Economic Self-Determination: Dr. Tro Kortian

Monday, 19 September 2016
Introduction: Mr. Noric Dilanchian

I’ve been asked to moderate this discussion because I’m a lawyer, and the world self-determination comes from law. Yet as a lawyer I know that after 30 years, disputes - particularly civil legal disputes - are not resolved by law alone. Legal disputes are in fact resolved through strategy, the availability of resources - economic in the main - psychology even is important in legal disputes - when you attack, don’t attack, or delay. And finally, ethics is very important. Because if you don’t apply ethics, how are you ever going to achieve a peace? You win by applying law, economics, culture, psychology, and ethics.

Yesterday is not today, historically speaking, and today is actually not tomorrow. What I mean by that is that for individuals, groups, people - self-determination, becoming yourself, depends on many things. It depends on what your vision is of tomorrow, where you came from is relevant to that, but what’s going to happen tomorrow, and what’s available tomorrow, is important to envision. When I came to this talk and I looked for images of Artsakh, I found very little. I found even an absence of geographical images. People can’t care about things of which they have no image.

As in litigation, it’s not just about law. It’s about creating a full image. So yesterday’s not today and today’s not tomorrow.

Our focus is still on self-determination, but when people self-determine is a function again of a lot of planets being in alignment. We’re living in a period of time where we can expect the alignments to change dramatically. We’ve got escalating globalisation, we’ve got escalating diasporas, the next 50 years will see more diasporas than we’ve ever seen.

New challenges emerge. Global warming, how will it effect things? We’re talking about parts of the world that are going to be depopulated. Digital media is changing the meaning of self. I get to establish dialogue with on a daily basis more people in Armenia than in Sydney; we get to choose our identity through digital media.

There will be cultures that will die in the next 50 years, there will be languages that will die. In the foreseeable decades ahead, self-determination is going to play out amongst all of these factors. So law can only ever be just part of the full picture of self-determination.

Economic Self Determination

Dr. Tro Kortian

"All people have the right to self-determination. By virtue of this right, they freely determine their political status and freely pursue their economic, social and cultural development" - Article 1, 1966 UN International Covenant on Civil and Political Rights)

My brief was to explore the relationship between economic self determination and recognition. I’ll briefly present the accepted definition of a sovereign state, and discuss the types of states that exist; making reference to de facto and unrecognised states. I’ll then look at the key priorities of de facto states and what their governments seek and attempt to do. I'll then try to define what economic self determination; a precise definition is surprisingly absent from the literature. And then I will focus on the key issues that I see for self-determination; the relationship that exists between the negative economic consequences of not having international recognition, and then look at how economic self determination, economic empowerment and autonomy itself can be viewed as an alternative channel by which certain unrecognised states can achieve some degree of external legitimacy.

I’ll talk about some legitimation strategies that have been pursued by de facto states, and then talk about specifically what steps could be undertaken in respects to utilising economic self determination in securing some degree of international legitimacy.

Basic typology of a state:

  • Sovereign States; fully recognised
  • Weak/Fragile States; recognised, but in a powerless condition
  • Contested/Unrecognised/De Facto States: unrecognised by the international community

There are a number of criteria that need to be present in order to be considered a state; this was defined at the Montevideo convention on the rights and duties of states in 1933. Montevideo, the capital of Uruguay - the first to recognise the Armenian genocide - and hopefully the first to recognised the independence of Artsakh.

There is also a relatively well accepted definition of a de facto state; a state with all of the attributes of a typical state - a permanent population, defined territory, well established political leadership, the capability of entering into relations with other states - but obvious the attributes of non-recognition prevent full sovereignty.
Obviously, for a de facto state, it is a very important issue as to how international recognition is secured. Typical ‘recognised’ de facto states include Karabakh, Somaliland, Transnistria, Northern Cyprus; others, including Taiwan, Kosovo and Iraqi Kurdistan enjoy a greater degree of autonomy that distinguished them from the other typical de facto states.

What is the main priority of these states? Essentially, secure protection and maintenance of the existence of the de facto state as is, and also take active measures to secure what it does not have - widespread international recognition of its sovereignty and right to independent statehood.

Legitimation is a key strategic objective of such de facto states; a key component that would define what is de facto state policy - and obviously this policy arises due to a conflict of principles; between self-determination (political, economic and cultural) and the principle of territorial integrity and the inviolability of borders. Obviously it is for this reason that the international community is reluctant to recognise certain de facto entities.

Note here, that in the definition of self-determination as provided by the UN (quoted above)  ‘economic self-determination’ is explicitly recognised. I will be briefly exploring the interlinkages between the exercise of such economic self determination and international recognition.

Economic self determination is actually not very well defined in the literature; one could put here the ‘free pursuit of economic development’. Economic development itself is a multifaceted concept that entails economic growth but it isn’t just only economic growth - so basically, one should recognise that it entails not only the fulfilment of basic needs such as food, shelter, environment, access to very important basic services such as healthcare, education, equitable distribution of wealth and opportunities as well as the potential and the ability to increase human development and a people’s relation’s capabilities. It really encompasses a range of rights, features that form within the economic domain that would imply some type of sovereignty over the wealth, natural resources, and the manner of which it undertakes economic activities.

When you do have a lack of international recognition, there is going to be some very serious economic consequences that will undermine economic development and long run economic viability, it will impede economic self-determination. However, there is also the relationship where the exercise of economic self-determination actually can contribute to the achievement of international recognition - or if not international recognition - and enhance the overall economic legitimacy of that de facto state.

The key negative consequences of the lack of international recognition:

  • Destabilising impact on economic structures
  • Undermining the economic stability and long run economic viability of the state
  • The presence of elevated levels of uncertainty
  • Country risks, political risks, legal risks; which all have a detrimental impact on the incentives of foreign firms and investors to engage in any way with that de facto state
  • Threats and retaliatory acts that could be undertaken by antagonistic (parent) states would also impede any reasonable levels of trade and investment.

Unfortunately a lot of these states because of their lack of international recognition, due to these impediments placed on their economic development, do see the emergence of greater criminality and corruption permeating the economic and political structures, and the emergence of a very inefficient and large informal shadow (or black) market. And one should also point out the unhealthy dependency on an external patron state, as well as an unhealthy economic dependency on diaspora populations.

There are very large negative economic consequences of lack of international recognition. The other point that needs to be mentioned is that in such states there are very excessive amounts of expenditure on the military - which then hampers and does not provide funds for other elements that would be important for development of that particular country’s economy. Emigration, depopulation, ‘brain drain’, are also phenomena that should be recognised. All of these factors impede economic self-determination.

The other dimension I want to address relates to the alternative strategies regarding what type of legitimation strategies these de facto states have pursued - especially post Kosovo.

One set of strategies include the continuance of the pursuit of unilateral independence. The second main type is the abandonment of that pursuit of unilateral independence and pursuing alternative paths.

In respect to the first path, there is a partitioning of two strategies that would focus on securing the support of greater powers (which spurs recognition). The other is the policy initiated in the late 1990s when a number of de facto states realise that if they were to embark on a process of democratisation, enhancing the institutions, engage in state-building, engage in measures to enhance the entrenchment of democratic principles, then you could ‘earn’ your sovereignty by demonstrating you are an effective entity.
The other two;

  • Seek recognition and independence as part of some type of negotiated settlement process.
  • Sets of measures which seek to improve the status-quo of the de facto state through greater international engagement - but one that does not have international recognition as an immediate short-term goal. Long term international recognition is not abandoned, but efforts are focused on securing greater international engagement.
Economic self-determination is an important element in the strategy of earned sovereignty and democratisation. Economic self-determination is going to be critical for establishing these particular features of a state that would possibly allow it to be recognised.

This last point relates to the strategy which underscores the importance of self-determination in terms of facilitating and providing alternative paths to legitimacy. Sovereignty, statehood and legitimacy should not be viewed in binary terms - which is possibly too simplistic - one should have a more nuance approach; that there might be differing levels of legitimacy that may be secured.

It is not that you are either a total pariah or have secured widespread international recognition; there may be somewhere in-between. This is what this final strategy focuses on, and this is where the economic dimension of self-determination play an important role. This shift towards short and medium term goal of attracting investment and economic cooperation, thus strengthening the status-quo position of the state by seeking greater international engagement and thereby enhancing that de facto state’s external legitimacy.

Globalisation and international financial integration is going to be an important element facilitating the implementation of this strategy. Such a strategy will hinge on the existence of external systems; either form the patron sovereign state, other powerful external backers, or from non-state actors - particularly diasporas.