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Dagestani violence underlines Caspian volatility
By Sergei Blagov

MOSCOW - Political violence in the Russian internal republic of Dagestan returned with a vengeance on August 27 when Magomed-Salikh Gusayev, regional minister for national policy, information and external relations, was killed in an explosion caused by a magnetic bomb placed on the roof of white sedan in Makhachkala, capital of Dagestan.

Continued violence in the mainly Muslim Dagestan highlights volatility in the oil-rich Caspian Sea region. Gusayev's demise came as the latest in a series of political assassinations there. On August 11, a vehicle carrying Nadirshakh Khachilayev, 44, was strafed with bullets in Makhachkala. Only 10 minutes before Nadirshah's death, Major Tahir Abdullayev, an officer at Dagestan's anti-terrorism unit, was assassinated in Makhachkala.

Nadirshah's political career has been linked to Chechnya, where he successfully brokered a peace deal to end the first Chechen war in 1996. The same year, Nadirshah was elected to the Russian State Duma and became the head of Russia's Union of Muslims. He moved to cultivate his image by meeting up with Colonel Muammar Gaddafi in Libya, and invited Louis Farrakhan, head of the controversial Nation of Islam, to visit Dagestan. His brother, Magomed, was a head of the Dagestani Fisheries Company, which controlled the lucrative trade in Caspian caviar and sturgeon.

Nadirshah opposed the re-election of Dagestani leader Magomedali Magomedov in March 1998. Two months later, the two brothers and hundreds of their armed supporters briefly seized government buildings in Makhachkala and demanded the resignation of Dagestan's leadership. They were persuaded to back down, and in September 1998 Nadirshah was stripped of his seat in the Russian parliament and went into hiding in Chechnya.

Chechen separatist rebels invaded Dagestan in August 1999, allegedly with Nadirshah's help, prompting the Kremlin to send Russian forces back into Chechnya to fight the second Chechen war. "Russian generals must not meddle in Dagestan's internal struggles ... " warned Khachilayev, who was a leader of the non-official Russian Union of Muslims.

Subsequently, his brother Magomed was detained, and a year later Nadirshah himself was arrested in Moscow. Both were freed in early 2000, but Magomed was shot dead in November the same year.

Dagestani opposition, including ethnic Laks and Chechens, have land disputes with the Avars and the Dargins, the republic's largest nations. Khachilayev has demanded more positions for the Laks in the Dagestani administration and accuses other ethnic groups, the Avars and the Dargins, of controlling the republic's government.

Dagestan, made up of more than 30 ethnic groups in the Caucasus mountains and steppes along the Caspian Sea, has been the scene of increasing border violence with Chechnya in recent months. With a population just above 2 million people, Dagestan is one the most ethnically diverse territories of Russia. It is homeland for over 36 different nationalities, each one of them with its own language.

It has been argued that the current volatility has deep social roots in blatant inequality and deprivation of most Dagestanis. According to some estimates, about 20 percent of the republic's population control 85 percent of Dagestan's wealth, while the rest live in desperate poverty, even by Russia's low standards. More than 80 percent of young Dagestanis are unemployed, providing potential recruits for the militant opposition.

Dagestan's political violence resurfaces against the backdrop of a dynastic transfer of power taking place in the neighboring - and oil-rich - former Soviet state of Azerbaijan. On August 4, Azerbaijan's parliament named ailing President Heidar Aliyev's son Ilham Aliyev, 42, as prime minister, a move that could soon make him acting and then actual country's leader.

Both Alievs are on the ballot for October's election, but Ilham Aliev says that he registered as a candidate only to assist in the campaign of his 80-year-old father, who has been hospitalized in Turkey and then in Cleveland since July 8.

In 2002, a referendum approved constitutional amendments, stipulating that the prime minister becomes acting president if the president is incapacitated or resigns. Those amendments were opposed by the opposition as allegedly designed to catapult Ilham Aliyev to power. If completed, Azerbaijan's dynastic transfer of power would be the first among former Soviet states so far.

A political transition looms in Azerbaijan at a time when the country is balancing between the United States and Russia in a "big game" over Caspian energy riches. In recent years, Aliyev has strengthened ties with the US, while at the same time managing to maintain a relatively friendly relationship with Moscow.

Azerbaijan has invested considerable hope and credibility in the Baku-Tbilisi-Ceyhan (BTC) pipeline, which would bypass Russia on a 1,760 kilometer course from the Azerbaijani capital through Georgia to a Turkish port in the Mediterranean. Moscow has also been wary of Azerbaijan's perceived intention to build closer ties with NATO, because Dagestan and Azerbaijan share a poorly guarded border.

Meanwhile, the BTC project has recently been dealt a psychological blow. On August 7, oil companies Total SA and ConocoPhillips refused to provide a bridging loan to Azerbaijan's state oil company Socar for work on the Baku-Tbilisi-Ceyhan oil pipeline. Other members of the BTC consortium had agreed to fund Socar's contribution until loans from international financial institutions arrive later in the year.

Socar needs to contribute some US$180 million to the BTC consortium, which is building the pipeline. The total cost of the project is estimated at $3 billion. BTC's shareholders are to fund 30 percent of construction, with the remainder coming from debt. BTC's shareholders are BP Plc 30.1 percent; SOCAR 25 percent; Unocal Corp 8.9 percent; Statoil ASA 8.71 percent; TPAO 6.53 percent; ENI, Total - both 5 percent; Itochu (3.4 percent); Inpex 2.5 percent; Amerada Hess 2.36 percent and ConocoPhillips 2.5 percent.

Obviously, Dagestani-style political violence is the last thing international investors would like to face in Azerbaijan.

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Sep 3, 2003



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