Bonanza Fuels Hopes of Wealth and Peace

SUMGAIT, Azerbaijan —  Ever since their past was swallowed up by war in 1993, the members of Azerbaijan’s Karabakh soccer team have lived the shiftless lives of refugees, carrying on with their sport even though they have not set eyes on their homeland of Nagorno-Karabakh since its Armenian majority drove the men out of the disputed enclave in a vicious ethnic war.

The dispossessed soccer stars slowly reassembled in this filthy industrial town 300 miles east of the sparkling, but now deadly, hills of their birth. Helped by Sumgait’s sports stadium director, a Karabakh-born Azerbaijani named Chingiz Orudzhev, they found a training ground, makeshift homes and a bus to take them to matches.

“The games help channel the guys’ energies, but unless there’s a peace agreement soon, who knows how long the team can hold together?” said Orudzhev, whose team of refugees was champion of the Azerbaijani domestic league last year.

“What we are all really hoping now,” he added, “is that Azerbaijan’s new oil wealth, and the West’s new commitment to us, will mean we can soon make peace and go home.”

The oil bonanza in the Caspian Sea basin, which is creating major commercial and strategic interests for the United States, has also kindled a new mood of hope among millions of people in this beautiful but quarrelsome region. They dream of a better life, with a real chance of prosperity, peace and economic independence from the area’s most recent colonial master, Moscow.

Oil revenue will “let our long-suffering region flourish at last,” predicted President Eduard A. Shevardnadze of Georgia, an embattled nation bordering Azerbaijan and Armenia.

Ominously, however, the oil that is now seen as a force for peace in the region helped start the wars of the early 1990s. In some cases, control of the oil itself or an oil pipeline was the goal of the combatants. In others, the government in Moscow, which had controlled the Caspian’s mineral wealth before the Soviet collapse, bankrolled one side or another as a way of destabilizing the region and regaining control of the wealth Russia had lost.

For centuries, the Caspian Sea area and the Caucasus Mountains have formed the disputed frontier between Russian, Turkish and Persian empires. They are still full of pugnacious peoples, steeped in long-standing grudges that have flared into a series of wars in the past decade.

Three of the nations that gained their independence from the Soviet Union in 1991 crowd into the Caucasus Mountain region between the Caspian and Black seas. None has known real peace.

Two of them--Azerbaijan and Armenia--are at odds over Nagorno-Karabakh, an Armenian-majority territory inside Azerbaijan. Karabakh Armenians have used force of arms since 1988 to back their claim of independence from Azerbaijan; although Armenia has never officially recognized the Karabakh Armenians’ claims, it has helped them unofficially because of its historical distrust of the Turkic-speaking Azerbaijanis.

The third republic, Georgia, was enmeshed in civil war in 1992-93 and forced to abandon control of the northwestern province of Abkhazia to separatist insurgents. Farther north, the Caucasus Mountains are also home to Chechnya--formally part of Russia--whose 1991 declaration of independence led, in December 1994, to a 21-month war with the Russian army.

These wars are in the very region through which pipelines from the Caspian Sea basin will run to Western markets. All three wars, suspended but still a potential threat, remain colossal headaches for both government policymakers and major oil interests as they work on how to most safely get the oil through tense, damaged zones of recent conflict.

Other pipeline routes to the West have problems of their own. Southeastern Turkey could serve as a prime route west, but any pipeline there would risk the dangers of a fourth conflict--the sporadic insurgency waged for years against Turkey by Kurdish rebels. War is also a problem for those wanting to transport Caspian oil southeast through Afghanistan to Arabian Sea ports and destinations in Asia.

Oil Interests a Factor

The United States has worked to head off any possible pipeline south to the Persian Gulf through Iran. Distance is the main obstacle for the Chinese, who plan a 2,000-mile line east through Kazakhstan to their western region of Xinjiang.

In Chechnya, the place where regional feuding most recently broke out into combat, the war was waged by the Russian army as it tried to win back control of a chunk of oil pipeline running from Azerbaijan that was controlled by local separatists.

As many as one in 12 Chechens may have died under Russian bombardment, intensifying ethnic hatred between the two peoples. Russians stereotype Chechens as knife-wielding savages, while Chechens consider Russians to be amoral bullies.

A truce in place since fall 1996 has at least given both sides a five-year breathing period in which the Chechens have a measure of independence and the Russians have access to the pipeline through which the first Caspian Sea oil is flowing.

The fighting in Georgia’s Abkhazia province destabilized the coast of the Black Sea, another likely pipeline route. Georgia accused Russia of supporting the tiny Abkhazian fighting force with money, sophisticated weaponry and even warplanes--allegations supported by Western diplomats in the region.

In the Nagorno-Karabakh war, which was suspended three years ago with Karabakh Armenians holding much of the disputed enclave and surrounding territory, Azerbaijanis repeatedly accused Russia of helping the Karabakh Armenians in an attempt to destabilize Azerbaijan and prevent it from signing a contract with Western oil companies--including the United States’ Amoco, Unocal, Exxon and Pennzoil--that Russia wanted for itself.

The Azerbaijanis said Russia was channeling troops, money and guns through officially neutral Armenia. The allegations were given substance in a 1997 military corruption hearing in Moscow, which made public that Russia had given the Armenian government $1 billion in covert military aid between 1993 and 1996.

Although hostilities in Nagorno-Karabakh have been halted, peace talks, now co-chaired by the U.S., have produced no agreement.

Azerbaijani President Heydar A. Aliyev said last fall that he wanted a peace deal by the end of 1997, and Armenia’s then-president, Levon A. Ter-Petrosyan, urged the Armenians in Karabakh to compromise before Azerbaijan can take advantage of its growing oil wealth. But the Karabakh Armenians have so far refused to budge.

In early February, Ter-Petrosyan resigned and was replaced by hard-line Karabakh Armenian Robert Kocharyan, who is also prime minister. Kocharyan is opposed to current plans for a settlement. New presidential elections are due March 16, amid widespread expectations that peace talks will get tougher and that new hostilities could begin.

The Karabakh war’s brutality hints at the spasms of savagery that have punctuated the area’s history. During the years of fighting, Azerbaijanis and Armenians accused each other of monstrous atrocities: of scalping and beheading their opponents; of severing ears and festooning their military trucks with the gruesome trophies; of using banned chemical weapons against civilians.

But even if the coming oil wealth works to soothe historic enmities when it begins to arrive in force during the first decade of the next century, it will carry the danger of another kind of instability. One respected diplomat here warns of potential trouble when the “wall of money” from the oil boom hits a region that has only recently begun to enter the modern age.

“When the wall of money hits, can they cope or will they drown?” the diplomat asked, framing the issue that, for many, remains the key question of the entire Caspian oil equation.

Another Western official said the Caspian Sea nations hope to follow the example of Norway, which has made good use of its North Sea oil deposits. But he said, “My fear is that it could end up like Nigeria,” whose oil workers produce 2 million barrels a day but are subjected to social conditions that he described as “a living nightmare.”

Others have a different disastrous model in mind: the Iran of Shah Mohammed Reza Pahlavi, who was toppled by a 1979 fundamentalist revolution in which disgruntled masses rose up against a greedy, out-of-touch elite for failing to distribute oil wealth equitably.

International observers point to some worrying similarities between the Iran of 1979 and the the Caspian Sea basin of 1998.

In Azerbaijan, for example, the disparity of wealth is enormous. In sharp contrast with the sleek glitter of Baku, the capital, which has become a boomtown filled with people in sharp clothes and fast cars, much of Azerbaijan’s hinterland is a desert of idled factories and concrete towns with no gas or heating.

Corruption in Baku, where the cost of a baby outfit at the recently opened Mothercare store is equivalent to a deputy minister’s monthly salary, is so widespread and deeply rooted that outside analysts fret that it could prove politically destabilizing.

“What is hard to accept is the hijacking of assets and wealth by a few people while a large part of the country goes empty-handed,” Roger Thomas, Britain’s ambassador to Azerbaijan, warned in a recent speech in Baku.

Those issues are also important on the other side of the Caspian Sea. Government officials in Almaty, the capital of Kazakhstan, distribute hard-bound copies (in Russian and English) of President Nursultan A. Nazarbayev’s vision of the country’s 30-year development, which would use oil wealth to modernize industries, build schools and hospitals and improve the quality of life for the nation’s 16 million people.

In reality, however, Nazarbayev has already chosen as one of his first priorities the grandiose project of moving the capital from the southeastern city of Almaty 750 miles north to the grim Soviet-era industrial center of Akmola. The task has already begun to cost large sums of money at a time when the state treasury cannot make salary or pension payments to government workers in many parts of the country.

It may be too much to expect of the oil money that it will deliver economic justice to the region’s states. But with the first oil flowing and the Russian government hard-liners who were prominent in the early 1990s replaced by more peaceable capitalists, there are at least signs that the time of wars is passing.

As Russian covert funding for the oil-related wars dries up, the local impetus for ethnic hatred is slowly following suit. Some of the bitter legacy of the wars is starting to fade.

The people of the Caucasus are forgetting the inflammatory talk of hatreds, pride and national passions that dominated their conversations a few years ago. Bruised, battered and bewildered, many of them are now wondering what provoked the brief but bloody romance with their long-buried past in the first place.

“Who needed this crazy war, or any of the other crazy wars that tormented us these last years? Only the politicians and armies and mafias on both sides that were making a profit from them,” Tamara Gasimova, a refugee in her 40s, said as she baked bread at a refugee settlement on the edge of Karabakh. “I pray that we will soon have peace and can go home and forget it ever happened.”

Weeping mothers in black head scarves still trudge daily to the Martyrs’ Cemetery in Baku, where the graves of Azerbaijan’s war dead are honored with the national flag, fresh and plastic flowers and solemn piped music. But the jam jar containing the pickled heart of a fallen Armenian soldier, brought back in revenge from the battlefield by the warrior mother of a fallen Azerbaijani, has been quietly removed from the cemetery.

Dream of Going Home

Around Agdam, an Azerbaijani district on the edge of Karabakh, only a simple police checkpoint now stops battered local cars heading into Karabakh. Beyond an Azerbaijani minefield--a no man’s land where rabbits and dogs are killed by forgotten explosives--and, farther away, an Armenian minefield, the mountains of Karabakh glimmer in the sunset. On a clear day, the refugees can see their smashed, burned houses in the distance.

The road back to Azerbaijan from Agdam is lined with tents and refugee rubbish.

In the tiny border village of Guzanli, former Agdam officials who have almost forgotten what City Hall looked like still hold meetings every Friday afternoon. In theory, these meetings are for coordinating aid distribution to refugees, but in practice they are a forum to discuss the endless collective dream of going home.

Like refugees everywhere in the Caucasus, Agdam district Mayor Gasan Sariyev is optimistic that the oil deal will soon bring peace, although he admits that no specific plans exist for resettling his people.

“Now that the oil project has got going, I believe that in the near future the occupied regions will be returned to Azerbaijan,” he said. “Our fate is inextricably linked with oil.

“People here are more than ready to move back. We’ve been waiting for this for a long time. If word came at 5 o’clock today that we could go home, everyone would be in Agdam by 5:30,” Sariyev added.

“We’ll have the town rebuilt in two years, looking as beautiful as before. No one wants war anymore, and I believe we can all live together in peace again. The past can be forgotten.”

Times staff writer Tyler Marshall contributed to this report from Baku.

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About This Series

While the possibility of new, world-class oil strikes seems very promising in the Caspian Sea region, the potential for political headaches is rife.

* Monday--As the United States moves to the forefront of the Caspian oil rush, the stakes--economic and political--are high.

* Today--A portrait of the fiercely independent inhabitants of this volatile region, one that has been racked by ethnic strife.

* Wednesday--Oil companies face unprecedented challenges in resource-rich territory neglected during decades of Soviet rule.

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Sea of Troubles

For centuries, the Caspian Sea region and Caucasus Mountains have formed the disputed frontier between Russian, Turkish and Persian empires. Steeped in long-standing grudges, the area has been racked by recent conflicts in Nagorno-Karabakh, an Armenian-majority enclave in Azerbaijan; Abkhazia, an insurgent province of Georgia; and Chechnya, a rebellious region of Russia.