The Central Asian States (CAS) and the Caucasus are resource-rich, yet impoverished and autocratic states. It is an established fact that the Caspian reserves are one of the largest in the world. According to the 1999 International Energy Statistics Sourcebook, the proven oil reserves stand at 78.2 billion barrels and proven gas reserves are 237.3 billion barrels (Alam). But other observers like Bremmer contend that the proven oil reserves stand at 200 billion barrels and proven gas reserves stand at 200-350 billion barrels. Azerbaijan and Kazakhstan have the largest reservoirs of oil and gas in the region,closely followed by Turkmenistan. Oil consumption all over the world has increased, but the United States has been particularly affected,consequently the area holds greater significance for American policy makers.

American interest in the CAS and the Caucasus is two-fold. On the one hand, the United States wants to integrate the region into the Western world order (i.e. prevent Russia from re-establishing hegemonic control over the region) and on the other hand use the resources from the region to provide for its energy needs. The main objective of the US in the CAS and the Caucasus is to prevent Russia from re-entrenching itself in the region. After the break-up in 1991, USSR lost the effective control is used to enjoy over the region and United States saw it as an opportunity to export the Western world order to the newly independent states.

Over time a definite American policy evolved and in 1997, Under-Secretary of State Strobe Talbott "outlined four dimensions of US support to the countries of the Caucasus and Central Asia: 1) The promotion of democracy; 2) The creation of free market economies; 3) The sponsorship of peace and cooperation within and among the countries of the region; and 4)integration into the larger community." (MacDougall) It is evident from these objectives that the aim was to wrestle the countries away from autocratic governance and centralized economies. It is interesting to note here that if the US is able to provide the CAS and the Caucasus with alternative oil transit routes, it would be successful in breaking the Russian monopoly over the region. Moscow has cultural and historical bonds with the CAS and the Caucasus but one of the main leverages it holds against these states, is its exclusive control over the pipeline infrastructure. The oil-producing countries are thus made dependent on the Russia for transport of their oil. In another speech in 1997 Talbot emphatically highlighted the strategic value of the region for the US. "If economic and political reform… does not succeed, if internal and cross-border conflicts simmer and flare, the region could become a breeding ground of terrorism and political extremism, and a battleground for outright war. It would matter profoundly to the United States if that were to happen in an area that sits on as much as 200 billion barrels of oil." (Blank)

The second objective of the Americans in the region is was to gain access to the untapped oil and gas reserves of the region. "On an average the Americans consume 19.7 million barrels of oil per day (mbd). The USA produces 9.1 mbd i.e. 47% of its demand. The US imports 11.1 mbd – equal to about 59% of total US oil consumption." (Kumar) The US Energy Department projects that by the year 2020 the United States would need to import nearly two-thirds of its energy requirements.

The incidents of 9/11 have strengthened the American resolve to reduce its dependence on OPEC for its oil supplies. Saudi Arabia has long being the main supplier of oil for the US. Kumar argues that "the American policy makers used to feel that the United States possessed a valuable political lever over Saudi Arabia's conduct. But over time this notion is changing and is now becoming more apparent in Saudi Arabian view that the United States isn't involved in the Middle East to defend Saudi Arabia, but rather to defend oil." This change in attitude has caused a shift in the Saudi attitude and thus the American policy makers feel that their interests in OPEC can no longer be looked after by the Saudi elite. "In other words it is important that the US establishes strategic presence in other regions so as to prevent an oil crisis caused by a shift in OPEC– US relations caused by anti – US sentiments. Hence the search fornew suppliers like the Caucasus and Central Asia in and around the Caspian Sea basin." (Kumar) Along with providing the US with greater freedom of choice while importing oil, the diversification of oil suppliers would also help keep the oil prices down. (Arvanitopoulos)

It is evident from this discussion that vital American interests would be served if it is able to entrench itself in the region. In order to establish its strategic influence in the region, the US looks to establish pipelines in the region, which are under its strategic control. In addition the Americans would want to make its presence felt in the region by seeking out allies. In particular the United States has sought the support of Turkey, Azerbaijan and Georgia. Turkey is United States' strategic partner in this new game of 'pipeline politics' while Azerbaijan and Turkey are the new 'oil states' for the US. At the same time, Russia would be keen to buttress its network of pipelines in the region and would aim to minimize American influence in the region. Bremmer notes that "a pipeline provides investment and jobs, long-term access to natural resources and transit fees, and-most important-political and economic leverage. In a region where all these things are in critically short supply, pipeline politics matter." The United States wants to "exclude Iran from influencing the exploration, shipment, development and marketing of energy products" (Blank), while promoting Turkey as an ideal outlet of foreign trade out of the region.

Although, the CAS and the Caucasus can easily provide for the energy needs of the world, but face problems concerning the transportation of the energy resources to the rest of the world. Enumerated below are the factors that contribute to the problem of transportation:

One striking feature about Central Asia and the Caucasus is that all the oil producing countries of the region are landlocked. This means that they have to rely on other external actors to gain access to the water-ways and to set up possible transit routes. Thus foreign investors and the governments of these countries are involved in a perpetual struggle for developing favorable transit routes out of theregion. Therefore, the issue of pipeline selection is of greatest geopolitical significance for the region. It is easy to observe that whichever power or 'centre of power' is able to establish its monopoly over the pipeline routes will have the greatest geopolitical and economic leverage in the region.

The Russian factor is also very important and warrants some discussion. As a legacy of its century-old rule over the region, Russia has a monopoly over the oil transit routes out of the region. Majority of the existing pipelines passing through Russian territory and thus make the oil-producing states dependent on Russia for access to markets around the globe. "The existing pipeline routes for oil from Azerbaijan and Kazakhstan (run) through Russia to the port of Novorossiysk on the Black Sea, giving Moscow a considerable advantage in the process of pipeline selection." (Arvanitopoulos) This has allowed the Russians to influence deals made between the oil producing states and the foreign oil companies. Moscow uses the pipelines as a leverage to exhort favorable terms of agreement and as tools to maintain its influence over the oil producing states. The mere fact that export of oil is one of the primary sources of capital for these states has made them especially vulnerable to Russian manipulation. Consequentially all the oil-producing states are eagerly searching for alternative partners so that they can reduce the Russian influence over their politico-economic life.

The CAS and the Caucasus possess little capital and technology to develop their vast oil and gas reserves. This present an ideal opportunity for investment and development to foreign investors, like Chevron. Arvanitopoulos alludes to this very fact by pointing out that the American establishment also aims to create economic opportunities for American companies. Bremmer points out that the pipelines that are currently in place are used to transport "early oil, i.e. the primitive and the relatively low-level Caspian production". The pipelines used for this purpose are Baku-Novorossiysk pipeline, Baku-Supsa one that travels from Kazakhstan to Russia. It is further noted that all three can only carry from 100,000 to 160,000 barrels a day.

These pipeline arrangements are thus temporary in nature and cannot cater to a) the growing demand for Caspian oil and b) to the changing geopolitical realities of the region and to complex strategic needs of external powers like the United States. It is therefore necessary to look at the pipeline options that are available to the players of this "New Great Game":

1.The Northern Route: The Northern Route calls for the expansion of the Kazakhstan-Russia pipeline so that it can be linked with the Baku-Novorossiysk pipeline. This option is highly favored by the Russian as it helps them maintain their monopoly over the region, while acting as a good source of revenue. But, as Kumar catalogues this route faces major opposition by the United States and Turkey. The United States wants to prevent the Russians from strengthening its strategic hold on the region while Turkey has environmental concerns over the increased traffic that would result in the Bosphorus/Turkish Straits. Another major problem faced by this route is that it would have to pass through the turbulent and war-torn area of Chechnya.

2.The Western Route The Western Route calls for the construction of a Baku-Tbilisi-Ceyhan pipeline. This pipeline would emerge in the Baku and will transport oil to the Turkish port of Ceyhan via Tbilisi. This route is the largely favored by the United States, Turkey and Georgia. The Southern Route: The Southern Route will go through Iran and calls for the expansion of the Turkmenistan-Iran pipeline. This is the most cost-effective route, as it can effectively link the CAS and the Caucasus to the rest of the world, but is strongly opposed by the United States.

3.The Eastern Route: The Eastern Route links China's Xinjaing province with CAS and the Caucasus. This pipeline would transport oil from the Kazakhstan and Turkmenistan to China, where it could be further distributed to Japan and India. This is a highly ambitious pipeline route as the proposed pipeline would be more than 2000 km, but the Chinese government considers it a strategic interest and is thus willing to go through with it.

4.The South-Eastern Route The South-Eastern Route caters to the expanding Asian market, by linking Turkmenistan to Pakistan and India through Afghanistan. During the mid-90's substantial attempts were made by the CentGas consortium to set up a pipeline but they failed to deliver due to continued political instability of the region.

I have already addressed American interests in Central Asia and the Caucasus, now I shall look at the policy decisions and steps that the United States government has taken to achieve these interests in the region:

The main American interest in the region was to prevent Russia from monopolizing the local energy supply and from establish its sphere of influence in the region. The US has had a very ambivalent policy in this regards. On the one hand, US insists that its policy aims do not attempt to divide Central Asia and the Caucasus into rival spheres of the influence and only look to establish a "win-win" strategic order in the region for all (Blank). But the ground realities of American policies in the region reflect otherwise. In order to reduce Russian influence in the region, America has adopted a two-pronged policy. On the one hand, the US has tried to export democratic ideals to these states and has tried to inculcate liberal norms into these societies.

On the other hand, the US has been providing economic aid, specifically, to oil-producing states like Uzbekistan and Kazakhstan (Hill). As we have seen throughout the course, majority of the Central Asian States and the Caucasus still have the old Communist elite in power. The resultant nature of these governments is autocratic and restrictive. Popular democracy has not been allowed to flourish and free market dynamics have failed to develop, in short theses states are still following Soviet era political orders. Nevertheless, at the same time the ruling elites of all the states are looking to escape from the Russian yoke. Therefore, it would be safe to say that with the inculcation of liberal norms these states, would move to a different ideological wavelength than the Russians and thus would find it easier to escape the Russian model.

Similarly, the economic aid is provided as an incentive to these states so to encourage them to adopt pro-US policies. American attempts to democratize and liberalize Central Asia and the Caucasus have borne little or no fruit. This failure is a consequence of skewed implementation of these ideals. Although the US has continuously espoused democratic and liberal ideals for the region, but their actions on the ground reflect that they are mere rhetoric. Hill observes that as a result of increased congressional funding to the security agenda, the U.S. military has taken the lead with the U.S. Central Command spearheading joint exercises, language instruction, and training programs for Central Asian forces in peacekeeping and counter-terrorism. The US agenda therefore has focused on combating terrorism and security issues and have thus tempered with initiatives that promote democratization in the region. "Flawed elections and human rights abuses have been met by lukewarm reprimands from top U.S. officials rather than meaningful penalties on regional governments. This has been backed by diversion of funds from programs promoting democracy and liberal values to programs aimed at bolstering the security of the region."(Hill) Blank notes that oil producing states like Uzbekistan that have repressive governments and closed economies get far greater aid than progressive states yet non-supplier states like Kyrgyzstan. Policies like these only strengthen the authoritarian regimes of the regime and the take the region further away from ideals of democracy. As we have observed through out the course, Central Asian states are transitional states and the conditions are rife for social upheaval. By blindly supporting the authoritarian regimes in the region, America is helping increase the instability in the region and is fueling the anti-status quo forces.

The US has also worked hard to ensure that Iran is unable to establish its hegemony and control in the region. Alam notes "the Southern routes make sense economically and commercially since they are the shortest, quickest and cheapest routes and would pass through relatively safer territories and pose no serious environmental hazard." Yet due to the history of the US-Iran relations, America has staunchly opposed any development along the Iranian/Southern route. In particular the Iran Libya Sanctions Act (ILSA) was passed by the US Congress in the 1995, which imposed major penalties on the main international investors in Iran's oil and gas industry. It restricted companies from investing more than $20 billion in Iran and $40 billion in Libya. The motive behind the US sanctions against Iran was to contain and isolate Iran and cripple its economy so that it could not emerge as a formidable power that could challenge the US interests in the region and elsewhere. (Alam)

American policy towards Iran in the Caspian has driven by politics rather than economics. I feel that this is not a pragmatic approach. I say this because Iran itself has adopted a very pragmatic approach in the region and is aware of the real dynamics of the region. They have looked to maximize their advantage and have cashed in on their strategic location, which makes them a launching pad for transport of oil around the globe. Faliure of American policies in this regard can be gauged by the fact that despite active US opposition, Kazakhstan is considering to "engage in oil swaps with Iran." I believe other states in the region will also engage in deals with Iran, if they perceive profitable returns out of them. It should also be noted that the cold shoulder America provides to Iran, only strengthens the Russian-Iranian nexus in the region. The strengthening of this relationship is against United States' vital interests. Alam also highlights the fact American oil-companies are interested in investing in Iran despite considerable official opposition. American foreign policy thus is depriving "US companies from attainting future economic and benefits." Therefore, it would be pragmatic and beneficial to American interests if the US reconsiders its Iranian policy in Central Asia and the Caucasus.

The main aim of US foreign policy in Central Asia and the Caucasus has been to establish US-backed pipelines in the region. In February 1995, the United States decided to support pipelines running through Turkey and not Russia. Since then America has supported all plans for Western pipelines through the region. All Western routes originate in Baku, Azerbaijan and terminate in the Black Sea. The US has supported three pipelines in the region: the Baku-Supsa pipeline, the Baku-Novorossiysk pipeline and the Baku-Tbilisi-Ceyhan pipeline. The Baku-Tbilisi-Ceyhan (BTC) route is favored by the US as its Main Export Pipeline (MEP) and will materialize the American vision of an East-West Corridor that opens up Central Asia to the West, while restricting the role Russia and Iran can play in the region. (Alam)

The US is also attempting to involve Kazakhstan in the BTC route, by connecting Baku to Aqtau, Kazakhstan. This will further strengthen American strategic presence in the region. America's Main Export Pipeline is riddled with many problems. Foremost, amongst them are the local conflicts festering in Azerbaijan and Georgia- the two transit states of the BTC. Conflicts are rife in Abkhazia and South Ossetia in Georgia, where the inhabitants are seeking independence from Georgia. Azerbaijan is also facing major problems in the Armenian populated enclave of Nagorno-Karabakh. "Nagorno-Karabakh has maintained a de-facto independence for eight years" (Alam) and the problem is "further exacerbated by the oil factor has seriously affected the oil export route." (Alam) Further complicating the prospects for BTC, is the fact that the BTC will have to established in area where no previous infrastructure exists and initial estimates yo establish the 1750 km pipeline reach $2.5 billion dollars. As a result, the oil companies are hesitant to invest in the region as yet. The BTC pipeline is further debilitated by the relatively small-scale volume of oil extracted from Azerbaijan. Presently the Azeri oil production is about 200,000 barrels per day, while the proposed Ceyhan terminal is built to cater to 300,000-ton tanker per day. (Stuart). This has resulted in the American efforts to persuade Kazakhstan to connect with the BTC through Aqtau and provide the difference.

The Baku-Novorossiysk pipeline also faces similar problems. The proposed pipeline will have to pass through the independent-minded and war-torn Chechnya. Russia has been fighting Muslim insurgents in the Chechnya for a long time and has been unable to resolve the conflict and the Chechen conflict has over flown to other areas in the region. Critical amongst those areas is Dagestan which borders Chechnya and is equally rife with internal conflict and turmoil (Alam). Foreign companies have thus found it difficult to being work on these two main pipelines of the region. The American foreign policy establishment should consider the current stalemate on these pipelines and should re-evaluate its options. One viable option would be recommencing the South-Eastern pipeline project through Afghanistan, as political normalization and stability is beginning to take place. This is also an imperative for the American establishment to reconsider its policy towards Iran.

In 1995 US foreign policy intelligentsia decided to take active interest in Central Asia and the Caucasus and it was reported then that "the new approach, coordinated by the National Security Council is designed to break Russia's grip on Central Asia's oil export. The objective is both to help ensure the survival of independent states in the region and to protect US cooperate interests." (Blank) Given this imperative, the US took on the role of an arbiter in the region. Blank documents several incidents where the US intervened in local conflicts and stalemates to resolve problems arising between third parties. The United States intervened in a conflict between Turkmenistan and Ukraine, by urging Turkmenistan to send gas to Ukraine, even though Ukraine had failed to pay for it. The United States also acted as an arbiter between the competing factions of Azeris and Turkmen. The motivation for taking on the role of an arbiter is the desire to keep the region as a "zone of free competition" and so that the US is able to "deny either Iran or Russian any lasting hegemony". "These (initiatives) include the Minsk process to negotiate a resolution of the Nagorno-Karabakh conflict and the opening of the 'new Silk Road' and/or East-West trade corridor, in addition to US involvement with oil and gas pipelines." (Blank)

Lastly, the United States has made substantial efforts to establish its military presence in the region. Blanks documents that the US wanted to develop a coherent security policy for the CAS and the Caucasus and thus the Pentagon allocated areas of responsibility to US commands for the Caspian region. By announcing its military presence in the region, the US wants to tie the region to the West through PfP (NATO's 'Partnership for Peace' Program), enhance the local capabilities for self-defense and prevent a military reliance on Russia. The announcement of America's military might in the region is also intended to deprive Russia from its traditional role as a mediator in conflict resolution. Since 9/11, the US has renewed its efforts to undertake defense reform in the region. A Brookings Institute report identifies the American desire to help the Central Asian states acquire "modern up-to-date communications equipment" and "essential military equipment" and help the Central Asian states improve their border security. All these efforts are being made to prevent de-stabilization of the region at the hands of Islamist and radical militants groups. The events of 9/11 have also allowed United States to place its special forces in Azerbaijan. The official purpose of these forces is to help prepare the Azerbaijan forces against possible militant activities. The US Special Forces are also to establish an American base in Azerbaijan and overlook the security of the BTC pipeline. This placement of strategic forces in Central Asia has allowed the US to have concrete military presence in the region and allows it to directly offset Russia's military presence in the region. One problem that I perceive with this policy is that it threatens Russia with concrete American presence in the region. This can fuel a Russian security dilemma and instead of making the region more stable and secure, it will introduce greater instability and polarization in the region.

In conclusion, American foreign policy in the region is primarily driven by the quest for new oil resources and a resolve to establish its strategic hold in the region. American policies thus adopted aim to maximize these objectives, but at times fail to address critical aspects regional politics, thereby adding to the political instability of the region.