PROBLEMS OF EUROPEAN COMMODITY SECURITY AND SUSTAINABLE DEVELOPMENT OF THE CENTRAL ASIA-CAUCASUS REGION

Alexander TVALCHRELIDZE, Avtandil SILAGADZE


Alexander Tvalchrelidze, D.Sc. (Geology and Mineralogy), Full Member of the Georgian Academy of Natural Sciences (Tbilisi, Georgia)

Avtandil Silagadze, D.Sc. (Econ.), Corresponding Member of the Georgian National Academy of Sciences (Tbilisi, Georgia)


Introduction

The Russia-Ukraine gas wars and the cold winter that hit Southern and Central Europe in January 2006 and 2009 highlighted Europes commodity insecurity and its dependence on Russian good will. In all fairness, it should be noted that some studies on this topic appeared even before the cold winter of 2009, but their impact on the leadership of the European Commission was insignificant, to put it mildly. This is evident from the fact that prior to the 2009 crisis the International Energy Agency did not see any pitfalls in European energy security.

The James A. Baker III Institute for Public Policy was much more far-sighted. Back in 2005 it already argued the need to reduce, as far as possible, Russias influence on the energy sector and developed a model for international trade in gas known as the Baker Institute World Gas Trade Model (BIWGTM).

Thus, there is evidence of Europes commodity insecurity, and any international conflicts interrupting the steady flow of raw materials to this region can have grave consequences for the daily life of Europeans and the stability of their democratic governments.

The prospects of sustainable development of the Central Asia-Caucasus region are directly associated with Europes resource security and economy. Already implemented projects (Baku-Tbilisi-Ceyhan oil pipeline and Baku-Erzurum gas pipeline) have fundamentally changed the geopolitical and geo-economic situation in the region and in the whole of Europe.

In this article, we try to analyze the extent to which new projects will affect Europes commodity security and sustainable development trends in the Central Asia-Caucasus region.

Having at our disposal extensive statistical material on global commodity flows, we have decided to use this material to analyze the problem of Europes commodity security and to identify the black holes in the highly complex infrastructure of its markets.

We analyze the following types of commodities that have a decisive effect on economic development: oil, gas, coal, iron, copper, lead, zinc, and gold. Other commodity markets of


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