Do Project Cancellations Indicate Declining US Interest in South Caucasus?

by Michael Hikari Cecire

US President-elect Donald Trump has canceled his real estate projects in Georgia and Azerbaijan. The moves suggest that the US role in the South Caucasus may decline during Trump’s administration.

The Trump Organization, Trump’s real estate business, announced recently that it is backing out of licensing deals for buildings in Baku, Batumi, and possibly Tbilisi. Observers believe the decision is linked to attempts to deflect criticism of potential conflicts of interest once he becomes president.

The Trump-branded ventures represented economic prestige projects for the Azerbaijani state and the previous Georgian government led by Mikheil Saakashvili and his party, the United National Movement (UNM). But after Trump’s surprise win in November, what had looked like vanity developments took on increasing significance, particularly given Trump’s tendency to view the world through the lens of his sprawling business empire.

The cancellation of these projects, then, is sure to put a dent in the hopes and plans of local officials, in which a Trump development represented a means to secure access to the new administration in Washington.

The Batumi project was first announced amid great fanfare during Trump’s visit to Georgia in 2012, and was billed by then-president Saakashvili and Trump’s local partner, the Silk Road Group, as a major Trump “investment.” That was not strictly true: the Batumi building, and reportedly one in Tbilisi to follow, would be Silk Road Group developments that would simply bear the Trump name via a licensing deal.

The Trump projects appeared closely tied to Saakashvili’s government, and when his UNM party suffered defeat in elections in late 2012, the prospects for the Trump developments seemed to decline along with Saakashvili’s political fortunes.

After Trump’s election, the Batumi plans seemingly found new life. After being stalled for several years, just days after the election, the Silk Road Group announced that construction would resume “in the near future.” Those hopes now appear to have been dashed.

Progress had been faster on Trump’s Baku development, which began construction in 2015. But by 2016, due to the downward spiral of the Azerbaijani economy, work on the tower came to a halt. Extended delays and questions swirling around the project’s financier, Azerbaijani businessman (and son of the minister of transportation) Anar Mammadov, contributed to the removal of the project from the Trump Organization’s website by mid-2016.

Now both governments are confronting the prospect that the lack of Trump financial connections to the South Caucasus could translate into a lack of political interest in the region for policymakers in Washington.

This is a particularly serious question for Georgia, which has long staked its international position – and even its own national security – on a stubbornly pro-American orientation. Given Trump’s heterodox style and outsider status, Tbilisi’s careful, years-long cultivation of allies within the Washington establishment does not stand to bring great returns over the next four years. Officials in Tbilisi likely will be challenged to gain access to the new administration. More worryingly, Trump’s seemingly cozy approach toward Russia is stoking fears that Georgia might become a sacrificial lamb to Moscow for the sake of improved US-Russia relations.

Even if that does not happen, Tbilisi’s hopes of a renewed US-led push for greater Georgian integration into Western security and economic structures are unlikely to find much purchase in the next administration. For Georgia, the prospect of reduced US support amid more forceful Russian claims to regional hegemony – and rapidly declining European interest in eastern engagement – undermines the logic of maintaining an exclusively pro-Western foreign policy strategy. Some policymakers in Georgia, including those with Euro-Atlantic inclinations, may deem some form of accommodation toward Russia to be prudent for the medium-term at least.

In Azerbaijan, the looming implications of a Trump presidency are less stark, but still serious. Azerbaijani foreign policy has long been predicated on the notion of “multi-vectorism,” which seeks to balance – and sometimes mutually leverage – relations between Moscow and Washington. This strategy, pioneered by former president Heydar Aliyev, found some manner of success, but has seen diminishing returns and some manner of dismantling under the rule of his son, incumbent President Ilham Aliyev. This is attributable in many ways to Azerbaijan’s rapidly declining economic fortunes. The drastic fall in energy prices has curtailed Baku’s international significance and its ability to project influence abroad – and vice versa.

The unmooring of Azerbaijan’s Washington “vector” has made Baku increasingly reliant on Russia, and has even encouraged better ties between Azerbaijan and Iran, with which Baku has long had at best a problematic relationship.

The Trump presidency’s anticipated transaction-based approach to the region may be welcomed by some segments of Azerbaijan’s ruling elite, given the country’s energy abundance, reputed secularism and counterterrorism bona fides. And as one of the most repressive states in the former Soviet Union, Azerbaijan could only welcome a likely de-emphasis of human rights by the Trump administration’s foreign policy team.

At the same time, the possibility that a Trump White House may simply defer to Moscow when it comes to Azerbaijan-related issues has the potential to kill off whichever final vestiges of multi-vectorism remain in Azerbaijani foreign policymaking. And with Trump’s reputed disinterest in the finer points of policy minutiae or geographical nuances, fears abound that Azerbaijani interests – and those of the wider region – could be overlooked.

Before the November elections in the United States, erecting a few Trump-licensed hotels in the South Caucasus was seen as little more than vanity projects. But the election result imbued the projects with new meaning: their likely cancellations may foreshadow the region’s greatly reduced status in the eyes of Team Trump.

That does not mean the United States is entirely finished in the South Caucasus: Georgia still has powerful friends in Washington, and is set to receive its most substantial US military assistance package yet. Meanwhile, Azerbaijani oil continues to play a part in questions about the regional energy mix.

But for a region that once commanded outsized influence in Western capitals, the likely new normal looks lonely.

Republished, with permission, from EurasiaNet. Photo: Azerbaijani President Ilham Aliyev.

Michael Hikari Cecire is an international affairs specialist focusing on Eurasia and an International Security Fellow at New America.

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One Comment

  1. i guess you thought “Pivot to Asia” was a new Chinese restaurant in Manhattan?

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