Areas for Future Cooperation or Conflict in Central Asia and the Caucasus

I. Overview

Before 1991—their significance as part of the ancient Silk Road notwithstanding—the states of Central Asia and the Caucasus were marginal backwaters in international affairs. They were republics of the Soviet Union that played no major role in the Cold War relationship between the USSR and the United States, or in the Soviet Union?s relationship with the principal regional powers of Turkey, Iran, and China. But, in the 1990s, the dissolution of the Soviet Union coincided with the re-discovery of the energy resources of the Caspian Sea, attracting a range of international oil companies—including American majors—to the region. Eventually, the Caspian Basin became a point of tension in U.S.-Russian relations. In addition, both Central Asia and the Caucasus emerged as zones of conflict. Civil war in Tajikistan, armed clashes in the Ferghana Valley, secessionist conflicts in the Caucasus, two wars in Chechnya, faltering political and economic reforms, and mounting social problems, all provided a fertile ground for the germination of radical groups, the infiltration of foreign Islamic networks, and the spawning of militant organizations like the Islamic Movement of Uzbekistan (IMU). The IMU first sought to overthrow the government of President Islam Karimov in Uzbekistan, later espoused greater ambitions for the creation of an Islamic state across Central Asia, and eventually joined forces with the Taliban in Afghanistan. Russia?s brutal assault on Chechnya also drew in religious fighters from the wars in Afghanistan and Bosnia, greatly complicating the prospects for a political solution, and sent fighters and refugees across Russia?s borders into Georgia and Azerbaijan. With the events of September 11, 2001 and their roots in the terrorist groups operating in Afghanistan, Central Asia and the Caucasus have come to the forefront of U.S. attention.

II. Central Asia and the Caucasus: Together but Divided

Central Asia and the Caucasus now pose a particular set of challenges for American policy. Although external observers tend to see the two regions as part of a single, shared geographic sphere—bound together historically by the threads of communications and interactions along the Silk Road, as well as by their shared experience under the Soviet Union—they cannot now, in fact, be approached as anything approximating a single entity. Over the last ten years of independence, the political divisions between and among the Central Asian and Caucasus states have hardened. The borders the states inherited from the USSR in 1991 were created on the principle of divide and rule from Moscow. Without Moscow to play the role of arbiter, these borders have become illogical, contested boundaries—fracturing ethnic groups, rupturing trade and communication routes, and breaking economic and political interdependencies. At the same time, the borders have remained porous to illicit trade, including weapons and drugs smuggling from Afghanistan, and the spread of infectious diseases. In the 1990s, Central Asia became the primary conduit for heroin trafficking from Afghanistan to Russia and from there to Eastern and Western Europe. This spawned a huge intravenous drug use problem in Russia and Ukraine, and a public health disaster that is now approaching catastrophic proportions with the rapid transmission of HIV infection and AIDS, extending back along the drug routes themselves into Central Asia.

The broader regional context has also become particularly complex. With the collapse of the USSR, the states find themselves at the nexus of a number of interlocking regions—Russia and Eurasia, the Middle and Near East, South Asia, and Asia more broadly. They have become simultaneously a buffer zone and a transit area among them. Ethno-linguistic and religious groups are spread across the regions, with Russia, Turkey, Iran, China, and Afghanistan all sharing groups with Central Asian and Caucasus states. Thus, in looking at Central Asia?s and the Caucasus? external security, economic and political environment, at the beginning of the 21st Century, all the neighboring states now have to be factored in as an element in the regions? future.

Finally, the last ten years have also seen the economic, political and military involvement of new states in both Central Asia and the Caucasus. Northeast Asian countries, for example—China, Japan, Korea—have now become engaged. In the 1990s, China put a particular priority on relations with Central Asia to foster the development and stabilization of its vast western province, Xinjiang. Beijing sees the region as a potential market, a source of energy and other natural resources, and as a communications bridge to Iran and the Middle East. Similarly, by 2000, Japan had become the largest donor country to Central Asia. Japan, like China, sees the region—if it is stabilized and developed—as a potential market, source of raw materials, and bridge to the Middle East. And Korea developed a more intimate relationship thanks to the distinct Korean populations deported there under Stalin, who have become an influential social, political and economic component in Kazakhstan and Uzbekistan. Although at the start of the 21st Century, China, Japan, and Korea, have only begun to make their presence felt, and their impact on trade and other regional issues has not yet been so substantial, in a sense Central Asia is rapidly becoming the heartland of Asia. China and Japan have also extended their influence into the Caucasus through involvement in a range of Caspian energy projects.

III. The Challenges Ahead in Central Asia and the Caucasus

In looking ahead to the next decade, the stability and development of the states of Central Asia and the Caucasus are threatened by their extreme domestic fragility. Independence has not been kind to any of the states. Although each state suffers from its own specific problems, they also share a common set of challenges. The transition from the Soviet command economy and authoritarian political system has been much more complex and difficult than anticipated.

The Central Asian states, in particular, were the poorest and least developed in the USSR and had to begin almost from scratch in their development in the 1990s. In losing Moscow as the center of gravity, the states lost crucial subsidies for budgets, enterprises and households, inputs for regional industries, markets for their products, transportation routes, and communications with the outside world—much of which was filtered through the Soviet capital. The World Bank estimates that as a result of these losses, between 1990-1996, the Central Asian states saw their economies decline by 20-60% of GDP. Thanks to extensive borrowing from international financial institutions, reforms in the 1990s also saddled regional states with high and unsustainable debt burdens. Landlocked, resource-poor Tajikistan and Kyrgyzstan have fared particularly badly. A staggering 70-80% of their populations have now fallen beneath the poverty line, which puts them among the poorest of the developing countries. Soviet-era attainments in health, education, infrastructure, and industrial development have gradually eroded. As a result of this decline and deprivation, there has been a massive exodus of ethnic Russians and highly skilled members of indigenous ethnic groups from Central Asia.

The same generally holds true for the Caucasus states where post-independence economic difficulties have been compounded by the fact that regional conflicts have left hundreds of thousands of people internally displaced and encouraged many more to leave for Russia. Expert estimates suggest that more than one million people may have left Armenia alone in the last 10 years, and remittances from diaspora and migrant populations have become crucial to all three Caucasus economies. The annual income of Azerbaijani migrants in Russia, for example, ranges between $700 million and $1 billion according to different estimates and more than 500,000 Georgian workers in Russia produce about one quarter of the country?s GDP. The losses of human resources in the region through out-migration, and persistent dependencies on Russia for temporary and migrant employment, and remittances have skewed development.

For both the Caucasus and Central Asia, Russia continues to serve as the main market for regional goods, primarily foodstuffs, especially as other international markets remain closed thanks to political instability in the region and a dearth of transit routes, as well as trade tariffs. With domestic markets contracted and trade opportunities constrained, all the Central Asian and Caucasus states have limited potential for development outside the energy sector. And, even for the energy self-sufficient states of Kazakhstan, Turkmenistan, Uzbekistan, and Azerbaijan, the challenge remains of finding ways to diversify their economies and to restore and develop critical water resources, agriculture, and the ailing manufacturing sector.

Compounding the general economic failings and the devastating effects of out-migration, the Central Asian and Caucasus states have also not developed effective post-Soviet state institutions over the last decade. In spite of some achievements in creating parliamentary and electoral mechanisms, passing new legislation, and training new leaders, the legitimacy of their governments remains weak. Governments have often resorted to authoritarian, Soviet-era methods to retain control of the levers of the state—manipulating elections, stifling opposition, clamping down on dissent, harshly cracking down on political manifestations of Islam in Central Asia, and frequently violating political freedoms and abusing human rights. As a result, the prospects for long-term economic and social stability remain uncertain.

Even before the events of September 2001, there was a growing realization that the accumulation of challenges in Central Asia—especially given the escalating crisis in Afghanistan—and in the Caucasus demanded attention. Most states were overwhelmed by the difficulties of reform. The prediction of new or renewed intra- and inter-state conflict was commonplace among analysts inside and outside the region. The countries of Central Asia and the Caucasus faced considerable difficulties in ensuring internal stability as well as dealing with threats from their external environment.

Military reform from the old Soviet system to forces capable of dealing with new threats from militants and insurgents—including replacing heavy motorized divisions with light border and mountain contingents—was woefully incomplete. Having relied on the Soviet center for security, after the withdrawal of Russian military forces, most states had no functioning border guard units. Central Asia was particularly threatened by simmering tensions in the fractured Ferghana Valley, by the ability of militants to move across borders and launch attacks seemingly at will, and by disputes over scarce water resources. Thanks to persistent regional drought (often man-made), chronic long-term mismanagement, and pollution, water—vital as a source of power generation in Kyrgyzstan and Tajikistan, and as a lifeline for drinking supplies and crop irrigation in Uzbekistan—was greatly reduced in quantity and quality. And, instead of cooperating in intra-regional water allocations, individual states planned large, wasteful water storage and distribution projects at the country, rather than regional, level. On all three fronts—borders, militants, and water—the prospect of conflict between Uzbekistan, Kyrgyzstan, and Tajikistan seemed increasingly likely by late 2001.

In the Caucasus, although the violent conflicts of the 1990s were for the most part frozen in fragile cease-fires, they threatened to re-ignite at the slightest provocation, and international efforts at resolution made little headway. After 1999, Russia?s second war in Chechnya placed increasing strain on Georgia and Azerbaijan, and led to particularly tense relations between Russia and Georgia over the presence and activities of Chechen refugees and fighters in Georgia?s Pankisi Gorge.

Despite these concerns and ten years of development community involvement and engagement in the region, until the aftermath of September 11, Central Asia and the Caucasus remained low down the priorities of governments like the United States or those of the European Union member countries. Even for Japan, as the leading bilateral donor in Central Asia, its preeminence was largely the result of the disinterest of others rather than a major priority on the part of the government in Tokyo. In the 1990s, there was no real vision for the regions in world capitals, and no sense of their interaction with issues of global consequence. This changed with the terrorist attacks on the United States and the realization that civil war and acute state failure in Afghanistan had facilitated them.

IV. Prospects for Future Cooperation or Conflict in Central Asia and the Caucasus

Now with international attention on the two regions and the promise of new assistance—especially to the ?frontline states? of Uzbekistan, Tajikistan, Kyrgyzstan, and Georgia in the U.S. war on terrorism—the primary issues for all the states remain: given the challenges they face, can they harness the full range of their resources for economic development, and thus for political and social consolidation? Will the new international engagement make a difference in helping to head off future conflict?

Many issues facing the Central Asian and Caucasus states will necessitate inter-state cooperation for any progress to be made, including natural resource development, water protection, conservation and management, trade and transit, and combating disease and drug-trafficking. These and many other issues can simply not be solved on a national basis, no matter how committed an individual government may ultimately become to reform and overall economic development. Particularly in land-locked Central Asia, states are dependent on the willingness and ability of their immediate neighbors to take action on critical issues that affect them all.

In spite of the evident need for sub-regional cooperation in both Central Asia and the Caucasus, little progress has been made over a decade. In fact, in areas such as the Ferghana Valley in Central Asia—which was formerly integrated economically, but has now been divided among Uzbekistan, Kyrgyzstan, and Tajikistan—regional cooperation has deteriorated steadily with a devastating impact on population livelihoods. Efforts to tackle regional issues such as drug trafficking have also been stymied. And, in both Central Asia and the Caucasus, tariff and quantitative controls, and new border regimes have closed crossing points and disrupted trade and transit for goods and people.

The importance of regional cooperation on key issues is recognized by all state governments, and the prospects are ultimately better for cooperation in Central Asia than in the Caucasus, given the fact that the political tensions there have led to less acute conflicts. However, there is also a paucity of regional organizations to promote cooperation—even though sub-regional entities like GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova) and international initiatives like TRACECA (the European Union-sponsored Transport Corridor Europe Caucasus Asia) have emerged to promote trade, communications, and economic cooperation from the Caspian to the Black Sea. Regional organizations often overlap in their goals and yet contain only a subset of regional states. In Central Asia, there has been much focus on the Shanghai Cooperation Organization (SCO), which includes China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. But tensions among the Central Asian member states of the SCO, squabbles over budgetary issues, and a shortage of funds for group commitments, have constrained the development of the organization as a new multilateral mechanism for regional cooperation (a Central Asian version of ASEAN or APEC, or potentially a Central Asian ?OSCE? as the Russians and Kazakhs have occasionally suggested). The entry of the United States and other international players into Central Asia in October 2001, coinciding with the beginning of the military campaign in Afghanistan, has also changed the SCO?s internal dynamic. The individual member countries have reacted in their own way to the war in Afghanistan and established independent roles in the U.S. coalition in Afghanistan rather than acting as a group. China, in particular, has taken a back seat, while the Central Asian states have forged ahead of Russia in seeking to deepen their relations with the U.S., openly speaking of the benefits of a potentially long-term American military presence in the region, and inviting and hosting U.S. and other foreign troops on their soil. Looking ahead, the SCO and other existing sub-regional organizations only address some of the needs and relationships in Central Asia and the Caucasus.

Further progress in promoting cooperation rather than conflict in Central Asia and the Caucasus will thus depend on the political posture of the United States, other key donor states, and on international organizations and their ability to coordinate, themselves, in delivering assistance to regional states. It will also greatly depend on the attitudes of the regional states and their governments? commitment to and capacity for domestic reform and development.

In reviewing the position of both regions today, apart from the forays of international business into Kazakhstan, Central Asia was a remote netherworld until the beginning of the U.S. campaign in Afghanistan, when it shot to the forefront of international attention. In the first few months of 2002, Central Asia hosted more high-level delegations from the United States, Europe, and international financial institutions than in the entire last ten years. No matter how seemingly superficial, the significance of this new attention and contacts cannot be underestimated. Although the U.S. and Central Asian states had already developed military ties in the 1990s, the physical presence of U.S. and other international armed forces in the states has an important symbolic effect in emphasizing Central Asia?s links to the outside world after a decade of obscurity and tenuous contacts. In 2002, Central Asian countries are only now, for the first time, beginning to interact at various levels with the international community.

In contrast, the Caucasus had more engagement with the United States, Europe, and other international players in the 1990s, thanks to the activities of the Armenian diaspora and the interest of energy companies in Caspian oil. But, in spite of foreign investment in Azerbaijan?s energy resources and the construction of the Baku-Tbilisi-Ceyhan pipeline—which both Azerbaijan and Georgia have come to see as a lifeline (rather than simply a pipeline) to Turkey and Europe—like Central Asia, the Caucasus states had little prospect of close economic, political and security relations with the West. Although, in the same decade, the Baltic States moved toward the possibility of NATO as well as eventual EU membership, and even Russia and Ukraine moved closer to Europe, the location and under-development of the South Caucasus states precluded these possibilities. In 2002, as in the case of Central Asia, with U.S. military trainers in Georgia, and the EU and individual European states formulating plans for more multilateral and bilateral engagement, new opportunities for development have emerged.

V. The Importance of Donor Coordination

The prospects for greater donor coordination have also increased. In 2002, in high-level donor meetings in London, Berlin and other capitals, international donors undertook to work together with the countries of Central Asia and the Caucasus on sustainable development, and particularly on debt and poverty reduction. A range of other issues were also identified for donor coordination, including: small business and micro-finance promotion; improving the general investment climate; bolstering the activity of non-governmental institutions and strengthening civil societies; helping states to build capacity for government institutions; and supporting public investment and social service improvement. On a regional level, in Central Asia, donors also agreed to coordinate on water resource management; trade and transportation; energy development; rural development in crucial areas such as the Ferghana Valley; tackling HIV/AIDS, tuberculosis and other public health issues; and combating drug trafficking. In the Caucasus, while conflict prevention and resolution remains the primary focus, efforts to promote regional trade, transportation, and tourism have also been singled out for donor attention.

This coordination among donors is crucial. It will have to be continued and intensified over the long-term if any significant development success is to be achieved. Although the increased attention to the regions in 2002 has already brought additional resources for assistance, international aid to both Central Asia and the Caucasus will still be limited. It is certainly unlikely to be sufficient to cover all pressing development needs. Multilateral donors, such as the World Bank and the UNDP, for example, will not provide huge new infusions of cash. World Bank loans for projects eventually have to be repaid, and regional governments are cash-starved and already heavily indebted. And while the UNDP can tackle poverty alleviation, this cannot be achieved through large financial outlays, but only through structural changes within the states themselves, multi-level projects in conjunction with other donors, and through gradual, incremental steps over a long period of time. The United States, other bilateral donors, and the European Union and its member countries, can provide far more significant funding on an individual basis for Central Asia and the Caucasus. But, here too, there are serious limitations.

All the states have a low absorptive capacity for assistance. There are few actors outside the central governments for donors to partner with. Local governments lack the skills and budget revenues for self-governance. Non-governmental organizations are largely absent in states like Turkmenistan and Uzbekistan, or are closely tied to the government where they exist. They are squeezed politically and starved of funds elsewhere in both regions and dependent on foreign donors. The private sector/business community can act as a partner for donors and has a vested interest in progress on reform, but it requires additional resources in the short-term to organize and enhance its capacity. In the Caucasus in particular, and in Kazakhstan, the private sector has already begun to attract some of the most competent and progressive individuals away from government to create an alternative potential power base.

In Central Asia, some notable successes have already been achieved through international donor assistance to private sector and business association development, and through the creation of micro-finance programs for small businesses by the EBRD, USAID, and the U.S.-based Eurasia Foundation in Kazakhstan and Kyrgyzstan. However, these can not be replicated easily in the closed economy of Uzbekistan or in isolated Turkmenistan. Private donors such as the Eurasia Foundation have also been able to work with the business community and NGOS to develop very active small grantmaking programs in the Caucasus that have improved cooperation between business and civil society groups across borders. However, in spite of their potential, these programs have not yet been translated into larger initiatives in the Caucasus because of mounting political tensions around the frozen regional conflicts. In Central Asia, similar efforts by the Eurasia Foundation and the Open Society Institute to promote cross-border business cooperation and NGO activity in the Ferghana Valley have faltered through the persistent resistance of the Uzbek government.

VI. Methods for Promoting Cooperation

If sub-regional projects and regional cooperation are to make any headway on a large-scale and over the long-term, they will require the backing of the largest multilateral and bilateral donors, and a systematic, coordinated, and equally persistent approach to regional governments. Donors will have to focus on promoting dialogue within and among Central Asian and Caucasus countries on critical issues related to reform and increased sub-regional cooperation; on encouraging them to increase popular participation in economic and political decisionmaking; and on exploring new approaches to development, such as tapping more into local resources for increasing economic activity.

Initially, regional cooperation will have to be depoliticized to move ahead by giving states national ?ownership? of specific projects, and also by promoting regional pilot projects on non-contentious issues, such as tackling child malnutrition, to serve as confidence-building measures. To encourage states to bring actors outside governments into the economic and political process, donors themselves will have to be willing to open their programs to public scrutiny and to carefully assess the impact of their programs on society—perhaps through the use of ?social impact assessments,? and by bringing in regional and local expertise to inform sectoral programs.

In Central Asia, in particular, donors focusing on economic development may also have to join forces with the OSCE, and with advocacy groups—such as the Open Society Institute and activists like Human Rights Watch and Amnesty International—to pressure governments to cease the blatant abuses of human rights that have become increasingly common, to push for the restoration of press and other political freedoms, and to combat the most egregious authoritarian tendencies. Donors will have to find a common voice, and use strength in numbers to move against government resistance, especially on issues of democratization where the importance of political reform accompanying economic reform must be stressed. Donors need to create responsive structures with enforcement mechanisms at a time when regional governments are resisting strategies for political reform and regional cooperation that are essential to their development.

In addition, in Central Asia, all donors will have to use high-level dialogue to press the leadership of the five countries to work together on regional water management. This is essential given repeated droughts, the catastrophic depletion of the Aral Sea, and widespread pollution and degradation of water resources. In the immediate future, however, it is more likely that pragmatic support will have to focus on bi- and trilateral cooperation among selected Central Asian countries, and on country-specific reform and investments for improved water management and use. Attention will also now need to be paid to the role of Afghanistan as a potentially significant player in the regional water situation.

In both Central Asia and the Caucasus, support for investment and institution building in trade and transit facilitation and infrastructure are of high priority. In Central Asia, individual countries such as China, Japan, and Korea can play a particularly important role in bringing the landlocked Central Asian countries into the global marketplace by helping to reconstruct the ancient Silk Road trading routes to both East and South Asia. Russia and Turkey, as well as the European Union, can play equally important roles in the Caucasus.

VII. Engaging Russia

In the final analysis, Russia will continue to play an important role and will have to be engaged in the long-term development of both Central Asia and the Caucasus. In spite of the decline of its political and military influence, Russia remains indispensable to the regions? future. Regional populations are dependent on Russia for temporary and migrant employment, remittances, and energy subsidies, while Russia is still the primary market for Central Asian and Caucasus. This is especially the case in Central Asia where Russian involvement will be crucial on three primary issues: 1) energy development, 2) drug trafficking and HIV/AIDS, and 3) trade and communications.

First on energy development, the energy potential of the Caspian Basin is rightly seen as the key to the long-term development of both Central Asia and the Caucasus. But there are major constraints on energy development, not least export dependence on Russia. Outside the extensive Soviet-era pipeline system running through Russia, the Caspian Basin faces a major shortage of transportation infrastructure. Although new pipelines have been built for oil exports from Azerbaijan and Kazakhstan since the 1990s, there has been little significant progress in the construction of regional gas pipelines. Central Asian gas fields are substantial in size but poorly situated for European and Asian markets. The lack of pipeline infrastructure has constrained the states? efforts to become independent producers and exporters. In the 1990s, a series of ambitious international projects to transport Central Asian gas to world markets—from Kazakhstan to China, from Turkmenistan across the Caspian to Azerbaijan and Turkey, and, again, from Turkmenistan across Afghanistan to Pakistan and India—all eventually ran out of steam. In contrast, in 2002, Russia promoted an Eurasian Gas Alliance to coordinate gas production, guarantee long-term purchases of Central Asian gas for Russia?s domestic market, and continue to feed Central Asian gas through Russian export pipelines, which is already making some headway. Russia?s energy industry will continue to play the dominant role in Central Asian gas and Russia?s participation is ultimately unavoidable and essential in any projects—U.S. or otherwise—to develop the region?s energy potential.

Second in terms of drug trafficking and HIV/AIDS, these have become a particular concern and security threat for Russia itself. A recent World Bank study of HIV, for example, notes that Russia has the fastest growing rate of new infection in the world—tied to intravenous drug use and thus to the Central Asian heroin trade. The Bank estimates that, by 2020, Russia will have more than 5 million people infected and face a 10.5 percent loss in GDP. Any new programs to eradicate heroin production and trafficking, as part of long-term reconstruction efforts in Afghanistan, will require Russia?s full cooperation—as well as that of all the neighboring states affected—and Russia has a keen interest in addressing the problem.

Third, Russia is key to restoring trade and communications, and to transforming Central Asia into a route for licit rather than illicit trade between Europe, and Afghanistan and South Asia. Projects for transporting gas from Turkmenistan and the broader Caspian Basin across Afghanistan to South Asia, which were precluded by the instability in Afghanistan, could one day be revived in the context of a broader effort to restore and improve road, rail and other transportation and communication links. The future restoration of Central Asia?s links with India and Pakistan, which were also ruptured through war in Afghanistan opens up the possibility of access to Pakistani and Indian ports as well as markets for Central Asian goods. In addition, Moscow has emphasized the revival of the Soviet-era North-South freight transportation corridor from Europe to India as part of its regional strategy for the 21st Century. Russia can play a particularly important role in developing infrastructure and bringing the landlocked Central Asian countries into the global marketplace. Here, the United States could also play a role by encouraging and assisting Russia in the development of this route as a complement to the East-West transportation routes from Central Asia across the Caspian, to the Caucasus and the Black Sea, promoted by the U.S. and the EU in the 1990s. While the East-West route became a focus of early competition between America and Russia, the development of a North-South route that binds Central Asia to Europe and Asia could just as easily become a vehicle for cooperation.

VIII. Conclusion and Summary

In sum, a policy for promoting cooperation in these regions will require:

  • Active coordination among bilateral and multilateral international donors on programs and initiatives related to key regional issues such as energy development, water resource management, and trade.

  • Concerted and persistent pressure by donors on regional governments to engage in dialogue on reform and regional cooperation.

  • Joining forces with advocacy groups to push for the restoration of political freedoms, combat authoritarian tendencies, and promote democratization as well as economic reform.

  • Engaging with Russia in critical areas where Moscow itself has a particular interest: energy development, drug trafficking and HIV/AIDS, and trade and communications.

  • And, finally, U.S. leadership.

United States attention to Central Asia and the Caucasus in 2002 has done much to create a new atmosphere conducive to progress, but the U.S. will have to stay the course and continue its economic, political, and military engagement. The development and stabilization of the fractured and fragile states of Central Asia and the Caucasus is a long-term endeavor. Many observers, both inside and outside the regions, believe that the United States will inevitably disengage from these regions and from Afghanistan as a new campaign in Iraq unfolds. Such a disengagement would undermine American credibility as well as negate the increased assistance efforts of the last year. And, as recent experience in Afghanistan has demonstrated, the risks of disengagement are significant. In addition, the U.S. will have set itself a poor precedent for its future commitment to the reconstruction of Iraq after the overthrow of Saddam Hussein. Although there will be competing goals and limited resources, the United States must continue to lead the way in a collaborative endeavor with Europe, Russia, other states, and major international donors to put Central Asia and the Caucasus on a more sure footing in the 21st Century.