c) The Caucasian Region. The Formation of the GUAM System.

Ukraine has significant transportation-energy interests in the Caucasian region and plays an important role in the strengthening of international cooperation and in the intensification of integrative processes. The national interests of such countries as Ukraine, Georgia, Moldova and Azerbaijan in large measure coincide with each other. This coincidence of interests led to the declaration in Strasbourg in October 1997 of the creation of a new regional bloc known under the conditional name of GUAM (Georgia, Ukraine, Azerbaijan, Moldova).

GUAM is a formation of equal post-Soviet countries with similar political and economic orientations. As such the newly formed bloc differs from the BSEC system that unites states with different levels of social and economic development, and from the CIS, where Russian domination is clearly evident. The creation of GUAM is indicative of the formation of new structures of economic and political interest within the CIS.

The CIS, in fact, already has a bipolar structure: pro-Russian states and those that aspire toward independent development and conduct independent foreign policy. GUAM plus the Central Asian states will number nine countries of the CIS that support the idea of the creation of new equal and mutually beneficial structures of cooperation. The states of the Baltic-Black Sea Alliance should be added to this list. In general, it can be asserted that GUAM is the response of a group of independent states to the claims presented in a well known RF document concerning the political course of relations with CIS states.

The geopolitical situation of GUAM states, their historical ties, and cooperation within the framework of BSEC and the CIS resolutely dictate to them the need to strengthen economic and political relations of special partnership on the regional level and in the solution of international problems. The positions of GUAM states concerning key issues of foreign policy coincide with each other.

The mutual economic interestsof GUAM states are mainly concentrated on two issues - the transportation of Caspian energy carriers and the building of new transit routes through the Caucasian region. The planning, construction and exploitation of transport communications from oil-gas deposits in Azerbaijan, Turkmenistan, Kazakhstan and Uzbekistan make the Transcaucasian Black Sea region appear extremely attractive. Today the idea of a Transcaucasian transportation corridor has obtained real significance. On the other hand, the Black Sea region, and in that number the Transcaucasus, has considerable importance as a market for Ukrainian goods.

Ukraine is an important strategic transit route of energy carriers to European states. This together with its processing abilities gives Ukraine the opportunity of becoming an essential link in the economic security of Europe. The use of Ukrainian territory more than halves the length of the oil transportation route from the Middle East to Europe. The Ukraine-Georgia oil supply transportation corridor is much shorter than any alternative route. Profits from the transit of energy carriers from the Caspian region to Europe will allow Ukraine to compensate expenditures for its import and to solve its own energy problems.

Ukraine has put forward a proposition about a trilateral Ukraine-Georgia-Azerbaijan agreement concerning the creation of a Transcaucasian transportation corridor. The creation of a single transportation line that will serve passengers and freight traffic and will unite Baku, Tbilisi, Poti, Odesa and Kyiv is foreseen. In December 1996 the " Illichevsk (Odesa) - Poti" ferry crossing was opened, which created new opportunities for an increase in the level of the exchange of goods between Ukraine and the Caucasian states. Potential freight traffic in both directions is foreseen to total 1 million tons. The crossing becomes an important part of the TRACECA transportation corridor.

Opportune directions for economic cooperation also include: the development of investment activity among GUAM states, the creation of mutual enterprises dealing with machine-building, energy and transport, and the processing of agricultural goods. In the future a regional zone of economic cooperation, self-sufficient in a number of aspects, can be created within GUAM.

The second sphere of cooperation within GUAM is represented by the regional security and stability problem. The realization of large-scale projects demands the formation of sub-regional security structures that could create a collective platform for cooperation in this sphere, with a maximal taking into account interests of all regional states.

Each of the GUAM states faces conflict situations that to a large extent have a common background and are inspired by a single external source (Abkhazia, the Crimea, Upper Karabakh, Transdniestria). A similarity in security problems causes the mutual gravitation of countries toward each other. The creation of GUAM provides new opportunities for the solution of present conflicts through mutual efforts, in a situation where the intervention of international structures is blocked by the RF.

The present level of development of interstate contacts is also an important reason for the formation GUAM.

The most developed relations within GUAM exist between Ukraine and Georgia. Russian politicians regard the signing of the Treaty on Friendship, Cooperation and Mutual Aid between Ukraine and Georgia (April 1993) to be the most serious step in the establishment of horizontal relations between post-Soviet countries.

In economic terms, romanticism and a certain euphoria in these relations are replaced by effective economic cooperation, the realization of wide-scale interstate projects and the practical political support of one another's positions in the international arena.

According to sociological surveys, only every third Georgian citizen sees the future of his state in connection with the RF, while two out of three respondents express sympathetic attitudes toward Ukraine. At present, Georgia appears as Ukraine's best bet for a partner in the Transcaucases, that will later support Ukraine's interests not only in the Caucasus but in the entire Black Sea region.

The instability of the political situation in this country, especially in Abkhazia, can cause damage to Ukrainian interests in the region. Standing by Georgia, Ukraine in whatever way becomes involved in regional conflict. At present, however, Kyiv does not maintain direct contact with Abkhazia, as it does not possess sufficient levers for politically influencing both conflicting sides. Ukraine stresses its hope for the preservation of peace in the Caucasus and advocates the quickest solution of the Abkhazian problem.

Ukraine-Azerbaijan. Azerbaijan's interest in Ukraine's goods and political support is an important factor in the intensification of cooperation between the two states. A dialog concerning the possibility of the common extraction of gas and oil deposits, partially in Ukraine, and also concerning the routes for their transportation through Ukraine, has begun. Azerbaijani experts have immense experience in oil and gas extraction both on land and on sea. They have expressed a will to help Ukraine in the development of its part of the Black Sea shelf. Azerbaijan shows considerable interest in the oil-gas extraction equipment made in Ukraine, which it could obtain in exchange for oil products.

Ukraine stays for the preservation of Azerbaijan's integrity, which automatically places it in confrontation with Armenia and the RF on the issue of Upper Karabakh. The RF here supports its strategic ally Armenia, where approximately 20, 000 Russian 4th Army troops are stationed. The RF has provided Armenia with one billion dollars worth of weaponry. On the other hand, Armenia has made public information according to which Azerbaijan in 1993-1996 " illegally obtained" a large amount of weaponry, in part from Ukraine.

Ukraine-Moldova. Relations between the two states are determined by similar geopolitical conditions, common borders, interconnected economies, and by traditional historical, cultural and kinship ties. Both states follow the principle of military-political neutrality. A solid normative-law base has been created in the sphere of trade-economic relations. The further trend of economic harmonization is mentioned in the Declaration on the Main Principles of a Bilateral Customs Union, signed on March 11, 1997.

Moldova satisfies its domestic demands on account of the supply of mainly Russian oil and gas. Its joining of GUAM is also determined by its aspirations to diversify its own energy policy. A well-arranged transit of goods through Ukraine and Romania is very important for the Moldovan economy. Common economic interests provide for the development of cooperation in the joint exploitation of Danube ports, in the creation of effective frontier cross-points, and in the construction of modern roads and railways.

A closely related Ukrainian and Moldovan population, with similar economic, cultural, legislative and social problems, resides in border territories. Ukraine as well as Moldova is interested in the creation of so-called " Euro-regions", ruled by common bodies responsible for the solution of emerging problems.

The Transdniestrian conflict has to a certain extent been solved by the signing on May 8, 1997 of the Memorandum about the normalization of relations between Moldova and the Transdniestria. This document was signed by Ukrainian President L. Kuchma, in his capacity as a mediator. Ukraine acts as a state-guarantor of peace in Transdniestria. A decision has been made to involve the Ukrainian military in peacemaking activity in Transdniestria and to include Ukraine in the United Control Committee.

In adherence to the Helsinki Act and norms of international law, Ukraine maintains the position of nonintervention in the internal affairs of neighboring countries and supports the principle of the absolute respect of the territorial integrity and sovereignty of Moldova within the borders of the former MSSR. The disposition of an Operative Group of Russian Military Forces (OGRT) numbering approximately 3500-3700 men in Transdniestria remains as a serious problem. Ukraine is interested in the quick withdrawal of the OGRF and especially in the liquidation of the ammunition store on the territory of Transdniestria.

Many problems emerge in connection with existent border centers of tension. A huge quantity of poorly controlled weaponry creates ready conditions for their penetration into Ukraine, Also possible is the flow of refugees, great migrations of population, etc. Approximately 300, 000 ethnic Ukrainians live in Transdniestria. They require the support and special attention of the Ukrainian state.

The formation of GUAM with the relative leadership of Ukraine and the support of other states that understand all of the advantages and benefits of the establishment of regional groups based on the principles of equality and mutual support signals the beginning of new extremely important integrative processes on the territory of the former USSR.

With the goal of ensuring the security interests of GUAM it is sensible to work on the creation of joint peacemaking formations, and to put forward the initiative for the holding of joint training in the framework of the NATO " Partnership for Peace" program.

It is expedient for Ukraine to activate the processes of multilateral sub-regional cooperation within GUAM, particularly in key issues pertaining to the transportation of energy carriers and the construction of Transcaucasian communications routes. Ukraine's further security policy within the framework of GUAM should be directed toward enlarging Ukraine's presence in this region, only however, in the case of the presence of substantial support from international organizations (the UN, the OSCE etc. ).

Ukraine and Armenia. Because of obvious reasons Armenia remains outside of GUAM. These include: pro-Russian orientations, the problem of Karabakh, etc. Armenia's first priorities include resolving the Karabakh conflict and solving the problems caused by a fall in production and by an almost absolute economic blockade, which entailed great hardship. Thus Armenia's stake on BSEC is not incidental, even more so as Black Sea area cooperation enables the balancing of its interests in the region. Armenia also has its foreign economic interests. They are connected with the development of export-oriented branches of industry, primarily with consumer goods, the chemical and electronics industries, and with agriculture.

In addition to a course toward strategic partnership with Russia, the Armenian leadership is developing relations with Iran and Turkmenistan. This combination has formed a political group that plays an increasingly important role in Transcaucasian and Caspian processes as an alternative to Turkish influence in the region.

An official visit of the President of Ukraine to this state has been made. After intensive negotiations, an agreement concerning friendship and cooperation between the two countries as well as a succession of treaties were signed. Among them are treaties concerning: cultural cooperation, ways of avoiding double taxation in the field of standardization, metrology and certification, the certification of scholars and teachers, cooperation in health care and also the minutes of the consultations between the ministries of foreign affairs of both states.