Russia comes on strong in Central
Asia By Bruce Pannier
PRAGUE
- Visiting the Tajik capital Dushanbe last month,
Russian President Vladimir Putin surprised his audience
by pledging substantial financial investment in the
Central Asian republic. "The Russian side - both its
state structures and private companies - intends to
invest some [US]$2 billion in the Tajik economy within
the next five years. I do not think any other country
has, in the past 12 or 13 years, ever invested such an
amount of money, or even announced plans to invest such
an amount of money in Tajikistan," Putin said.
He was correct. No single country or
organization has ever promised that sort of investment
in Tajikistan, a country still shattered from a 1992-97
civil war and regarded as the poorest of the
Commonwealth of Independent States (CIS) countries.
Another deal also appeared to clear most of Tajikistan's
$300 million debt to Russia.
Tajikistan was not
the only Central Asian country to receive promises from
Moscow in October. Uzbekistan and, to a lesser extent,
Kyrgyzstan, also have been promised investment by
Russia.
Russia has yet to back up its promises
with cash, which leads some to ask - where is this
largesse coming from? Even before the 1997-98 financial
crisis, Russia was poorly positioned to pursue ambitious
investment projects.
Alex Vatanka, a senior
editor at the London-based publication Russia-CIS
Security Assessment Binder, explains the driving force
behind what he called Russia's October "shopping spree"
in Central Asia: "It probably has to do with the fact
that Russia is now receiving more money from the sale of
oil. Suddenly you've seen the oil price going from $20 a
barrel, which is what the fiscal stance of Russia in
based on - they're going with a $15-20 a barrel price -
and they're [now] getting twice that," Vatanka said.
Oil and natural gas sales now are helping fill
Russia's state coffers and presenting the government
with new possibilities that could not have been
anticipated even a year ago.
Many might not
consider Central Asia the best place to invest part of
this newfound wealth. But John Schoeberlein, the
director of Harvard University's program on the Caucasus
and Central Asia, said for Russian investors and the
Russian government, the region is actually
well-positioned for investment. "Where Russia might try
to expand its economic relations overseas, there aren't
that many markets, for example, where really Russia can
be competitive. It happens that in Central Asia there is
something of a natural market, a natural basis for
economic relations between these countries,"
Schoeberlein said.
Central Asia, like other
areas of the former Soviet Union, is still bound to
Russia in many ways. Schoeberlein pointed out that spare
parts for a number of machines being used across the
territory still come from Russia. Other connections
remain as well.
These past connections, Vatanka
said, do not mean investing in Central Asia is a safe
venture, though it's one for which Russia is perhaps
better suited than others, he added. "When you look at
places like Tajikistan and Kyrgyzstan, it's important to
bear in mind that - if you're willing to risk it - it's
relatively cheap to buy up assets in a place like
Tajikistan or Kyrgyzstan. If you are Russian, you know
the region and you speak the language of the people
you're dealing with. You're taking a risk, but it's
cheap and the returns can be very high. That's the big
distinction between Russian and Western companies
operating in the region - the Russians are willing to
take that risk," Vatanka said.
Oil and gas
revenues may be fueling Russia's new economic interest
in Central Asia, but just a few years ago Central Asia
had largely fallen off Moscow's field of interest.
"There was a period under [Boris] Yeltsin when it seemed
Russia had sort of forgotten its interests in Central
Asia. It was pursuing a much less apparent policy in
relations to the Central Asian countries and seemed to
be allowing them to go their own way to a large extent,"
Schoeberlein noted.
Lena Jonson, a senior
research fellow specializing in Russian foreign and
security policy at the Swedish Institute of
International Affairs and author of the recently
released book Vladimir Putin and Central Asia,
said Russian policy toward Central Asia started to
change when Putin became president. "Since Putin came to
power, it's meant a more active policy with regard to
Central Asia. Then you can see that there is a focus on
the energy resources of these countries and also that
the Central Asian countries are part of the former
Soviet Union infrastructure, which makes them important
in general," Jonson said.
Shopping spree
According to Jonson, Russia made several gains
in the region last month. "It got the rights to continue
using the space-monitoring station, Okno [in
Tajikistan]. [Then] they have this military base, which
gives it a status for the future, and also you have
agreements with the hydroenergy sector and also the
aluminum sector," she said.
In addition to
Putin's own investment promises, Russia's Unified Energy
Systems promised to invest $200 million in Tajikistan's
Sangtuda hydropower station. The Rusel aluminum company,
meanwhile, pledged to invest $560 million into a dam at
the Rogun hydropower plant along with further
investments in Tajikistan's current aluminum plant, one
of the country's major export producers, and said it
would build a new one as well.
Just a few days
after these deals were announced, Yuri Lebedev, the
economic adviser at the Russian Embassy in Uzbekistan
made another announcement. He said the Russian company
Gazprom plans to invest $1 billion to develop gas
condensate fields in the Ustyurt region in western
Uzbekistan and $15 million to extend the life of the
country's Shakhpakhty field. Lukoil plans to invest more
than $995 million for natural gas extraction in the
Bukhara-Khiva region.
Russia's seeming economic
success in Central Asia in October also was accompanied
by political successes. During Putin's visit to
Dushanbe, he and the presidents of Kazakhstan,
Kyrgyzstan, Tajikistan and Uzbekistan signed documents
admitting Russia to the Central Asian Cooperation
Organization (CACO).
Tajik President Imomali
Rakhmonov greeted the organization's new member.
"Everyone [attending the meeting] has agreed that
Russia's full participation in the Central Asian
Cooperation Organization will increase the potential and
the dynamics of our organization," Rakhmonov said.
CACO, through its various stages of evolution
since its 1994 founding, has not proven a very effective
organization, but Jonson of the Swedish Institute of
International Affairs said Russia's entry was still
significant. "It reflects this interest of Russia in
Central Asia and it gives [Russia] a better possibility
to act within the region and to become part of
agreements in the region," she said.
Russia's
military also got a firmer foothold in the region.
Following the events of September 11, 2001, the United
States was given permission by the governments of
Kyrgyzstan, Tajikistan and Uzbekistan to station US-led
coalition troops on their soil for the campaign in
Afghanistan. Many in Russia, particularly in the
military, have been upset by this new foreign presence
in what many regard as Russia's backyard.
Russia
already had troops stationed in Tajikistan, the 201st
Motorized Rifle Division. The Tajik government has
always been glad to have the unit stationed there, but
until Putin's mid-October visit, the unit and its bases
had no legal status in the country. That problem was
quickly resolved. As part of Russia's debt forgiveness
to Tajikistan, Russian assumed control of the Okno space
observatory high in the Tajik mountains, a facility that
has both civilian and military uses.
Besides the
unit in Tajikistan, Russia also commands the Kant air
base in Kyrgyzstan, located some 40 kilometers from a
US-led coalition base used for support operations in
Afghanistan. At the start of October, the commander of
the Fifth Corps of the Russia Air Force, Yevgeny Yurev,
said more warplanes and helicopters will be coming to
Kant base, and that the number of Russian troops will be
increased by as much as four times, to about 1,000
personnel.
While in Tajikistan, Putin noted that
the now legally stationed Russian unit in Tajikistan
would be part of a security network for the region that
included the Kant base. "This base, along with the air
base at Kant, Kyrgyzstan, will be an important part of
the united system of collective security for the
region," the president said.
Kant provides an
excellent example of an improvement in Russian-Tajik
ties. Last year, when the Kant base opened and Putin was
in Kyrgyzstan, Tajikistan refused to give permission for
Russian warplanes of the 201st division to fly the short
trip to Kyrgyzstan for the opening ceremony. Planes had
to fly in from Russia instead.
Investing in
energy The high revenues from Russian oil and gas
exports may not last, but for now Russia appears
determined to maintain its investments in Central Asia's
energy projects for years to come. Harvard program
director Schoeberlein said it is still too early to tell
how much Russia's move into Central Asia will affect the
region. But despite the fact that Russia has yet to
fully deliver on its pledges, he believes Moscow's vow
is genuine.
"I think it's clear that Russia is
seeking a stronger position. How much actual meaning
these steps will have remains to be seen, but there's a
clear commitment on the part of the Putin government to
strengthen its strategic ties with Central Asian
countries and to impose a greater presence even. So
they're working hard on various fronts to assert a new
role for Russia and to make sure that Russia stays there
and that that Russian presence is felt," Schoeberlein
said.
Vatanka, the senior editor, also said
Russia's commitments in Central Asia are real. "This is
not just going to be about rhetoric and CIS-related
treaties being signed when everybody knows it's going to
be words on paper and no more," Vatanka said. "[Russia
is saying:] 'We're going to make it a bit more concrete,
we're actually going to show people that Russian
involvement can result in economic generation.'"
No one doubted Russia would remain a player in
Central Asia, but the Kremlin is now taking full
advantage of unexpected revenues to replant its
influence firmly on familiar territory.
Bruce Pannier is a correspondent in
Prague specializing in Central Asia. He studied under
the doyen of Central Asian studies in the US, Edward
Allworth, and at Tashkent State University in 1990. He
led a research project in rural areas of Central Asia
for the University of Manchester in 1992-93. A frequent
visitor to the region, he has a number of chapters on
Central Asia in books and magazines.
Copyright (c) 2004, RFE/RL Inc.
Reprinted with the permission of Radio Free
Europe/Radio Liberty, 1201 Connecticut Ave NW,
Washington, DC 20036
