GLOBAL DIALOGUE
Volume 3 ● Number 2–3 ● Spring/Summer 2001—Iran at the Crossroads
Iran and the Caucasus: The Triumph of Pragmatism over Ideology
SVANTE E. CORNELL
Students of the Islamic Republic of Iran’s foreign policy note the existing dichotomy between its mainly, and increasingly, pragmatic orientation and elements of Islamic fervour, as exemplified by Iranian support for various radical groups in the Levant and in Turkey. Likewise, observers correctly note that Iran’s main strategic concerns, and indeed the chief threats to its territorial, military and economic security, lie in the Persian Gulf region. However, the dissolution of the Soviet Union and the emerging unrest on Iran’s northern border significantly deflected Iranian interest from the Gulf and required Tehran to spend considerable energy on devising a strategy towards the Caucasus, Central Asia and Russia. But whereas warnings were issued in the West in the early 1990s concerning the danger of an “Iranian model” taking over Central Asia, the last ten years have shown a different development. The Islamic Republic’s policies have centred on the Caucasus, Russia and the Caspian Sea, providing interesting insights into Tehran’s priorities and policy choices, which often defy conventional wisdom. How is it that the self-proclaimed defender of Islamic values and politics has aligned itself against Muslim Azerbaijan and with Christian Armenia in their conflict over the enclave of Nagorno-Karabakh? How is it that Tehran has developed a strategic partnership with Moscow that leads it to defend and cover up Moscow’s brutal suppression of a small Muslim nation’s rebellion in the Russian northern Caucasus? Additional issues of concern are Iran’s policies in the Caspian Sea and the recent trends in Iran’s northern relations, which seem to indicate an increasing activism.
Iran’s northern policy can hardly be said to have evolved into a coherent strategy in the decade that has passed since the collapse of the Soviet Union. Disagreements within the ruling circles in Tehran have produced a certain quantity of mixed signals. Yet, despite these differences, a transition of power in the mid-1990s and domestic unrest, Iranian policy has proven remarkably stable and durable. Three main facets of this policy are identifiable: first, concern over the emergence of an Azerbaijani state on Iran’s northern border, causing a gradual Iranian tilt towards Armenia in the Nagorno-Karabakh conflict; second, a dramatic improvement in security relations with Russia, relations that, despite a shaky basis, have proven enduring and in fact developed into a strategic partnership; and third, a desire to influence the development of oil and gas resources in the Caspian Sea so that Turkish influence over pipeline routes is minimised and a maximum level of Iranian participation ensured.
The South Caucasus
For Iran, the dissolution of the Soviet Union produced numerous opportunities in the middle and long term. But the immediate consequences were overwhelmingly disturbing. This was especially the case in the Caucasus, which posed two challenges to Iranian security, one containable and short-term, and the other long-term but immensely larger. The short-term threat was the spillover of regional conflicts into Iran’s territory. The Afghan war in the 1980s led to the influx of close to three million refugees into Iran, putting a considerable burden on its economy and society. The emerging conflicts in the Caucasus and Central Asia posed a potential threat of a similar kind. More pointedly, the two countries most affected by conflict were also those with the strongest cultural affinities with Iran: Tajikistan and Azerbaijan. Whereas the Tajiks form the only large nation in the region speaking a Persian tongue, and therefore attract solidarity from Iran, Tajikistan is overwhelmingly Sunni Muslim (unlike predominantly Shi’ite Iran) and, moreover, does not share a border with Iran. The Tajik civil war did affect Iran, involving it in mediation and the provision of humanitarian aid to Tajikistan, but the turmoil in southern Central Asia hardly posed a direct security threat to the Islamic Republic.
The Armenian–Azerbaijani conflict, however, which had broken out long before the dissolution of the Soviet Union, was another matter. The Azeris speak a Turkic language closely related to Anatolian Turkish, thereby giving them a clear connection to Turkey, but more than 75 per cent are Shi’ite Muslims, making Azerbaijan one of only a very few countries in the world to share Iran’s majority religion. Moreover, Armenia and Azerbaijan both have a border with Iran, and much of the fighting between the two states in 1993 occurred close to the Iranian frontier, leading to flows of Azeri refugees displaced by an Armenian offensive on Azerbaijani territory. Consequently, the disorder emanating from the dissolution of the Soviet Union in the southern Caucasus had a direct bearing on Iran. Not only was Iran faced with a potential refugee influx of tens of thousands of Azeris, but it was also threatened by a regional conflict in which Russia was clearly involved and into which Turkey was also being drawn. When Marshal Yevgeniy Shaposhnikov, head of the Commonwealth of Independent States’ chiefs of staff, famously warned Turkey of a third world war should it get involved in the Nagorno-Karabakh conflict, the potential for an uncontrolled escalation of violence in its own neighbourhood was not lost on Iran. As a result, Iran was one of the first countries to offer to mediate in the conflict, and it achieved several abortive cease-fires in 1993.
Iran’s efforts at mediation were hampered both by developments in the Caucasus and the international community’s determination to keep it out of the conflict. Armenia used the Iranian-mediated cease-fires to buy time and regroup forces before resuming its offensive; the Azeri government was highly suspicious of Iran, as will be discussed below; and the United Nations early on delegated efforts to resolve the crisis to the Organisation for Security and Co-operation in Europe—a body of which Iran, perhaps not entirely coincidentally, was not a member.1 Escalations in the fighting, in particular Armenian attacks on the Azeri enclave of Nakhichevan on the Iranian border, actually led Iranian forces to cross the Araxes border river on more than one occasion in 1993, while Tehran increased diplomatic pressure on Armenia to contain its offensive. This period coincided with the formative phase of Iranian policy in the Caucasus, which above all was concerned to assess a development that could only have a fundamental impact on Iran: the creation to its north of an independent Azerbaijani state.
The Azerbaijan Question
The area inhabited by Azeris in fact lies not only in what is today the Republic of Azerbaijan, but also in large neighbouring tracts of northern Iran. Indeed, the term “Azerbaijan” was the designation of a geographical area on both sides of the Araxes River long before it became, in the twentieth century, the ethnonym of a distinct self-conscious people, referred to variously as the Azeris, Azerbaijanis, or Azerbaijani Turks.
Estimates vary regarding the distribution of the Azeris, but it is beyond doubt that there are at least twice as many in Iran as there are in the independent state of Azerbaijan, where Azeris number six million out of a total population of almost eight million. The figure of twenty million Iranian Azeris often mentioned in the literature is certainly no exaggeration; the Azeris are by far the largest minority in Iran, followed by Kurds, Arabs, Turkmens and Baluchis. They are also perhaps the most well-integrated minority in the country, given their long historical connection with Iran and the Shi’ism they share with the Persian population. Conventional wisdom, indeed, stresses the strength of their Iranian identity, and the weakness of their ethnic Turkic or Azerbaijani identity. To a certain extent, this is true: the representation of ethnic Azeris in the Iranian economy, ulema (religious elite) and political life is high. Iran’s supreme leader, Ayatollah Ali Khamenei, a native of the city of Khameneh in Iranian Azerbaijan, is half-Azeri and speaks the language. This illustrates the fact that, much like the Kurds in Turkey, Azeris in Iran are not handicapped by their ethnic origin, as long as they assume and integrate into the language and culture of the majority population. Much of the Tehran bazaar is in Azeri hands, and there are numerous Azeris in the senior ranks of the armed forces. The strength of Iranian identity among Azeris derives from the fact that the Safavid dynasty, which ruled Iran from the early sixteenth century, was Azerbaijani in origin: visitors to Baku will find that Shah Ismail Khatai, the founder of the Safavid dynasty, is an important element of republican Azerbaijani identity.
That said, recent studies point to a recurrent political expression of distinct Azeri identity in Iran throughout the post–Second World War era. During the Islamic Revolution, the strong following enjoyed by Ayatollah Shari’at Madari, an ethnic Azeri, in Tabriz and other parts of Iranian Azerbaijan was linked to a perception among Azeris that he represented their interests. It is reasonably clear that a separate and distinct Azeri identity has been growing among the citizens of northwestern Iran. Although hardly representing an immediate threat to the regime in 1991, the size and economic and strategic significance of the Azeri minority was certainly an issue Iran treated with the utmost caution.
In this context, the emergence of an independent Azerbaijani state in 1991 could not have been greeted with anything but dismay in Iran’s ruling circles. Regardless of possible irredentism by the new republic, the very fact of Azerbaijani statehood was likely to act as a magnet for significant numbers of Azeris to the south, in the long term ensuring that a distinct Azeri identity in Iran would not wither away but gradually increase. Moreover, the nascent Azerbaijani republic had large oil resources for a comparatively small population, and thus potentially enjoyed significant wealth. In contrast, Iran had suffered the setbacks of war, economic stagnation and, significantly, US-imposed economic sanctions and international ostracism. Hence, much as Turkey has made it a foreign policy priority to prevent the establishment of a Kurdish state in northern Iraq, so Iran would have preferred the continuation of the pattern established with the 1828 Turknianchai treaty, which confirmed the Russian conquest of substantial Azeri-populated areas.
As the war over Nagorno-Karabakh escalated, Iran was domestically torn on how to respond. Religious and ethnic Azeri forces urged support for their brethren in Azerbaijan against the Armenian infidel. However, Iran’s foreign policy establishment saw a weak Azerbaijan as lying in the Iranian national interest, and therefore pursued a policy of tacit support for Armenia. Iranian vacillation and hesitation in the early 1990s can be ascribed to these internal divisions, but the general direction of Tehran’s policy soon became clear: except for instances where it became necessary to restore a balance by preventing Armenian gains from reducing the region to chaos (since too much suffering and destruction in Azerbaijan would risk arousing Iranian public opinion and drawing Turkey into the fighting), Tehran used the conflict to pressure Baku. Iran served as Armenia’s main purveyor of electricity and goods, and since the Armenian conquest of Nagorno-Karabakh, Iranian trucks have been supplying most of the secessionist enclave’s needs.
The decisive factor tilting Tehran towards Yerevan was the policies of the Popular Front government in Baku, which ruled Azerbaijan from mid-1992 until June 1993. Led by President Abulfaz Elçibey, the Popular Front government oriented Azerbaijan towards Turkey and the West, and gradually adopted a vehemently anti-Russian and anti-Iranian stance. Elçibey himself was a convinced secularist who despised Iran’s theocracy and accused Iran of denying cultural rights to its Azeri minority. Worse, before gaining the presidency, Elçibey spoke of Iran as a “doomed state” and openly mooted the idea that Azerbaijan north and south of the Araxes River would be reunited. In sum, Elçibey and his nationalist policies constituted precisely the Azerbaijani government of Tehran’s worst fears, pushing Iran further towards Armenia. Indeed, Iranian economic support played an important role in keeping Armenia alive at a time of economic embargo by Turkey and, of course, the severing of trade links with Azerbaijan. Had Iran sided with Azerbaijan and joined the joint embargo on Armenia, the last would have had to rely solely on supplies through Georgia.
After Elçibey’s overthrow and Heydar Aliyev’s assumption of the presidency, relations improved somewhat, but only on the surface. While refraining from nationalist rhetoric, Aliyev has essentially pursued and refined the foreign policy inaugurated by the Popular Front, and there remains tension with Iran. As Iranian–Armenian co-operation blossoms in the political, economic, scientific and cultural spheres, Baku has repeatedly accused Tehran of supporting Armenia against it. Aliyev has personally voiced the offence felt by Azerbaijanis over Iran’s close ties with Armenia. As recently as March 2001, he walked out of a meeting with an Iranian minister after the latter announced Tehran’s plans to restore a bridge over the Araxes between Iran and Armenian-occupied territories of Azerbaijan.
President Aliyev’s planned visit to Tehran has been postponed a number of times. A crucial issue of discord is Baku’s desire to open a consulate in Tabriz, the historical capital of Iranian Azerbaijan. Iran opened a consulate in Nakhichevan in 1993, but Azerbaijan’s request has not been granted. In 1999, Iran’s ambassador to Baku said the consulate issue would be resolved only after a package of proposals from Iran had been accepted—hardly standard diplomatic procedure. As will be discussed in detail below, the issue of the Caspian Sea’s legal regime has been another major source of disagreement between the two states.
While the Azerbaijani media and opposition often discuss the issue of “South Azerbaijan” and make anti-Iranian comments, Baku has maintained a relatively clear line of non-interference in Iranian Azerbaijan. It regularly complains, however, of Iranian intelligence activity on Azerbaijani territory, especially alleged support for radical Shi’ite movements in Azerbaijan. Iran’s apprehension towards Azerbaijan has not been attenuated by Baku’s openly pro-Western policy and its close links to Israel. Even worse from Tehran’s perspective, Azerbaijan has courted the United States and the North Atlantic Treaty Organisation. (In subsequently downplayed statements, a presidential adviser in 1999 and a defence minister in 2001 invited NATO to set up bases in Azerbaijan.) Tehran’s rhetoric has not been far behind that of Baku’s. Iranian voices have on various occasions said that Azerbaijan should indeed be reunited, but that this should occur as the return of the presently independent state of Azerbaijan to its historic motherland—Iran.
A decade since Azerbaijan’s independence, the issue of Iranian Azerbaijan has acquired increased significance in Iran. Turkish culture has had a major impact on Iranian Azeris, specifically through satellite television beamed to Iran. Turkish private and public television depicts “Turks” (the principal self-identification of Iranian Azeris) as highly educated, wealthy and proud individuals, an image that contrasts sharply with the Persian perception of Turks as belonging to a lower culture. In sum, the influence of Turkish culture and Azerbaijani statehood has radically increased the self-awareness of Iranian Azeris. Politically, this has taken the shape of movements to improve cultural rights and political participation. Azeris have demanded schooling in the Azeri language, and various degrees of local autonomy.
Tehran’s response to most Azeri demands has been stern. The unofficial leader of the Azeri community, Tehran University professor Mahmud Ali Chehregani, has twice been prevented from taking a parliamentary seat. In 1996, after receiving overwhelming electoral support in the first round of voting, his name was summarily removed from the ballot in the second round, sparking popular demonstrations of up to forty thousand people in Tabriz, which were suppressed by force. In 2000, Chehregani was simply denied registration. This again led to riots of several thousand protesters in Tabriz. Tehran responded by deploying troops on the streets; eyewitnesses reported that for a few days scenes in the city resembled those of the 1978–9 revolution. Tehran is apparently intent on suppressing Azeri claims by force. If this policy continues, the radicalisation of segments of the Azeri population is inevitable and will exacerbate an issue that could have been resolved by making a relatively small number of concessions. Needless to say, any escalation of tension in Iranian Azerbaijan cannot fail to involve the Republic of Azerbaijan—irrespective of the stance of its government.
The Russian–Iranian Alliance
The end of the Cold War led to several realignments of power in the Middle East. A major one was the Turkish–Israeli entente. Of equal significance was the Russian–Iranian strategic partnership. A Russian–Iranian rapprochement occurred as early as 1989, when President Ali Akbar Hashemi Rafsanjani visited Moscow and concluded numerous agreements, laying the foundation of a new relationship. This relationship is based on a number of mutual foreign policy interests and goals. These include resistance to American hegemony, the containment of Azerbaijan, opposition to the Taliban regime in Afghanistan, the prevention of Turkish expansion into the former Soviet south, and military and nuclear co-operation. Earlier, the two countries also shared positions regarding the Caspian Sea, but this is no longer the case, as is seen below.
Opposition to American hegemony is an ideological and rhetorical element in the Russo-Iranian co-operation. In practice, US sanctions against and isolation of Iran increased Tehran’s need to find friendly, and influential, allies. Its relationship with Russia, its links to China and fresh signs of a possible entente with India are elements in this: Tehran has been increasingly successful in breaking out of its international isolation by forging lasting and improving ties with Asian great powers. All of the Islamic Republic’s newly found partners view Iran as a geopolitical lynchpin in the future of Eurasia. In contrast to the smaller regional states near Iran’s borders, they see no threats but only significant opportunities, both political and economic, as emanating from Iran.
A main feature of Russian–Iranian relations has been military and nuclear co-operation. Under international sanctions and situated in a volatile region, Iran has desperately sought a secure and reliable supply of arms. For its part, Russia has little to offer in terms of trade but weaponry. Arms sales have thus become a key source of hard currency earnings for the beleaguered Russian economy. In this context, Iran and Russia were ideal trading partners. Iran has received various types of weaponry from Russia, including submarines and top-of-the-range fighter jets. Russia was also able and willing to export nuclear technology to Iran, including forms of “dual-use” technology potentially of assistance in Iran’s alleged nuclear weapons programme.
Moscow’s policy has been incomprehensible to some observers, given that Iran’s acquisition of nuclear weapons does not lie in Russia’s national interest. However, it can be explained by the Russian need for hard currency, and the rather short-sighted nature of Russian foreign policy: during the 1990s, Moscow repeatedly made decisions that have been or may become harmful to Russia. For example, Russia supported the de facto secession of Abkhazia and South Ossetia from Georgia and of Nagorno-Karabakh from Azerbaijan. The emergence of secessionist mini-states in the southern Caucasus undoubtedly encouraged the Chechen leadership to believe in the feasibility of establishing an independent Chechnya. Likewise, there is evidence that the Russian defence ministry is manipulating the threat of radical Islam in order to keep the Central Asian states within Moscow’s orbit. With 20 per cent of Russia’s population being Muslim, this is indeed a perilous course.
This short-sightedness is related to the ad hoc and tactical nature of Russian foreign policy that characterised the Yeltsin period and survived into Vladimir Putin’s presidency. Different branches of the Russian state have been reined in over the past year, but various lobbies, including the atomic energy ministry, retain a strong influence on foreign policy. The atomic energy ministry, under its head Yevgeny Adamov, has been an influential advocate of Russian nuclear technology sales to Iran. As a result, Russia has ignored—and increasingly made a point of ignoring—US protests over its nuclear deals with Iran. The construction of the Bushehr nuclear reactor has been speeded up with the arrival of Russian technicians, and the reactor is scheduled to be completed in 2003. It should also be noted that numerous Russian scientists and researchers in the nuclear field, but also in the spheres of biological and chemical warfare, are on Tehran’s payroll while remaining in their laboratories in Russia—an arrangement which has been allowed to continue basically unchecked by Moscow.
An additional area of concord between Moscow and Tehran has been the war in Afghanistan. For different reasons, both Iran and Russia have felt it necessary to contain and oppose the ruling Taliban movement that controls about 80–90 per cent of Afghanistan’s territory. Russia fears that consolidation of Taliban rule over Afghanistan would pose the danger of Islamic radicalisation in Central Asia and in Russia’s Muslim republics, such as Dagestan, Tatarstan and Bashkortostan.
Iran’s apprehension over the Taliban stems mainly from the vehemently anti-Shi’ite sectarian character of the Sunni fundamentalist movement. The Taliban have repressed Afghanistan’s Shi’ite Hazara minority more harshly than they have other minorities in the country. The increasingly ethnic nature of the Afghan war has affected Iran as the minorities with cultural or religious links to Iran, the Hazara and the Tajiks, oppose the Taliban. Moreover, under the Taliban, the Afghan drugs trade has become a serious problem for Iran, as illustrated by the fact that over three thousand Iranian guards have been killed on the border with Afghanistan in the last decade. Iran currently deploys thirty thousand border guards to interdict the flow of drugs from Afghanistan, and Tehran’s tough stance on narcotics has been lauded by international drug control agencies.
As a result of these considerations, Iran and Russia have co-operated over Afghanistan and co-ordinate their support to the anti-Taliban Northern Alliance and its military commander Ahmed Shah Massoud, with whom Iran has reluctantly made peace after a long period of distrust. Iran directly supports the Hazara Hezbi Wahdat faction and reportedly drops supplies to its allies by air. It should be noted that Iran has welcomed the Taliban’s recent destruction of large parts of the opium poppy crop in Afghanistan. Taliban sources say Iran is now considering a dialogue with the militia and may support replacement programmes for former poppy growers.2
Yet another area of agreement between Moscow and Tehran has been the containment of Azerbaijan. The republic’s pro-Western foreign policy has put it on a collision course with its two powerful neighbours. Moreover, Azerbaijan from the early days of its independence identified Turkey as its main ally, an alignment that was not well received in either Tehran or Moscow. With its increasingly activist foreign policy, imposing and growing military power, and burgeoning self-confidence, Turkey is thought to have ambitions to expand its influence in the southern Caucasus. Lately, Turkish overtures to Georgia have dramatically increased, a development interpreted by Russia and Iran as prefacing the formation of a Turkish–Israeli–Georgian–Azerbaijani bloc supported by the United States. This shared fear of a US-engineered West–East axis from the Mediterranean to the Caspian Sea, together with overt American support for the Baku–Ceyhan pipeline bypassing both Iran and Russia and intended to carry Azerbaijani and Kazakhstani oil to the Mediterranean, has further deepened the sense of common interest between Tehran and Moscow. To counterbalance the said axis, they have tried to draw Greece, Cyprus, Syria and, more successfully, Armenia into a loose alignment of their own. In sum, Tehran and Moscow are working together to restrict Turkish influence in the Caucasus and Central Asia, and to contain Azerbaijan’s independence.
An important question over the long-term viability of the Russian–Iranian partnership is whether a thaw in US–Iranian relations would prompt a qualitative change in Iranian policy and reduce Tehran’s reliance on Moscow. But while improved ties with the United States would alter Iran’s threat perception, they would be unlikely to have dramatic effects on Iranian foreign policy. The link with Moscow has anchored itself deeply in Iran’s outlook, and is not solely a response to Washington’s policy of containment. Indeed, Russia and Iran are likely to continue to co-operate in areas where they share national interests: the containment of the Taliban, Azerbaijan and Turkey, and military and nuclear co-operation. The stability of their relations, despite disagreements over the Caspian Sea (discussed below), was confirmed by the visit to Moscow of a high-level Iranian delegation headed by President Mohammad Khatami in March 2001.
Chechnya
Russia’s now decade-long conflict with Chechnya has been a thorn in the side of the Russian–Iranian relationship. This was the case during the 1994–6 war and even more so during the current war, which erupted in September 1999. The conflict in Chechnya put Iran in a difficult position, given the republic’s foundational Islamic ideology. Support for oppressed Muslims is enshrined in the Iranian constitution, whose third article enjoins Iran to frame its foreign policy “on the basis of Islamic criteria, fraternal commitment to all Muslims, and unsparing support for the mustad’affun [freedom fighters] of the world”.
During its heyday of revolutionary zeal in the 1980s, Tehran supported numerous Islamic groups abroad, most famously the Palestinian Hamas and Lebanese Hizbollah. Yet, despite dissenting opinions on Chechnya from hard-line clerics, Tehran did not press the issue with Russia. During the first Chechen war, Iran was preoccupied by the conflict in Bosnia-Herzegovina, and the Islamic element in the Chechen fighting was relatively low key, the Chechens adopting primarily nationalist rhetoric. The second war, however, is being fought on an increasingly Islamic platform. Chechen leaders have proclaimed a jihad, and their propaganda is dominated by Islamic rhetoric and verses from the Qur’an.
Moreover, by the time of the second Chechen war, Tehran was head of the Organisation of the Islamic Conference (OIC). On the one hand, this put Iran in a difficult position as it was obliged to respond to Moscow’s actions on behalf of the Islamic world, but on the other, Tehran was able to use its position effectively to minimise OIC criticism of Russia. At the outset of the conflict, Foreign Minister Kamal Kharrazzi indicated that Tehran considered the war Russia’s internal affair, but as the brutality of Moscow’s tactics became ever starker, Tehran stepped up its criticism, stressing the need for a political solution. Later Iranian statements deplored “the continued armed operation by Russian troops” in Chechnya. On behalf of the OIC, Kharrazi told a Russian deputy foreign minister that the catastrophe in Chechnya was “unacceptable to the Muslim world”.3 But Iran was subsequently able to soften OIC communiqués on the matter, as only a few Islamic countries took an active interest in the conflict.
Iran was accused by Chechens and other Islamic critics of covering up its Russian ally’s dirty war. In an editorial, the London-based newspaper Al-Sharq al-Awsat, which is close to Saudi Arabian ruling circles, accused Iran of “stabbing the Chechen Republic in the back”.4 Tehran’s stance has certainly been appreciated in Moscow and may have brought Iran benefits in its dealings with Russia on other issues. However, it is likely to have been costly domestically, perhaps alienating radical clerics already disillusioned by the excessive pursuit of Realpolitik as opposed to a more principled foreign policy. Yet, it is conceivable that the anti-Shi’ite leanings of certain Chechen field commanders, and the link between Chechnya and the anti-Iranian Taliban regime (which remains to date the single government to have recognised Chechnya’s independence), have helped cool pro-Chechen sentiment in Iran. In any case, Tehran’s approach to Chechnya has reaffirmed the predominance of Realpolitik in Iranian foreign policy—but the price has been the damage done to Iran’s image in the Islamic world as a defender of the faith.
The Caspian Sea
The legal status of the Caspian Sea is one of the issues that drew Russia and Iran closer together in the early 1990s. The two countries at that time passionately opposed the sectoral delimitation of the Caspian into territorial waters. With little oil in their would-be sectors, they argued that the laws of the sea do not apply to the Caspian since it is in fact not a sea but a giant lake. Hence, its resources should be jointly exploited in a condominium, with equal sharing of the revenues. However, this view was vehemently rejected by Azerbaijan and Kazakhstan, which proclaimed “exclusive economic zones” of up to two hundred nautical miles or median lines, and the division of the Caspian Sea into national sectors. Azerbaijan and Kazakhstan initially also demanded a division into national sectors of the sea bed and its resources, as well as the waters themselves. (Turkmenistan’s position has shifted repeatedly according to political criteria.)
Azerbaijan and Kazakhstan unilaterally began exploiting sea-bed resources in consortia with mainly Western oil multinationals. Tehran and Moscow both called these deals, including a 1994 $7 billion Azerbaijani oil deal dubbed the “Contract of the Century”, null and void as they lacked a legal basis. Yet the multinationals seemed unperturbed and proceeded with the exploitation projects. Of course, the participation of the Russian state-owned company Lukoil in a consortium the Russian foreign ministry deemed illegal helped attenuate the fears of the multinationals. Iranian companies have also, to a lesser extent, participated in international consortia in the Caspian, including the large Shah-Deniz gas project in Azerbaijan.
Moscow’s stance on the Caspian Sea gradually weakened, and in mid-1998 Russia accepted the division of the bottom and subsoil of the Caspian in a separate agreement with Kazakhstan. Moscow essentially made a U-turn on a position it had vigorously upheld for the better part of a decade. This naturally angered Iran, as it was left alone to defend the principle of “proportional exploitation” and “fair shares” of Caspian wealth, a principle Iran reiterated as recently as late March 2001.
During 2000 and the early months of 2001, the quest among the five littoral states for an agreement on the legal regime of the Caspian Sea gathered speed. Russia in particular was highly active in trying to achieve a settlement. It now advocated division of the subsoil into national sectors; twelve-mile territorial waters; joint use of the water and its surface (which would enable Russia, the sole naval power in the Caspian, to rule the waves); and various conflict resolution mechanisms, including a fifty-fifty division of deposits claimed by two countries, as is the case between Azerbaijan and Turkmenistan.
At first, Russia had little success in promoting this solution, but Kazakhstan and Azerbaijan have now committed themselves to the principles of an upcoming agreement. By late 2000, Turkmenistan and Iran had entered the discussions. President Khatami called for a speedy resolution of the Caspian Sea issues, and Russia and Iran signed a joint communiqué in January 2001. Several rounds of negotiations at the deputy minister level were initiated, and President Saparmuead Niyazov of Turkmenistan offered to host a five-way presidential summit in early March to secure agreement on energy resources, shipping, fishing and ecological conservation in the Caspian. Negotiations in Tehran led to agreement among the five states on a set of issues, with Turkmenistan moving closer to the positions of Russia, Azerbaijan and Kazakhstan. However, Iran remained committed to the condominium principle. This saw the postponement of the planned March meeting until April at Tehran’s request. Following President Khatami’s trip to Moscow in March, however, Iran announced it would not attend the April summit, causing its postponement until the autumn.
Iran is feeling increasingly isolated on issues related to the Caspian legal regime. It is clear that a common position is achievable among the four other littoral states, with Iran alone rejecting some of its basic principles. However, Tehran appears to have realised that a condominium solution is no longer realistic, and that it must make the best of the situation. Since no legitimate agreement can be signed without its participation, Iran has leverage over the other states, which hope to settle the issue so that disputed oilfields can be explored. In this context, the geography of the Caspian is important. According to standard modes of median-line delimitation, Iran would receive the smallest sector of the Caspian, amounting to about 13 per cent of the sea. Moreover, the Iranian sector would consist mostly of deep-sea waters, where exploration and drilling are costly. Iran thus seems to be seeking a larger share of the sea, and has hinted it would consider an “equitable” division granting it 20 per cent of the Caspian.
For reasons of economics and principle, Iran did not attempt to exploit its Caspian waters until recently, but it is now unilaterally undertaking oil and gas exploration in areas that would not necessarily fall within its sector under a final agreement. The motives for its recent activity are decidedly political: after all, Iran can drill for oil in the Persian Gulf at a fraction of the cost of doing so in the deep waters of the southern Caspian. Iranian policy seems to replicate that successfully pursued by Azerbaijan and Kazakhstan in the early 1990s: exploring and drilling for oil unilaterally in what they considered their sectors of the Caspian. Iran’s oil minister, Bijan Namdar-Zanganeh, recently said Iran would not “wait for other littoral states to find a legal status and [would] start exploring for oil and gas itself”.5 And, indeed, Tehran has concluded an agreement with the Swedish firm GVA through the Iranian company Sadra to build an oil platform for an unspecified location in the southwestern Caspian. Given the lack of delimitation between the Azerbaijani and Iranian sectors, Iran’s drilling could well take place on territory Baku claims to be within its sector. In sum, Iran now seems to be acting unilaterally, hoping to extract concessions on the size of its eventual sector of the Caspian Sea. This is likely to cause friction with Azerbaijan and possibly Turkmenistan. In this context, an imminent resolution of the legal status of the Caspian is not to be expected.
Conclusion
Ten years after the dissolution of the Soviet Union, Tehran is still struggling to define its policy towards the Caucasus and Central Asia. It is torn between ideology and the pragmatic pursuit of short-term national interest. In the Nagorno-Karabakh conflict, ideology and public opinion demanded support for Azerbaijan; Realpolitik dictated support for Armenia. On Chechnya, ideology and public opinion would have tilted Iran towards the Chechens; national interest dictated support for Russia. In each clash between ideology and public opinion on the one hand and Realpolitik on the other, the latter has emerged victorious.
Tehran’s policies on the Caucasus and Central Asia thus support the assessment that Iran is a “normal” actor in international affairs. Its foreign policy is much less determined by Islamic revolutionary zeal than by pragmatic interest as perceived by the present ruling elite. Hence, much like other actors in world politics, Iran in the Caucasus and Central Asia is pursuing a largely reactive policy. As one observer put it, Iran is condemned to react to, but unable truly to influence, developments to its north.6 As a result, Tehran is continuously pursuing short-term tactical goals, and allowing these to form its strategy in the region. This certainly discredits claims of Iran’s “fundamentalist” and destabilising role in international politics, but it is another question whether Tehran’s policies actually promote long-term stability either in Iran or in the region as a whole.
Tehran’s Caucasus policy is largely determined by the Persian-dominated ruling elite’s desire to maintain its hegemony within Iran’s borders and to contain threats to its rule from abroad. The containment of Azerbaijan is a logical result of this goal. But while it may indeed suit Iran’s short-term interests to prevent the emergence of strong and attractive Azerbaijani republic, this stance betrays a certain myopia on the part of the ruling circles in Tehran. In the long run, Iran cannot afford to ignore the growing sense of ethno-national identity among its large Azeri population. This issue would be relatively easy to accommodate within the framework of a liberalised and participatory democracy, but the regime’s obvious unwillingness to conduct serious reforms is likely to accentuate rather than attenuate the Azeri question in Iran, and in the worst case could result in a conflagration that will undermine Iranian statehood as well as regional stability.
As regards Iran’s relationship with Russia, this is an obvious consequence of the international ostracism imposed on Tehran by Washington. Iran has been accused of supporting various forms of international terrorism; yet, as in the case of Cuba, Washington’s containment policies are likely to deepen the intransigence of the current regime rather than lead to significant reform. As long as US policy towards Iran is devoid of a clear aim or strategy, Iran is likely to strengthen its ties not only with Russia but also with other Asian powers, including China and India.
Iran is significantly embroiled in all regional discords in the Caucasus: the Armenian–Azerbaijani conflict, the Caspian Sea dispute and, to a lesser extent, the Russian–Chechen conflict. On all these issues, Iran is relatively unable to exert a positive influence, instead finding itself obliged to act in a manner prejudicial to its international standing, its image in the region, and even its future interests. Yet Iran’s role may change drastically in the near future. Tehran’s relations with Washington, Moscow, Islamabad and New Delhi all being in a state of flux, the future of Iranian foreign policy is anything but clear. Iran has the capacity to be a stabilising factor in the Caucasus, but it has yet to realise this potential.
Endnotes
1. See Svante Cornell, Small Nations and Great Powers: A Study of Ethnopolitical Conflict in the Caucasus (Richmond, England: Curzon Press, 2000), pp. 328–30. See also Abdollah Ramezanzadeh, “Iran’s Role as a Mediator in the Nagorno-Karabakh Crisis”, in Contested Borders in the Caucasus, ed. Bruno Coppieters (Brussels: VUB Press, 1996).
2. Seyid Rakhmatullah Hashimi, representative of the Islamic Emirate of Afghanistan (Taliban), interview by author, Washington, D.C., March 2001.
3. See Robert O. Freedman, “Russian–Iranian Relations in the 1990s”, Middle East Review of International Affairs 4, no. 2 (summer 2000), p. 75.
4. Al-Sharq al-Awsat, 27 January 2000, cited in RFE/RL Iran Report 3, no. 6 (7 February 2025).
5. “Iran against Caspian Summit until Clarification of Legal Regime”, Deutsche Presse-Agentur, 18 March 2001.
6. Fred Halliday, “Condemned to React, Unable to Influence: Iran and Transcaucasia”, in Transcaucasian Boundaries, ed. John Wright et al. (London: UCL Press, 1996).