Regional Developmental Requirements and the Role of Caspian Development

Abstract

The article questions how the countries in the Caspian region can make the best use of their riches and how prepared they are to absorb the potential benefits of natural resources under their possession taking into consideration the whole complex of closely intertwined international and regional economic political and geostrategic interests tied together in this region. The author argues that with the recent downward revision of the region’s oil reserves estimates and export volume countries in the region will be forced to look for other ways to draw investments. Although there are grounds for optimism that fossil fuels will in the long run play a major role in the three countries’ economic development many problems like lack of democratization corruption and over-involvement of government officials in economic activities must be resolved first. Otherwise there is a possibility for decline into Nigeria-style chaos rather than a rise to Norway-like stability and affluence. In terms of the influence of the oil factor over the regional conflicts resolution the most destabilizing factor in the region is not the Caspian oil itself but the disputes and rivalry over the pipeline routes and division of the Caspian Sea shelf. No country in the region will benefit from the oil until the phase of struggle for a share of Caspian oil and the transportation route and the exploitation of the oil factor as an instrument of pressure is over.