A recent conference on the status of the Caspian Sea area highlighted the ongoing lack of development due to corruption and a lack of any stable structure determining who has development rights over the area.
Prior to the dissolution of the Soviet Union, control of the Caspian Sea was divided between Iran and the USSR. Currently five nations — Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan — claim rights over the sea, though so far the five nations have been unable to come to an agreement over the sharing of those rights.
That has left a lot of confusion that has deterred investment in the region. As U.S. envoy Steven Mann told the conference, “Successful development of the Caspian basin is not something we can consider inevitable.” That is true especially when the problem with corruption in the former Soviet republics is taken into account.
So what should be one of the wealthiest regions of the world, thanks to enormous untapped oil reserves, is nowhere near its potential due to a lack of a predictable legal structure.
Source:
Corruption ‘deters Caspian investors’. The BBC, February 26, 2002.