Publication: Prism Volume: 3 Issue: 20

Grozny is lobbying for a Caucasus Common Market, hoping the profit motive will force the world community to recognize Chechnya’s independence

By Igor Rotar

In the middle of October, a foreign delegation visited Grozny. On October 13, Lord McAlpine, a member of the British House of Lords; Francis Pike of Peregrine, the Hong Kong-based investment bank; Patrick Robertson, director of the British company Robertson and Associates; and Imram Khan, leader of Pakistan’s "Movement for Justice" party, held talks with Chechen president Aslan Maskhadov.

The contents of the talks were strictly confidential. It was two weeks before the Jamestown Foundation’s Monitor, first of all the mass media, could publish a brief summary of the protocol of intentions signed by President Maskhadov, Lord McAlpine, Francis Pike, Patrick Robertson, and Khozh-Akhmed Nukhaev, president of the closed "Caucasus Common Market" corporation. (1)

The signatories agreed to look into the possibility of creating a Transcaucasus Energy Company (TCEC). This would take the form of an international consortium with the participation of enterprises in the oil, gas, and energy industries as well as investment banks and international financial institutions. The government of the Chechen Republic of Ichkeria expressed its willingness to consider leasing, either to the international consortium or to an international corporation in which the Chechen government would be both co-founder and shareholder, the section of the oil pipeline that crosses Chechnya’s territory, together with energy industry enterprises and their infrastructure.

Moscow’s Miscalculation

It seems quite possible that Russia, when transporting Caspian oil to the Black Sea port at Novorossiisk for onward transmission to western markets, will have to deal not only with Grozny but also — and even more unpleasantly for the Kremlin — with western capital. To ensure the functioning of the "northern variant" (Baku/Grozny/Novorossiisk) as well as of the "western route" (through Georgia to Turkey), Russia had to make several major serious concessions, including recognizing Grozny as an equal partner in the transit. Russia was also forced, when it renewed its Treaty of Friendship and Cooperation with Azerbaijan, to pledge to support Baku in the Armenian-Azerbaijani conflict. This latest protocol signed in Grozny means that all these sacrifices may have been in vain. Western financiers may end up controlling not only the "western variant" but also part of the "northern variant," in which Moscow had counted on maintaining a dominant position.

The protocol was signed by politicians and businessmen who are well-known in the western world. For 15 years, Lord McAlpine served, on appointment by Prime Minister Margaret Thatcher, as treasurer of Britain’s Conservative Party. In 1996, he became chairman of the Referendum Party (set up to campaign in Great Britain for a referendum on the issue of European economic and monetary union). After the death of its leader, the millionaire politician Sir James Goldsmith, McAlpine assumed the leadership of the movement. Francis Pike of Peregrine Investment Holding, Ltd., a large investment company in Southeast Asia, is married to India Jane Romaine, daughter of Marcus Birley and Lady Annabel Goldsmith. Patrick Robertson is executive director of Robertson and Associates, a political consulting firm. Earlier, he was personnel director and aide to Sir James Goldsmith. Since Goldsmith’s death, Robertson has continued to be an adviser to his family. Imram Khan, who also participated in the talks in Grozny, is a leading Pakistani politician who is married to Goldsmith’s daughter Jemima.

In other words, all the foreign politicians and businessmen who participated in the talks with Maskhadov have close ties to the Goldsmith family. One may therefore speculate that one of the largest fortunes in Europe — the Goldsmith capital — will be brought to bear in implementing this project.

Is a Flourishing Economy a Guarantee of International Recognition?

Equally interesting is the fact that the protocol was signed by the president of the closed "Caucasus Common Market" corporation, Khozh-Akhmed Nukhaev. It would not be an exaggeration to say that this document was signed, in large part, thanks to Nukhaev’s efforts. In essence, the protocol is the logical continuation of a project advocated by Nukhaev, a businessman who served as Chechen first deputy premier under former president Zelimkhan Yandarbiev, at an international forum in the Swiss city of Crans Montana this June. There, Nukhaev proposed the creation of a Caucasus Common Market (similar to the European Common Market), which Chechnya would join as an independent state, recognized by the world community. To achieve this goal, a Caucasus-American Chamber of Commerce, headquartered in Washington, has been set up. Headed by Nukhaev, the Chamber has already attracted several influential western politicians and businessmen as members. The post of chairman of the Chamber’s executive committee was taken by a man well known in political circles, former U.S. Ambassador Frederick M. Bush, a man close to former U.S. president George Bush and best known in Russia as the person who invited Gen. Aleksandr Lebed to President Bill Clinton’s inauguration. Professor Kenichi Ito, president of the Japanese International Relations Forum and a former diplomat who worked in Japan’s embassies in the USSR and the U.S., is the Chamber’s vice president. His group of experts is headed by Jacques Attali, former director of the European Bank for Reconstruction and Development. This group also includes White House adviser Mel Levine and former Soviet foreign minister Boris Pankin.

On November 11, the Caucasus Investment Fund — the Caucasus Common Market’s main financial body — made its presentation in London. The Fund aims to raise $3 billion in capital for priority investment projects in the Caucasus. Nukhaev, Lord McAlpine, and Francis Pike became the Fund’s co-founders.

Before the presentation, Nukhaev met with Baroness Thatcher and a group of about twenty leading financiers and bankers in the City of London. Members of the Goldsmith family gave a gala dinner in Nukhaev’s honor.

The Fund’s presentation was attended by the president of the "Iveria Plus" company and co-founder of the Caucasus Common Market, Tsezar Shevardnadze, and by Altai Khasanov, another co-founder of the Caucasus Common Market. Shevardnadze and Khasanov are nephews of the presidents of Georgia and Azerbaijan respectively. In view of the role that kinship plays in the Caucasus, one may assume that both Tbilisi and Baku are seriously interested in this new undertaking. Grozny is no less interested. "Aslan Maskhadov supports this project, and will pay close attention to its practical implementation," Isa Bizhaev, the Chechen president’s economic adviser, said at the presentation.

"We are proceeding from the fact that Chechnya is already a de facto independent state and that, with the creation of the Caucasus Common Market, Chechnya will sooner or later achieve de jure recognition of its independence from the international community. But our organization will not meddle in politics. It will be involved only in economic issues. Our main idea is to proceed, not from the top down, but from the bottom up: based on concrete agreements between cities in the Caucasus. Nothing, for example, prevents the Mayor’s Office in Grozny from concluding an agreement with another city in the Caucasus. In that way, we can get around the problem of Chechnya’s being a formally unrecognized state," Prism was told by the chairman of the board of directors of the "Caucasus Common Market" corporation, Nukhaev’s chief adviser Mansur Jachimczyk, who is a British businessman who was born in Poland.

A Professional Revolutionary?

In the late 70s, Khozh-Akhmed Nukhaev, then a student in the law department of Moscow State University, together with his fellow Chechen and fellow student Said-Khasan Abumuslimov, organized a student committee for the liberation of Chechnya. The members of this underground group distributed the books of Abdurakhman Avtorkhanov and passed out leaflets. Nukhaev dismissed such activity as half-measures; in his opinion, an armed uprising would have to be organized before Chechnya would win liberation from its Russian colonizers. To achieve this goal, Nukhaev tried to organize armed detachments and started buying guns. But his plan was nipped in the bud: the KGB arrested the underground revolutionaries, and Nukhaev got his first prison term.

When he returned from prison in the early nineties, Nukhaev once again began to engage in political activity. It was then that he met the chairman of the Vainakh-Democratic Party "Bart," the writer Zelimkhan Yandarbiev. At that time, Yandarbiev was the undisputed leader of the Chechen national-liberation movement. In addition to his political activity, Nukhaev became actively involved in business — the former dissident is probably the most prominent of the Chechen businessmen who worked in Russia.

To be fair, it must be added that Moscow law enforcement agencies have another view of Khozh-Akhmed Nukhaev’s past. Prism‘s correspondent was told in the Moscow branch of the Regional Anti-Organized Crime Directorate (RUOP) that the thrice-convicted Nukhaev is the leader of Moscow’s Chechen mafia. And policemen say that Nukhaev’s main business is racketeering.

According to the weekly newspaper Moskovskie novosti, Nukhaev’s business ties extend not only to the Russian financial and political Olympus but also to Moscow’s large mafia network. (2) According to the weekly, the Moscow banking world and mafia organizations experienced such an expansion of Chechen mafia groups in the period preceding the war in Chechnya that there are rumors that this was the real cause of the military operations on Chechen territory and of the anti-Caucasus campaign in Moscow. It may or may not be a coincidence that all the big Chechen businessmen, including Nukhaev, left the Russian capital a week before the war started.

Nukhaev’s supporters have a reasonable objection to these accusations: Nukhaev, as is well-known, waged war against the Russian Empire, and it is impossible to engage in such activity without violating the Criminal Code. "What some call mafia activity was really a continuation of the fight for independence. The money we earned went, not to enrich us personally, but to strengthen our underground structures!" Nukhaev told Prism‘s correspondent.

After Russian troops invaded Chechnya at the end of 1994, Nukhaev went to fight in Chechnya. He was seriously wounded in battle, and went abroad for medical treatment. He resumed his civilian activity only in the fall of 1996, when he became First Deputy Premier in Yandarbiev’s government. The idea of a Caucasus Common Market was one of the planks in Yandarbiev’s election program. But Yandarbiev lost to Maskhadov in the presidential elections. Nukhaev did not enter the new government but (so it seemed at the time) "dropped out of the game." The "Caucasus Common Market" project was apparently buried.

Grozny’s New Tactic

But, as subsequent events have shown, this perception was mistaken. Nukhaev was one of Yandarbiev’s team, it is true. But the project of the Caucasus Common Market has been approved by the republic’s present leadership. "The Caucasus Common Market will not only revive Chechnya’s economy, it will indirectly help solve another important problem: that of consolidating Chechen society. Russian journalists love to write about the ostensibly difficult relations between Maskhadov and Yandarbiev. But now, this problem simply doesn’t exist. Nukhaev has become a bridge between the former and current presidents of Chechnya. Today, Maskhadov and Yandarbiev share a common cause," Mansur Jachimczyk told Prism’s correspondent.

One may suppose that official Grozny and the organizers of the Caucasus Common Market, having as their common goal the recognition of Chechnya by the world community, have consciously decided on a division of labor. Nukhaev holds no government post in Chechnya today for purely tactical considerations. Instead, his job is to lobby for Chechnya’s interests in the outside world and to force western politicians and businessmen to conduct their relations with Chechnya as a de facto independent state, thereby prodding the world community into recognizing Chechen independence. Once the Caucasus Common Market has prepared the ground, Chechnya’s official leadership will try to achieve the recognition of Chechnya by political means.

If the Caucasus Common Market project is realized, and a stream of foreign investment flows into the region, Chechnya will cease to be economically dependent on the Kremlin. Moscow will then lose its only lever of pressure on Grozny. Moreover, the whole Caucasus could drop out Russia’s sphere of influence.

Nukhaev does not subscribe to this prognosis, however. "If Russia tries to defend its interests in an imperial way, that is what will happen. Russia’s imperial policy has no future today. But if Russia tries to solve its problems by relying on the laws of the free market, in partnership with Chechnya, it will be able not only to defend, but even to strengthen its position in the Caucasus. Here, the interests of Chechnya and Russia coincide," Nukhaev told Prism.



1. Monitor, November 4, 1997

2. Moskovskie novosti, No. 37, September 14-21, 1997

Translated by Mark Eckert

Igor Rotar is an analyst for the Jamestown Foundation.


Prism is a publication of the Jamestown Foundation. It is edited by Elizabeth Teague and Stephen Foye.

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