FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 26, 2001

• 0907

[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, let's get started. We have a quorum for the purpose of hearing witnesses, so I'd like to do that.

I want to remind you what we're doing. Last year we started our study on the south Caucasus and central Asia, and the steering committee and yourselves agreed that we should complete that study, although the election has intervened. Canada really has very limited relations with those states, and I think this will be a helpful thing to do to bring attention to those issues and have the government give us a report in the House that will address them.

There's obviously a lot of oil in the Caspian Sea, but the problems the countries have are phenomenal, as you know. We saw those firsthand when we were there.

As far as the work program is concerned, we would like to get the report out before we rise in June. I appreciate that many of the members here were not on that trip or didn't go, so the people who are new to the committee don't have the same personal interest in the report as the others. I would suggest that those who were directly engaged in the trips and working on it will be the ones who spend most time on the report. Other members have a lot of other pressing obligations. So we'll try to organize it that way.

We are hearing from the department officials this morning, who will bring us up to speed as to what has changed since we were last there. We could also hear from CIDA about their activities in the area, or given our very heavy schedule between now and June, something like 14 things to do and only 11 working days in which to do them—about the water bill, which will be coming in, and the other matters that we discussed the other day in committee—I would recommend with your permission that we suggest to CIDA that they send us a written submission that our researchers then can use for the purpose of preparing the report. Would that be all right?

Some hon. members: Agreed.

The Chair: Thank you very much, colleagues.

I'd like to welcome Mr. Halpin, who is the director general for the central, east, and south Europe bureau; Ann Collins, who's with him; and Wendy Gilmour. I think we've had all of you before the committee previously, so thank you very much for coming again.

Mr. Halpin, are you going to lead off? Tell us why, as a result of our trip, democracy and peace now reign in the Caucasus, which they did not before.

• 0910

Mr. Ron Halpin (Director General, Central, East and South Europe Bureau, Department of Foreign Affairs and International Trade): I'd love to be able to tell you that, Mr. Chairman.

The Chair: Whether you tell us that or not, we believe it.

Mr. Ron Halpin: That's fine.

[Translation]

Mr. Chairman, Members of the Committee, it is my pleasure to address this committee as it again takes up the question of Canadian interests and opportunities in Central Asia and the Caucasus. The committee's continued interest is very encouraging.

As you know, Central Asia and the Caucasus is a region full of contradictions, with both tremendous potential and many serious challenges. It is a region full of opportunities for Canada, but also one in which we must pay careful attention to the risks.

Certain members of your committee had the opportunity to visit the three Caucasus, and four of the Central Asian states last year. I know that they have shared their impressions with you. My intention is not to repeat information you already will have heard, but rather provide a brief overview of recent developments and current Canadian activities. I would then be pleased to take your questions.

Recent years have been difficult for the eight countries that constitute Central Asia and the Caucasus. Their membership in the former Soviet Union provided a legacy of four decades of common history, along with a shared economic and political system. Yet these similarities are juxtaposed on many cultural, linguistic and physical differences: landlocked and mountainous Kyrgyz Republic shares many of the same challenges as the gas rich desert of Turkmenistan; and conflict ridden Georgia still manages to co-operate with mutually antagonistic Azerbaijan and Armenia.

[English]

This is not a part of the world in which Canada has been extensively engaged. Since the collapse of the Soviet Union, Canada's presence has been changing and evolving, influenced initially by our commercial interest and shored up by our commitment to global development and human security.

The vast mineral riches of the Tien Shan mountains and the enormous hydrocarbon bounty of the Caspian Sea region have been a magnet for the worldwide mining and petroleum community. Canadian companies are well represented in this group. They pursued opportunities that have yielded significant benefits, both to the people of the region and to Canada.

[Translation]

Canadian government activities continue to be limited by our modest representation in this region, and the wide scope of programmes and interests we must cover. We have also been constrained by the pace of reform, both political and economic. It is perhaps more appropriate to look at these eight countries from a developmental, rather than transitional point of view. We cannot expect them to replicate the relatively speedy and successful transformation of Poland or Hungary. Rather, the countries of this region face a long, uphill road in establishing democratic traditions, the rule of law, and an open and transparent market economy.

[English]

Let me touch first upon the three Caucasus states: Georgia, Azerbaijan, and Armenia. Members of your committee have had the opportunity to visit each of these countries, along with Turkey, and to gain a firsthand view of their rugged beauty, as well as their complex mix of competing ethnic and political loyalties.

Little has changed in the year since the committee's visit. There are still some small signs of hope. The protracted conflict between Armenia and Azerbaijan over the ethnic Armenian enclave of Nagorno-Karabakh may be reaching its final stage. Over the past year, the presidents of the two countries have been meeting regularly. The first formal face-to-face talks in April, in Key West, Florida, resulted in agreement on a broad outline of a settlement. But what is most significant is the fact that the various international sponsors of the peace process, primarily the OSCE Minsk Group of the United States, France, and Russia, are cooperating to an unprecedented degree.

• 0915

Peace is unlikely tomorrow—sorry, Mr. Chairman—but both the Azerbaijani and Armenian leadership seem to realize that meaningful development requires that the situation be resolved and the borders normalized. Progress on Nagorno-Karabakh was recognized by the Council of Europe, which admitted both Azerbaijan and Armenia as members in January. The council is committed to helping both countries reach European standards of good governance.

The situation in Georgia remains static. Continuing difficulties between the central government and the breakaway regions of Abkhazia and South Ossetia as well as the autonomous region of Ajaria have been compounded by the imposition of a Russian visa regime. While Russia declared that it was part of an effort to contain the conflict in neighbouring Chechnya, residents of both South Ossetia and Abkhazia were excluded from the visa requirement. This prompted the majority leader of Georgia's parliament to accuse Russia of trying to annex these regions or, at the very least, to recognize them as outside the territory of Georgia.

[Translation]

Economically, the need for greater regional and internal stability is equaled only by the need to combat endemic corruption. Some steps are being taken, particularly in Georgia and Armenia. However, the problem remains serious, and is compounded by other economic challenges. Armenia continues to be isolated by an economic blockade from both Turkey and Azerbaijan, and has experienced enormous outward migration relative to its population.

The Armenian government has made some progress on its reform agenda, and is well along in the WTO accession process. Sadly, mutual recrimination over the tragic events of 1915 remain a major roadblock for Turkish-Armenian reconciliation and regional economic development.

The significant rise in world oil prices has helped Azerbaijan, however the government continues to delay vital economic reforms. Georgia is already a WTO member, and stands to benefit from the construction of the proposed oil pipeline from Azerbaijan to Turkey. Notably in late March, Azerbaijan concluded a sale and purchase agreement with Turkey to supply almost 83 billion cubic metres of gas over a 15-year period beginning in 2004. This is good news to those who hope to participate in the Baku-Ceyhan pipeline, including Canadian companies.

In our presentation to you last spring, we outlined the potential for Canadian commercial interests in the energy sector. We also cautioned that without progress in governance and democratic structures, the opportunities presented would bring benefit only to a few, with the result of continued social instability and potential conflict. Progress in these areas continues to be slow.

Elections in Azerbaijan in the autumn demonstrated the gap between international expectations and local practices. As a result, we must ensure that Canada's efforts and engagement in the region is broader than simply identifying and exploiting commercial opportunities. We must also ensure the promotion of Canadian values, and look for modest ways in which to assist and influence these countries in pursuing the path of democratic and economic reform.

[English]

This is also the case in the five central Asian states. While less a victim of historic conflicts and uncertain borders, the central Asian states' history under Stalinism was absolutely catastrophic. In more recent decades central Asia suffered the consequences of a series of man-made ecological disasters. Years of nuclear testing in Semipalatinsk, the desertification of the Aral Sea, and efforts to create a Soviet breadbasket in the north have left a permanent legacy.

But the Soviet experience was not uniformly negative. The Cosmodrome in Kazakhstan still testifies to their technical prowess, and some Soviet-era projects, such as the exploration of oil and gas reserves in the Caspian basin, promise to bring expanded benefits to the region.

Mr. Stan Keyes (Hamilton West, Lib.): Mr. Chairman, I have a point of order.

• 0920

Mr. Halpin, I apologize. I don't mean to be rude in interrupting your presentation.

Mr. Chairman, I'm not sure how many members of the current committee were on the past committee, which has already prepared a report. It is about to be presented. I'm very interested in Mr. Halpin's presentation. It's going to go on for 17 pages, and, naturally, there is some good information in this report. But from my perspective, and probably that of many on the committee today, having not had the benefit of travel to these areas and having not seen the recommendations that are in the current report, I'm wondering if it would help the committee at all to do a little bit of a redirect and maybe ask our witnesses to speak more specifically to the current report that's in the committee's hands. Is Mr. Halpin familiar with this report and its recommendations?

The Chair: That's helpful, but the problem is this, Mr. Keyes. This is a panel to bring us up to date on what changes have taken place since we started work on this issue. We don't have a current report. The report is yet to be drafted. This panel today is the last panel we will have prior to the report being drafted. This is an opportunity for us to be brought up to date. That's why I think it's important for us to hear from Mr. Halpin.

Now, the committee members may have some questions of them, and I hope they do. That's the last thing.

Mr. Halpin, bearing that in mind, rather than reading your complete presentation, you might want to take us more quickly through the ideas that are in it. Then we can move more quickly to questions. Are you going to be the only one presenting?

Mr. Ron Halpin: Yes.

The Chair: Mr. Halpin is the only witness who will actually be speaking on this issue. The other two witnesses are there to answer questions. In that case let's take the time to go through all the issues. It is very helpful for us to refresh our minds.

Now that we've interrupted you once, let me just keep you there. I want to do two things. There's a cocktail party or something going on behind you that I'd like to calm down if I can. I don't know what it is.

A voice: It's the Boy Scouts.

The Chair: I had better not, or they'll come and burn us down, or something like that. So if anybody wants to go camping, go into the next room.

The other thing is that we now have a quorum. Some of the members have other committee meetings. You've been good enough to come into the room, and you're not directly engaged in this process. Colleagues, you have before you the second report of the subcommittee on agenda and procedure. Can I get that passed while we have a quorum in the room?

Mr. Stan Keyes: I so move.

The Chair: Many of you were in the room when we debated this report. It's just a matter of setting our agenda between now and the end of the term.

[Translation]

Is everything alright, Mr. Rocheleau? You were there.

Mr. Yves Rocheleau (Trois-Rivières, BQ): Was there a representative of the Bloc Québécois at this meeting?

The Chair: Yes. We never do anything without the Bloc Québécois.

[English]

(Motion agreed to)

The Chair: Thank you very much. That's what we needed the quorum for.

Mr. Halpin, sorry to interrupt.

Mr. Ron Halpin: I have two points of clarification. Last spring a comprehensive presentation was provided by the department, which was made by Jim Wright and Ann Collins at that time. That formed the basis for the department's briefing before the trip. We have not seen any report or been made aware of any recommendations at this point. So the purpose is basically to provide an update, mixing it a little bit with some broader strategic interests and concerns we have about the area for the benefit of those members who did not participate in the trip.

I will try to be brief and will deem some of my remarks to have been said.

I should mention that because of the nature and the remoteness of the markets from Europe and Asia, the challenge of unlocking central Asia's vast mineral resources is profound. There has been uncertain progress in privatization and a lack of transparency in the application of the rule of law in dealings with foreign investors, and this has warned off some Canadian business.

• 0925

There have been some success stories. For those members of the committee who visited the Kumtor mine in the Kyrgyz Republic, you were able to see for yourself.

Canada, of course, remains a world leader in the mining and energy sectors. For us, the opportunities there are plentiful. Contacts with the central Asian partners indicate that our investment is much welcomed and highly sought after.

Along with the post-Soviet economies, the central Asian states are still struggling with strongly authoritarian governments, and western concepts of democratic development and rule of law are very slow to take root. The presidential elections in the Kyrgyz Republic in October 2000 were widely criticized by international observers, including Canada. To its credit, however, the Kyrgyz government is continuing to work with the OSCE and other international organizations to address the problems.

With the exception of Tajikistan, the same individuals and groups have remained in power in each of these countries since they gained their independence in 1991. The preservation of clan privilege continues to take precedence over national interests, to the detriment of civil society and good governance. This is a fact of life that we all have to take into account in all and any programs that we conduct there.

If I might, I would speak for a couple of minutes on continuing themes.

[Translation]

If there is a common theme for the region, it is that in each country, potential far outweighs performance. All of the common problems, all of the threats...

The Chair: That was very well said.

Mr. Ron Halpin: This is true not only for Central Asia, but for the Caucasus as well.

The Chair: It could be said of a number of situations, wouldn't you agree?

Mr. Ron Halpin: All of the commons problems and threats to stability that were identified last year remain current: environmental degradation, human rights violations, ethnic tensions, corruption at all levels of government and disparities in wealth and delivery of services. Drug trafficking, terrorism and trafficking in people are receiving ever more western attention. Many of the submissions and presentations made to the committee last year dealt with these issues in considerable detail, so I will not dwell on them now, other than to say that they remain of significant concern, and present ever increasing demands on our resources.

Central Asia and the Caucasus' external relationships are also of increasing interest and concern. Recent economic instability in Turkey and the continuing threat posed by Islamic fundamentalism, particularly from Afghanistan, bode ill. Uzbekistan and the Kyrgyz Republic clashed in the Fergana Valley last summer following incursions from fundamentalists groups trained and equipped in Afghanistan and sheltering in Tajikistan. Unfortunately, in some cases the States have responded by condoning religious intolerance and persecution. This, combined with the lack of democratic opportunity, simply encourages extremism.

[English]

It's Russia, however, that commands the most attention throughout the region. Over the first fifteen months of President Putin's administration, we've seen a considerable evolution in Russian foreign policy, particularly with regard to the countries of the Commonwealth of Independent States.

The CIS was created in part to address the loss of empire, and it was initially viewed by some of the central Asian and Caucasus states as Moscow's attempt to continue to control their activities. Other leaders welcomed the CIS, having initially opposed the breakup of the Soviet Union. Still others hoped the organization would serve to consolidate and defend the interests of smaller states vis-à-vis the big brother, Russia. It proved to be ineffective in both regards.

President Putin now seems to be paying more attention to the promotion and protection of Russian economic interests. Furthermore, he is pursuing these interests bilaterally, rather than using the more traditional but unwieldy multilateral mechanisms. It's evident in the role Russia is playing in the resolution of the Nagorno-Karabakh dispute, and it has led to a more constructive relationship between Russia and Azerbaijan. President Putin himself has travelled frequently in the region throughout the past year, in stark contrast to his predecessor.

After some delay, Russia has gradually begun to meet some of its OSCE commitments on troop withdrawals from Georgia. This is an encouraging development, but it is unlikely that all the OSCE Istanbul deadlines will be met.

• 0930

However, the Russian visa regime in Georgia remains a cause for concern, while the rest of the Caspian Sea littoral states remain nervous about Russian intentions with regard to boundary delimitation and resource exploitation.

Pipeline diplomacy still retains the last vestiges of great game politics, although the principles of commercial viability seem to be keeping the upper hand. We should keep in mind that western investors are often at a disadvantage in competition with Russian or other regional commercial interests, as they're not tied to the same standards of corporate governance and transparency.

The other proximate interest in the region remains Turkey. In an ideal scenario, Turkey's historical and linguistic links to many of these countries should provide a key model of secular development in an Islamic region as well as a market for Caspian oil and gas and suppliers of modern goods and services. However, for the time being, Turkey's own developmental needs and recent severe financial problems are inhibiting its ability to play a greater modernizing role.

It's of interest that Turkey is looking to coordinate its activities in the region with those of other western nations. The newly created Turkish international development agency, founded in 1992, has already visited Canada to explore possible avenues of cooperation. And CIDA in fact is in Turkey this week, in part meeting with them.

[Translation]

The visits by members of your committee last year represented the first serious high-level political attention to the region from Canada. Your interest was noticed and warmly welcomed, and has opened doors for other Canadians. The reception from the host governments was unprecedented - and is a clear indication of the degree to which these countries wish to engage with Canada. It is also clear that your study, and last year's visits, have raised expectations which we must be careful to manage within our existing resources. That is very important.

As stated at the outset, Canadian engagement in the region has been initially influenced by commercial interests, primarily in the mining and energy sectors. It is hardly surprising that Cameco Gold of Saskatoon is the largest single Canadian investor in the former Soviet Union, and the largest investor in the Kyrgyz Republic. Calgary based Hurricane Hydrocarbons has had notable success, despite many obstacles, in Kasakhstan. In the Caucasus, Canadian firms have been active in Georgia and are developing on- and off-shore oil fields, and providing helicopter services to off-shore platforms in the Caspian Sea. In March, the Canadian Embassy organized and led a successful business development mission to Uzbekistan.

As you know from the presentations made to the committee last year, the region has proved a difficult experience for many Canadian companies. We noted in our previous presentation that Canadian diplomatic support is an essential formula for success in emerging economies. It is also important to note the importance of a strong and active government to government dialogue. While government rarely plays a direct role in commercial affairs in Canada, it almost always does in Central Asia and the Caucasus. High level visits and contacts are deemed essential in closing deals and receiving all-important official sanction.

[English]

Canadian interests are not wholly commercial, however, and we remain actively engaged on a range of issues through international organizations such as the OSCE. This multilateral engagement allows us a voice and influence far greater than what our resources would normally command.

Over the past year Canada has provided election observers to OSCE missions in Azerbaijan and to the Kyrgyz Republic and participated in a number of OSCE-led events including a very successful conference on international crime, which took place in Tashkent in the autumn.

Canadians are also working with the UN mission in Abkhazia. We're an active contributor to NATO's Partnership for Peace, which is engaged in efforts to build regional stability.

Our department, DFAIT, also works very closely with CIDA to assist in the development of Canada's growing technical assistance program. As the countries of central Europe graduate from our technical assistance programs, opportunities may arise for Canada to become more engaged in central Asia and in the Caucasus.

• 0935

Efforts to build a civil society, to improve governance, and to address human rights concerns could take advantage of existing Canadian expertise and build partnerships of long-term benefit to Canada and the region. We're also very interested in developing and strengthening partnerships between the development community and commercial interests.

I understand that there is a possibility that you will hear from CIDA directly in coming weeks, so I will limit my remarks on that field.

To conclude, last year we informed the committee that Canada had maintained an interest in central Asia and the Caucasus but that our engagement was constrained by the distance, the remoteness, and the absolute reality of resource limitations. It's still the case.

[Translation]

Yet the response to your study in Canada, as well as the tremendous reception received by your Members during their visits to the region, has been illuminating. It has demonstrated a growing Canadian interest in Central Asia and the Caucasus as well as a reciprocal interest from the region in Canada and things Canadian. The committee's decision to resume this study therefore is welcome, and we look forward to your findings.

[English]

I welcome your questions at this point, and I thank you very much for your attention throughout these remarks.

The Chair: Thanks very much. Thank you, Mr. Halpin; that's a very helpful review of pretty well all the issues that we've got to deal with in the report. We'll try to pin you down on a couple of specifics as well.

Let me just ask two very quick questions arising out of your paper. I've got some others, but then I'll turn to our colleagues.

On page 11 you say that fundamentalism remains Muslim fundamentalism in the region, Islamic fundamentalism, particularly from Afghanistan. We were told that a great deal of the activities in some parts of the north Caucasus were financed, in fact, from Saudi Arabia rather than Afghanistan. Do you know anything about that? Does that sound crazy to you?

Mr. Ron Halpin: I don't have any particular information on any support from Saudi Arabia. I don't know that...no.

The Chair: It was the security expert from the department who suggested that. Anyway, we can come back to that. I'm not suggesting that's principal. It's not core to the issue, but just a question of curiosity on my part.

The other one was when you mentioned the role of the OSCE in business missions.... There was a crime conference, various issues, respecting and monitoring of the OSCE in the region.... Do you know if the OSCE Parliamentary Assembly is engaged in any of that? Do they get them engaged, or is this just the governmental arm of the OSCE that does that?

Mr. Ron Halpin: Mr. Chairman, you have a long history of engagement with the OSCE Parliamentary Assembly, and you know it's—

The Chair: I'm trying to find out what you guys are doing.

Mr. Ron Halpin: —very actively engaged. I'm not up to date on exactly what parliamentary activities have taken place since Istanbul, but certainly we are seeing that the OSCE retains a very active attention and focus on central Asia in particular. We're increasingly seeing interest on the part of the Council of Europe in terms of both the Caucasus and central Asia. The pace is very, very active.

The Chair: I just wondered, for example, to take something like the crime issue, but the security issues as well.... I know when the OSCE missions go, but if they were to engage the people that came from those countries to the Parliamentary Assembly.... We discuss those things at the Parliamentary Assembly. If you got the local legislators to come and sit in, that's one of the reasons of getting people drawn into the discussions, engage them...illicit drugs, crime, and corruption in their own countries. If they have to sit around the table and look at other OSCE parliamentarians and say yes, this is a problem for us, it's one way of dealing with it.

Some of our colleagues here were engaged in forming the FIPA, the Interparliamentary Forum of the Americas, a while ago. This will do the same sort of thing. We sit down with our own colleagues and discuss these issues. It's a way of engaging civil society at the political level in a solution to their own problems. I just wondered to what extent our government is pressing the use of what I think is an important facilitator in that dimension.

• 0940

Mr. Ron Halpin: I thank you for that question, because this goes to the heart, in a sense, of what we can do within the realities of what's available to us. We don't have the capacity, as I've mentioned, because of the remoteness, distance, and resource constraints to be everywhere and to engage in a lot of the programs.

So basically a lot of what we are doing is reaching out to the capacities that Canada does have, whether this be in terms of Parliament.... And I agree that when we can engage their legislators in some of these issues, that helps. We are using many of the NGOs that are active in central Asia as well to spread the good word in terms of engaging the civil society and trying to convince a lot of these countries that an act of civil society is not necessarily threatening.

Wendy, do you have something?

Ms. Wendy Gilmour (Deputy Director, Belarus, Caucasus, Central Asia, Moldova, Ukraine, Department of Foreign Affairs and International Trade): Just to answer your question specifically, for instance, at the OSCE seminar in Tashkent last fall, which was on international crime, trafficking in people, and drugs, there were parliamentarians there. I understand that the OSCE secretariat from the Parliamentary Assembly was present, and there were parliamentarians specifically targeted from the region.

I know that when ODIHR, which you're very familiar with—the Office for Democratic Institutions and Human Rights—goes out to the region, they make a particular point of engaging at the parliamentary level to try to get legislators involved. There's obviously more that could be done, but, as Ron said, it is simply a question of resources.

The Chair: That's very helpful, because as you know, we participate in the Parliamentary Assembly, and it will have its meeting in Paris this year. Some of our members are interested in going and being active. One of our problems in Canada is that we often don't know exactly what they're doing over there. The secretary general is good at informing us, but because we're so far away it's difficult for us to keep in regular contact with them.

There are some of our members, now that we've done this study, who may want to be engaged in that more. The department might even think of that because I've met often with your ambassador in Vienna and things like that. But there will now be people on this committee who have been engaged in doing this study who will be going to the OSCE Parliamentary Assembly. They're a resource, if people think about it at the time to say, well, let's engage them. That's all.

Mr. Ron Halpin: If I may offer, before the delegation does go to Paris, we'd be very happy to provide an informal briefing and to both update and outline our concerns and ask for help.

The Chair: We make a practice of that. Our clerk always organizes a briefing before we attend the assembly, and always somebody from the department comes. I'll try to remember to ask our clerk to ensure that we maybe get you to come, Mr. Halpin, because you're key to that. Thank you for making that offer.

Maybe Wendy could come too, because she seems to know more about what they're doing over there than I do. That would be helpful.

Ms. Ann Collins (Director, Eastern Europe Division, Department of Foreign Affairs and International Affairs): I guess also in particular, Mr. Chairman, when issues either directly relating to that part of the world or that can affect that part of the world are on the agenda, then we would very much welcome the opportunity to meet with you prior to those meetings.

For example, we've briefed on numerous occasions those members who attend the Parliamentary Assembly of the Council of Europe because there have been some specific agenda items dealing with the former Soviet Union.

The Chair: Thanks.

Sorry, colleagues, I didn't mean to get into that much of a.... I wasn't intending to go down that road quite as far as we did, but I think it's helpful.

[Translation]

Any questions, Mr. Rocheleau?

Mr. Yves Rocheleau: Thank you, Mr. Chairman.

Thank you, Mr. Halpin, for your presentation. I was one of the members of the group that visited Central Asia last year and your presentation brought back some very fond memories. It proved to be a very interesting and highly enlightening trip.

I have two questions for you. The first concerns the Kumtor mine which, as you pointed out, represents a very substantial investment. It was the site of an environmental accident which caused some concern to the local population. We listened to a mining company spokesperson who, rather than provide us with answers, left us with even more questions and doubts. If my memory serves me correctly, the matter is now before the courts. The company seemed to be under a cloud of suspicion. What is the current state of public opinion? That's my first question.

• 0945

You also talked about growing Russian influence in the region. As I recall, Russia did not appear to dominate people's mind. Rather it's role appeared to have been relegated to the past. How does the public and the governments view the actions of President Putin versus those of his predecessor? Do they look favourably upon them? Do they see them as something positive and more as a source of frustration and unrest?

Mr. Ron Halpin: With regard to your second question, could you be a little more specific? Are you interested in the public's reactions to the actions of President Putin?

Mr. Yves Rocheleau: Does the public welcome Russia's role, given its historic predominance, or does it have no choice in the matter?

Mr. Ron Halpin: It's very difficult to answer that question given the shortage of public opinion polls in Central Asia. Economic cooperation with Russia in certain areas is doubtless a reality. Russia is also concerned about Islamic fundamentalism in Afghanistan. Therefore it's a combination of things: security issues, trade channels and so forth.

Most government leaders in Central Asia have been in power for 10 years. They know Russia very well and know what to expect from this nation. They are familiar with the realities of this region.

As for the accident at the Kumtor mine and the ensuing legal battle, I have no information about that at all. Perhaps Wendy Gilmour can tell you more.

[English]

Ms. Wendy Gilmour: You know that this bill took place in 1998. There was some difficulty afterwards, particularly with regard to the testing kits used to measure the levels of cyanide left in local streams and rivers. Kumtor has worked very closely with the government of Kyrgyzstan to make sure the local population understood what had been done.

We have heard nothing but that it was business as usual. The local populations were happy with the testing kits, and some reparations were paid. Some development was provided to that community to address this bill. As far as we know, there have been very good relations since then.

The population of the Kyrgyz Republic still actively supports the Canadian investment, and every indication we have from the government is that it's still looking for more engagement with Canada. So we believe the outcome was positive. I think it was a good example, if not a lesson, of how Canada deals with spills like these—even when they happen in countries as far away as the Kyrgyz Republic.

The Chair: Thank you very much.

Madam Marleau.

Ms. Diane Marleau (Sudbury, Lib.): Thank you.

I had the opportunity of being on the central Asian portion of this trip, and I wanted an update on the different countries we visited. The Kyrgyz Republic was by far the part of central Asia that had made the most progress. It had done the currency conversion, and it had really met a lot of what was demanded. But the population had become poorer rather than richer. I wonder if that continues—if the population is forever poorer. Because of course that influences the long-term outcome.

I also want to know about Kazakhstan, where Hurricane Hydrocarbons had a substantial investment. I would say there had been some serious challenges to its continued presence there, but it was adamant that it was going to be successful. However, I haven't heard anything about where it is now, compared to where it was a year ago when we were there.

• 0950

One of the other countries we were in—I believe it was Uzbekistan, if my memory serves me right—was very far behind in terms of trade liberalization. It was not a good place to be. They had beautiful buildings, they had all the institutions, but I don't think they understood what democracy was all about. It was “Democracy, my way”.

I'm going to ask you for an overview. A year ago, they were at a certain position. Has that evolved? Are there any new investments? One general theme we heard there was that they wanted more Canadian investment. Even the groups working on the ground with the poor told us that the more Canadian business people came, the better their chances were to combat the corruption and mismanagement that were so prevalent in many places.

Mr. Ron Halpin: I think it would be correct to say that not much has changed. Their inward investment is static: only those who were doing well and registering growth are continuing to do so. The very slow rate of reform in Uzbekistan continues, and the poverty in Tajikistan continues. The problems investors are running into in Kazakhstan continue too, and they continue to have a deleterious effect on attracting foreign investment.

If there are specific updates on individual investments, perhaps Wendy or Ann could speak to them, but I don't think much has changed. I'm not aware of any spikes in the trend line in either direction.

Ms. Ann Collins: I'll just make a couple of comments on things we have to watch in the future.

One thing to watch is the extent to which all these pipeline developments affect both the rate of foreign investment in countries such as Kazakhstan, for example, and also how these will eventually affect their internal economies.

With the Kyrgyz Republic, I guess a lot of the concern over the past year has been about a slippage in democratic development. As you correctly said, they had a very good WTO record on economic reform, and their record on democratic development was quite positive too. So we've seen some slippage there.

Uzbekistan still remains an area of interest. In the early nineties it was one of the countries that Canadian companies were particularly interested in, and there is still some interest there. But a number of key things, such as currency conversion and the dialogue with the IMF, are still not advancing.

Wendy may be more specific.

Ms. Wendy Gilmour: The Kyrgyz Republic had presidential elections in the fall, to which Canada sent observers under the OSCE aegis. The elections were deemed not to have been conducted in accordance with international norms. But on the positive side, unlike other countries of the region where the OSCE has been engaged—Belarus, for example—the Kyrgyz government is continuing to work with the OSCE in an effort to address the problems.

The opposition wasn't terribly happy, but it isn't as organized in the Kyrgyz Republic as it is elsewhere. So there hasn't been significant fallout.

Uzbekistan continues to have significant problems in its democratic development and governance. That being said, some small efforts are being made. The Uzbek government is reaching out to the west and very much wants to engage with western countries—which gives us an opportunity to try to influence development there.

A delegation from Uzbekistan visited Canada in February, I believe, to look at the possibility of opening up reciprocal air landing rights with Canada. A business development mission organized by our embassy in Moscow went into Uzbekistan in March with representatives from seven or eight Canadian companies, I believe. They were looking at the possibilities of the large-scale privatization that's going on right now in the telecom industry, in mining and in railroads. That's not to say that the privatization is happening in a completely open and transparent manner, but at least they're making an effort to reach out to the west.

• 0955

Hurricane Hydrocarbons has had continuing difficulties, but on a positive note, they are addressing those difficulties through the courts in Kazakhstan. They have had significant success in getting judgments that shore up the sanctity of their contracts and their own rights as the company representative in the country, which is positive because it's exercising the legal and judicial systems in Kazakhstan.

The Chair: Thank you very much.

Dr. Patry.

[Translation]

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): I'd like to thank this morning's witnesses for whom I have two brief questions.

I was a member of the group that visited the southern Caucasus. You note the following on page 7 of your presentation:

Notably, in late March, Azerbaijan concluded a sale and purchase agreement with Turkey to supply almost 83 billion cubic metres of gas over a 15-year period [...]

It's widely known that the Baku-Ceyhan pipeline will traverse Georgia. What impact will the pipeline have on Georgia? During our trip, we observed that this republic was also experiencing a great many problems.

Now for my second question. You also spoke about the problems in Abkhasia. We didn't visit this region, but we did travel to South Ossetia during our trip.

Chechnya also remains a problem. The Russians tells us that they are somewhat at cross- purposes with Georgia because it appears to be helping the Chechen rebels cross the mountainous areas. Conversely, a Russian visa regime was recently imposed with the full knowledge that the Chechens sided with Abkhasia against Georgia during the war about 10 years ago. I believe that was in 1991. It's a difficult puzzle to decipher. Isn't the real reason why Russia is putting up such a strong fight with Georgia the fear that Muslim fundamentalists will take control in Chechnya, as the chair mentioned earlier on?

[English]

Ms. Wendy Gilmour: The Baku-Ceyhan pipeline is further ahead than it was when you visited there last year. Georgia has now signed the agreement, has agreed to be a formal part of the pipeline, and is making the land available. So that's very positive.

The commercial viability of this pipeline is always still in question, because of course it will take a very difficult route through a tortuous geographic area. The engineering difficulties in actually getting it built are quite large.

That being said, what is helping the process along is that there is now agreement in place between Azerbaijan and Turkey, as you mentioned, for Turkey to buy Azeri gas, which gives a guaranteed flow through the pipeline that should make it more commercially viable. If it's built, it will be very positive for Georgia. They will get transit rights for the gas that passes their territory. They will be required to ensure that its security remains intact, which will probably be very costly for them, but all in all, it's probably a very positive thing.

Ms. Ann Collins: On Chechnya, as you know, there has been a border monitoring mission set up by the OSCE to monitor that border. That has been extended, as I understand.

It's not clear what exactly....

[Translation]

What was your question concerning Chechnya?

Mr. Bernard Patry: I would like to have a better understanding of the Chechen problem. What is the real reason for Russia's actions? Does Russia want to hold on to Chechnya merely for territorial reasons, or is it afraid of Muslim fundamentalists allegedly backed by Saudi Arabia? Is this a long-term religious war, or a short-term territorial squabble?

Ms. Ann Collins: Obviously, I can't speak for the Russian government, but Russia has always maintained that this is an anti- terrorist campaign. We, on the other hand, have always argued that their actions, particularly military actions, have been excessive for an anti-terrorist campaign.

• 1000

The Russian are now commencing a so-called rebuilding phase in Chechnya. They have begun to withdraw their military forces and are focusing more on the rebuilding effort. An ongoing concern is people's living conditions, not only in Chechnya proper, but in Ingush, a region located next to Chechnya, the return of displaced persons, the need for humanitarian aid for civilians and also, obviously, human rights in the region.

Mr. Bernard Patry: Regarding Armenia and Azerbaijan, you mentioned that the two presidents met recently in Florida. Could you tell us a little more about that encounter? As you well know, there is a fairly large community of Armenian ex-patriots here in Canada. As you also know, this week marked the anniversary of the Armenian genocide. Acknowledgment of the genocide is one issue on the table. Canada does not accept the word "genocide". What exactly is involved in these negotiations to try and end the conflict in Nagorno-Karabakh?

Mr. Ron Halpin: In early April, President Aliev and President Kotcharian met in Key West, Florida to discuss sponsorship of the Minsk Group. According to media reports, they agreed on the broad outline of a settlement, which represents significant progress for both parties and for the region.

Still according to media reports, Armenia would cede six of the seven regions outside Nagorno-Karabakh to Azerbaijan. The latter would gain in the process a secure corridor to Nakhichevan through Armenia. The borders between Turkey and Azerbaijan would be opened up.

The critical issue in dispute is the final status of the enclave of Nagorno-Karabakh. No solution is yet in sight. It is likely that the present situation will continue for some time yet. It's not really a matter of finding a solution, but rather of accepting the status quo and a rather fragile peace.

It's very difficult for the people of these regions to accept a compromise.

Mr. Bernard Patry: You mentioned seven regions. One region that would not be ceded in Lachin, where the corridor would be located. Is that correct?

Ms. Wendy Gilmour: Correct.

Mr. Bernard Patry: Thank you, Mr. Chairman.

[English]

The Chair: I have maybe just a couple of questions. If there's anybody else, we can move on.

When we were in Istanbul we went to the signing of the agreement for the Baku-Ceyhan pipeline. There was a great deal of talk about that when we were in Georgia and Azerbaijan—where would the route go, through Armenia or Georgia, and all that. What's the status of that pipeline? Is it making progress?

• 1005

Maybe I can tie another question to that. When we had one of our earlier committee hearings about the area, we had an American come—I think he was a professor—and he made it pretty clear that the American interest in the region is very much related to energy and oil. Since the Bush administration has been elected in the United States, and since they seem to have an increased focus on that, are they more active than ever in trying to produce energy from there, or are they active in trying to discourage it so that they can make more money out of some energy somewhere else? Is the present U.S. administration linked to the development of a pipeline, etc.?

Ms. Wendy Gilmour: To deal first with the specific question of the pipeline, you were there during the signing ceremony, when Georgia formally agreed to join Turkey and Azerbaijan. That confirmed the route, which would go from Baku, through Georgia, and then south through Turkey, avoiding Armenia. That is still the planned route. The American government is still very engaged in trying to gain support for this pipeline. It is, at the end of the day, a commercial opportunity, so there has to be the commercial interest in actually seeing it built. The American government will not finance it entirely, so there has to be interest from elsewhere.

As we said, there is this agreement now in place between Azerbaijan and Turkey that would guarantee a flow of gas through the pipeline beginning in a few years for a set period of time, which makes it that much more commercially viable.

What's interesting, in terms of the new American administration—

The Chair: Has the route been confirmed? Is it a firm route?

Ms. Wendy Gilmour: The route has been confirmed from Azerbaijan through Georgia and through Turkey.

The Chair: Okay.

Ms. Wendy Gilmour: I believe, although I'm not entirely sure, there's still some question of the engineering, specifically what piece of territory it will go through in those three countries.

The Chair: Right.

Ms. Wendy Gilmour: But they're looking at different alternatives all of the time. As you know, it's a very difficult region. It is an earthquake-prone region, not to mention the human security, in terms of terrorism and otherwise. So there's a lot still to be decided on that front.

The Chair: The earthquakes are not just underground.

Ms. Wendy Gilmour: Yes, exactly.

In terms of the American administration, the new government of President Bush has confirmed that they still have a special representative, an ambassador for the Caspian Sea region, who is specifically engaged in promoting this pipeline. The Bush government has made a particular point of engagement in the Minsk Group and Armenia and Azerbaijan. That's why the talks were held in Florida. And what was notable about them is not simply the American engagement, but the fact that Russia was there and playing a very constructive role, in cooperation with the United States. Whether that will continue to play out I think depends very much on whether or not there is progress in resolving the conflicts of the region.

The Chair: Thank you.

You mentioned in your paper, Mr. Halpin, the issue of resources. We heard a great deal about that. I don't know whether at this time.... I know from the department's perspective there are two dimensions to the resource issue, as I understand it. First, should we open more consular offices or embassies in that area, and if so, where? And if so, where do you get the resources to do that?

Secondly, there is the CIDA presence in the region, which is quite important in terms of building civil society and investing in court systems, training lawyers, and those issues, which I understand CIDA is becoming more active in—and we'll get their report. But perhaps just on the departmental resources, can you help us...? Because we'll be making recommendations in that respect, and we heard from every single country we were in that they would like a Canadian embassy there. There's no question: everybody we talked to said they would like an embassy there. Now, somebody has to make a resource allocation decision. Are you in a position to help us choose what would be the more appropriate places, if you had to pick two, instead of six?

Mr. Ron Halpin: That's the kind of question I used to get at this committee when I appeared here a few years ago, dealing with the estimates, only then it was where we would close.

The Chair: That's true, yes, exactly.

Ms. Diane Marleau: It has changed somewhat.

• 1010

Mr. Ron Halpin: Even if we had more resources, that wouldn't necessarily mean that we would open a mission there. It would be a question of allocating sort of line-item resources, where you say “open a mission in the Caucusus or central Asia”.

Right now the committee's focus is on this area, and there's no question that there is a trend that international attention and the attention of granting agencies, the question of the strategic energy issues.... They're moving eastward, right throughout Europe, in terms of the energy needs of the west, whether it be Europe or the United States or North America, whatever. The question of the stability of Middle Eastern supplies.... All of this is forcing an examination of the strategic interests that we have in the Caucusus and central Asia.

There are opportunities there, there's no question about it. But when you look at the opportunities, you have to consider that we have different means of dealing with them, and it is not always through the presence of a resident mission that we will do so. They all want us to have missions there. We pay a lot more attention to them now through visits. We encourage visits, not only in terms of our ambassadors and virtually all programs in our embassies that have an interest, but through NGOs and through Parliament. We are working to develop contact and dialogue between their private sector or state sector enterprises and their Canadian counterparts.

You mentioned before the issue of how do parliamentarians engage in terms of OSCE and the other instruments. Well, there's the opportunity for you to invite and receive the members of their legislatures.

I'm not sure, if we had resources—even when I look at the area I have responsibility for—whether in those circumstances we would be looking at any of these countries as the absolute priority for that, partly because it's so difficult to choose among them.

In Baku our interests are almost wholly commercial in terms of relations to the energy sector. We have a very active and interested community in Armenia that likes to visit. We have consular interests there. In terms of Georgia, there's the question of the political goings-on in the region. It's probably the only place right now where we could logistically have an embassy, yet in all probability our interests there are the least.

The Chair: Thank you very much.

Just speaking of visits, I understand that both Azerbaijan's and Kazakhstan's heads of state would like to come to Canada. There's some pressure for them to come. Do you see it as useful if Mr. Nazarbayev were to come to Canada? And if so, does one try to clear up any bilateral problems relating to the area before he comes, or while he's here?

Mr. Ron Halpin: The process of negotiating a visit and having one is often a very good way to clear up a bilateral problem with these countries. We are engaged in terms of a possible visit by both President Nazarbayev and President Aliev. There are Canadian interests at stake, and we're looking for possibilities and possible dates when that might be arranged.

The Chair: Thank you.

Ms. Collins.

Ms. Ann Collins: Perhaps I could just make a comment on the issue of resources. I guess one way to approach it, too, is always the issue of the definition of Canadian interests and how Canadian interests are best served. I think Canadian interests have evolved and are evolving in the region, whereas when we set up our first offices they were primarily commercial. Mr. Wright pointed that out in the earlier presentation last spring.

We continue to have commercial interests. I think there is more interest now in the Caucusus than there was say ten years ago. So that's one thing to take into account. But also the interests are evolving more towards security and human rights issues, so we're very pleased now that there's a CIDA officer in Kazakhstan, for example. Those types of things help. Oftentimes increasing the resources in the offices that we already have is useful.

The Chair: Thank you very much.

Mr. Casey, sir.

• 1015

Mr. Bill Casey (Cumberland—Colchester, PC): Thank you.

Right away, when I was given this responsibility for foreign affairs.... One of those contradictions that you mentioned in your very first paragraph was the Armenian-Turkish question about genocide. I had presentations immediately on both sides, and none of them were very objective. I just wondered if you could help me and give an objective view of how the department reads that situation. Yesterday we almost had a private member's bill to identify the Armenian genocide as a genocide. It didn't happen, but it's a troubling issue and certainly of great concern to everybody who hears anything about it. I wonder if you could just give us an objective overview of what information is available on that.

Mr. Ron Halpin: It's a difficult issue that has a lot of emotion attached to it. There's the government policy that was articulated by Mr. Julian Reed in the House, and that statement's available to you all. I could go through it again. The government policy has not changed.

I think the important point is that, as we've explained in terms of both the opportunities to improve the economic situation in the area and reduce the inter-ethnic conflict, we think they should be getting on with reconciliation. We are seeing positive signs, I think, through pipeline diplomacy and through OSCE activity, that Turkey and Armenia are going to be able, as time goes by, to reconcile their difficulties on this. There was a tragedy, but trying to deal with it, I think, through emotionally charged and legally laden language has taken them back into the past, and they've got to look forward to the future.

Mr. Bill Casey: I'm not asking for a position or an opinion as much as for the basic facts. Can you give just a thumbnail sketch of the facts of what happened between 1915 and 1923?

The Chair: I don't even see a map, as far as I can see.

Mr. Ron Halpin: There are a lot of people who were killed in that period. Some of them were Armenian, and some of them were Turks. There were a lot of other nationalities, and I have read accounts of this. Sometimes the figures are different. Sometimes other things are different. I don't think it's very....

Trying to do an historical analysis of this in current-day Canada challenges the kinds of values that we have here in Canada in terms of dealing with this. It's a very, very difficult issue to try to situate in a policy for the region, where we are talking about wanting to improve the economic situation, to reduce the inter-ethnic squabbles, and to get them to look at the values that would tend to bring them together, such as those they've all embraced in the various human rights declarations and the OSCE.

Mr. Bill Casey: What began this tragedy? What started it?

Ms. Ann Collins: The breakup of the Ottoman Empire.

Mr. Ron Halpin: The breakup of the Ottoman Empire. World War I.

Mr. Bill Casey: Where did the fatalities take place? In Armenia, or Turkey, or both, or...?

Mr. Ron Halpin: It depends on which map you look at, and the date of it. There are a lot of interesting maps, and there still are these days, in terms of challenged borders or regions that overlap in terms of where current borders exist.

Mr. Bill Casey: I'm not getting very far.

Mr. Deepak Obhrai (Calgary East, Canadian Alliance): What's the position?

Ms. Wendy Gilmour: If I may, the reason we're unable to give you an answer is because there is no agreed account of the history. One of the things that we have been trying to do in the official position of the Canadian government is to encourage, for instance, the complete opening of the archives in Turkey to allow academics to be able to have access to all of the material and produce what would be an historically accepted account. The emotions on all sides of the issue run very high. What is indisputable is that a tragedy took place, and many thousands, if not hundreds of thousands, of people were killed. But how you name each one and attribute it to a particular ethnic group gets you into a terrible minefield.

• 1020

Mr. Bill Casey: Is it possible for you to give me both sides of the story without saying which one's right? What does one side say? What does the other side say?

Ms. Wendy Gilmour: I can give you a library, if you wish.

Mr. Bill Casey: Yes, I realize that, but is it possible just to...?

Ms. Wendy Gilmour: First, I would make all of the caveats in terms of our belief in what account is correct. The position of those who lament the Armenian diaspora, who wish that a genocide be recognized in relationship to these events, is that there were—and I don't have the figure—1.5 million ethnic Armenians who perished during the years 1915 to 1923. This was the result of forced marches, direct attacks, executions, and so forth that were the result of an Ottoman plan to expel the Armenian population from what was at the time the Ottoman Empire and afterwards the modern state of Turkey.

The Turkish position is that there were many atrocities committed on all sides during the breakup of the Ottoman Empire. Furthermore, it is impossible at this point to do an accounting of who and what were the actual numbers and who was actually responsible; this is due to a lack of direct knowledge and is because of the people involved. The Turks will point to the fact that there were particular atrocities they laid blame for, that there were war crime trials that took place during and immediately after the period, and that those problems were addressed at that time. In the dissolution of empire the confusion is such that no one can now confirm that certain events actually took place.

Mr. Bill Casey: If the map we have here now was applicable in 1915, was this an effort to drive the Armenians from what's presently known as Turkey into Armenia? Is that the accusation?

Ms. Wendy Gilmour: At the time the border of the Ottoman Empire in this area was very much where Turkey's border is right now. Most of the Canadian-Armenian diaspora came from what was western Armenia, currently part of Turkey. Eastern Armenia had a different group of Armenians, and at the time they were not part of the Ottoman Empire. It was the division or borderland between the two that was the problem. There was an effort on the part of the Turkish government, so descendants of the Armenian diaspora would say, to remove all the ethnic Armenians from what is now Turkey.

Mr. Bill Casey: I agree that there's no sense in going—

Ms. Wendy Gilmour: But it's an historical argument that is terribly emotive.

The Chair: But, Mr. Casey, there's one other dimension to the historical aspect of what was happening. Do not forget that this also took place in the middle of the Russian revolution and that Armenia at that time was integrated into the Union of Soviet Socialist Republics. There was all the Russian revolution, the Red Army, the White Army, and fighting all over as to who was going to take over the area. There's not just the collapse of the Ottoman Empire and the consequences of a whole host of different battles. You have Ataturk trying to establish control over Turkey, Lenin trying to establish control over there, and—

Ms. Wendy Gilmour: And they had the First World War.

The Chair: And the First World War was winding down. So I think that's a context where we would have a lot of trouble.

Like many of you, I have certainly received a great deal of documentation from both sides on this. One of the most troubling things for me—as someone who's very interested in history, if I may just speak personally—is the very great difficulty in getting any handle on the accuracy of the allegations. It's very hard to find a balanced historical account that just describes the facts, as opposed to colouring them with the numbers and who was motivated....

I remember that when we were in Turkey, we were told that while these events were taking place in eastern Turkey, there were many other Armenians living in western Turkey. They even had their Armenian newspapers, and there was no suggestion that they were being persecuted, prosecuted, or in any way interfered with. That is the Turkish answer, saying it wasn't genocide because it wasn't directed against the Armenian people; it was part of the war thing. If you talk to the Armenian people who have spoken to us, they give us another story entirely. So who do you believe and how do you get an objective reading on it? It's difficult for us.

Ms. Wendy Gilmour: I would just finish by saying that this is why we try to concentrate on encouraging people to look forward and on saying that reconciliation now in the region would do a great deal to address whatever wrongs may have been committed in the past.

• 1025

The Chair: Yes, that's true.

It's a timely question, because it does come up in the draft report. It came up while we were in Yerevan, as you can appreciate. It's obviously not something we can try to rule on definitively in our report, but it's certainly of great interest to the Armenian population in this country. We have to be very sensitive and conscious of it.

Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Canadian Alliance): Thank you, sir.

I apologize for coming late. I thought my other colleagues were here, but I guess they're all somehow busy. So my apologies.

I wasn't one of those who went on this trip in the last session, but reading from the reports, perhaps you can enlighten us on the Taliban presence in Afghanistan—where it is, and what its influence on security is for the Caucasus and the surrounding area.

A report on BBC a few days ago said that the 5% area held by the non-Taliban forces is appealing for international assistance. Perhaps you can tell us who's assisting them. What's happening in this area, with reference to security?

Mr. Ron Halpin: I don't have any information on what's going on with the Taliban in Afghanistan.

I think the feared Taliban activity in the regions of central Asia is basically a matter for regional security, in terms of exporting it. Are those regions going to continue as secular clan dynasties in central Asia, or will they succumb to the serenade of Islamic fundamentalism as preached by the Taliban?

There are alleged links between the Taliban and insurgent groups in Uzbekistan and the Kyrgyz Republic. There has been fighting in the Fergana Valley: there was bombing there last summer by the Uzbek air force.

There's no question that this raises tensions in the area, of course. These countries, and Russia as well, are concerned about the activities and influence of the Taliban. But as far as the situation in Afghanistan itself is concerned, I don't have any information.

Wendy, would you like to speak on that?

Ms. Wendy Gilmour: I'm not an expert on Afghanistan, and I can't really address the situation there, but it continues to be a concern for the region—not just because of the activities of the Taliban and their alleged sponsorship of terrorism in the area, but also because of the resulting flows of refugees. There is drought there now, and that exacerbates the region's problems, which are already quite serious.

The organization everyone is concerned about is the IMU, the Islamic Movement of Uzbekistan. It's believed that this is based in Tajikistan, sponsored and equipped in Afghanistan, and that it makes excursions into Uzbekistan itself.

The countries of the region, the five central Asian states, are exhibiting stronger signs of cooperation among them—in an effort, perhaps, to coordinate their activities to counter this type of incursion.

• 1030

Our effort, through the OSCE and directly, is simply to say yes, we realize that there are legitimate security needs that they must address, but that being said, they should make sure that they do so in a spirit of democratic governance and respecting human rights. We would not, for instance, want to see undue repression of religious minorities simply because they are believed to be in some way associated with extremist movements.

Mr. Deepak Obhrai: Economically, I suppose they were socialist countries and dismantled the socialist system and went into a free market. Is that a bigger concern in economic development of the region, or is the security concern of the area the bigger threat, in your view, in the longer term for the region? Which would it be?

Mr. Ron Halpin: They go hand in hand. As the security improves, there will be more foreign investment, foreign governance that will again stimulate and keep the reform process going. As the countries become more concerned with their security situations they take steps that undermine the confidence of foreign investors, and in a sense they divert government attention from the reform agenda into security matters.

Mr. Deepak Obhrai: So what do we tell our Canadian—

Mr. Ron Halpin: It's difficult to say. It's a multifaceted approach that both the governments and those who are interested in the region have to take.

I think the chairman has noted that when you talk about the pipeline in the Caucasus itself, the earthquakes, both above and below the ground, are ones that foreign investors and those local investors also have to be conscious of.

It goes back and forth. We're trying to improve the situation for human rights, civil society, democratic values. We are trying to help them move along in terms of their adherence to the WTO regime, to get on with economic reform, to reduce corruption, all of these things, but it is going to take some time.

Mr. Deepak Obhrai: Yes. So your institution right now has a long way to go.

Mr. Ron Halpin: Yes.

Mr. Deepak Obhrai: Thank you.

The Chair: Mr. O'Brien, Mr. Rocheleau, and that will draw this to a close.

Mr. O'Brien.

Mr. Pat O'Brien (London—Fanshawe, Lib.): Thank you, Mr. Chairman.

It's nice to see you again, Mr. Halpin, after our chance to meet you in central Europe with the minister last fall. It was a very interesting trip.

I just want to pursue Mr. Casey's question on the Armenian-Turkish dispute that we've all had so much correspondence about. First, I guess I'd request if we could get a briefing note, if it goes back to what the government position is. Could you give us a brief verbal snapshot of it right now? Is it essentially—I'll choose my words carefully, Mr. Chairman—to not try to deal with the issue and press people, encourage the people to get on with reconciliation? Is that really it? I'm not sure. This doesn't seem to be going away, at least based on my correspondence. So I wonder if you could give us a snapshot of what the current government position is.

Mr. Ron Halpin: The government position has not changed since the statement by the then parliamentary secretary to the foreign affairs minister in the House of Commons on June 10, 1999. If you wish, it would take me 30 seconds to read it. Mr. Reed said:

...we remember the calamity inflicted on the Armenian people in 1915. This tragedy was committed with the intent to destroy a national group in which hundreds of thousands of Armenians were subject to atrocities, which included massive deportations and massacres.

May the memory of this period contribute to healing wounds as well as to the reconciliation of present-day nations and communities and remind us all of our collective duty to work together toward world peace.

We have interests with all the countries. We're pursuing Canadian interests with all of the countries in this region. It's in Canada's interest as well as in their regional interest and their interest in getting along and reconciling with their neighbours that we move beyond this and look forward.

• 1035

On sponsoring one side or the other in terms of historical assessments, we have no way at this point in judging. We don't see it as a productive way to go. We focus on the reconciliation aspect of moving forward, looking ahead.

Mr. Pat O'Brien: I appreciate that, Mr. Chairman, and in answer to Mr. Casey, I think we had a pretty good overview of the extreme complexity of this in trying to decide exactly what happened.

It seems that the key to this from the Armenian point of view is the word “genocide”. They wanted the recognition of that word. Is that the nub of their argument?

Mr. Ron Halpin: That is the main aspect of their claim, yes.

Mr. Pat O'Brien: Okay, I understand better now. Thank you.

The Chair: You weren't on the trip. As I said, this issue came up, and Jim has just reminded me that there are consequences, juridical and political, that arise out of a recognition of an issue like genocide, and that is really where the nub of the problem lies. Just to refresh the committee members' memory, the Turkish side is concerned that to state that it was a genocide would then open up claims for huge reparations, possible changes of borders, etc.

However, the President of Armenia, Mr. Kocharian, told us in the meeting that we had with him that what the Armenian community seeks is a recognition of the suffering they had, and which they genuinely believe to have been a genocide, but that they do not expect to then take it to the level of wanting rectifications of borders and monetary reparations, etc.

So that's where the two sides are on that. It's very clear that is the key dimension to the problem of both the Turks' hesitation to recognize it and the possible consequences. And that will be addressed in the report.

Mr. Pat O'Brien: I appreciate that, Mr. Chairman. I understood it's more than just semantics. There are an awful lot of ramifications if you endorse the word “genocide”.

The Chair: Yes, exactly. And as I said, we can't solve the problem in the report, but we'll certainly address the issue.

[Translation]

Mr. Rocheleau.

Mr. Yves Rocheleau: On the same subject, Mr. Chairman, the fact that the French government has come out in favour of recognizing...

The Chair: Excuse me, Mr. Rocheleau. It was the French National Assembly, not the French government.

Mr. Yves Rocheleau: I stand corrected, Mr. Chairman.

The Chair: I've discussed this matter at some length with my counterpart at the National Assembly. I simply wanted to clarify that point.

Mr. Yves Rocheleau: Thank you, Mr. Chairman. Might this influence Canada's position? I assume it had a reason for taking this stand and weighed the pros and cons. Will Canada be influenced in any way by the position taken by France, or does each country act independently where this issue is concerned?

Mr. Ron Halpin: I think each country has the right to assess the situation based on the facts available to it and on its own interests in the region.

Mr. Yves Rocheleau: Thank you. I have another question, Mr. Chairman.

The Chair: [Editor's note: inaudible]

Mr. Yves Rocheleau: In your presentation, you alluded to six years of nuclear testing. Judging from what we've been told, there is a great deal of nuclear waste in Kazakstan. The Russian Parliament recently passed legislation to treat nuclear waste. Are the two situations in any way connected and is there any reason to believe that the Russian initiative is tied to the situation in Kazakstan?

Ms. Ann Collins: I don't know if I can answer that question. I don't know whether or not the Russian initiative specifically targets waste in neighbouring countries. We will have to examine it a little closer. I know that opinion on the subject is divided in Russia. It is a controversial initiative. However, in order to answer your question more specifically, we would have to take a closer look at this.

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The Chair: Thank you very much.

[English]

Thank you very much, everyone. Thank you very much for coming. Sorry for the interruptions. Your comments have been very helpful in refreshing our minds about the complexities of these issues. Hopefully we'll do a report that will be helpful to the government in focusing attention on these issues and focusing us on an area that's very important to us but relatively unknown.

Thank you very much for coming, sir, and we look forward to your reaction to our report.

We're adjourned.