union with double standards. And this is a very firm and very clear position. And unfortunately, it happens. It happened in the past. It happened also today. It happened, speaking about double standards, with Romania and Bulgaria’s accession, and even today, being members within European Union, we are meeting some double standards in some important topics like the Schengen accession to the Schengen Area.

Double standards were applied when – while referring also to Croatia, to Macedonia, to Serbia, to Turkey, of course, and my conclusion, my brief conclusion to this situation it’s the following. There’s a need for better coordination, not collaboration, coordination of the positions of the countries in the region, inside – within the European Union or being candidates or wanting to accede to European Union, better coordination of the position.

Romania is well-known a contributor to the process of elaborating and implementing different regional policies, different regional initiatives. I will quote very briefly the Black Sea Synergy, which was an initiative launched by Romania, the Organization for Cooperation to the Black Sea, the Southeast European cooperation process, also the Danube Strategy, which was adopted by European Union at the proposal of Romania and Austria, and not to mention the support for the eastern partnership of the European Union.

We were very supportive for the visa liberalization of the countries in the region. And we were very supportive and we are very supportive for regional cooperation only –not only, but mainly because this is an asset for building mutual trust and cooperation between states in the region. This is a key issue and we are looking with great attention, by the way, to the possible and relaunching – and very needed relaunching bilateral dialogue between Belgrade and Pristina, by the way, speaking about mutual trust and mutual confidence. We are supportive for such a dialogue.

Also we are very committed and very involved in the process of combating international or transborder organized crime, transborder and illegal trafficking persons and some other goods, in drugs. We are hosting in Bucharest, by the way, the 10th level of the Romanian parliament in a very secured zone the so-called SECI Center. SECI Center is the center which is based on intelligence and the presence of different agencies from the European, American agencies for combating human trafficking in the region, is a very successful center.

The main problem and the main challenge, speaking about this process, is according to our and my opinion the infrastructure connection. Steve Larrabee mentioned among the four questions this issue, the energy, and I will say that the real and sincere meaning of the European perspective for the region is a very solid, a very robust investment in infrastructure for the connection with the European Union structures – energy, transports, and not only.

This will imply this very strategic action for the Republic of Moldova, for instance, being connected and putting the money, putting the budget, the European money first of all, for the connection in gas, in electricity, in the transports. For the Black Sea region and also the Caspian region, the connectivity of the markets to the European markets, the connection of the infrastructure of transport and energy with the Europeans, this implies inter alia the Nabucco Corridor, which for many European member states, including Romania; it’s a very essential project. It’s a very strategic project.

This is why I welcomed yesterday – and I will finish in one minute and a half. This is why I welcomed the presence of, for instance, the Iraqi officials yesterday. I was in Baghdad in September. I discussed with the Iraqi officials, the governmental and the parliamentary officials a possible involvement of the Iraqi authorities in the Nabucco Corridor, and this is a very positive step forward.

I will end making a brief comment to a notion or a concept that I heard once again also yesterday during the conference, which is very familiar also for the Romanian political establishment, the so-called notion of the bridge. Yesterday, I heard the advantages of being a bridge because north and south, different civilization, different economic dimensions, different political and strategic dimensions. From a geographical point of view, I can understand and I fully support such an advantage and the fact that a country and can wants to put in practice and took advantages for such a geographical position.

Romania advocated in the ’90s, when wanting to promote its candidature to NATO and European Union the same thing. We are a bridge between north and south, between east and west. We will be a major – and important member of NATO and the EU. From a geopolitical point of view, and I underline, it took a number of years for us to understand a very simple issue. If you are a bridge or if you are on a bridge, definitely you are not either on one side of the river or clearly on the other side of the river. You are simply in between.

From a geopolitical point of view, if someone is interested to be part of a family must take the political decision not to be a bridge, to be on a clear, solid soil. That implies to assume the values. That implies to assume the standards. That implies the measures for the reforms. So for those who are – those friends who are maybe in the broader Black Sea region or Caspian region that are still thinking, if they are committed and interested by the European family, they must avoid to be a bridge. They must avoid to be something in between to assume politically very clear the European identity and to take the direction that was decided. Thank you very much. (Applause.)

MR. LARRABEE: I’d now like to call on Deputy Foreign Minister Pashayev for his perspectives. You can sit here or you can go to the podium, whichever you like.

HAFIZ PASHAYEV: I will try to stay here. Thank you very much for this opportunity and it’s great opportunity for me to speak in this audience in great city of Istanbul. And I want to start congratulating all former Soviet republics being 20 years already independent.

In case of Azerbaijan, it’s very valuable to us because we were experiencing only two years independence in 1918, 1920, now 20 years, so it’s important milestone for us. After the collapse of Soviet Union, many republics of the former Soviet Union have aspired Euro-Atlantic integration. Membership in EU and NATO was perceived as a way to strengthen national independence, political sovereignty, develop economy, and seal a well-deserved place in political map of the world.

We were excited to join PfP program as a venue to achieve our goal because the West symbolized justice, fairness, and successful economic development to many of us. Two decades later, the picture is rather complicated and much different than in early ’90s. While many of our countries continue to pursue Euro-Atlantic integration, for some there has been a real disappointment with the actions of the Western democracies. Having closely studied the nuances of democratic structures in the Western countries, the public in the post-Soviet space has been disappointed with double standards, role of interests groups and money in decision-making process, biased media, use of democracy card in achieving foreign policy goals. Military involvement in Iraq has further weakened the image of the West.

The ongoing economic and financial crisis in Europe made once attractive model of European Union development rather disappointing. The West is no longer that magnet which pulled to itself post-Soviet republics. And while no other major alternative to the Western democracy has been developed, each post-Soviet republic tries to find its own way of development, balancing between models of EU, United States, Russia, China, and Turkey.

Nearly a decade has passed since the last expansion of European Union and NATO. Now, one can observe that although open door policy is still not over, boss organizations are very cautious to expand further. In the last several years, the European Union has failed to provide a tangible carrot to those who aspire European Union membership.

What EU was willing to offer to these states is the so-called European neighborhood policy, later shifted toward the Eastern Partnership. The program envisions economic aid, visa facilitation, and enhanced trade with these countries, but not full membership. In a way, it was sending a message to the former Soviet republics that EU needs you and your territory as a buffer zone against security and economic problems, but does not see you as one of ours. That forces us to rethink our policies and identities, just like the case with Turkey, which is country which is finding new identity and role in the region.

As we yesterday heard from the Minister Bağış, he said that it took 45 years for Turkey to get date only to start negotiation process.

The unresolved conflicts in the post-Soviet space present a serious danger and risk to the social economic development and political stability. For two decades, 20 percent of Azerbaijani lands are being held under Armenian military occupation and a million Azerbaijanis have become refugees and IDPs. Basic human rights of the so many people were violated. Lack of interest and real commitment from United States and European Union to help resolve this and other conflicts and bring the rule of international law into this region have also been a major factor in disappointment of the public.

Many people believe now that conflict – by the way, I would respectfully disagree with Ambassador Çavuşoğlu, we are not calling this conflict frozen conflict. It’s still ongoing conflict actually. So this conflict are used by major powers to increase the influence in the region. Lack of coherent strategy is damaging the whole idea of Euro-Atlantic integration for the republic of the former Soviet Union. In this respect, I would like to specifically highlight the weakness of pan-European institutions and U.N. in preventing and resolving the conflicts, especially when there are clear cut cases of an aggression of one state against the international recognized territory of another sovereign state, member of these same organizations.

Energy – energy issue. Energy, despite conventional stereotypes, has so far served a good cause for Caspian region. For the past 20 years, energy has brought much needed resources to recover the economy destroyed by the collapse of the Soviet Union. Draw investments, open new enterprises, employment opportunities, reduce poverty, social problems, youth crime, and reduce ethnic tensions. Today, Azerbaijan, Kazakhstan and Turkmenistan and other regional energy players enjoy their rapid economic growth, which fuels the economic development of the whole region.

Azerbaijan alone is now the biggest investor in the neighboring Georgia. It also invests in Moldova, Ukraine, Romania, and Turkey, as a case of $5 billion worth petrochemical factory opened last month shows.

Azerbaijan also finances other regional projects in non-oil sector, such as construction of Baku cars railway, Baku sea port, and Baku shipyard. These projects are aimed at making Baku a regional hub for commerce and transportation and connection of the Caspian region with other regional powers in greater Eurasian region.

As an ambassador of Azerbaijan to United States in 1990s, I have been involved in very deep turbulent process of Caspian energy development. I am not involved in energy talks theses days, but able to draw some comparisons between what was in ’90s and today. If compared with oil development in ’90s, particularly BTC project, one of the most important differences has been the absence of strong Western support for carrying gas transportation projects. In the case of BTC, the West, especially United States, provided very strong vision, as well as political backing. This was well synchronized with oil companies and country leaders from the region.

Here I would like to remind that three great leaders of the time, Haidar Aliev, Eduard Shevardnadze and Demirel played exceptional role which allowed to bring even other leaders like Clinton to be on board. And I would remind that in 1999, in this city, on the summit of OECE, BTC got final approval. It was great date for us. And in this situation now, I want to bring example of Nabucco. We don’t see such championship as we had before in the ’90s. European Union and United States have been preoccupied with wars and economic crises. Turkey and other regional players have had some serious disagreements on tactical questions, such as prices for gas and transit fees, thus putting the faith of the pipeline in doubt. The companies that proposed to build the pipeline do not hold stakes in the gas fields in the Caspian, thus making it very difficult to push the case for the pipeline.

Recent agreements between Turkey and Azerbaijan give us hopes that two countries have made a significant and well-crafted move towards strategic vision on regional gas projects. This act has reminded me same ’90s when regional leaders were making some tactical sacrifices to put aside their differences for the sake of strategic vision and partnership.

It is strong belief in Baku that our region should be transformed from the region of competition into a region of cooperation and help, where Caspian region can connect and benefit all regional players, such as European Union, China, India, Russia, and the Islamic world. In fact, the Caspian and greater Black Sea region should serve as a bridge between European Union and Asia. Our region can play a vital role as a hub for energy, transportation, economic, and security issues. It can also play a role of bridge of civilizations, religions, and cultures.

I believe our region will regain policy focus and importance if it is treated not as periphery to the European Union, but a solid, vital, and important partner in greater Eurasia. Thank you.

MR. LARRABEE: Great, thank you very much. (Applause.)

We’ve had five very good, very substantive contributions. Unfortunately, we don’t have a lot of time left because we have to be fair to the next session. But I’d like to ask, since this is particularly a conference devoted to energy and economic security, the panelists a question related to energy. And that is as they look – particularly I’d like to ask the two of you – South Stream has made an effort, the rest of it made a strong effort to promote South Stream as an alternative to Nabucco – Nabucco. How do you see that affecting your region and how much success is this effort likely to have? If you could both address that, first I’d ask Mr. Corlăţean and then you about South Stream and Nabucco, how they fit into your perspectives.

MR. CORLĂŢEAN: Maybe a few comments on your question, Steve. One of the key interests of European Union and of the member states is the energy security. It’s a long story. I’m a former member of the European Parliament. We had long debates within the European Parliament on a common European policy on energy and the fact that instead of that, many years, important actors of the European Union preferred to solve their issues, their problems on a bilateral way with Russia because we are discussing both to Russia. How to move forward and to secure from an energy point of view Europe, this was the main challenge on this topic.

Now, there are different possibilities of course. And not neglecting Russia because it’s impossible, not rejecting the need of cooperation with Russia because it’s essential. How to be sure that’s – including having in mind the past and quite recent past with some examples, with some countries in the region that suffered because the logical of – cooperation logic was let’s say put it away and some political interests were used when speaking about energy – and I’m speaking now very directly.

This is why to divert the sources and to secure the sources it’s a very strategic interest of the EU member states, including Romania. This is why we are advocating very, very strong in favor of the Nabucco Corridor for the AGRI Corridor and some other possibilities, not neglecting the other possibilities and the projects that you mentioned. But once again, there is a scale of priorities and we put it the priorities according to European and other national interests.


Mr. Beqaj.

MR. BEQAJ: Yes, well, I think it’s very important for all of us to speak about security of supply.

MR. LARRABEE: Is your microphone on?

MR. BEQAJ: About security of supply of energy and affordability of the energy because we are all – when we speak about energy, we are fan of let’s say all green orientations which are all over the world, and then we speak about the possibilities and – that our citizens are having to have and to be able to pay for that – for that energy.

Recently, as you know, in the Southeastern Europe there is an energy treaty which is going to give a regional perspective for energy production and as well as alternatives of other projects, like Gas Ring, which is already going on discussions because we should think about diversifying as much as possible that kind of possibilities.

Absolutely I just was presented the European Union ministers of energy, about a month ago in Poland, we were discussing about the future orientations for diversification of supply and diversification of the regions and the projects is one of the key issues, but absolutely there are orientations that every country should use as much as possible their resources in order to have these components – security supply and the affordability of the energy for the country and for the region.

MR. LARRABEE: As we wind up, let me return to your statement that there doesn’t seem to be as much Western interest and support for gas pipelines this time around in comparison to the BTC, the Baku-Tbilisi-Ceyhan oil pipeline. But even there, the United States, although it was extremely supportive, as you mentioned in the Clinton administration, made very clear that this had to be a – in the end, it would be successful on a commercial basis and it had to be viable economically.

And it seems to me in the case of the EU and Nabucco, a number of countries also have been quite clear that the EU itself was not going to finance this, this had to be done by private companies, and there has been, it seems to me, for reasons that were explained and discussed yesterday, the process has been very slow. It’s taken a long time to get the various parties involved to come to a consensus, but here again, the basic issue is it seems to me the same as it was with BTC, that this enterprise, Nabucco, has to be commercially viable. And in order to do that, one has to have a certain assured supply.

Now, Azerbaijan has made a commitment to Nabucco, but other countries have talked about possibly contributing, but have not made any form of commitment. So let me ask the two of you very quickly in just a minute or so to say how you feel this enterprise, what are its chances and what do you think is the prospect for success and on what do those prospects depend. And I’ll start with –

MR. PASHAYEV: Yes. As I said, I am not so much involved, and so details it’s behind my knowledge, but overall what I can see in case of BTC oil was there, proven reserves were there, and the companies knew that they should take this out to market. In case of – by the way, this political game also was great that time also, but again was to show that this project it’s not commercially viable. This time, I think more political support than commercial confidence in this project. So I don’t know.

It’s – position of Azerbaijan is to support all roads and for all participants it’s better to have as many as possible, but resource is important, and in that sense I think arguments about to bring some eastern part reserves, eastern part of Caspian reserves to Nabucco I think it’s very important probably part of the discussion.

MR. LARRABEE: Lastly, let me ask you, Mr. Baramidze, how you see this yourself from the Georgian position related to Nabucco.

MR. BARAMIDZE: Well, we think it’s very important project. We certainly have to be sure – I mean the companies have to be sure that the project will be economically viable, but certainly leadership component is important. Insurances from governments are important and encouragement from governments’ side is also important for this kind of strategic projects because when we talk about this type of projects, except the resources itself, I think we need to – not to forget about the interests of diversification, not to be dependant on one sources alone. So therefore, having in mind all these components, Nabucco is absolutely vital and we feel that it has a potential to be materialized and to become a real project and real success of this idea.

MR. LARRABBE: Okay, thank you very much. I’d like to thank all the panelists for very rich and helpful and interesting contributions. And then I think we should proceed to the next panel. Thank you very much.


MS. : Ladies and gentlemen, please proceed immediately to Fuji Ballroom I for lunch. Thank you.