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Central, Eastern and South Eastern Europe
Caucasus Initiative
The admission of Armenia, Azerbaijan and Georgia to the Council of Europe at the end of the nineteen nineties and the involvement of the three states in the European Neighbourhood Policy (ENP) put international political cooperation with the Southern Caucasus on a new footing. The aim is to strengthen stability, security and prosperity in the states around the EU.
In this context, the BMZ launched its Caucasus Initiative in 2001. It was intended to foster cooperation between Armenia, Azerbaijan and Georgia, and to support economic, social and political development in the region, thus helping to defuse conflicts. The Initiative, which has since been revised and updated, supports regional measures in the following fields:
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Sustainable economic development: The focuses are on private sector promotion and on developing and reforming the financial sector. Assistance is accorded to projects that help small and medium-sized business to start up and develop so as to achieve sustainable economic development and long-term social stability in the region. The German government advises ministries and associations on how to overcome obstacles to trade and investment and on local economic promotion initiatives. In the financial sector, support is granted to help put in place systems to ensure that savings are safe and to promote microfinance institutions.
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Energy: All three countries of the Southern Caucasus suffer from seasonal fluctuations in power availability. The strong economic growth in recent years has significantly increased the demand for power. German development cooperation thus focuses on enhancing energy efficiency and on generating power from renewable sources. Another priority is the promotion of regional electricity grids.
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Environment: The over-exploitation of natural resources in the Caucasus is destroying the region's unique biodiversity and jeopardising the opportunities of the rural population to generate an income in the long term. The aim of German development cooperation is then to ensure the sustainable management and use of natural resources. The Caucasus initiative is also supporting the establishment of cross-border national parks, along with the partner ministries in the region. These parks firstly protect the unique flora and fauna of the region and also help build trust among the nations of the region.
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Democracy, municipal development and the rule of law: Another goal of the Caucasus Initiative is to put in place modern governmental institutions and ensure a properly functioning legal system and judiciary. This will then provide a framework for the successful transition to market-economy structures. Assistance takes the form of advisory services on legislating, the dispensation of justice and the application of the law, in particular at the level of private law, business law and commercial law. In addition to the dialogue with German colleagues, the focus is on a regional exchange of experience. Other important aspects of Germany's development cooperation include firming up existing rule-of-law structures and developing local democracy. The Federal Republic of Germany is helping Armenia, Azerbaijan and Georgia to decentralise their administrations and promote civil society participation in political decision-making processes. Municipal infrastructure programmes focus on the essential improvements to drinking water supply and sanitation systems.
