World Savvy Monitor

Armenia

Population: 2,968,586     

GDP per capita (PPP): $5,800 US

Freedom House Status: Partly Free

Armenia, one of the oldest Christian civilizations, is located in Southwestern Asia and is geographically slightly smaller than the US state of Maryland.  The nation was recently in international headlines in connection with the deaths of one million Armenians during WWI, at the hands of Ottoman Turks and Turkey’s present-day denial that the deaths constituted genocide.

Upon its independence from the Soviet Union in 1991, fighting between Armenia and neighboring Azerbaijan, which had begun three years prior, escalated.  The conflict centers on claims to the Nagorno-Karabakh region, which is primarily populated by Armenians, but was incorporated into Azerbaijan by the Soviet Union in the 1920s.  In 1994, a ceasefire was declared, with Armenia forces in control of the contentious area, as well as 16% of Azerbaijan.  As a result of the dispute, Turkey and Azerbaijan have instituted trade blockades on the nation, and this has further worsened an already weak economy.

Most of Armenia’s gas comes from Russia via a Georgian pipeline, and in April 2006, these gas prices were doubled by Russia.  Armenia also derives energy from a nuclear power plant that was reopened in 1995 after a 1988 earthquake caused the plant to be shut down.  It became a member of the Council of Europe in 2001 and the United States has provided the nation with significant amounts of aid, though it still has strong ties to Russia.

Azerbaijan

Population: 8,177,717

GDP per capita (PPP): $8,000 US

Freedom House Status: Not Free

Azerbaijan, a country about the geographic size of Maine and with borders on the Caspian Sea, Russia and Iran, has long been an international supplier of oil.  Despite heavy inflows of Western capital to develop its energy infrastructure – in 1994 it signed an oil contract worth $7.4 billion with a Western consortium – the overall Azerbaijan economy has not benefited generally.  Most of Azerbaijan’s oil runs from the Caspian Sea, through pipelines in Georgia to the Turkish port of Ceyhan, and on to Europe.  Russia recently offered to buy all of Azerbaijan’s natural gas, but the two nations have not yet come to an agreement on a deal.  

Its geostrategic location and vast energy resources make it an important ally to both Russia and the West, and it has striven to balance these interests.  For example, while it has announced no desire to join NATO, it has accepted NATO training.  Russia’s recent show of power in its conflict with Georgia may have altered this balance, however.  As Paul Goble, an American expert on the region who teaches at the Azerbaijan Diplomatic Academy in Baku, put it, “The chess board has been tilted, and the pieces are shifting into different places.”  Tellingly, when the fighting in Georgia began, Azerbaijan requested that Russia protect its infrastructure in Georgia – infrastructure that is vital to Azerbaijani oil reaching the West.  

Azerbaijan has a long-standing conflict with Armenia over the largely Armenian-populated Nagorno-Karabakh region that was incorporated into Azerbaijan in the 1920s by the Soviet Union.  At present, Armenia controls the region as well as nearly one-seventh of Azerbaijan’s territory.  As a consequence, there are currently 800,000 refugees and internally displaced persons within Azerbaijan.  Since the conflict with Georgia, Russia seems to have taken a more active role in mediating this conflict.

Belarus

Population: 9,685,768

GDP per capita (PPP): $10,600 US

Freedom House Status: Not Free

Belaurs is a land-locked nation in Eastern Europe that is geographically slightly smaller than Kansas.  It is East of Poland and West of Russia.  Most experts agree that out of all the former Soviet republics, Belarus has retained the closest political and economic ties to Russia.  Its longtime President Alexander Lukashenko, who has been described as Europe’s last dictator, has consistently pursued close ties with the Kremlin.  In 1999, the two nations even signed a treaty establishing the framework for a two-state union that called for greater political and economic integration; however, to date, little has been done to implement this framework.  Lukashenko has been resistant to private enterprise and as a consequence, foreign direct investment is very low.  However, Lukashenko’s redistributive socialist policies have led the nation to boast one of the lowest Gini coefficients in the world.

Belarus depends upon Russian oil and gas to meet almost all of its energy needs.  Furthermore, a significant portion of the Russian oil and gas that is imported by Europe travels through pipelines in Belarus.  In December of 2006, Russia increased Belarusian natural gas prices from $47 per thousand cubic meters (tcm) to $100 per tcm, and it has plans to bring these prices up to world market values by 2011.  Tensions between the two nations heightened as a result of this and disagreements over export tax rates (Belarus resells Russian gas to Europe at a profit), and Russia even threatened to cut off gas to Belarus at one point during negotiations.  Belarusian relations with the West have not been good historically.  In 2006, after corrupt presidential elections, the EU froze the assets of senior officials and barred them from entering the EU.  However, the EU has made attempts to win Belarus from Russian influence through offers of aid, trade, and a relaxing of sanctions.  To date, this effort has had little effect.

Estonia

Population: 1,307,605

GDP per capita (PPP): $21,800

Freedom House Status: Free

Estonia, a Baltic state slightly geographically smaller than New Hampshire and Vermont combined, has been largely integrated into the Western community and has one of the highest per capita income levels in Central Europe.  In 2004, it became a member of both the EU and NATO.  The nation enjoyed independence from 1920-40, before being absorbed into the Soviet Union after a deal struck between Germany’s Hitler and the Soviet Union’s Stalin.  As a result of this arrangement, there was large-scale immigration into Estonia from the Soviet Union, and Russians now make up approximately one-third of the Estonian population.  

While Estonia is on very good terms with the West, tensions run high with Russia.  The two nations have a border dispute that remains unresolved after a 2005 treaty fell through when Estonia demanded that references to Soviet occupation be included.  Tensions were further heightened in 2007 amidst a dispute concerning the relocation of a Soviet WWII memorial, which Estonians saw as a symbol of Soviet occupation and Russians interpreted as a tribute to the Soviet fight against Nazi Germany.  What some have termed as the world’s first ‘cyber war’ ensued, with Estonian government and commercial websites attacked from internet addresses reportedly from within Russia.

Nearly 90% of the oil used in the Baltic region (Estonia, Latvia, and Lithuania) is imported from Russia and the region is an important transit location for the export of Russian oil to the greater international community, though the Estonia port of Tallin has less traffic than the key Baltic ports of Ventspils, Latvia, Butinge, Lithuania, and Primorsk, Russia.

Georgia

Population: 4,630,841

GDP per capita (PPP): $4,400

Freedom House Status: Partly Free

Georgia is a nation on the Black Sea, located South of Russia and slightly geographically smaller than South Carolina.  Its relationship with Russia has become extremely tense since the Rose Revolution in 2003 and the election of President Saakshavili in 2004.  In August of this year, the two nations engaged in a one-week conflict over the Georgian breakaway regions of South Ossetia and Abkhazia.  Georgia has received support from the West and particularly from the US, and it hopes to become a member of NATO.

Georgia imports most of its gas and oil from Russia and is an important transit point for gas and oil from both Russia and the Caspian Sea.  Kazakhstan recently abandoned plans to build an oil terminal in Georgia – a move that would have been very beneficial to the nation’s economy, especially in light of its recent war with Russia.

For a more detailed account of the current situation in Georgia, see the Crisis in the Caucasus section in Russia Beyond Its Borders.

Kazakhstan

Population: 15,340,533

GDP per capita (PPP):  $11,000

Freedom House Status: Not Free

Kazakhstan is a large mineral rich nation about the geographic size of Western Europe, with a diverse population comprised of Kazakhs (53%), Russians (30%) and various other minority groups such as Ukrainians, Germans, Chechens, Kurds, Koreans, and other Central Asian ethnic groups.  It is located in Central Asia, with borders on the Caspian Sea, as well as with Russia and China.

Due in large part to its huge energy resources – it boasts the Caspian Sea’s largest reserves of crude oil – Kazakhstan’s economy is larger than all of the other economies of the Central Asian states combined.  Since its independence from the Soviet Union in 1991, its energy sector has had a great deal of foreign investment and its petroleum industry accounts for approximately one-third of its GDP.  An oil pipeline that opened in 2001 links the Tengiz oil field in western Kazakhstan to Russia’s Black Sea port of Novorossiysk.  An oil pipeline into China was opened in 2005, and there are plans to build a link to the Baku-Tbilisi-Ceyhan pipeline.

Kazakhstan’s energy wealth requires that it perform a delicate balancing act in its relations with the West and Russia, as both are keen to develop their access to Kazak energy.  Recently, Kazakhstan received visits from Russian President Medvedev and US Secretary of State Condoleezza Rice within two weeks of each other.  Kazakhstan’s foreign minister, Marat Tazhin, has commented that Kazakhstan enjoys good relationships with both Russia and the United States and that relations with Moscow are “very politically correct.”  In September, Kazakhstan and Uzbekistan agreed to a gas pipeline that will feed into the Russian pipeline system, a move that stymied Western ambitions to create a gas route that would bypass Russia in the transport of Central Asian gas to Europe.

Kyrgyzstan

Population: 5,356,869

GDP per capita (PPP): $2,000

Freedom House Status: Partly Free

Kyrgyzstan is an entirely mountainous, landlocked nation that is slightly geographically smaller than the state of South Dakota; it is located in Central Asia and bordered by China, Kazakhstan, Uzbekistan and Tajikistan.  The nation is largely poor and its political environment has been unstable in recent years.

The US CIA has estimated that Kyrgyzstan’s proven natural gas reserves amount to 5.4 billion cubic meters, but its annual production is only 2.8 million cubic meters.  As a result it imports the vast majority of its oil and gas needs, which it does mostly from Uzbekistan.  Tensions with this neighboring former Soviet nation have run high as a result of competition for land and housing in border regions and the fact that Kyrgyzstan frequently has difficulty making payments on its imported gas.  In 2008, Uzbekistan raised gas export prices to Kyrgyzstan by 45%.  In 2003, the Kyrgyz government signed an agreement with Russia’s natural gas monopoly, Gazprom, to cooperate in prospecting for natural gas and developing Kyrgyz natural gas deposits.  Some analysts predict that this will limit the extent to which Kyrgyzstan will be able to benefit from future natural gas production.

Like many of the other former Soviet republics, Kyrgyzstan has balanced its relations with the West and Russia.  It was the first Commonwealth of Independent States (CIS) country to be accepted into the World Trade Organization, but has also maintained its trade relationship with Russia.  Russia and US forces are stationed only 19 miles from each other.  In 2001, after the terrorist attacks on the US, Kyrgyzstan agreed to allow the Americans the use of an airport in Bishkek as a base; in 2003, also in conjunction with the fight against terrorism, Russian rapid reaction forces were allowed to deploy at the Kant airbase.

Latvia

Population: 2,245,423

GDP per capita (PPP): $17,700

Freedom House Status: Free

Latvia is a small nation – slightly geographically larger than the US state of West Virginia – that borders the Baltic Sea and Russia.  Latvia gained its independence in 1991.  It had been absorbed by the Soviet Union in 1940, and subsequently underwent heavy industrialization.  It is home to a significant Russian minority (30% of the population) as a result of this period.

The nation is entirely dependent upon natural gas imports and serves as an import transit point for conveying Russian oil and gas to the greater international community.  It holds a long-term supply agreement with the Russian gas monopoly Gazprom, and the completion of the North European Gas Pipeline, which began construction in 2005, will increase the amount of gas flowing from Russia to Europe by way of the Baltic Sea.

Latvia has enjoyed good relations with the West. Yet, its status as an important transit point for oil and gas has prevented it relationship with Russia from deteriorating to a great degree.  Following its independence, it quickly made the transition to a free market economy, joining the WTO in 1999, and by 2004, it had joined both NATO and the EU.  Since Russia’s conflict with Georgia, NATO has taken steps to ensure the protection of its Baltic members (Latvia, Estonia, and Lithuania), and in October of 2008, the chairman of the Joint Chiefs of Staff of NATO, Admiral Mullen, made a visit to the nations.  NATO is considering increasing the number of military exercises with these nations, clarifying that the move should not be perceived as a provocative action, but as evidence of NATO’s determination “to do everything we can to prevent and deter” attack by any potential aggressor.

Lithuania

Population: 3,565,205

GDP per capita (PPP): $16,800

Freedom House Status: Free

Lithuania was the first of the Soviet republics to declare its independence, in March of 1990.  It is a small nation, about the geographic size of West Virginia,.

Like it’s fellow Baltic states, Latvia and Estonia, Lithuania is an important transit point for oil and gas imports to Europe.  It has had a less rocky relationship with Russia than have Latvia and Estonia (perhaps a byproduct of its smaller Russian minority population), and as a consequence, it is the Baltic state that conducts the most trade with Russia.  It boasts the only refinery in the Baltic region, which is the nation’s largest revenue generator, and its port of Butinge, though significantly smaller in terms of capacity, exports more crude oil than the larger Latvian port of Ventspils.

Lithuania enjoys good relations with the West and is a member of NATO, the EU, and the WTO.  Its trade is increasingly oriented toward the West.  Russia is particularly concerned with Lithuania’s increasingly close relationship with the West and its involvement in NATO as the nation borders the Russian enclave of Kaliningrad.  In the summer of 2008, after negotiations with Poland stalled, the US began discussions about locating interceptors for its planned missile defense shield in Lithuania.  In October, following Russia’s conflict with Georgia, NATO officials visited Lithuania to reassure the nation and its Baltic counterparts that it would receive adequate NATO protection. Lithuania’s chief of defense has said that one of his nation’s primary motives for joining NATO was the organization’s commitment to collective defense.  In another sign that Lithuania’s relationship with Russia may be cooling, in July, hackers attacked about 300 Web sites in Lithuania, defacing them with Soviet symbols and anti-Lithuanian slogans after the Lithuanian government outlawed the display of Soviet symbols.

Moldova

Population: 4,324,450

GDP per capita (PPP): $2,300

Freedom House Status: Partly Free

Moldova, a nation slightly geographically larger than Maryland, is one of the poorest nations in Europe.  It is wedged between Ukraine and Romania, and about two-thirds of Moldovans are of Romanian decent.  Russian troops still occupy parts of Moldovan territory in support of a region located along its border with Ukraine.  The region, which has a Slavic majority made up of mostly Ukrainians and Russians, has proclaimed its independence as the republic of Transnistria, though it is not recognized by the international community.  In a 2006 referendum, the region expressed support for its plan to join Russia.

Moldova imports almost all of its energy and is highly dependent upon Russia for these supplies.  In response to pricing disputes at the close of 2005, a Russian-owned electrical station in Transnistria disconnected Moldova’s power and Gazprom, Russia’s natural gas monopoly, cut off its supply of natural gas.  Moldova hopes to become more fully integrated into the EU and has been granted EU trade preference.  In 2007, it became the center of a dispute regarding the Treaty on Conventional Forces between the US and Russia when Prime Minister Putin announced Russia was refusing its obligations under the treaty.  The main point of contention was the presence of Russian troops in Transnistria and the Georgian regions of Abkhazia and South Ossetia.

Tajikistan

Population: 7,211,884

GDP per capita (PPP): $1,600

Freedom House Status: Not Free

Tajikistan is a mountainous nation in Central Asia, slightly geographically smaller than Wisconsin, and shares borders with China, Afghanistan, Uzbekistan and Kyrgyzstan.  The country is one of the poorest of the former Soviet republics; after gaining its independence in 1991, it suffered through a violent civil war between a Moscow-backed government and an Islamist-led opposition.  Up to 50,000 people were killed and over one-tenth of the population fled the country before a 1997 UN-brokered peace agreement was reached.  As a result of the war, the nation’s already limited infrastructure was further damaged and the nation’s population is disproportionately young, with almost half under the age of fourteen.

Since the war in Afghanistan began, the nation has received increasing attention from international powers of China, the US, and Russia.  It has been accused of tolerating the presence of Islamist rebel training camps and relies heavily on Russia for both security and economic assistance.  Until mid-2005, Russian forces guarded sections of the border with Afghanistan and in 2004, Russia formally opened a military base in Dushanbe.  The opening of this base has been interpreted as a sign of Russian resistance against increasing US influence in Central Asia.  In addition to this, Russia wrote off $250 million of Tajikistan’s $300 million debt in 2002.  The nation is also receiving assistance with the development of its infrastructure from both the Chinese and American governments.  In 2007, a $36 million, US funded bridged connecting Tajikistan with Afghanistan was completed.  This will allow Tajikistani goods to reach ports in Pakistan and Iran, which are twice as close as the Baltic Sea ports to which those goods are currently transported by land.  Tajikistan is also currently transitioning to a free market economy and is in the early stages of pursuing WTO membership; it is also a member of NATO’s Partnership for Peace.

The price of Tajikistan’s imported Uzbekstani natural gas was raised by 45 percent in 2008.  

Turkmenistan

Population: 5,179,571

GDP per capita (PPP): $5,300

Freedom House Status: Not Free

Turkmenistan is a resource rich nation located in Central Asia and is slightly geographically larger than the US state of California.  It has the smallest population of the five former Soviet republics in Central Asia.  Until December of 2006, the nation was ruled by what Western human rights organizations have described as one of the most repressive governments in the world:  the autocratic leader Saparmurat Niyazov, who named himself Turkmenbashi – or father of all Turkmens.  Niyazov ruled Turkmenistan from the time of its independence from the Soviet Union in 1991 and had largely isolationist and opaque policies.  Under his rule, Turkmenistan’s economic statistics were state secrets.  Though under new leadership that seems to be slightly more open, much is still unclear to the outside world about Turkmenistan’s policies and economy, and GDP figures are thought to contain a wide margin of error.

Turkmenistan has huge oil and natural gas reserves, though these remained largely untapped for a variety of reasons.  According to Oil and Gas Journal, it has proven oil reserves of 600 million barrels, probable reserves of two billion barrels and possible reserves of six billion barrels.  Its natural gas reserves rank in the top twelve in the world.  Despite this, it only produces about 60 billion cubic meters of natural gas each year, with about two-thirds of its exports going to Russia’s Gazprom; it only exports 40% of the oil it produces.  

Russia currently holds a monopoly on pipelines to take oil and gas out of Turkmenistan and finding alternative routes is a key goal of Turkmenistan.  Since the rise to power of President Berdymukhammedov, Turkmenistan has reestablished relationships with Russia, China, Europe, the US, and other Central Asian neighbors.  It has signed an agreement to build a gas line to China and has expressed a desire to build a pipeline under the Caspian Sea to bypass Russia.  A further obstacle to Turkmenistan’s oil and gas production is the fact that large oil and gas deposits lie under the Caspian Sea in areas that are disputed by Iran, Azerbaijan, and Turkmenistan.

Ukraine

Population: 45,994,288

GDP per capita (PPP): $7,000

Freedom House Status: Free

Ukraine, a country slightly geographically smaller than Texas, holds a key geostrategic location, linking Europe to Asia.  It was one of the Soviet Union’s most important economic republics and remains an important trade link between the nations of the former Soviet Union and Europe.

Ukraine is the sixth-largest consumer of gas in the world and is highly reliant upon gas and oil imports – it depends on imports to meet about three quarters of its oil and gas needs.  In 2005, 75% of its natural gas imports came from Russia.   The potential danger of this dependence was highlighted in late 2006, when Russian natural gas monopoly Gazprom temporarily cut off Ukraine’s gas supply after a price dispute.  The effects were felt in Europe, which experienced losses in pressure to its pipelines, as a large portion of Russian gas imported to Europe flows through Ukraine.  In recent years, Turkmenistan has become Ukraine’s largest supplier of natural gas, but Ukraine’s dependence and lack of diversification is still a concern for many.  Another source of anxiety is Ukraine’s natural gas infrastructure, which affects both European consumers and Russian producers.  A lack of funds has prevented need repairs from being made.

In 2004, the Orange Revolution ushered in new, reformist leadership that has pursued closer ties to the West.  President Viktor Yushchenko has announced his hopes for joining both the EU and NATO; talks are to be reinitiated in December on its NATO membership and 2015 has been put forth as a possible date for Ukraine’s entry into the EU.  This has been a concern of Russia, which is strongly opposed to Ukraine’s NATO membership.  After Russia’s recent confrontation with Georgia, NATO members are divided as to whether to continue with membership talks.  The US is supportive, but some European leaders worry that membership could lead to a NATO-Russia confrontation.  The opposition party in Ukraine is pro-Russian.

Russia’s Black Sea Fleet is based in Crimea, which is an autonomous republic that has strong Russian ties.  Some worry that Russia may try to revive claims to the region.

Uzbekistan

Population: 27,345,026

GDP per capita (PPP): $2,400

Freedom House Status: Not free

Uzbekistan is one of only two doubly landlocked countries in the world.  It is the most populous nation in Central Asia and is slightly geographically larger than California.  In recent years, aid and loans have been cut as a result of human rights violations, and a UN report described the use of torture as “systematic.”

Uzbekistan has large natural gas reserves and oil levels similar to those of Turkmenistan, but produces significantly less as a result of lack of investment in new reserves and few export options.  Though it has traditionally focused on supplying its domestic energy needs and those of its neighbors, in September, it signed an agreement with Russia to supply Russia with natural gas at market prices.  This is a likely indication that the West will not soon gain access to these reserves.

Upon the 2001 terrorist attacks on the US, American aid to Uzbekistan increased after Uzbekistan allowed the US to set up a base within its border, providing US forces with access to Afghanistan.  Despite this warming of relations, a 2005 Uzbek attack on protesters that was estimated to have left approximately 750 people dead led to rising tensions between the two nations.  After the US threatened to withhold aid to Uzbekistan, US forces were denied the use of their base.  Recently relations have improved slightly and the Uzbeks have allowed Americans limited access to a German base and have offered to let NATO use its railway to transport goods to Afghanistan.  Uzbekistan’s relations with Russia have been good; Uzbek President Karimov has described Russia as Uzbekistan’s “most reliable partner and ally,” and the countries signed an agreement outlining closer military cooperation in 2005.

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