Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests Page: 14 of 19
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07-22-05
its cooperation with Russia on these interests), ending regional instability that might threaten
its own territorial integrity, and building economic links. A major share of the world's
Azerbaijanis reside in Iran (estimates range from 6-12 million), as well as about 200,000
Armenians. Ethnic consciousness among some "Southern Azerbaijanis" in Iran has grown,
which Iran has countered by limiting trans-Azerbaijani contacts. Azerbaijani elites fear
Iranian-supported Islamic extremism and object to Iranian support to Armenia. Iran has
growing trade ties with Armenia and Georgia, but its trade with Azerbaijan has declined. To
block the West and Azerbaijan from developing Caspian Sea energy, Iran long has insisted
on either common control by the littoral states or the division of the seabed into five equal
sectors. Iranian warships have challenged Azerbaijani oil exploration vessels. Some
thawing in Azerbaijani-Iranian relations occurred in early 2005 with Ilkham Aliyev's visit
to Iran and the long-delayed opening of an Azerbaijani consulate in Tabriz. U.S. policy aims
to contain Iran's threats to U.S. interests (See CRS Report RL32048, Iran: U.S. Concerns
and Policy Responses).
Among non-bordering states, the United States and European states are the most
influential in the South Caucasus in terms of aid, trade, exchanges, and other ties. U.S. and
European goals in the region are broadly compatible, involving integrating it into the West
and preventing an anti-Western orientation, opening it to trade and transport, obtaining
energy resources, and helping it become peaceful, stable, and democratic. The South
Caucasus region has developed some economic and political ties with other Black Sea and
Caspian Sea littoral states, besides those discussed above. Azerbaijan shares with Central
Asian states common linguistic and religious ties and concerns about some common
bordering powers (Iran and Russia). The South Caucasian and Central Asian states have
common concerns about ongoing terrorist threats and drug trafficking from Afghanistan.
Central Asia's increasing energy and other trade with the South Caucasus will make it more
dependent on stability in the region.
U.S. Aid Overview
The United States is the largest bilateral aid donor by far to Armenia and Georgia, and
the two states are among the four Eurasian states that each have received more than $1
billion in U.S. aid FY1992-FY2004 (the others are Russia and Ukraine). See Table 1. U.S.
assistance has included FREEDOM Support Act (FSA) programs, food aid (U.S. Department
of Agriculture), Peace Corps, and security assistance. Armenia and Georgia have regularly
ranked among the top world states in terms of per capita U.S. aid, indicating the high levelof concern within the Administration and Congress. Foreign Operations Appropriations for
FY1998 (P.L. 105-118) created a new South Caucasian funding category, which still exists,
to emphasize regional peace and development. Besides bilateral aid, the United States
contributes to multilateral organizations such as the International Monetary Fund and the
World Bank that aid the region.
In January 2004, Congress authorized a major new development assistance program,
the Millennium Challenge Account (Section D of P.L. 108-199). A newly established
Millennium Challenge Corporation announced in May 2004 that Armenia and Georgia would
be among the first states invited to apply for aid. Georgia was deemed eligible despite low
scores on "rulingjustly," "encouraging economic freedom," and "investing in people," with
the Corporation arguing that the new government in Georgia appeared reformist. ThisCRS-1I
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Nichol, Jim. Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests, report, July 22, 2005; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metacrs6895/m1/14/: accessed July 17, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.