(Page 1 of 31) - GOVERNANCE OF THE CASPIAN RESOURCES: COMPETITION AND COOPERATION authored by Kobonbaev, Maks.

GOVERNANCE OF THE CASPIAN RESOURCES: COMPETITION AND

COOPERATION

Maks Kobonbaev

University of Missouri-St. Louis

The Caspian Sea region is of growing importance to world energy markets because of its
potential to become one of the world’s major oil and natural gas exporting regions over the
coming decade. However, the geopolitical location and abundance of hydrocarbon
resources in Caspian region have dragged a multiplicity of actors into the Caspian game
whose interests do not necessarily coincide. The Caspian game is multidimensional
characterized by the competition and conflict of interests by the extra-regional, regional
and littoral states over strategic influence in the region, the construction of pipeline routes,
the legal status of the Caspian and the territorial and other issues.

Although literature on the Caspian region mainly views the issues of the Caspian

region mainly through the traditional state-centric and security lenses, during the last ten
years, the Caspian region have also become subject to the globalization project, which is
characterized by a more complex trends. Yet, there is almost no literature that, for instance,
discusses the role of non-state actors (e.g., MNCs, IGOs and NGOs) in shaping the
political economy of the Caspian resources. To assume that the political economy of the
Caspian resources is purely state centric is to miss the empirical reality. For example, with
the growing demand for energy throughout the world, MNCs have already invested
billions of dollars into the Caspian region to diversify production, develop new sources of
energy supply and make profits. Assuming that MNCs monolithically represent the
interests of their home countries is rather simplistic. MNCs have their own agenda and
economic interests, which may not always coincide with the interests of both home and
host states.

Furthermore, the rapid growth of regional energy industry, the landlocked nature of

the Caspian region, and externalities arising from environmental pollution are requiring the
Caspian littoral and neighboring countries to enter cooperative regional and subregional
arrangements to gain from mutual agreements and solve the problems of “market failure.”
Obviously, all these trends need be accounted to understand the political economy of the
Caspian resources. Thus, the paper argues that the Caspian political economy is not only
represented by the struggle for power between nation-states but it is also characterized by a
more complex set of relationships between non-state actors and new agenda of issues. The
paper also makes a normative argument that over time cooperative arrangements in the
Caspian will surpass the competitive and conflicting interests simply because of the
economic and strategic benefits that extra-regional, regional and littoral states can gain
from cooperation.

The work in progress: Please cite with caution

Citation: Maks Kobonbaev. “Governance of the Caspian Resources.” Draft paper

presented at the Annual Meeting of the International Studies Association, Honolulu, USA,
March 1-5, 2005 (Collective Security in Eurasia Panel, organized by Gregory Gleason).
Also available at http://www.umsl.edu/~mk6c3/paper/caspiangov.pdf