EurasiaNet Business & Economics - GUAM Gets New Life, New Identity

BUSINESS & ECONOMICS

GUAM GETS NEW LIFE, NEW IDENTITY
5/24/06

Editor's Note: Update with analysis from Baku Experts.

Russia’s aggressive geopolitical policies have helped revive a moribund regional organization, GUAM, comprising states interested in reducing their economic dependence on Moscow.

The leaders of the four member states � Georgia, Ukraine, Azerbaijan and Moldova � gathered May 23 in the Ukrainian capital Kyiv to reanimate the long-troubled organization. In a move designed to bury its troubled legacy, summit participants agreed to rename the group the Organization for Democracy and Economic Development (ODED) � GUAM.

The new name underscores the differences that each of the four states have with Russia. Participants at the Kyiv summit stated that they intend to use ODED as a vehicle for accelerated integration into Western economic and security structures. Moldovan President Vladimir Voronin, in comments distributed by his press service, sought to draw a distinct line between ODED member states and Moscow, saying the group aimed to become a "hot bed of European standards" in the former Soviet Union.

At a May 23 news conference, Ukrainian President Viktor Yushchenko emphasized the group’s Western orientation. "We are linked by common values [and] common goals � the aspiration to occupy a respectable place in a united Europe," Yushchenko said.

The organization has existed since 1997, largely in name only, as repeated attempts to undertake substantive regional economic cooperation never got off the ground. [For background see the Eurasia Insight archive]. When a fifth member, Uzbekistan, withdrew from the organization in 2005, it appeared that GUAM was destined to end up a failed experiment. [For background see the Eurasia Insight archive].

Given its history, skepticism continues to cloud the group’s immediate future. But the leaders of member states seem more optimistic than ever about its prospects. "I am convinced that our organization, which is assuming a new format, will announce itself loudly in the international arena," the Interfax-Ukraine news agency quoted Azerbaijani President Ilham Aliyev as saying.

Lending additional weight to the belief that the ODED/GUAM may have turned a corner was a report, distributed May 24 by the Azerbaijani news agency Trend, saying that Romania was intent on joining the organization. Romania -- which is already a NATO member, as well as a candidate for EU accession � has a strong cultural connection with Moldova.

Political experts believe that Russia’s heavy-handed behavior towards its former Soviet neighbors played a major role in prompting renewed interest in ODED/GUAM. Since the start of the year, Russian leaders have feuded with three of the four member states, with Moscow demonstrating a willingness to use coercive measures to impose its geopolitical agenda on the region. [For background see the Eurasia Insight archive]. Georgia has the tensest relations with Russia, which has introduced trade sanctions against Tbilisi, including a ban on the import of Georgian wine. [For background see the Eurasia Insight archive]. In early 2006, Ukraine and Russia engaged in a bitter row over gas imports. [For background see the Eurasia Insight archive]. Meanwhile, the Kremlin has rankled Moldovan leaders with its continuing support for Trans-Dniester separatists.

The only ODED/GUAM state not to have a severely strained relationship with Moscow is Azerbaijan. However, Russia’s recent energy moves have exhibited an intent hostile to Azerbaijan’s new economic lifeline � the Baku-Tbilisi-Ceyhan (BTC) pipeline. [For background see the Eurasia Insight archive].

Aliyev indicated that ODED leaders see the group as a means to defense against Russian bullying. The Azerbaijani leader appeared to take a swipe at Russia when he mentioned that those responsible for violating the territorial integrity of three of the four ODED members "have been subjected to neither international nor public condemnation." He went on to say that the "energy-factor" would drive ODED decision making. Yushchenko indicated that one of the ODED’s main aims was challenging Moscow’s energy-export dominance. "Azerbaijan has unique oil producing capabilities, while Ukraine has unique oil transit facilities. Why don’t we unite them?"

A free-trade agreement, signed by the member states on May 23, is expected to give the group the cohesion that has been lacking. "I am confident that the next stage of our joint work will be harmonizing our relations concerning the unification of border and customs services," Yushchenko said. The Ukrainian president went on to recognize the difficulty of unifying trade and tariff policies, but he stressed that "the four presidents have the will to solve" logistical issues concerning ODED development.

In a sign of the strong sense of solidarity now binding ODED states, billboards were put up in Kyiv in advance of the summit urging Ukrainians to buy Georgian wine that had been "banned in the Russian Federation."

In Azerbaijan, some political analysts expressed surprise that the Aliyev administration, which has been assailed by human rights organizations for restricting the individual rights of Azerbaijani citizens, would join an organization that holds democratization to be one of its major aims. [For background see the Eurasia Insight archive]. “[The administration] is against democratization in the country because democracy undermines its authority,” said Zardusht Alizade, independent political analyst based in Baku. “Azerbaijan is there because the United States is backing this project [ODED-GUAM].” Eldar Namazov, the president of the For Azerbaijan Public Forum suggested that Azerbaijani leaders would probably stress the economic development aspect of the new organization.

Rasim Musabekov, another Baku-based political analyst believed that ODED-GUAM may well serve as a transition mechanism to assist member states in Euro-Atlantic integration efforts. Musabekov downplayed the group’s potential for economic development, saying that “the volume of trade between Ukraine and Russia exceeds $20 billion, while turnover with GUAM states is roughly $1 billion. So this alliance will fail to impose an alternative to the trade with Russia.”

“Let us hope that ‘democracy’ word in the name of organization will inspire real processes in this direction,” Musabekov added.

Russian analysts do not appear to be concerned about ODED’s creation. Political analyst Alexei Makarkin, in a commentary published May 24 by the Russian state-run RIA Novosti news agency suggested that it was unlikely that the group’s grand energy-export designs would come to fruition. "There is a long distance between a declaration of intent and practical energy projects," he wrote.

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