The Caucasus has emerged as a pivotal geostrategic region within which the interests of the U.S., Europe, Russia, Iran, Turkey, and the broader Islamic world intersect. The region will be crucial to the economic development of the ancient Silk Road--the cross-continental trade route between the East and Central Asia, and Europe and the Middle East. Oil and gas reserves and future auxiliary investments are estimated in the hundreds of billions of dollars. Major oil and gas pipelines are planned to bring the abundant energy resources of the Caspian Sea and Kazakhstan to global markets.

U.S. interests in the Caucasus include ensuring the independence and territorial integrity of Georgia, Armenia, and Azerbaijan; keeping Iran and Islamic fundamentalism in check; ensuring access to energy resources; and preventing a re-emergence of Russian imperialism. However, lingering ethnic conflicts, weak central governments and institutions of civil society, and external tampering may endanger advantageous routes for oil pipelines and even destabilize this crucial region.

The United States must secure its priorities by strengthening civil societies and markets within the three caucasian states, and developing an East-West coalition of Georgia and Azerbaijan supported by Turkey and Israel. It must ensure that American energy companies are able to establish oil and gas pipelines in a western direction to the Black Sea and the Mediterranean instead of north (to Russia) and south (to Iran). If Washington fails to achieve these policy goals, its own interests as well as those of key U.S. allies, such as Turkey and Israel, will be imperiled and anti-Western elements in Russia and Iran will reap the benefits.

Congress must set firm policy goals for this important region. To this end, the Silk Road Strategy Act (S. 1344), authored by Senator Sam Brownback (R-KS), is pending in the Senate Foreign Relations Committee, while a companion bill, H.R. 2867, introduced by Chairman Benjamin Gilman (R-NY), is before the House International Relations Committee. Both bills would support the independence, territorial integrity, and prosperity of post-communist states in the South Caucasus and Central Asia while fostering American business and strategic interests in the region.

Specifically, the United States should:

• Increase its political and security support for the proposed Baku (Azerbaijan)-Ceyhan (Turkey) pipeline. It is in America's strategic interests to ensure the flow of oil and gas from the Caspian Sea basin via Georgia and Turkey rather than south to Iran or north to Russia. A north-south main route would allow Russia and Iran to control an even larger share of the world energy market than they do now. The United States should use its influence with the governments of Kazakhstan and Turkmenistan to ensure the construction of cross-Caspian pipelines that will link up to the Baku-Ceyhan route, thus making it economically viable.

• Foster security cooperation with Georgia. Georgia is a key U.S. ally in the region, but it lacks the military force necessary to defend its own borders. This weakness encourages already intense ethnic separatism, sometimes supported by Russia, to continue. The U.S. should strengthen Georgia's military by providing assistance in building its command-and-control, communications, and intelligence capabilities; training instructors for Georgian military schools; inviting Georgian officers to study at American military colleges; and educating officers on civilian control of the military, especially in such areas as budgeting and procurement.

• Lift sanctions against Azerbaijan. The sanctions imposed by Article 907 of the 1992 Freedom Support Act were enacted during Azerbaijan's war with Armenia over Karabakh. In 1994 the two nations signed a cease-fire, but the sanctions are still in place, undermining the U.S. role as an honest broker in the Karabakh conflict and blocking many types of U.S. assistance to the Azerbaijani government. Senior Clinton Administration representatives recently have admitted that the U.S. would be better off without these sanctions. The House Appropriations Committee voted on September 10, 1998, to repeal the sanctions, but the measure was defeated by the full House on September 17.

• Make it clear to Moscow that continued support for separatism in the South Caucasus will ensure the end of U.S. assistance. Because of Russia's poor economic performance, the Kremlin is interested in a broad range of business and financial assistance, both from the United States and from international financial organizations such as the International Monetary Fund and the World Bank. But Moscow has supported Abkhaz separatists against the central government in Georgia and Karabakh Armenians against Azerbaijan. Influential Moscow hard-liners believe that instability in the Caucasus enhances Russia's power in the region. Russia has supplied over $1 billion worth of heavy weapons clandestinely to Armenia and is supporting Abkhaz separatists in Georgia. Washington should make it clear that U.S. assistance to Russia and U.S. support for Russia's requests to international financial institutions cannot continue as long as Moscow works to destabilize the Caucasus.

• Begin a discussion with ethnic leaders of the Northern Caucasus. The Northern Caucasus is a cauldron of ethnic hostilities on the verge of eruption. The United States must increase its information-gathering and analysis capabilities and initiate an open discussion with and among the leaders of autonomous regions in the Northern Caucasus. This should be a public effort aimed both at ensuring stability, mutual understanding, and peace in the region and at giving U.S. policymakers a better knowledge of this potentially explosive situation.

Dr. Ariel Cohen is Senior Policy Analyst in Russian and Eurasian Studies in The Kathryn and Shelby Cullom Davis International Studies Center at The Heritage Foundation.