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Review & Outlook

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By Richard Giragosian and Khatchik Derghoukassian

An important, yet subtle development in U.S. foreign policy in the
Caucasus was virtually obscured by the flurry of announcements and
press briefings of April's Key West mediation effort attempting to
secure a negotiated resolution to the Nagorno Karabagh conflict.  The
Key West meetings between the Armenian and Azerbaijani delegations
represents the first real effort at U.S. Transcaucasus summitry in the
post-Clinton period of foreign relations.  Demonstrating the maxim of
the random nature of foreign policy challenges, the Key West talks
were overshadowed by the confrontation between the U.S. and China over
the downed surveillance plane and the fate of the U.S. military crew
detained by the Chinese.  This chance occurrence helped the State
department to maintain an impressive degree of secrecy and fostered
the lack of transparency essential to a frank negotiating session.

In many ways, the Bush Administration is still setting its compass to
steer through the shoals of international affairs.  The ongoing
process of formulating a concise concept of Bush foreign policy is
complicated by competing power centers around the new president, each
jockeying for position and influence within the inner circle.  Endowed
with several leading and experienced advisers, this president must
sort out the often conflicting (and more often competing) counsel of
these prominent advisers.  Seen in this light, the U.S. initiative
within the Organization for Security and Cooperation in Europe (OSCE)
is an important indication of the future direction of Bush foreign
policy, both in general terms as well as in its approach to the

The announcement by the OSCE's Minsk Group co-chair, U.S. Ambassador
Carey Cavanaugh, that he would brief the Iranian government on the
developments reached during the Key West talks represent more than the
standard courtesy of international diplomacy.  This announcement holds
deeper significance because the exclusion of Iran from the OSCE
organization was a reflection of long standing U.S. policy. The U.S.
opening to Iran through the OSCE peace process could well be an
important preliminary step in a new policy of constructive engagement
with Iran.  Recognizing the legitimacy of Iranian interests in the
region, as well as its interests in the Nagorno Karabagh conflict and
the Caspian in particular, is a commendable revision to the long
standing policy of isolation of Iran as a "rogue state" by the past few
U.S.  administrations.

The essential elements of this new U.S. inclusionary move toward Iran
comprise a wide range of security, economic and geopolitical
considerations. The Bush Administration has initiated a covert effort
designed to foster a new relationship with Iran. This initiative rests
on the need to counterbalance the weakening of Turkey in the wake of
the most serious economic crisis in that country's history, as well as
serving to diplomatically contain and manage the burgeoning
Russian-Iranian relationship marked by the sudden announcement of
increased Russian arms sales to the Iranians. The U.S. is seeking to
effectively counter the risk of regional instability and proliferation
by taking preliminary steps toward the establishment of a cooperative
partnership with Iran. Another important element is the U.S. desire to
explore the Iranian option as a means toward solving the transport
challenges of exporting Caspian oil to Western markets. This policy
option is tied to Washington's current modification of its policies of
engagement in the Balkans and the Middle East, while minimizing the
risk of destabilization, and the reordering of priorities in other
areas of the world.

Another Earthquake Strikes Turkey

The sudden loss of a strong Turkey as a regional proxy for the United
States caught many administration policy makers by surprise. This
weakening of Turkey's regional power and prestige, due to a significant
economic crisis, has left Washington without the ability to fully rely
on Ankara as a power broker in the region.

Turkey was struck by an economic earthquake, which in many respects
was similar to its recent natural earthquake disaster. The tremors of
this economic earthquake were felt throughout the country's financial
markets with aftershocks affecting all of its economy. The fault
lines of this economic earthquake exposed serious weakness in the
foundations and structures of the Turkish economy. Just as in its
natural earthquake, the vulnerability of its foundation led to greater
financial and economic damage than would ordinarily be expected in
such a crisis. Following the model of the Japanese "bubble" economy,
the accumulation of questionable bank loans, the inefficient pattern
of cronyism and corruption throughout many leading sectors, all
contributed to an abrupt collapse of the Turkish economy.

This weakening of Turkey has led Washington to seek new leverage in
its efforts to contain an assertive Russia and to reinvigorate plans
to develop the oil resources of the Caspian Sea. In this context, Iran
offers an important new avenue for U.S. engagement in the region. In
the longer term, however, the new emphasis on an Iranian option does
not necessarily mean an abandonment of Turkey as a regional partner.
The inclusion of Iran can be seen as a diversification of options and
possibilities for the formulation of a more comprehensive engagement
by the United States throughout the region.

Regional Shift: A New East-West Axis

Amidst these first steps toward a more balanced approach in U.S.
relations with Iran, there is a subtle shift underway in the Caucasus.
In fact, this regional shift extends much further from Europe and the
Balkans in the west, to the Middle East to the south, and along this
axis into Asia. The United States is formulating policies designed to
follow this eastward axis by redirecting efforts to secure stability
in the Balkans and to regain a geostrategic initiative guided by the
imperatives of containing China.

This effort is meeting a series of obstacles of which the most
pressing is the Israeli-Palestinian. The disengagement of the U.S from
the region is complicated by the seemingly endless escalation of
violence by the hard-line Israeli government of Ariel Sharon and the
Palestinian "intifada," threatening to spillover into a broader "arc
of crisis" throughout the Arab world and the spreading of anti-American
sentiment. The fragility of the still fairly new regimes and monarchies
of Syria, Jordan and even Morocco may be especially vulnerable to a
wave of militant Arab nationalism sparked by frustration over the
spiraling Palestinian conflict with Israel. This threat of regional
instability must, however, be prevented from similarly affecting Iran,
and thereby impeding the potential for Iran to assume a role promoting

A U.S. Foreign Policy in Times of Economic Slowdown

The Bush administration came into office on a platform highly critical
of its predecessor's liberal internationalism. Denouncing the
Democrats' strategy of "engagement and enlargement" as wanting to
embrace too much, the new Republican Administration was already
advocating a return to a narrow national interest-focused foreign
policy. The few opinions that were heard during the course of the
presidential campaign suggested a withdrawal of U.S. military from the
standing commitment in the Balkans and proposed a Reaganesque National
Missile Defense (NMD) system as a high priority. Although not as
immediate as these proposals were during the heat of the campaign,
they are well on their way to fruition.

These policies, however, should not be interpreted as a return to
isolationism, but rather what the analyst Christopher Lane qualifies
as "offshore balancing". The practical implications of the Bush
foreign and security policy doctrine would mean, among other things, a
major revamping of burden sharing in peacekeeping in Europe and
elsewhere, a delay in NATO expansion, and a virtual rejection of the
concept of humanitarian intervention (as seen in Kosovo). Even more
importantly, this "offshore balancing" concept would be marked most
notably by the deployment of the National Missile Defense system. As
the U.S. remains the only superpower, with an annual overall defense
budget equivalent to the sum of the twelve most powerful nations'
annual defense budgets, this "offshore balancing" strategy is
credible, despite the fact that its inherent unilateralism provokes
friction, tension and even conflict with other nations - including

There is another factor contributing to Washington's perspective
seeing itself as obliged to pursue a gradual disengagement from
international commitments deemed unworthy of passing the national
interest litmus test. This factor lies in the alteration in the
economic landscape. The U.S. economy, despite having started its
decline in the waning days of the Clinton era, poses a significant
consideration to the Bush team. The economic slowdown, and its
inherent threat of an eventual recession, inevitably questions the
priorities of the foreign aid budget and the worthiness of
U.S. contributions to multilateral organizations. The most important
consideration in this case is the necessity for reordering foreign
policy priorities and commitments. This scenario is further
complicated by the looming confrontation between the executive and
legislative branches over the reordering of priorities. The
complexities and constituent-based constraints of the congressional
authorization and budget process promises a difficult road ahead.

The Moderation of the Powell Doctrine

Given this structural context of the administration's foreign policy,
it is also evident that Washington's new foreign policy has yet to
find a solid course and, hence, predictability. Thus, the challenges
of the low-politics agenda, - mainly trade,- and its visible and
potential linkages to U.S. security did not receive much attention
during the first hundred days of the administration (the Quebec
meeting of the Summit of the Americas being the only exception, and a
superficial one at that). Moreover, the ongoing bureaucratic
competition between Secretary of State Colin Powell, Secretary of
Defense Donald Rumsfeld and Vice-President Dick Cheney each trying to
impose his own vision of world affairs and America's place in it is
further delaying the consolidation or conceptualization of foreign
policy. And while the former seem to be more prone to a hawkish
(i.e. unilateralist) stance, Secretary of State Powell is following a
cautious, moderate course seeking to balance his administration's
gradual disengagement with the need for multilateral consensus

Although superficially contradictory, given Powell's military
background, this moderate course adheres to the tenets of the
so-called "Powell Doctrine."  Based on a realistic evaluation of the
Vietnam experience, this Doctrine seeks to impose a new logic-based
military system, opposing inefficiency and inadequacy in times of
military action. According to the Powell doctrine, the use of force
must obey the logic of "first cut them, then kill them" applied during
the Gulf War and featuring the application of greater force, greater
strength and greater intensity in every action, all designed to
overwhelm and annihilate the opposing force. In strict military terms,
this is the classical concept of "disproportionate use of force."

A second element of the Powell Doctrine is the recognition of the
necessity for an "exit strategy" following the application of force or
for instances where a quick victory seems unattainable. In foreign
policy terms, this would be a gradual, yet orderly, disengagement. In
order to avoid perceptions of isolationism or of an "arrogance of
power," this disengagement would be implemented within a multilateral
framework based on consensus building. Thus, still within a realist
perspective, the Powell Doctrine introduces an element of moderation
buttressed by consensus building. No matter how debatable its results,
the Powell Doctrine is being applied from the Middle East to the
Balkans and China and, according to some analysts, seems to be serving
as the core of Washington's foreign policy.

Building Consensus for Regional Stability?

What are the ultimate aims of the U.S. in opening to Iran through the
OSCE process?  While the positive step would certainly broaden the
multilateral efforts, oil and strategic interests hardly are absent in
this new phase. It should be noted that the announcement made in Key
West comes at a crucial time for the internal dynamics of Iranian
politics. Specifically, the moderate line of President Khatami is
facing yet another challenge from the conservatives in the face of
forthcoming elections. An additional feature in timing concerns the
fact that relations between Teheran and Moscow are getting closer.
This may suggest that Washington would accept a reformist Iran, under
the leadership of Khatami, along with a contained Russia, as
stabilizing factors in a region where the threat of a renewed cycle of
violence is but too obvious.

If this comes to pass, the most basic implication is that the
strategic alliances that define the current balance-of-power are to be
maintained and "legitimized" as key security factors. The most
optimistic implication is that a framework based on a consensus to
develop the Caspian cooperation can been forged to stabilize and
develop the region. Only in such a case of regional consensus and
inclusion would it be reasonable to expect a breakthrough in the
negotiations towards mutual compromises and the discussion of the
economic perspectives of both Armenia and Azerbaijan. Thus, the key to
any Karabagh resolution encompasses the complex, but vital, need for
regional security, stability and economic development.

Richard Giragosian has worked as a professional staff member with the
Joint Economic Committee, U.S. Congress specializing in international
relations and economics in the former Soviet Union and China.  He is
the author of the monthly newsletter, "TransCaucasus: A Chronology."

Khatchik Der Ghougassian is a Ph.D. student of International Relations
in the School of International Studies, at the University of Miami. He
has written as a political analyst in the Armenian and Argentinean

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